Snowflake’s first quarter results were met with a significant positive market reaction, driven by accelerated product adoption and strong customer momentum. Management attributed this outperformance to rapid uptake of Snowflake’s new AI-native products, including Snowflake Intelligence and Cortex Code (CoCo), which saw the fastest adoption rates in company history. CEO Sridhar Ramaswamy highlighted that these agentic products not only created new revenue streams but also fueled increased consumption of the core data platform. The company’s ability to facilitate large-scale migrations and deliver operational efficiencies for customers in sectors like financial services and consumer goods was cited as a key factor behind the robust quarterly performance.
Is now the time to buy SNOW? Find out in our full research report (it’s free for active Edge members).
Snowflake (SNOW) Q1 CY2026 Highlights:
- Revenue: $1.39 billion vs analyst estimates of $1.32 billion (33.5% year-on-year growth, 5% beat)
- Adjusted EPS: $0.39 vs analyst estimates of $0.32 (21.9% beat)
- Adjusted Operating Income: $165.8 million vs analyst estimates of $120.2 million (11.9% margin, 37.9% beat)
- Product Revenue Guidance for Q2 CY2026 is $1.42 billion at the midpoint
- Operating Margin: -23.4%, up from -42.9% in the same quarter last year
- Customers: 779 customers paying more than $1 million annually
- Net Revenue Retention Rate: 126%, up from 125% in the previous quarter
- Billings: $907 million at quarter end, up 17.8% year on year
- Market Capitalization: $90.51 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Snowflake’s Q1 Earnings Call
- Sanjit Singh (Morgan Stanley) asked about the inflection in demand and product uptake. CEO Sridhar Ramaswamy explained that AI is driving both core platform acceleration and new adoption of agentic products, while CFO Brian Robins emphasized CoCo’s unique impact on forecasts.
- Karl Keirstead (UBS) questioned whether AI product usage could lead to customer cost concerns and margin drag. Ramaswamy responded that value creation far outweighs cost, and Robins noted that cost efficiencies and contracts help maintain gross margins.
- Brent Thill (Jefferies) inquired about conservative go-to-market hiring despite demand. Ramaswamy attributed improved sales productivity and higher leverage to AI-driven tools, reducing the need for aggressive headcount growth.
- Aleksandr Zukin (Wolfe Research) explored how new AI products and acquisitions like Natoma might change customer spending profiles. Ramaswamy highlighted faster migrations and broader workflow automation, while Kleinerman added that backlog reduction is accelerating value realization.
- Koji Kada (Bank of America) asked what secures Snowflake’s long-term differentiation as an enterprise AI and data vendor. Ramaswamy pointed to deep governance, security capabilities, and rapid product innovation as enduring strengths.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the pace of AI product adoption and its impact on both new and existing customer usage, (2) margin sustainability as AI-driven workloads scale, and (3) integration progress from new acquisitions and partnerships, including Natoma and AWS. The ability to maintain differentiated governance and security features will also be a key indicator of future success.
Snowflake currently trades at $258.00, up from $175.26 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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