0001640147-26-000030
SEC filingRevenue growth driven by consumption-based model; product gross margin stable at 71%; net loss narrowed 31% YoY.
Revenue for Q1 FY27 was $1.39B, up 33% YoY from $1.04B. Product revenue, which constitutes 96% of total revenue, grew 34% to $1.33B, reflecting strong consumption from existing customers, as evidenced by a net revenue retention rate of 126%. Professional services and other revenue increased 25% to $56.6M. Total gross margin remained flat at 67%, with product gross margin holding steady at 71%. The stability in product margin was attributed to lower personnel-related costs as a percentage of revenue and volume-based cloud infrastructure discounts, offset by costs from new product capabilities. Operating loss improved significantly from $447.3M to $326.2M, and operating margin improved from -43% to -23%, driven by revenue growth and a sharp decline in general and administrative expenses due to the absence of asset impairment charges that had weighed on prior year results. Net loss narrowed to $295.6M from $430.1M. Non-GAAP free cash flow rose to $232.8M from $183.4M, supported by higher cash collections from customers.
The product segment remains the core revenue driver, with 779 customers contributing over $1M in trailing 12-month product revenue (up from 604 a year ago). These customers accounted for approximately 68% of product revenue. The professional services segment, while small, saw margin improvement from -40% to -37%, though it remains dilutive. The company continues to invest in sales and marketing (42% of revenue) and research and development (39%), with headcount increases across all functions. Notably, R&D expenses grew 13% YoY, driven by personnel costs and cloud infrastructure for AI development.
Management did not provide quantitative guidance for the upcoming quarter but expects positive net cash from operating activities for fiscal 2027. The company plans to continue investing in growth, including AI technology and international expansion, while focusing on cash flow and long-term profitability. Key contractual commitments include a $6.0B cloud infrastructure agreement through 2031. The stock repurchase program had $802.7M remaining as of April 30, 2026. The weighted-average remaining life of capacity contracts was 2.6 years, and RPO of $9.2B provides visibility into future revenue, though timing remains dependent on customer consumption patterns.
As of April 30, 2026, Snowflake held $2.1B in cash and cash equivalents and $2.3B in short-term and long-term investments, totaling $4.4B in highly liquid assets. Total debt comprised $2.3B in convertible senior notes (net of issuance costs), with no material near-term maturities. Stockholders' equity stood at $1.9B, supported by $12.1B in additional paid-in capital offset by an accumulated deficit of $10.1B. The current ratio (current assets / current liabilities) was approximately 1.05, indicating adequate short-term liquidity despite negative working capital of $0.2B.
In April 2026, Snowflake amended a third-party cloud infrastructure agreement, committing to a cumulative minimum spend of $6.0B over five years ending March 31, 2031, with annual minimums ranging from $900M to $1.25B. Additionally, the company had $69.7M in operating lease commitments for leases signed but not yet commenced. These commitments underscore Snowflake's heavy investment in cloud capacity to support its consumption-based model.
During Q1 FY2027, Snowflake repurchased 1.7M shares for $300M at an average price of $178.95 per share, leaving $803M remaining under its $4.5B authorization (expiring March 2027). No dividends were declared. Capital expenditures were minimal at $10.5M (0.7% of revenue), primarily for software development and leasehold improvements. The convertible notes remained outstanding with no conversions material during the period.
Snowflake operates as a single reportable segment. Revenue for the three months ended April 30, 2026 was $1.39B, up 33% year-over-year. Geographically, the United States contributed $1.04B (75% of total), EMEA $0.23B (17%), Asia-Pacific $0.08B (6%), and Other Americas $0.04B (3%). Long-lived assets were concentrated in the U.S. (75% of total $522M).