Snowflake (NYSE:SNOW) reported fourth-quarter fiscal 2026 results that management characterized as strong across revenue, bookings, and margins, while emphasizing accelerating adoption of its AI products and growing multi-year customer commitments. Executives also outlined fiscal 2027 guidance that assumes continued stable growth in the core business, a larger contribution from AI workloads, and an incremental boost from the recently closed Observe acquisition.
Q4 results: 30% product revenue growth and stronger RPO
For the fourth quarter, Snowflake said product revenue grew 30% year-over-year to $1.23 billion. The company reported remaining performance obligations (RPO) of $9.77 billion, with 42% year-over-year growth, which management noted was an acceleration for the second consecutive quarter.
Bookings momentum includes a $400M+ deal and seven nine-figure contracts
Management highlighted strength in large deals during the quarter. Robins said the company signed the largest deal in Snowflake’s history, with more than $400 million in total contract value, and closed seven nine-figure contracts in Q4, compared with two in the same period a year earlier.
On the $400 million-plus deal, CEO Sridhar Ramaswamy said it reflected Snowflake’s strategic importance to a “large financial services customer.” Robins added it was an existing customer and therefore “already built into the run rate.” When asked whether the bookings strength reflected any unusual changes, Ramaswamy said the quarter was largely “business as usual,” while noting Snowflake adjusted compensation plans last year to consider bookings, which he described as a return to how things were two years ago.
Customer growth and expansion: $1M+ and $10M+ cohorts increase
Snowflake said it added 740 net new customers in Q4, representing 40% year-over-year growth in net additions and including 15 Forbes Global 2000 organizations. For the full year, the company said it added 2,332 net new customers, bringing the total customer count to more than 13,300.
Robins highlighted continued expansion among large customers:
- 733 customers spent more than $1 million on a trailing twelve-month basis, up 27% year-over-year.
- 56 customers surpassed $10 million in trailing twelve-month spend, up 56% year-over-year, which management said was a record number crossing that threshold.
Management cited examples of deepening customer relationships and migrations, including Seagate consolidating a “massive data environment” onto Snowflake and Capital One leveraging Snowflake to unify proprietary data and deliver AI-driven analytics across the enterprise.
AI and product updates: Snowflake Intelligence, Cortex Code, Openflow, and Postgres
Ramaswamy framed fiscal 2026 as a year in which AI moved from “promise to reality,” positioning Snowflake as a platform built to deploy AI “safely and at scale” through trusted data, governance, security, and broad model choice.
He pointed to increased AI adoption metrics during the quarter, including the largest sequential increase in accounts using AI, bringing the total to more than 9,100 accounts. Snowflake Intelligence scaled to over 2,500 accounts, nearly doubling quarter-over-quarter, while Cortex Code was described as helping more than 4,400 customers build and scale AI-powered applications.
Among product launches and updates, management highlighted:
- Snowflake Intelligence, positioned as “enterprise-grade agentic capabilities” for business users.
- Cortex Code and Cortex Code CLI, aimed at accelerating the data lifecycle and building agents faster.
- Snowflake Openflow (generally available), designed to ingest structured and unstructured, batch, and streaming data.
- Snowflake Postgres (generally available), described as a fully managed operational database built on the Snowflake platform.
During Q&A, executives also discussed interoperability, including supporting Apache Iceberg “as a first-class construct,” enabling SQL access to open data, making semantic models available through semantic views, and allowing Snowflake Intelligence agents to be used as MCP servers by other agents.
On pricing predictability as AI agents proliferate, Ramaswamy said Snowflake’s consumption model is designed to align spend with value and noted the company plans to introduce controls such as a per-user cap for Snowflake Intelligence to reduce “sticker shock.”
Margins, Observe acquisition, capital return, and FY2027 outlook
For fiscal 2026, Snowflake reported:
- Non-GAAP product gross margin of 75.8%
- Non-GAAP operating margin of 10.5%
- Non-GAAP adjusted free cash flow margin of 25.5%
Ramaswamy said stock-based compensation declined from 41% of revenue in fiscal 2025 to 34% in fiscal 2026, and he said the company expects it to decline further to 27% of revenue in fiscal 2027.
Robins said Snowflake closed its acquisition of Observe earlier in the month for approximately $600 million in cash and stock, calling it a way to extend Snowflake into the “$50 billion IT operations market” through AI-powered observability. Ramaswamy emphasized the observability opportunity in the agentic AI era and said Observe, which was built on Snowflake, can be “factors” more efficient than traditional observability approaches for customers facing high costs.
On capital return, Snowflake said it repurchased $150 million of stock in Q4, buying approximately 668,000 shares at a weighted average price of about $225. The company ended the quarter with $4.8 billion in cash and investments and had $1.1 billion remaining under its repurchase authorization.
Looking ahead, Snowflake guided for Q1 fiscal 2027 product revenue of $1.262 billion to $1.267 billion, implying 27% year-over-year growth. For the full fiscal year 2027, management guided to approximately $5.66 billion in product revenue, also representing 27% year-over-year growth. Robins said Observe is expected to contribute about one percentage point of product revenue growth in FY2027.
For profitability, the company guided to FY2027 non-GAAP product gross margin of 75%, Q1 non-GAAP operating margin of 9%, and FY2027 non-GAAP operating margin of 12.5%. Snowflake guided to a non-GAAP adjusted free cash flow margin of 23%, including an approximate 150 basis point headwind related to the Observe acquisition. Robins also said bookings are expected to remain weighted to the fourth quarter and cash collections have been greater than 60% in Q4 for the last two years.
Snowflake said it will host an Investor Day in conjunction with its Summit conference the week of June 1 in San Francisco.
About Snowflake (NYSE:SNOW)
Snowflake Inc is a cloud-native data platform company that provides a suite of services for storing, processing and analyzing large volumes of data. Its core offering, often described as the Snowflake Data Cloud, combines data warehousing, data lake and data sharing capabilities in a single managed service delivered across major public cloud providers. The platform is designed to support analytics, data engineering, data science and application workloads with a focus on scalability, concurrency and simplified administration.
Key products and capabilities include a multi-cluster, shared-data architecture that separates compute from storage; continuous data ingestion and streaming; support for structured and semi-structured data formats; tools for data governance, security and compliance; and developer frameworks for building data applications.
