Snowflake’s executives said to expect product revenue of about $1.3 billion for the first fiscal quarter, which would mean 27 percent growth year on year.
Snowflake enters a new fiscal year on more stable growth footing, with some notable successes in its artificial intelligence product portfolio that should spell good news for its most innovative solution providers.
But like other enterprise technology vendors, the Bozeman, Mont.-based data platform provider still faces concerns that its business model is safe from AI upstarts like Claude maker Anthropic and ChatGPT creator OpenAI. Snowflake also faces pressure from hyperscalers expanding native data federation tools and from younger rivals such as Databricks.
Snowflake entered fiscal 2027 on Feb. 1 and reported its fiscal 2026 results on Feb. 25. Snowflake’s executives said to expect product revenue of about $1.3 billion for the fiscal 2027 first quarter, which would mean 27 percent growth year on year. For the 2027 fiscal year overall, Snowflake expects about $5.7 billion in product revenue, which would mark the same growth rate.
[RELATED: Snowflake Is Unlocking AI’s Future—And For Partners, There’s No Time Like The Present]
Snowflake Enters Fiscal Year 2027
Wall Street expected $5.55 billion in forecasted fiscal year 2027 product revenue, according to a Thursday report by Wedbush. Bank of America reported that it believes Snowflake can deliver at least 30 percent growth year on year. Although Snowflake still sees decelerating growth, it has become more controlled and could reverse if momentum continues, Bernstein said in a Thursday report.
“We are uniquely positioned to be that central place where that 360-degree view is possible for a number of our customers,” Snowflake CEO Sridhar Ramaswamy said on the vendor’s most recent quarterly earnings call, according to a transcript. “We are stewards of their most important data—the gold layer, as it is called in analytics. I think that positions us exceptionally well to also be the ones that are providing agents for accessing the data.”
Alejandro Laplana, co-founder and CEO of Austin, Texas-based solution provider Shokworks, which has been a Snowflake partner for about two years, told CRN recently that the vendor’s tools have been key for data cleansing work with his midmarket customers across oil and gas, biotechnology, life sciences, wealth management technology and other verticals.
His company is creating digital twins of customer businesses and leveraging data and AI for automating workflows and predictive maintenance.
“We do see the potential for transformation through the data layer, through the application layer, to be really spectacular,” he said.
Here’s what partners need to know about Snowflake’s new fiscal year.
Partners Pick Up Snowflake Cortex Code
Although Ramaswamy didn’t explicitly talk about the vendor’s partner ecosystem–which has exploded in growth in recent years to more than 14,200 global partners, up 22 percent year over year and 24 times the 600 partners Snowflake had in 2022, he held up an anecdote from an implementation partner for how Snowflake technology is making business models for the AI era possible.
Overland Park, Kan.-based Squadron Data, much like other Snowflake partners and even solution providers operating in other ecosystems, has publicly acknowledged using Snowflake products for assisting with moving from charging for time to a fixed-fee service through better predictability using Snowflake Cortex Code to drive migrations. Ramaswamy called out the solution provider’s experience on Wednesday’s call.
In another example, Dallas-based Evolv Consulting has leveraged Cortex Code to deliver 21,000 operations, 3,100 file edits and 500-plus hours of work in 20 days, compressing about 16 work-weeks into less than a month, Ramaswamy said.
“We see a lot of upside to where the business can go,” Ramaswamy said on the call, according to a transcript. Cortex Code now has more than 4,400 customers, the vendor reported Wednesday.
Although Snowflake’s initial foray into AI code generation confused some industry watchers, Cortex Code has reduced timelines for building data pipelines to help customers move into production faster, Morgan Stanley said in a report Thursday. Users are building AI-powered applications and AI agents faster and accelerating new Snowflake workloads.
Unlocking agentic use cases aligns with the results of a CIO study KeyBanc published Monday. About 40 percent of the CIOs surveyed said that agentic advancements have affected their spending plans with existing software vendors in the coming years compared to six months ago. About 40 percent said they haven’t, and 20 percent are in discussions.
Early Observability, Observe Wins
Snowflake is seeing a growing business in the observability market with recently acquired Observe, with executives expecting Observe to contribute about 1 percentage point of product revenue growth in the 2027 fiscal year, which comes out to about $45 million of contribution.
Observe’s expected $10 million contribution in the first quarter of fiscal year 2027 helps Snowflake beat Wall Street’s product revenue prediction by $9 million, KeyBanc said in a report Wednesday.
Snowflake’s move follows an explosion of mergers and acquisitions involving observability tools and platforms over the past year as technology vendors look to add observability capabilities to improve security, performance monitoring and other benefits. Palo Alto Networks bought Chronosphere for $3.35 billion in January. And 2025 saw F5 buy MantisNet, LogicMonitor buy Catchpoint and Datadog buy Metaplane.
Snowflake AI Adoption Growth
Snowflake’s top and bottom lines in the fiscal 2026 fourth quarter beat Wall Street expectations, Wedbush said in a report on Thursday. AI has proven to be a tailwind to the core Snowflake business, with AI driving increased consumption of core Snowflake data warehousing products as well as upsell opportunities.
Snowflake’s $1.28 billion in total revenue beat Wall Street’s $1.26 billion estimate. The $1.23 billion in product revenue, up 30 percent year on year, beat Wall Street’s $1.2 billion forecast and Snowflake’s own forecast.
