Snowflake Inc (SNOW) Q1 2026 Earnings Report

- Revenue: $1.042B, +25.8% YoY, +5.6% QoQ (calculated from 1Q26 data).
- Product revenue: $997M, +26% YoY (28% YoY excluding leap year).
- Gross profit: $693.3M, gross margin 66.53% (YoY gross profit +24.65%).
- Non‑GAAP product gross margin: 75.7%; non‑GAAP operating margin: 9.0% (YoY up ~442 bps).
- Operating income (GAAP): -$447.3M; net income (GAAP): -$430.1M; EPS (GAAP): -$1.29.
- Net revenue retention (NRR): 124%; Remaining performance obligations (RPO): $6.7B, +34% YoY.
- New customers: +451 net adds, +19% YoY.
- Cash and investments: $4.90B in cash, equivalents and investments; net cash position of approximately -$0.45B (net debt negative, i.e., net cash).
- Free cash flow (non‑GAAP): $183.4M; non‑GAAP FCF margin: ~25%.
- Share repurchases: $491M spent to repurchase 3.2M shares; $1.5B remaining on authorization.
- Outlook: Q2 product revenue guidance of $1.035B–$1.04B (+~25% YoY); FY2026 revenue guidance raised to $4.325B (+~25% YoY); non‑GAAP gross margin ~75%; non‑GAAP operating margin ~8%; non‑GAAP FCF margin ~25%.

Key management takeaways from the earnings call:
- Strategic AI momentum and platform breadth: Sridhar Ramaswamy emphasized that Snowflake’s AI data cloud is a core driver of value, with Cortex transforming from nascent to foundational, and a 5,200+ weekly active account base. He noted the move to make AI an integrated part of customer data workflows (not a separate SKU), citing use cases like AI assistants, chatbots on documents, and multi‑source data disambiguation. Quote: “Our AI data cloud helps customers get more value out of their data, innovate faster and remove friction from their business operations.” and “Cortex AI has gone from a nascent product area to a foundational pillar of enterprise AI strategies for customers around the world.”
- Product and data‑fabric momentum: Sridhar highlighted the acceleration of product introductions (125 capabilities in Q1, up 100% YoY) and the expansion of open formats with Apache Iceberg, reflecting a move toward a more open, flexible data architecture. Quote: “We have brought over 125 product capabilities to market, a 100% increase over what we delivered in Q1 of last year.” and “We are seeing strong adoption of open data formats, especially Apache Iceberg.”
- GTM and partnerships: The company stressed the refreshed GTM discipline under CRO Mike Gannon and strengthened ecosystem partnerships (Azure hosting of OpenAI models, Datavolo connectors, Snowflake/Iceberg, and government sector expansion). Quote: “Under the leadership of our new Chief Revenue Officer, we have renewed focus and rigor across our go‑to‑market.” and “expanded partnership with Microsoft to host OpenAI models on Microsoft Azure.”
- Customer wins and usage trends: On the demand side, Snowflake highlighted large new logos and notable customer deployments (e.g., Kraft Heinz internal AI, Siemens collaboration) and robust customer adoption of Cortex in production environments. Quote: “We added 451 net new customers in Q1, growing 19% year over year.” and examples like Kraft Heinz and Siemens demonstrating AI adoption.
- Outlook and capital allocation: Mike Scarpelli outlined the Q2 revenue guide and FY2026 uplift, with a note on seasonality of free cash flow due to large Q4/late‑year bookings and Q2 Summit spend. Quote: “We expect Q2 product revenue between $1.035 billion and $1.04 billion, representing 25% year‑over‑year growth.” and “FY 2026, we are increasing our revenue guidance to $4.325 billion, representing 25% year‑over‑year growth.”

Snowflake’s QQ1 2026 results reinforce a strategic thesis built around AI‑enabled data platforms. The combination of 25% revenue growth, healthy gross margins, and improving non‑GAAP profitability signals an improving path to operating leverage as scale increases. The company’s data‑cloud advantages (RPO growth, high NRR, Cortex adoption, Iceberg/open formats) position Snowflake to monetize AI workloads across a broad set of industries. The elevated RPO provides revenue visibility, while a robust cash position supports ongoing investments and opportunistic capital allocation (e.g., share repurchases). The near‑term risk is the transition from heavy investment to sustained profitability, and the external risk of competition from hyperscalers and Databricks. Monitoring key indicators such as ARR growth, Cortex monetization cadence, GM trajectory (FFCF margins), and government/Public Sector pipelinewill be crucial. If Snowflake maintains its AI/data‑fabric leadership and successfully monetizes Cortex while expanding GTM efficiency, the stock could sustain a multi‑year growth and margin expansion trajectory, potentially reaching higher revenue milestones as outlined in its long‑term plan.