Snowflake earnings outlook: three tests investors should watch

Snowflake is set to release its earnings on September 2 after the market closes. Investors are looking for three key indicators to watch during the earnings report. First, product revenue growth is a major factor, with management expecting 34% year-over-year growth. Analysts, however, predict a more modest 31% growth. A product revenue beat above 31% would suggest that AI adoption is driving demand, rather than simply reallocating existing spending.

Second, consumption durability is critical to watch. Metrics like remaining performance obligations, net revenue retention, and large customer expansions will shed light on whether AI workloads are generating sustained demand. Snowflake's consumption model can generate bookings before revenue fully appears, making these indicators particularly important early demand signals.

Third, investors will closely examine AI monetization efforts. While the number of CoCo and CoWork customers is important, the real question is whether expansion rates and revenue contribution from the AI offerings increase platform usage across existing customers. Snowflake's Cortex and AI agents are key to assessing if they are expanding usage and driving revenue growth.

Snowflake's stock is currently trading near its 52-week high at $320.00, up 97% over the past six months. However, the company's net margin remains negative at -23.8% as of April 30, 2026. The big question for investors is whether the adoption of AI is accelerating consumption and generating revenue growth without sacrificing margins or cash generation. A strong earnings report could validate higher spending on data infrastructure, while a weak report could pressure the entire data software sector.