Snowflake shares jumped 16.6 percent in the session after its fiscal second-quarter report, extending a 2026 advance to nearly 70 percent as the data-warehousing company posted a third consecutive quarter of accelerating product revenue growth and lifted its full-year outlook.
Product revenue accelerates for third straight quarter
Revenue for the quarter ended July 31 rose 35 percent year over year to $1.55 billion, surpassing the $1.48 billion analyst consensus. Product revenue, the closely watched metric that excludes services, climbed 37 percent to $1.49 billion. Adjusted earnings per share more than doubled to $0.62 from $0.35 a year earlier, well above the $0.45 estimate.
Existing customers keep expanding
Net revenue retention held at 126 percent over the trailing twelve months, unchanged from the prior quarter and signaling that existing accounts are growing faster than churn. The company added 692 net new customers, a 32 percent increase in net additions from the same period last year, including 14 Global 2000 names. Customers spending more than $1 million annually now total 828.
Guidance raised across the board
Management lifted full-year product revenue guidance to approximately $6.07 billion from $5.84 billion, implying 36 percent year-over-year growth. The adjusted operating margin target was raised to 14.5 percent from 13.5 percent. For the current quarter, product revenue is forecast between $1.588 billion and $1.593 billion, representing 37 to 38 percent growth, with a 15.5 percent adjusted operating margin.
Valuation sits at the expensive end of recent history
The stock now trades at roughly 20 times forward price-to-sales on this fiscal year's estimates and 16 times fiscal 2028 estimates, toward the high end of its range since 2024 despite revenue growth that is similar to or only modestly higher than that period. The source argues the multiple could cap near- to medium-term upside and suggests waiting for a meaningful pullback before adding exposure.