Snowflake shares surged 21 percent on Thursday following the release of its fiscal 2027 second-quarter financial report, with intraday gains reaching 25.6 percent.
For the quarter ended July 31, Snowflake generated $1.55 billion in revenue, a 35 percent increase year over year. Product revenue reached $1.49 billion, growing 37 percent—the third consecutive quarter of acceleration. Adjusted earnings per share rose 77 percent to $0.62, significantly exceeding analyst consensus of $1.48 billion in revenue and $0.45 in adjusted EPS.
"AI continues to compound our advantages, creating a flywheel effect across the business," CEO Sridhar Ramaswamy said.
The company's AI-powered coding assistant is driving increased consumption on its core data platform. Snowflake is also expanding its use of Amazon's in-house chips for AI workloads.
Remaining performance obligation—contracted future revenue not yet recognized—grew 30 percent to $9 billion, a leading indicator of sustained demand.
Snowflake's total customer base expanded to 14,554, up 32 percent year over year. Its highest-value customers, those spending over $1 million in trailing-12-month revenue, increased 27 percent to 828. Net revenue retention reached 126 percent, indicating existing customers are increasing spend.
The company raised fiscal 2027 revenue guidance to $6.07 billion, up from $5.84 billion, implying approximately 37 percent growth at the midpoint and exceeding Wall Street's $5.85 billion forecast.
The valuation carries execution risk: the stock trades at 137 times next year's anticipated earnings. Customer spending discipline could tighten as cost controls reassert themselves across enterprise budgets. However, Q2 results show AI advancements are accelerating consumption rather than triggering pullbacks.
