$Snowflake(SNOW)$ is scheduled to report its fiscal Q2 2026 earnings on August 27, 2025. The general sentiment is optimistic, with analysts expecting continued growth driven by the strong adoption of its data platform and new AI-driven products like Cortex.
Revenue: The Zacks Consensus Estimate for revenue is pegged at approximately $1.09 billion, which would represent a 25% increase year-over-year. Product revenue, a key metric for the company, is expected to be in the range of $1.03 billion to $1.04 billion.
Earnings Per Share (EPS): Non-GAAP earnings per share (EPS) are projected to be around $0.26, a significant increase from the prior year.
Summary of Snowflake's Fiscal Q1 2026 Earnings
Snowflake (SNOW) reported a strong start to fiscal 2026, with results that largely met or exceeded analyst expectations. The company's total revenue grew to $1.04 billion, a 26% year-over-year increase. Product revenue, a key metric for Snowflake's consumption-based model, also showed robust growth, reaching nearly $1 billion with a 26% year-over-year increase. The company's remaining performance obligations (RPO), a measure of future contracted revenue, grew by an impressive 34% to $6.7 billion, signaling strong customer commitment.
Despite some fluctuations in margins, the company demonstrated solid operating performance. Non-GAAP operating income reached $91.7 million, with a 9% margin. The company's net revenue retention rate, though slightly down from the previous quarter, remained high at 124%, indicating that existing customers are continuing to expand their usage of the platform. The number of customers with over $1 million in trailing 12-month product revenue grew by 27% year-over-year.
The Lesson Learned from Q1 2026 Guidance
The main lesson from Snowflake's Q1 2026 guidance is that the market rewards stability and sustained, predictable growth more than explosive, but decelerating, growth.
While the Q1 results were strong, the company's guidance for Q2 and the full fiscal year was viewed positively by investors. Snowflake projected Q2 product revenue of $1.035 to $1.040 billion, representing a 25% year-over-year growth. For the full fiscal year 2026, the company projected product revenue of $4.325 billion, maintaining a consistent 25% growth rate.
This guidance, which was in line with or slightly above analyst consensus, gave investors confidence in the company's ability to deliver consistent performance. Unlike other high-growth tech stocks that have been penalized for slowing growth, Snowflake's guidance suggested a stable and manageable growth trajectory, even if it's at a lower rate than in previous years. The company's emphasis on improved operating margins and a clear path to profitability also resonated with investors.
The key takeaway is that in the current market environment, where high valuations are under scrutiny, a company that can provide a clear, predictable, and consistently profitable growth story is more likely to be rewarded than one that delivers an erratic or decelerating growth narrative, even if the absolute growth numbers are still high.
Analysis of Q2 2026 Earnings Expectations
AI and Partnerships: A major driver for growth is Snowflake's focus on AI capabilities and its strong partnerships with tech giants like Microsoft, NVIDIA, and Amazon. The success of its AI-driven products and the momentum from these collaborations are expected to be key contributors to the Q2 results.
Valuation: Despite the positive outlook, Snowflake's valuation remains a point of caution. The stock's forward price-to-sales (P/S) ratio of over 12.9x is significantly higher than the industry average, which could make it vulnerable to any negative surprises.
Key Metrics Investors Should Watch
Product Revenue Growth: Unlike many SaaS companies, Snowflake's revenue is consumption-based. Investors will be scrutinizing the growth of product revenue, as it directly reflects customer usage and engagement with the platform. A strong beat on this metric would be a significant positive catalyst.
Remaining Performance Obligations (RPO): This metric represents the total amount of future revenue under contract. An increase in RPO indicates strong future business momentum and customer commitment. Analysts are watching for an increase in RPO, with consensus estimates around $6.84 billion.
Net Revenue Retention Rate: This metric measures how much more revenue Snowflake is generating from its existing customer base. While the rate has shown some signs of slowing, a net revenue retention rate above 120% would signal continued customer expansion and stickiness, which is crucial for the company's long-term health.
Customer Growth: Investors will be monitoring the total number of customers, particularly those with a trailing 12-month product revenue of over $1 million. Growth in this high-value customer segment is a strong indicator of the company's enterprise traction.
Snowflake (SNOW) Price Target
Based on 45 analysts from Tiger Brokers offering 12 month price targets for Snowflake in the last 3 months. The average price target is $233.55 with a high forecast of $440.00 and a low forecast of $150.00. The average price target represents a 19.97% change from the last price of $194.68.
Short-Term Trading Opportunities Post-Earnings
Snowflake's stock is known for its volatility around earnings reports. The options market is currently implying a potential stock move of +/-11.5% in either direction following the earnings release.
Bullish Scenario: If Snowflake beats on key metrics, especially product revenue and provides strong guidance for the rest of the year, the stock could see a significant rally. Positive commentary on AI adoption and customer traction would reinforce this momentum, creating a potential short-term long opportunity.
Bearish Scenario: On the other hand, given its high valuation, any disappointment—such as a miss on revenue, a slowing net revenue retention rate, or a cautious outlook—could trigger a sharp sell-off. A significant slowdown in growth or a hint of macro weakness affecting customer usage would be a major concern, potentially leading to a short-term short trade.
Snowflake (SNOW) Summit 2025 Highlights On Strategic Shift Towards Growth Through AI
Snowflake's 2025 Summit highlighted a strategic shift towards growth through AI integration and enhanced platform capabilities. Key announcements centered on making AI accessible to all users, with new features like Snowflake Intelligence, a conversational interface allowing non-technical users to query data in natural language. The company also introduced Cortex AISQL for multimodal data analysis and Adaptive Compute for improved performance and cost efficiency. These updates aim to accelerate customer adoption, streamline data workflows, and solidify Snowflake's position as a leader in the AI-driven data cloud market.
Technical Analysis - Exponential Moving Average (EMA)
If we looked at how SNOW have been trading in consolidation, while trying to hold up the short-term level, 12-EMA, we can see that the bulls are trying to gain control, this might be made even possible if SNOW could produce a continued growth and a profit turnaround, with significant positive outlook for the rest of the year.
I am expecting SNOW to make a pretty good price surge if that happens, and SNOW momentum continued to show positive, and I think investors should watch this earnings release closely for how SNOW would be navigating for continued growth and how they planned to make a profit turnaround.
Summary
Snowflake (SNOW) is scheduled to report its fiscal Q2 2026 earnings on August 27, 2025. Analysts anticipate the company will post solid results, with a consensus revenue estimate of around $1.09 billion, representing a 25% year-over-year increase. Product revenue, a key performance indicator for Snowflake's consumption-based model, is expected to be a major driver of this growth.
Investors will be closely watching for continued strength in remaining performance obligations (RPO), a strong indicator of future business momentum, and the net revenue retention rate, which measures customer usage expansion. The market will also focus on the company's commentary regarding its new AI-driven products and partnerships, as these are expected to be key growth catalysts. Given the stock's premium valuation, any guidance miss or signs of slowing growth could trigger a negative market reaction, while a strong report could reinforce investor confidence.
Traders should exercise caution and be mindful of the stock's high volatility and premium valuation when considering any post-earnings positions. The market's reaction will hinge on whether the company's results and guidance can justify its lofty expectations.
Appreciate if you could share your thoughts in the comment section whether you think SNOW can give a continued growth narrative and also show they are on path to profit turnaround.
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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