The 30 percent growth marked an acceleration from 29 percent in the third quarter, but still came in below 32 percent in the second quarter, according to a Morgan Stanley report Thursday. Other metrics shared on Wednesday’s call gave the investment firm more confidence in a stable demand environment for the vendor.
The vendor now has a customer count of about 13,300 compared to Wall Street’s 13,000 forecast. The number of customers with trailing 12-month revenue of more than $1 million grew 27 percent year on year, reaching about 730, according to Wedbush.
About 9,100 accounts now use Snowflake AI, up from 7,300 the prior period, according to Wedbush. The agentic AI Snowflake Intelligence product now has 2,500 customers, almost double the prior period. Net-new customer additions reached a record 740, up 20 percent quarter on quarter and up 40 percent year on year.
Remaining performance obligation of $9.8 billion was up 42 percent year on year and featured Snowflake’s largest deal in company history at about $400 million with an existing financial services customer, according to a KeyBanc report Wednesday. That RPO bested Wall Street’s $8.8 billion expectation and marked an acceleration of 5 points.
That RPO also shows how customers of a variety of sizes view Snowflake as a long-term strategic vendor, Bank of America said in a Thursday report.
Current RPO of $4.5 billion, up 37 percent year on year, beat Wall Street’s $4.2 billion prediction. Billings of $2.2 billion, up 39 percent year on year, beat Wall Street’s $2 billion forecast. And earnings before interest and taxes (EBIT) of $139 million beat Wall Street’s $92 million forecast, according to KeyBanc.
Snowflake even leveraged AI itself to let go of about 200 employees, resulting in a small net hiring of 37 people, CFO Brian Robbins said on the call.
AI’s Impact On Enterprise Software
Ongoing concerns that AI upstarts will challenge the traditional enterprise software market, which dominated much of Salesforce’s quarterly earnings call also held Wednesday, earned attention by Ramaswamy (pictured).
AI is redefining the software landscape’s categories and competitive dynamics, the Snowflake CEO said. Snowflake should shine in this moment thanks to the data foundation it delivers across clouds and data types with mission-critical performance, reliability and operational sufficiency.
AI agents are only as powerful as the data they access and the governance and security around them, Ramaswamy said. Snowflake can help AI users create a single source of truth to leverage with AI instead of trying to navigate multiple siloed sources.
“The winners will be the platforms that combine trusted enterprise data, governed business metrics, secure execution and broad model choice, and make all of it easy to use,” Ramaswamy said, according to a call transcript. He called Snowflake “uniquely positioned to become the control plane for the agentic era.”
Recent product innovations from Claude maker Anthropic has prompted a mass selloff of software stocks this year. But better AI models do not reduce the need for data platforms, according to a Wedbush report Thursday. More adoption of AI workflows will mean business users seeking clean, governed, auditable data layers and improved data warehousing–Snowflake’s traditional business.
Long-Term Concerns Over Data Warehousing
Snowflake’s latest financial performance came with some concerns. Although Snowflake’s fourth quarter product revenue beat Wall Street expectations by 2.2 percent, that is below Snowflake’s four-quarter rolling average of 3.2 percent, William Blair said in a report Thursday.
To put to rest concerns about Snowflake’s health in the long run, it needs to show wins in AI and data cloud against larger enterprise software companies and the hyperscale cloud providers Snowflake runs on top of, Bernstein said in a report Thursday. Users may just prefer to use native hyperscaler AI capabilities instead of Snowflake’s.
The data warehousing market Snowflake participates in isn’t growing as fast as it once was, according to the investment firm. Snowflake also faces the prospect of more users moving databases to the cloud faster, eliminating the need to increase the size of data warehousing estates.
Channel partners have told Bernstein that customers are more aggressively moving on-premises data, even critical data, to the cloud instead of making copies they need to manage in two places and update frequently, according to the investment firm. Even Oracle on-premises workloads have moved to the cloud through the big three of Microsoft, Google Cloud and Amazon Web Services.
Not only does Snowflake face competition from incumbent database providers and hyperscalers, but also newer vendors such as Databricks and other software-as-a-service application vendors.
In February, Databricks reported that it had crossed a $5.4 billion revenue run rate, delivering more than 65 percent year over year growth during its fourth fiscal quarter, according to a company statement. Databricks crossed a $1.4 billion revenue run-rate for its AI products and reported more than 800 customers consuming its products at more than $1 million in annual revenue run rate, with more than 70 customers consuming more than $10 million ARR.
SaaS vendors and other hyperscalers are also looking to build zero-copy offers to aid with data federation for cloud and AI, according to Bernstein. This move could slow growth in the data warehousing total addressable market (TAM) or even shrink it if users no longer need a third-party option.
Salesforce reported last week that its Data 360 data platform ingested 53 trillion records through zero copy direct. The number of zero copy ingested records more than quadrupled year on year.
Also, a deceleration in Salesforce’s Tableau data analytics product business doesn’t bode well for Snowflake should this reflect an industrywide trend, according to Bernstein.
Microsoft executives said in January that its Fabric data analytics platform that competes with Snowflake now has an ARR of more than $2 billion with more than 31,000 customers two years into its broad availability. Fabric is the fastest-growing analytics platform on the market with revenue up 60 percent year over year, Microsoft reported at the time.
And SAP has a more comprehensive data federation tool that leverages structured and unstructured data, Bernstein said in its report. SAP also integrates with Databricks and Snowflake.
