Outlook on Financial Statements: Revenue Expected to Increase by Over 30%, but Could Fail to Hide $1.3 Billion Loss: Snowflake (SNOW.US) Q1 Financial Statements May Fall into a "Growth Delusion" Trap.

Cloud data platform provider Snowflake (SNOW.US) will release its first quarter earnings report for the 2027 fiscal year on May 27, 2026. Following a challenging start to the year, the company's stock price has recently shown moderate recovery. Management will hold a conference call at 2pm Pacific time to discuss financial data, performance guidance, and AI adoption trends driving customer demand. The stock market is currently filled with a subtle sense of anticipation. This nearly $60 billion company has reported $4.7 billion in revenue over the past twelve months but still faces over $1.3 billion in net losses. As the halo of AI narratives encounters valuation pressure and profit concerns, what kind of performance will Snowflake deliver? Market expectations for growth are moderating, with profit pressures remaining Behind this quarter's earnings report lies a sense of "gentle cooling." Market expectations show that Snowflake's total revenue for this quarter is expected to reach $1.32 billion, a year-on-year increase of about 31.33%, with adjusted earnings per share expected to be $0.32, a year-on-year increase of about 33%. However, the company's management has given a more cautious product revenue guidance for the first quarter of the 2027 fiscal year, in the range of $1.262 billion to $1.267 billion, corresponding to a roughly 27% year-on-year increase. The slowdown in performance growth is in line with the development trajectory of Snowflake as a mature SaaS company. From a product quality perspective, product revenue remains a core pillar, accounting for approximately 95% of total revenue. It is worth noting that the company still faces significant net losses under GAAP- in the previous quarter, GAAP net loss was as high as $310 million, with a net profit margin of -24.11%. Although the market and investment banks have optimistic profit expectations, the pace of turning losses into profit remains a point of contention between bulls and bears. Snowflake's first quarter earnings report for the 2027 fiscal year comes at a critical juncture in the reshaping of enterprise software valuations. The company's revenue growth exceeded analyst expectations in the last quarter (the fourth quarter of the 2026 fiscal year ending January 31, 2026), but in today's volatile market environment, investors are still highly focused on whether this cloud data platform can maintain its growth momentum. The Net Revenue Retention Rate (NRR) in the previous quarter was 125%, indicating strong expansion momentum of existing customer accounts- a core indicator of SaaS business sustainability. The "trap" of high valuation: can it break out of the shadow of stock price retreat Since the beginning of the year, Snowflake's stock price has fallen by 30.7%, significantly underperforming the positive gains of the S&P 500 during the same period and also lagging behind the average decline of about 14.6% in the internet software industry. What is more concerning is that this trend is not isolated. In the financial quarter of December 2025, Snowflake handed in a report of revenue beyond expectations, but the stock price still fell by about 9% in pre-market trading; and even earlier in the second quarter of the 2025 fiscal year, after publishing results that exceeded expectations, the stock price fell by more than 8% in after-hours trading. This reveals a structural dilemma: in today's environment of high interest rates and valuation compression, market expectations for Snowflake's growth have been stretched to the extreme, and "good performance" is not enough to exchange for "good stock prices." Currently, Snowflake's forward price-to-earnings ratio is as high as 78.42, while the average price-to-earnings ratio for the software industry is less than 20. The price-to-sales ratio of about 11.34 times is also significantly higher than the industry benchmark. Although management is committed to executing the "45 rule"-26% revenue growth with a 19% free cash flow margin, only by sustaining a growth trajectory of over 30% and synchronously realizing free cash flow, can it alleviate the selling pressure accumulated by the valuation bubble. What metrics will the market focus on? Remaining Performance Obligations (RPO) The most forward-looking indicator for Snowflake's short-term revenue visibility. At the end of the fourth quarter, RPO reached $9.77 billion, providing the company with a significant income reserve and high predictability for the 2027 fiscal year. This indicator showed a year-on-year growth rate of 42%, reflecting an accelerated commitment from customers and continuing expansion of multi-year contracts. Customer expansion itself is a separate story. In the fourth quarter, there were a net addition of 740 customers, continuing the growth strategy of focusing on quality and rejecting low-value customers. The group of customers with annual product consumption of over $1 million has become a key focus for the company's expansion efforts, demonstrating the effectiveness of its strategic shift towards the high-end market. Like the wider software industry, Snowflake's success will be determined by its ability to simultaneously grow customer numbers and account values. As recent tech sector earnings reports have shown, the market favors companies that can strike a balance between growth and unit economics. Acceleration of AI Engine, Ecosystem Alliances, and Product Breakthroughs Beneath the surface, Snowflake is quietly building its AI moat, which is also an incremental variable worth paying attention to in this earnings report. Snowflake is at the intersection of two major macro trends: the acceleration of enterprise AI deployment and the normalization of software valuations. Unlike pure software suppliers, Snowflake benefits from the demand for integrating fragmented data infrastructure to support machine learning projects. This positions its core data cloud platform as a crucial player in the enterprise AI application deployment, rather than just an analytics infrastructure. During the 2026 fiscal year, the company released more than 430 product features and emphasized a "model-agnostic" strategy. After strategic alliances with Anthropic and OpenAI, each worth $200 million, it broke free from reliance on a single model and built a full-stack data cloud ecosystem integrating data engineering, AI agents, governance, and security. Deployed data shows that AI workloads are effectively transforming into customer growth and usage expansion. By the end of the 2026 fiscal year, Snowflake had added a net of 2,332 new customers, surpassing 13,300 total customers, with coverage in the Fortune Global 2000 rising from 573 companies to 790. In terms of core AI products, Snowflake Intelligence was launched and landed in over 2,500 accounts within three months, almost doubling, while Cortex Code has been adopted by over 4,400 customers, with over 9,100 weekly active users of AI products. In addition, customer quality has significantly improved- with 733 customers spending over $1 million annually, a 27% increase year-on-year, and 56 customers spending over $10 million annually, a substantial increase of 56%. The average year-on-year growth rate of the world's top three cloud providers is 44%, providing a favorable macro backdrop for Snowflake's further driving of platform consumption. Wall Street Divide: Optimism And Neutral Outlook Coexist Surrounding this earnings report, major investment banks are showing clear differentiation. Benchmark raised its target price from $190 to $200 on the eve of the earnings report, expecting Snowflake to deliver product revenue and operating profit that exceed market expectations; Bank of America Corp also raised its target price to $205. The most aggressive JMP Securities upgraded its rating to "outperform" and assigned a target price of $325, citing Snowflake's increasingly widening moat in the AI data platform ecosystem. However, conservative voices should not be ignored. Although KeyBanc reiterated its overweight rating, it bluntly pointed out that the survey results regarding Snowflake's growth expectations and the impact of large language models are "mixed blessings"; UBS Group AG lowered its target price from $235 to $210, mainly based on concerns about increasing competition in AI; Zacks Investment Research gave a "neutral" rating, warning that macroeconomic headwinds and valuation pressure will make it difficult for the stock price to break through in the short term. Currently, the 12-month average target price of 41 analysts is approximately $242.19, representing about 58.5% upside potential.