Snowflake Inc.

Previous wording

Our platform is used globally by organizations of all sizes across a broad range of industries. As of April 30, 2026, we had 13,912 total customers, increasing from 13,296 customers as of January 31, 2026. Our customer count is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity, and we present our total customer count for historical periods reflecting these adjustments. Our platform has been adopted by many of the world’s largest organizations that view Snowflake as a key strategic partner in their cloud and data transformation initiatives. As of April 30, 2026, our customers included 813 of the Forbes Global 2000, based on the 2025 Forbes Global 2000 list, and those customers contributed approximately 43% of our revenue for the three months ended April 30, 2026. Our Forbes Global 2000 customer count is subject to adjustments for annual updates to the Global 2000 list by Forbes, as well as acquisitions, consolidations, spin-offs, and other market activity with respect to such customers, and we present our Forbes Global 2000 customer count for historical periods reflecting these adjustments. See the section titled “Key Business Metrics” for how we determine our customer count.

Current wording

Our platform is used globally by organizations of all sizes across a broad range of industries. As of July 31, 2026, we had 14,554 total customers, increasing from 13,245 customers as of January 31, 2026. Our customer count is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity, and we present our total customer count for historical periods reflecting these adjustments. Our platform has been adopted by many of the world’s largest organizations that view Snowflake as a key strategic partner in their cloud, data, and AI transformation initiatives. As of July 31, 2026, our customers included 829 of the Forbes Global 2000, based on the 2026 Forbes Global 2000 list, and those customers contributed approximately 41% of our revenue for the six months ended July 31, 2026. Our Forbes Global 2000 customer count is subject to adjustments for annual updates to the Global 2000 list by Forbes, as well as acquisitions, consolidations, spin-offs, and other market activity with respect to such customers, and we present our Forbes Global 2000 customer count for historical periods reflecting these adjustments. See the section titled “Key Business Metrics” for how we determine our customer count.

Previous wording

Our business and financial condition have been, and may continue to be, impacted by adverse macroeconomic conditions, including inflation, high interest rates, fluctuations or volatility in capital markets, energy markets, or foreign currency exchange rates, tariffs and trade wars, and geopolitical and military conflicts. These conditions have caused, and may continue to cause, customers to rationalize budgets, prioritize cash flow management, including through shortened contract duration, and optimize consumption, including by reducing storage through shorter data retention policies. We are continuing to monitor the actual and potential effects of general macroeconomic conditions across our business. For additional details, see the section titled “Risk Factors.”

Current wording

Our business and financial condition have been, and may continue to be, impacted by adverse macro- or microeconomic conditions, including inflation, high interest rates, fluctuations or volatility in capital markets, energy markets, or foreign currency exchange rates, sector-specific capital expenditure concentration, tariffs and trade wars, and geopolitical and military conflicts. These conditions have caused, and may continue to cause, customers to rationalize budgets, prioritize cash flow management, including through shortened contract duration, and optimize consumption, including by reducing storage through shorter data retention policies and optimizing AI usage. We are continuing to monitor the actual and potential effects of general macro- and microeconomic conditions across our business. For additional details, see the section titled “Risk Factors.”

Previous wording

The results of operations of this business combination have been included in our condensed consolidated financial statements from the date of acquisition. See Note 7, “Business Combinations,” to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for details regarding this business combination.

Current wording

The results of operations of these business combinations have been included in our condensed consolidated financial statements from the date of the respective acquisition. See Note 7, “Business Combinations,” to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for details regarding these business combinations.

Previous wording

Our future success depends in large part on the market adoption of our platform, including new product functionality, such as Snowpark and our AI and machine learning technology (collectively, AI Technology). While we see growing demand for our platform, particularly from large enterprises, many of these organizations have invested substantial technical, financial, and personnel resources in their existing database products or big data offerings. In addition, customers’ use of our AI Technology is often dependent on their ability to meet evolving regulatory standards, successfully complete internal compliance reviews, and enter into mutually acceptable contractual terms. While this makes it difficult to predict customer adoption rates and future demand, we believe that the benefits of our platform put us in a strong position to capture the significant market opportunity ahead.

