Cloud data platform company Snowflakehas forecast product sales for fiscal year 2027 to $6.07 billionIt has increased. This is the result of a simultaneous rise in demand from companies to migrate their existing data to the cloud and integrate generative AI into their operations.
Product revenue for the second quarter of fiscal year 2027 was $1.49 billion, a 37% increase from the previous year, while total revenue reached $1.55 billion. The company explained that roughly half of its recent growth acceleration came from AI products.
Coding Agent CoCohas been used by more than 9,100 accounts, and a business AI agent CoWorkhas expanded to 5,800 accounts. Since CoCo is the new name for the former Cortex Code, it refers to the same product line.
| Product sales forecast revised upward from $5.84 billion to $6.07 billion
Snowflake has revised its FY2027 product revenue forecast from the previous $5.84 billionfrom $6.07 billionI posted it. The new forecast indicates growth of approximately 36% compared to the previous year.
Product revenue is the core revenue generated when customers use Snowflake's data processing and related features. It is distinct from total revenue, which includes other sources of income such as professional services.
Since revenue depends on usage, the company needs customers to actually use more data and run more AI tasks to maintain its growth momentum. It’s not just about winning contracts, but also It's important to consider how quickly platform consumption is growing.
| Product Sales Up 37% in the Second Quarter
Product revenue for the second quarter of FY2027 was $1.4919 billionThis represents a 37% increase compared to the same period last year. Total quarterly revenue was $1.5468 billion...it increased by 35%.
Non-GAAP operating income was $237 million, and the operating margin was 15.3%. Adjusted earnings per share were $0.62, exceeding market expectations.
On the other hand, under GAAP, the company reported a net loss of $191.7 million. You need to look at both the adjusted metrics and the actual profit and loss based on accounting standards to avoid overinterpreting profitability.
| 9,100 CoCo accounts and 5,800 CoWork accounts
Snowflake's Data-Driven Coding Agent CoCohas expanded to over 9,100 accounts, with more than 2,000 new accounts added during the quarter. CoCo, formerly known as Cortex Code, is a tool that provides interactive support for data pipelines, analytics, and AI application development.
Enterprise Personal Work Agent CoWorkhas grown to about 5,800 accounts. It is designed to answer questions based on corporate data and perform tasks by connecting to various business tools.
The number of accounts doesn't necessarily reflect actual paid revenue or usage intensity. Since trial accounts and frequently used accounts may be mixed together, we need to monitor both usage and customer retention rates over the long term.
| Half of the growth acceleration comes from AI products
CEO Sridhar Ramaswamy explained that AI products accounted for about half of the recent acceleration in growth. The structure is such that AI not only generates revenue as a standalone feature but also increases usage of existing data storage and processing capabilities.
For companies to use AI agents in their actual work, We need to first organize the location, access permissions, and quality of our internal data. Snowflake aims to reduce these integration costs by providing a data platform and AI tools within a single environment.
We can expect a virtuous cycle in which AI products attract new users, and as those users perform more data-related tasks, platform usage increases. That’s why the company describes AI as an accelerator for growth.
| Existing demand for the data cloud is also important
It’s hard to attribute the improvement in performance solely to AI. There is a continuing underlying demand from companies to migrate legacy systems to the cloud and consolidate their analytics environments.
Snowflake reported a total of 14,554 customers at the end of the quarter, with a net increase of 692. The value of remaining contracts, which indicates future contract revenue, was $9 billion, a 30% increase from the previous year.
In other words The structure is such that existing data warehouse demand serves as the foundation, while AI tools add new tasks and usage. Rather than viewing them as separate, it is more appropriate to see them as a relationship in which they reinforce each other.
| A 5-Year, $6 Billion Partnership with AWS
Snowflake signed a five-year agreement with Amazon Web Services in the previous quarter $6 billion We've signed a major contract. It includes provisions for utilizing AWS's Graviton processors and AI infrastructure.
Securing cloud infrastructure on a large scale helps handle rapidly growing data and AI workloads. At the same time, Spending on a specific cloud provider and long-term commitments could increase.
Since Snowflake supports various environments, such as Microsoft Azure and Google Cloud, multi-cloud options are important to customers. The key going forward will be how much the AWS partnership actually improves performance and cost efficiency.
| Competition and the financial burden of AI remain
In the enterprise data and AI platform market, Databricks, Microsoft, Google, AWS, and several specialized companies are competing. Customers compare not only model performance but also data transfer costs, security, regulatory compliance, and integration with existing tools.
AI inference can be more computationally expensive than traditional data queries. Even if usage increases, If infrastructure costs rise faster, profitability may not keep pace with revenue growth.
While Snowflake's upward revision of its outlook is positive, We need to separately verify the number of AI accounts, actual repeat usage, contribution to product revenue, and improvements in GAAP profitability. Going forward, it will be crucial to see whether we can achieve $6.07 billion in product revenue by FY2027 and to what extent CoCo and CoWork will move beyond the pilot phase and become firmly established in core operations.
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#Snowflake #Snowflake #CoCo #CortexCode #CoWork #AI Agent #DataCloud #CloudData #Enterprise AI #Product Sales #AWS #Generative AI
