Key Takeaways:
- Snowflake reported Q1 product revenue of $1.33 billion, up 34% year over year
- Adjusted EPS of $0.39 beat consensus estimates by $0.07
- Full-year product revenue guidance raised to $5.84 billion from $5.66 billion
Key Takeaways:

Snowflake Inc. reported fiscal first-quarter product revenue of $1.33 billion, up 34% from a year earlier and beating analyst estimates by 5.1%, as its AI coding assistant drove a sharp acceleration in customer spending.
"AI continues to be a powerful tailwind for Snowflake, and Q1 marks a clear inflection point in that journey," Chief Executive Officer Sridhar Ramaswamy said.
Adjusted earnings per share came in at $0.39, topping the $0.32 consensus by $0.07. Non-GAAP operating margin expanded more than 300 basis points year over year to 12%, well above the 9.2% analysts had forecast. The company achieved the efficiency gain while adding just 17 organic employees during the quarter.
The primary catalyst was Cortex Code, an AI coding assistant that became generally available on Feb. 5. More than 7,100 customer accounts were using the tool by quarter-end, and Chief Financial Officer Brian Robins confirmed it was "the largest driver" behind the upgraded guidance. Snowflake also signed a five-year infrastructure agreement with Amazon Web Services valued at $6 billion, more than doubling its prior commitment, and announced plans to acquire Natoma, an enterprise platform for AI agents.
Net revenue retention improved to 126% from 125% in the prior quarter. The company added 616 net new customers, a 38% increase from a year earlier, bringing the total number of customers generating more than $1 million in trailing 12-month product revenue to 779. Remaining performance obligations rose 38% year over year to $9.21 billion.
Snowflake raised its full-year product revenue outlook to $5.84 billion, representing 31% annual growth, up from the prior forecast of $5.66 billion. It now expects second-quarter product revenue of $1.415 billion to $1.420 billion, implying roughly 30% year-over-year growth. The company also lifted its full-year non-GAAP operating margin target to 13.5% from 12.5%.
The broader AI application software sector rallied alongside Snowflake, with the sector index rising 4%. Figma, Tempus AI and ServiceNow each gained more than 7%, while the tech software industry ETF added over 2%.
The guidance raise signals management expects AI-driven demand to sustain its acceleration. Investors will watch the Q2 earnings call for updated metrics on Cortex Code adoption and its contribution to net revenue retention.
This article is for informational purposes only and does not constitute investment advice.