Snowflake Inc. Q2 FY2026 earnings call

• Snowflake delivered a strong quarter with core business remaining very strong. • Continued product innovation including Snowflake Intelligence, Cortex AI SQL, Gen 2 Warehouse, Snowflake Postgres, Snowflake OpenFlow, and Snowpark Connect for Apache Spark. • 40% of customers are data sharing on Snowflake, over 1,200 accounts using Apache Iceberg. • AI influenced nearly 50% of new logos won in Q2 and powered 25% of all deployed use cases. • Launched approximately 250 capabilities to GA in the first half of the year.

Product revenue for Q2 was $1.09 billion, up 32% year over year. Remaining performance obligations totaled $6.9 billion with year-over-year growth of 33%. Net revenue retention rate was 125%. Non-GAAP operating margin increased to 11%.

• Q3 product revenue expected: $1.125 billion - $1.13 billion (25-26% YOY growth), non-GAAP operating margin 9%. • FY 2026 product revenue raised to $4.395 billion (27% YOY growth), non-GAAP product gross margin 75%, non-GAAP operating margin 9%, non-GAAP adjusted free cash flow margin 25%.

Q: Sanjit Singh asked about the durability of growth after data modernization efforts.

A: Sridhar Ramaswamy said data modernization is the start of the journey, and AI transformation depends on data being AI-ready in Snowflake, with data in Snowflake being AI-ready for various uses.

Q: Raimo Lenschow asked about European momentum in new customer adds.

A: Sridhar Ramaswamy said Europe is contributing, with setup in EMEA and APJ replicating the US model.

Q: Karl Keirstead asked about Azure performance.

A: Mike Scarpelli said Azure was fastest-growing cloud at 40% YOY, attributing to better alignment with Microsoft.

Q: Kirk Materne asked about newer products in Q3 guidance.

A: Mike Scarpelli said newer products outperformed expectations and are included in forecasts based on consumption patterns.

Q: Alex Zukin asked about outperformance drivers.

A: Sridhar Ramaswamy said core business analytics is strong, and AI components are driving budget allocation, with 25% of use cases involving AI.

Q: Kash Rangan asked about AI in enterprise and Spark support.

A: Sridhar Ramaswamy talked about AI's emergent power and Christian Kleinerman explained Snowpark Connect for Spark.

Q: Brent Thill asked about second half visibility.

A: Mike Scarpelli said consumption trends are strong and new features drive revenue.

Q: Mark Murphy asked about sales and marketing hires.

A: Mike Scarpelli said hiring is focused on productivity and aligns with pipeline growth.

Q: Brent Bracelin asked about drivers of Q2 acceleration.

A: Mike Scarpelli said core business and new workloads contributed.

Q: Tyler Radke asked about competitive environment.

A: Sridhar Ramaswamy said Snowflake is the best AI data platform with unique qualities.

Q: Brad Sills asked about professional services ramp.

A: Mike Scarpelli said it was driven by a large customer milestone and most services are via partners.

Q: Michael Turrin asked about expansion rate.

A: Mike Scarpelli said it was driven by large customers migrating new workloads.

Q: Brad Reback asked about migration activity in second half.

A: Mike Scarpelli said there are new workload use cases in production.

Q: Joe Vandrick asked about G2K customers.

A: Mike Scarpelli said ~50% of million-dollar customers are G2K and sales focus on business value.

Q: Matt Hedberg asked about Crunchy integration.

A: Christian Kleinerman said integration of Snowflake Postgres is progressing well with preview soon.

Q: Patrick Walravens asked about AI model convergence.

A: Sridhar Ramaswamy said models are still advancing with ample runway for enterprise AI.

Q: Mike Cikos asked about AI monetization.

A: Sridhar Ramaswamy said AI adoption is via natural extension of data access with specialist team driving revenue.

Q: Greg Muskowitz asked about Cortex AI use cases.

A: Sridhar Ramaswamy said use cases include customer 360 and agentic AI for tasks like updates.

Q: John DiFucci asked about core market sustainability.

A: Sridhar Ramaswamy said core market is sustainable with focus on product innovation for long-term success.