Snowflaked Inc (NYSE:SNOW) jumped 36% in premarket trading Thursday after the cloud data platform company exceeded Wall Street expectations across major first-quarter metrics and boosted its full-year guidance, reinforcing investor confidence in its emerging AI revenue strategy.
The stock finished Wednesday’s regular session at $175.26, down 1.3%, before the company released results after the market close.
Adjusted earnings reached $0.39 per share, ahead of analyst expectations of $0.32 by $0.07.
Product revenue climbed 34% year-over-year to $1.33 billion, accelerating from 30% growth in the prior quarter and 26% growth a year earlier. The result also surpassed consensus estimates by 5.1%.
Non-GAAP operating margin expanded to 12%, improving by more than 300 basis points and coming in above analyst forecasts of 9.2%.
“AI continues to be a powerful tailwind for Snowflake, and Q1 marks a clear inflection point in that journey,” said Sridhar Ramaswamy, CEO of Snowflake.
A major contributor to the quarter’s performance was Cortex Code, the company’s AI coding assistant internally nicknamed “Coco,” which became generally available on February 5 at the beginning of the reporting period.
During the earnings call, CFO Brian Robins said Coco was “the largest driver” behind the company’s upgraded guidance. He added that management only includes measurable customer behavior in its forecasts, meaning the tool’s impact could not previously be reflected.
Management said more than 7,100 customer accounts are now using the product, which is helping drive direct AI-related sales while also increasing activity across Snowflake’s broader data cloud platform.
Analysts responded positively to the results. Morgan Stanley, which maintains an “overweight” rating on the stock and increased its price target to $300 from $245, described the quarter as “a blockbuster, thesis-affirming quarter.” The bank added that growth was fueled by authentic AI monetization rather than temporary migration-related benefits that boosted prior results.
Bernstein kept its “market-perform” rating while raising its target price to $250 from $195, saying the company “checked all the boxes” and had “decisively resolved” concerns about whether growth could accelerate again in fiscal 2027.
For the second quarter, Snowflake projected product revenue between $1.415 billion and $1.420 billion, implying roughly 30% growth compared with analyst expectations of 26%.
The company also lifted its full-year product revenue forecast to $5.84 billion, representing 31% annual growth, up from prior guidance of $5.66 billion. Full-year non-GAAP operating margin guidance was raised to 13.5% from 12.5%.
Additional announcements during the quarter included a new five-year infrastructure agreement with AWS valued at $6 billion, more than twice the size of its previous arrangement. Snowflake also disclosed plans to acquire Natoma, an enterprise MCP platform that enables AI agents to securely connect with common business applications such as email, Slack, and Jira while remaining inside Snowflake’s governed ecosystem.
Net revenue retention improved to 126%, up from 125% in the previous quarter. Snowflake added 616 net new customers during the period, a 38% increase year-over-year, bringing the total number of customers generating more than $1 million in trailing 12-month product revenue to 779. Remaining performance obligations increased 38% from a year earlier to $9.21 billion.