Cloud data platform provider Snowflake (NYSE: SNOW) reported revenue ahead of Wall Street’s expectations in Q2 CY2026, with sales up 35.1% year on year to $1.55 billion. Its non-GAAP profit of $0.62 per share was 38.7% above analysts’ consensus estimates.
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Snowflake (SNOW) Q2 CY2026 Highlights:
- Revenue: $1.55 billion vs analyst estimates of $1.48 billion (35.1% year-on-year growth, 4.3% beat)
- Adjusted EPS: $0.62 vs analyst estimates of $0.45 (38.7% beat)
- Adjusted Operating Income: $237 million vs analyst estimates of $185.9 million (15.3% margin, 27.4% beat)
- Product Revenue Guidance for Q3 CY2026 is $1.59 billion at the midpoint
- Operating Margin: -17%, up from -29.7% in the same quarter last year
- Free Cash Flow Margin: 5.4%, down from 16.7% in the previous quarter
- Customers: 828 customers paying more than $1 million annually
- Net Revenue Retention Rate: 126%, in line with the previous quarter
- Billings: $1.27 billion at quarter end, up 15.1% year on year
- Market Capitalization: $110.8 billion
Company Overview
Named after the unique architecture of its data warehouse which resembles a snowflake pattern, Snowflake (NYSE: SNOW) provides a cloud-based data platform that enables organizations to consolidate, analyze, and share data across multiple cloud providers.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Snowflake grew its sales at an incredible 44.9% compounded annual growth rate. Its growth surpassed the average software company and shows its offerings resonate with customers, a great starting point for our analysis.
Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. Snowflake’s annualized revenue growth of 30.2% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
This quarter, Snowflake reported wonderful year-on-year revenue growth of 35.1%, and its $1.55 billion of revenue exceeded Wall Street’s estimates by 4.3%.
Looking ahead, sell-side analysts expect revenue to grow 26.3% over the next 12 months, a deceleration versus the last two years. Still, this projection is admirable and implies the market sees success for its products and services.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Snowflake’s billings punched in at $1.27 billion in Q2, and over the last four quarters, its growth was fantastic as it averaged 24.9% year-on-year increases. This alternate topline metric grew slower than total sales, meaning the company recognizes revenue faster than it collects cash - a headwind for its liquidity that could also signal a slowdown in future revenue growth. 
Customer Retention
One of the best parts about the software-as-a-service business model (and a reason why they trade at high valuation multiples) is that customers typically spend more on a company’s products and services over time.
Snowflake’s net revenue retention rate, a key performance metric measuring how much money existing customers from a year ago are spending today, was 126% in Q2. This means Snowflake would’ve grown its revenue by 26% even if it didn’t win any new customers over the last 12 months.
Snowflake has an excellent net retention rate. This data point proves that the company sells useful products, and we can see that its customers are satisfied and increasing their usage over time.
Key Takeaways from Snowflake’s Q2 Results
We were impressed by how significantly Snowflake blew past analysts’ adjusted operating income expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 22.3% to $375.68 immediately following the results.
Should you buy the stock or not? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