Current wording

Our future success depends in large part on the market adoption of our platform, including new product functionality, such as Snowpark and AI. While we see growing demand for our platform, particularly from large enterprises, many of these organizations have invested substantial technical, financial, and personnel resources in their existing database products or big data offerings. In addition, customers’ use of our AI is often dependent on their ability to meet evolving regulatory standards, successfully complete internal compliance reviews, and enter into mutually acceptable contractual terms. While this makes it difficult to predict customer adoption rates and future demand, we believe that the benefits of our platform put us in a strong position to capture the significant market opportunity ahead.

Previous wording

Once deployed, our customers often expand their use of our platform more broadly within the enterprise and across their ecosystem of customers and partners as they migrate more data to the public cloud, identify new use cases, and realize the benefits of our platform and the AI Data Cloud. However, because we generally recognize product revenue on consumption and not ratably over the term of the contract, we do not have visibility into the timing of revenue recognition from any particular customer. In addition, many customers are attempting to rationalize budgets, prioritize cash flow management, and optimize consumption amidst macroeconomic uncertainty. In any given period, there is a risk that customer consumption of our platform will be slower than we expect, which may cause fluctuations in our revenue and results of operations.

Current wording

Once deployed, our customers often expand their use of our platform more broadly within the enterprise and across their ecosystem of customers and partners as they migrate more data to the public cloud, identify new use cases, and realize the benefits of our platform and the AI Data Cloud. However, because we generally recognize product revenue on consumption and not ratably over the term of the contract, we do not have visibility into the timing of revenue recognition from any particular customer. In addition, many customers are attempting to rationalize budgets, prioritize cash flow management, and optimize consumption amidst macro- and microeconomic uncertainty. In any given period, there is a risk that customer consumption of our platform will be slower than we expect, which may cause fluctuations in our revenue and results of operations.

Previous wording

New software releases or hardware improvements, like better storage compression, cloud infrastructure processor improvements, and compute optimization, may make our platform more efficient, enabling customers to consume fewer compute, storage, and data transfer resources to accomplish the same workloads. In addition, open data formats allow customers to use our platform for compute services without requiring storage. To the extent these improvements do not result in an offsetting increase in new workloads, we may experience lower revenue. Our ability to increase usage of our platform by, and sell additional contracted capacity to, existing customers, and, in particular, large enterprise customers, will depend on a number of factors, including our customers’ satisfaction with our platform, our customers’ adoption and use of new product features, competition, pricing, macroeconomic conditions, overall changes in our customers’ spending levels, customers’ attempts to optimize their consumption, our customers’ confidence in the security of our platform, our ability to maintain our reputation as a trustworthy vendor, the effectiveness of our and our partners’ efforts to help our customers realize the benefits of our platform, and the extent to which customers migrate new workloads to our platform over time, including data science, AI, and machine learning workloads.

Current wording

New software releases or hardware improvements, like better storage compression, cloud infrastructure processor improvements, and compute optimization, may make our platform more efficient, enabling customers to consume fewer compute, storage, and data transfer resources to accomplish the same workloads. In addition, open data formats allow customers to use our platform for compute services without requiring storage. To the extent these improvements do not result in an offsetting increase in new workloads, we may experience lower revenue. Our ability to increase usage of our platform by, and sell additional contracted capacity to, existing customers, and, in particular, large enterprise customers, will depend on a number of factors, including our customers’ satisfaction with our platform, our customers’ adoption and use of new product features, competition, pricing, macro- and microeconomic conditions, overall changes in our customers’ spending levels, customers’ attempts to optimize their consumption, our customers’ confidence in the security of our platform, our ability to maintain our reputation as a trustworthy vendor, the effectiveness of our and our partners’ efforts to help our customers realize the benefits of our platform, and the extent to which customers migrate new workloads to our platform over time, including data science, AI, and machine learning workloads.

Previous wording

We are focused on our long-term revenue potential, and believe our market opportunity is large. We will continue to invest significantly in research and development to improve our platform, including in the areas of data science and AI Technology. In addition, we are focused on expanding our business both domestically and internationally. As part of these efforts, we are investing in meeting the needs of organizations in geographies and government and regulated industries that have heightened requirements, including with respect to data localization, privacy, and security. We intend to continue to invest heavily to grow our business to take advantage of our expansive market opportunity, while also focusing on cash flow and long-term profitability.

