Snowflake Earnings Tonight: Will AI-Fueled Growth Melt Wall Street’s Doubts or Leave Investors Out in the Cold?

Snowflake Inc. (NYSE: SNOW), a leader in cloud-based data warehousing and analytics, will report fiscal second-quarter 2026 results after the close on August 27. The company sits at the center of enterprise data transformation, providing customers with a platform to store, manage, and analyze data in the cloud. Its role has grown even more important as organizations race to integrate artificial intelligence into workflows. SNOW stock has climbed roughly 37% over the past year, handily outpacing large-cap software peers, though it has been volatile heading into the print.

Consensus calls for revenue around $1.09 billion, up 25% year-over-year, and adjusted EPS of $0.27, a 44% increase from the prior year. Analysts will zero in on product revenue, which accounts for the bulk of sales, as well as remaining performance obligations (RPO), net revenue retention, and customer additions. Citi expects a “good beat” in the 3–4% range, implying growth reaccelerating toward 30% year-over-year, and sees guidance for the back half of FY26 potentially moving into the high-20s growth band. KeyB’s surveys suggested resilient demand for on-prem migration and data engineering workloads, though they flagged early-stage adoption of Cortex and potential competitive leakage via Iceberg.

Management guided in Q1 for Q2 product revenue of $1.035–$1.04 billion, representing 25% growth, with non-GAAP operating margin around 8%. Full-year FY26 revenue guidance was set at $4.325 billion, also up 25%, with operating margins of 8% and free cash flow margins near 25%. Investors will be looking for any revision upward, particularly as bullish analyst takes (UBS, BAML, and MSCO) argue Snowflake is well-positioned to capture a multi-year enterprise cycle in the data layer. Wells Fargo recently noted momentum shifting back to SNOW as its product and go-to-market engine realigns under new leadership, led by CEO Sridhar Ramaswamy and CRO Mike Gannon.

Last quarter, Snowflake delivered product revenue of $997 million, up 26% year-over-year, with RPO of $6.7 billion, a 34% increase. Net revenue retention landed at 124%, down modestly from 126%, but new customer additions were robust at 451, bringing the total to over 8,900. Management highlighted Cortex AI adoption, noting more than 5,200 weekly active AI/ML accounts, alongside 125 new product capabilities delivered in the quarter. The company also unveiled Gen2, a next-generation warehouse designed to improve analytics performance by over 2x for core workloads, positioning it as a premium higher-margin offering.

Compared to those Q1 results, tonight’s Q2 numbers will give a clearer view of whether stabilization in net revenue retention and RPO can extend further. Investors will also focus on customer spending trends—particularly the cohort of customers generating over $1 million in trailing 12-month product revenue—as well as net new customer momentum. Gross margin and profitability will be in the spotlight too, given concerns about higher infrastructure costs associated with supporting AI workloads. Events like Snowflake Summit, which drove higher expenses in Q1, also weigh on margin comparisons.

Analysts have mixed views heading in. Guggenheim sees Q2 targets as achievable but warns that consensus-beating growth may be tougher in the second half. Bernstein flagged divergence between RPO and net retention as a reason to temper upside expectations, while Citi and UBS have become more constructive, citing stronger partner checks and Cortex traction. BAML upgraded the stock to Buy earlier this month, calling SNOW’s multiple “reasonable” given improving free cash flow leverage and its expanding AI product set.

Key issues for investors to watch tonight include: • AI monetization – Management has emphasized that AI products like Cortex are embedded in existing consumption rather than sold as separate SKUs. Investors will want more clarity on how these capabilities drive incremental usage and revenue. • Federal and industry vertical traction – Snowflake has rolled out new Data Cloud offerings for public sector, manufacturing, and government agencies. Updates on wins in these verticals could broaden the growth narrative. • Competitive dynamics – Questions about migrations to open formats like Iceberg and threats from hyperscaler solutions will remain front and center. • Margins and infrastructure costs – Rising compute demands from AI workloads and events-driven spend may pressure margins. The Street expects product gross margin to remain around 75%. • Capital allocation – Snowflake repurchased $491 million of stock in Q1, and investors will want updates on how buybacks factor into capital deployment.

The bottom line: Snowflake enters its Q2 report with a strong product pipeline, expanding AI capabilities, and renewed confidence under new leadership. The stock’s premium valuation—trading near 17x forward sales—leaves little margin for error, especially as expectations run high. Management’s ability to show durable growth in product revenue, reaffirm stable retention metrics, and communicate a credible AI monetization story will determine whether SNOW can buck the recent pattern of peers that popped on earnings only to fade shortly after.