Snowflake, Inc. Q1 FY2026 earnings call

• Strong start to the year with core business performing well, product delivery on track, and go-to-market engine strengthening.
• Product revenue growth of 26% y/y in Q1, with no deceleration quarter-over-quarter. Remaining performance obligations grew 34% y/y.
• Innovations in product include Snowpark and Dynamic Tables outperforming, Iceberg expanding data scope, and Snowflake connectors enabling seamless data integration with platforms like Google Drive and Workday.
• AI advancements: Over 5,200 accounts using AI and machine learning weekly, Cortex AI as a foundational pillar, partnerships with Microsoft and Meta, and AI-powered migration enhancements.
• Go-to-market focus: Renewed focus under new Chief Revenue Officer Mike Gannon, expansion into public sector with Department of Defense authorization, and automotive solutions.
• Customer examples: AstraZeneca, Dentsu, Siemens, Samsung Ads leveraging Snowflake for data analysis, cost savings, operational efficiency, and AI-driven innovation.

Product revenue for Q1 was $997 million, up 26% year-over-year. Excluding the impact of leap year, product revenue grew 28% year-over-year. Remaining performance obligations totaled $6.7 billion with year-over-year growth of 34%. Our net revenue retention was a very healthy 124%.

• Q2 product revenue expected between $1.035 billion and $1.04 billion, representing 25% year-over-year growth.
• Q2 non-GAAP operating margin expected to be 8%.
• FY 2026 revenue guidance increased to $4.325 billion, representing 25% year-over-year growth.
• Non-GAAP product gross margin expected to be approximately 75%, non-GAAP operating margin 8%, non-GAAP adjusted free cash flow margin 25%.

Forward-looking statements are subject to risks and uncertainties, which could cause them to differ materially from actual results. Information concerning these risks and uncertainties is available in Snowflake's earnings press release, most recent Forms 10-K and 10-Q, and other SEC reports.

Q: How was consumption exiting the quarter and through May?

A: As we don't comment on consumption within a quarter, overall Q1 consumption was very strong coming out of the holiday period, and we feel good about our consumption.

Q: Talk about monetization trends associated with Cortex.

A: People invest in Snowflake to make their data AI-ready, and Cortex is integrated into existing spend, with use cases like chatbots and compound systems driving value.

Q: Dive into Snowpark and Dynamic Tables outperforming.

A: It's a combination of great products creating value and a go-to-market team enunciating value, with specialist sales motions identifying high-value use cases.

Q: Contrast macro pressure now vs post-COVID.

A: Customer base has evolved to more mature, cost-focused companies, and we haven't seen significant macro impact, with strong new customer adds and RPO growth showing confidence in Snowflake.

Q: Thoughts on go-to-market motion for AI developments.

A: We've created specialist teams for AI, making specialized knowledge available to more sales teams, combining specialist expertise with broader team participation for data-driven go-to-market.