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It has been about a month since the last earnings report for Snowflake Inc. (SNOW - Free Report) . Shares have lost about 5.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Snowflake due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Snowflake Inc. before we dive into how investors and analysts have reacted as of late.
Snowflake Q1 Earnings Top Estimates, Revenues Increase Y/YSnowflake reported first-quarter fiscal 2027 non-GAAP earnings of 39 cents per share, which beat the Zacks Consensus Estimate by 21.88%. The company reported earnings of 24 cents per share in the year-ago quarter.
Revenues were $1.39 billion, up 33% year over year and beat the Zacks Consensus Estimate by 5.23%.
SNOW Top-line DetailsSNOW’s fiscal first quarter was driven by consumption across its core platform, with product revenue representing the majority of results. Product revenues totaled $1.33 billion, which accounted for 96% of total revenues. Professional Services and other revenues were $56.6 million, which contributed 4% of total revenues, representing a 25.1% year-over-year increase.
Geographically, results remained concentrated in the Americas, which represented 78% of revenue, with EMEA and APJ contributing 16% and 6%, respectively. The steady regional mix suggests Snowflake is scaling internationally without materially changing its revenue concentration.
Snowflake’s AI-Led Momentum and PartnershipsSnowflake framed the quarter as an inflection point in its AI roadmap, citing accelerating adoption of first-party AI products alongside core platform demand. Management pointed to strong sequential product revenue dollar growth and emphasized the role of offerings such as Cortex Code and Snowflake Intelligence in broadening usage across the installed base.
The company also underscored ecosystem moves aimed at extending distribution and deepening enterprise relevance. It expanded collaboration with AWS through a new $6 billion multi-year agreement, highlighted ongoing work with OpenAI, and noted that capabilities from its SAP partnership reached general availability. Snowflake also signed a definitive agreement to acquire Natoma in May 2026 to strengthen secure connections for AI agents across tools and workflows.
SNOW's Customer Scale Supports Durable ExpansionSNOW ended the quarter with 13,912 total customers and added 616 net new customers, including 13 new Forbes Global 2000 customers. Large-customer depth continued to improve, with 779 customers above the $1 million trailing product revenue threshold, representing 29% year-over-year growth in that cohort.
Retention remained a key support for the consumption model. Net revenue retention rate was 126%, reflecting continued expansion from existing customers, even as usage patterns can vary quarter to quarter. Contracted demand also stayed healthy, with remaining performance obligations of $9.21 billion, up 38% from the year-ago period.
Snowflake’s Operating DetailsThe non-GAAP gross margin contracted 40 basis points (bps) year over year to 71.8%. Product gross margin was 75.1% in the reported quarter.
Research & development expenses, as a percentage of revenues, decreased 250 bps on a year-over-year basis to 20.4%. General & administrative expenses, as a percentage of revenues, were 5.5%, down 60 bps year over year. Sales and marketing expenses, as a percentage of revenues, contracted 40 bps on a year-over-year basis to 33.9%.
Operating margin expanded 300 bps on a year-over-year basis to 11.9%.
SNOW’s Balance Sheet & Cash Flow DetailsThe balance sheet remained liquid. As of April 30, 2026, Snowflake reported $2.08 billion in cash and cash equivalents and $870.3 million in short-term investments.
SNOW produced $243.2 million of net cash from operating activities in the quarter. Free cash flow was $232.8 million, and adjusted free cash flow was $265.5 million.
Snowflake Raises Full-Year Product Revenue OutlookSnowflake expects second-quarter fiscal 2027 product revenues in the range of $1.415-$1.420 billion, implying 30% year-over-year growth, with a non-GAAP operating margin expected to be 12.5%.
For fiscal 2027, the company raised its product revenue outlook to $5.84 billion, representing 31% growth. Snowflake also lifted its full-year non-GAAP operating margin target to 13.5% and reiterated a 75% non-GAAP product gross margin assumption alongside a 23% non-GAAP adjusted free cash flow margin.
How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in fresh estimates.
The consensus estimate has shifted 5.83% due to these changes.
VGM ScoresCurrently, Snowflake has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock has a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Snowflake has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
