Snowflake raises forecast 31% to $5.84B after $6B AWS AI deal

Snowflake reported first-quarter product revenue of $1.33 billion, up 34% from a year earlier, and raised its full-year forecast to $5.84 billion after signing a five-year, $6 billion AI infrastructure deal with Amazon Web Services.

"Snowflake delivered a milestone quarter, with product revenue of $1.33 billion, up 34% year-over-year, marking the strongest sequential dollar growth in our history," Chief Executive Officer Sridhar Ramaswamy said.

Product revenue of $1.334 billion beat the consensus estimate of $1.32 billion compiled by LSEG. Total revenue came in at $1.39 billion, also above the $1.32 billion estimate. The company's net revenue retention rate rose to 126%, and non-GAAP operating margin expanded to 12% from 9% a year earlier.

Shares surged 29% in extended trading after the results. The raised outlook reflects surging enterprise demand for Snowflake's data warehousing products and early traction from AI tools including Cortex Code, now used by more than 7,100 accounts, and Snowflake Intelligence, whose usage more than doubled quarter over quarter.

AWS deal more than doubles prior commitment

The $6 billion agreement with Amazon Web Services is tied to AWS' Graviton processors and AI infrastructure, more than doubling Snowflake's prior contract signed in fiscal 2023. The deal includes deeper product integrations around generative and agentic AI, expanded go-to-market efforts through AWS Marketplace and workload migrations aimed at moving businesses from AI experimentation to routine deployment.

Chief Financial Officer Brian Robins said the company now has 779 customers spending more than $1 million on a trailing 12-month basis, with 46 crossing that threshold in the quarter compared with 26 a year ago. Remaining performance obligations grew 38% year over year to $9.21 billion.

Guidance raised across the board

For the second quarter, Snowflake expects product revenue between $1.415 billion and $1.420 billion, above the $1.37 billion consensus. The company raised its full-year non-GAAP operating margin guidance to 13.5% from 12.5% while maintaining its non-GAAP product gross margin forecast at 75%.

The company also signed a definitive agreement to acquire Natoma, an enterprise Model Context Protocol platform for AI agents, to extend governance to AI-driven workflows. Snowflake repurchased about 1.7 million shares for roughly $300 million during the quarter.

The guidance raise signals management expects AI demand to accelerate. Investors will watch the Q2 earnings call for updates on Cortex Code monetization and the Natoma integration timeline.

This article is for informational purposes only and does not constitute investment advice.