SNOW Earnings Preview: 2.3% AI Revenue, 59% Slowdown Risk

Disclosure: As of 2026-02-10, the Runchey Research Model Trading Fund holds call options in SNOW. Per our Editorial Policy, these are classified as Event-Driven holdings and may be adjusted immediately following the relevant catalyst event. View our full Editorial Integrity & Disclosure Policy.

The Core Question

Snowflake calls itself the “center of today's AI revolution,” but AI is $100M ARR — 2.3% of product revenue. Meanwhile, SBC runs at $1.5B (40.8% of revenue), Databricks has surpassed Snowflake on ARR ($4.8B vs. ~$4.4B), NRR declined 33 points from 158% to 125%, and insiders have sold $400M+ with zero discretionary purchases. Is the ~39% stock decline an opportunity, or the market catching up?

Our five-lens analysis ran 11 debates across narrative, accounting, moat, revenue durability, and governance. Read the deep dive here.

Ensemble Forecast

Key Market

FY2027 Guidance Below 25% Growth

Probability

59%

Model Agreement

0.90

Strong consensus

Our nine-model ensemble assigns 59% probability that Snowflake's initial FY2027 product revenue guidance will imply growth below 25%. The deceleration trend is clear: 32% → 29% → 27% (guided) over the last three quarters. Snowflake's historical 3pp guide-and-raise pattern applied to current 27-28% growth mathematically implies 24-25% initial guidance. This market resolves directly from Wednesday's earnings call. See all seven active markets on the SNOW forecasting page.

Earnings Scorecard — February 25

FY2027 Product Revenue Guidance

Bull: >25%Bear: <23%

Most impactful market (59% probability below 25%). Below 23% would severely escalate EXPECTATIONS_PRICED. Above 25% with RPO growth above 35% would be the first de-escalation signal across our coverage.

AI Product ARR

Bull: >$150MBear: <$120M

Currently $100M (2.3% of product revenue). Ensemble assigns 38% probability AI ARR reaches $200M by Q2 FY2027. Above $150M would show acceleration; below $120M keeps AI in “promising but immaterial” territory and widens NARRATIVE_REALITY_GAP.

Net Revenue Retention

Bull: >125%Bear: <120%

NRR declined 33 points from 158% to 125%, 2-3x steeper than peers (DDOG, MDB, CRWD). Three-quarter stability at 124-125% is suggestive but unconfirmed. Below 120% (37% probability) would trigger REVENUE_DURABILITY escalation toward FRAGILE.

Cloud Infrastructure COGS

Bull: <70%Bear: >72%

Cloud COGS rose from 64% to 72% of product COGS, with $2.77B in non-cancelable cloud commitments escalating to $965M annually by FY2029. Ensemble assigns 60% probability it stays above 70% — the highest-confidence bearish market in the set.

SBC as % of Revenue

Bull: <34%Bear: >36%

SBC at 40.8% of revenue creates a 38pp GAAP/non-GAAP margin gap and negative SBC-adjusted FCF. Ensemble assigns 54% probability it drops below 35% in FY2027. Q3 trailing figure was 36.5% — 1.5pp away. Compression depends on revenue outgrowing SBC grants.

Current Assessment

Snowflake is classified at “Higher Scrutiny” with medium confidence. The SBC/dilution complex is the strongest single finding — flagged by all five lenses independently. The company borrows ($2.3B convertibles at $157.50 conversion) to buy back SBC-driven dilution, yet net shares outstanding still increased 8.1M. Read the full five-lens analysis. We will update within 24 hours of the February 25 earnings release.

Five-lens analysis covering narrative-reality gap, accounting integrity, competitive position, revenue durability, and governance alignment — plus seven active prediction markets

SNOW Full Analysis SNOW Forecasts