Current wording

We are focused on our long-term revenue potential, and believe our market opportunity is large. We will continue to invest significantly in research and development to improve our platform, including in the areas of data science and AI. In addition, we are focused on expanding our business both domestically and internationally. As part of these efforts, we are investing in meeting the needs of organizations in geographies and government and regulated industries that have heightened requirements, including with respect to data localization, privacy, and security. We intend to continue to invest heavily to grow our business to take advantage of our expansive market opportunity, while also focusing on cash flow and long-term profitability.

Previous wording

(3)Cash outflows for employee payroll tax items related to the net share settlement of equity awards were $142.8 million, $187.6 million, $190.7 million, $162.0 million, and $132.5 million for the three months ended April 30, 2026, January 31, 2026, October 31, 2025, July 31, 2025, and April 30, 2025, respectively. These amounts are included in cash flow for financing activities and, as a result, do not have an effect on the calculation of non-GAAP free cash flow. See the section titled “Free Cash Flow” for a reconciliation of net cash provided by operating activities, which is the most directly comparable financial measure calculated in accordance with GAAP, to non-GAAP free cash flow.

Current wording

(3)Cash outflows for employee payroll tax items related to the net share settlement of equity awards were $184.9 million, $142.8 million, $187.6 million, $190.7 million, and $162.0 million for the three months ended July 31, 2026, April 30, 2026, January 31, 2026, October 31, 2025, and July 31, 2025, respectively. These amounts are included in cash flow for financing activities and, as a result, do not have an effect on the calculation of non-GAAP free cash flow. See the section titled “Free Cash Flow” for a reconciliation of net cash provided by operating activities, which is the most directly comparable financial measure calculated in accordance with GAAP, to non-GAAP free cash flow.

Previous wording

(5)As of April 30, 2026, our remaining performance obligations were approximately $9.2 billion, of which we expect approximately 50% to be recognized as revenue in the 12 months ending April 30, 2027 based on historical customer consumption patterns. The weighted-average remaining life of our capacity contracts was 2.6 years as of April 30, 2026. However, the amount and timing of revenue recognition are generally dependent upon customers’ future consumption, which is inherently variable at our customers’ discretion and can extend beyond the original contract term in cases where customers are permitted to roll over unused capacity to future periods, generally upon the purchase of additional capacity at renewal. In addition, our historical customer consumption patterns are not necessarily indicative of future results.

Current wording

(5)As of July 31, 2026, our remaining performance obligations were approximately $9.0 billion, of which we expect approximately 54% to be recognized as revenue in the 12 months ending July 31, 2027 based on historical customer consumption patterns. The weighted-average remaining life of our capacity contracts was 2.4 years as of July 31, 2026. However, the amount and timing of revenue recognition are generally dependent upon customers’ future consumption, which is inherently variable at our customers’ discretion and can extend beyond the original contract term in cases where customers are permitted to roll over unused capacity to future periods, generally upon the purchase of additional capacity at renewal. In addition, our historical customer consumption patterns are not necessarily indicative of future results.

Previous wording

We define free cash flow, a non-GAAP financial measure, as GAAP net cash provided by operating activities reduced by purchases of property and equipmentand any capitalized software development costs. Cash outflows for employee payroll tax items related to the net share settlement of equity awards are included in cash flow for financing activities and, as a result, do not have an effect on the calculation of free cash flow. We believe information regarding free cash flow provides useful supplemental information to investors because it is an indicator of the strength and performance of our core business operations.

Current wording

We define free cash flow, a non-GAAP financial measure, as GAAP net cash provided by operating activities reduced by purchases of property and equipment and any capitalized software development costs. Cash outflows for employee payroll tax items related to the net share settlement of equity awards are included in cash flow for financing activities and, as a result, do not have an effect on the calculation of free cash flow. We believe information regarding free cash flow provides useful supplemental information to investors because it is an indicator of the strength and performance of our core business operations.

Previous wording

(2)Cash outflows for employee payroll tax items related to the net share settlement of equity awards were $142.8 million, $187.6 million, $190.7 million, $162.0 million, and $132.5 million, for the three months ended April 30, 2026, January 31, 2026, October 31, 2025, July 31, 2025, and April 30, 2025, respectively. These amounts are included in cash flow for financing activities and, as a result, do not have an effect on the calculation of free cash flow.

Current wording

(2)Cash outflows for employee payroll tax items related to the net share settlement of equity awards were $184.9 million, $142.8 million, $187.6 million, $190.7 million, and $162.0 million, for the three months ended July 31, 2026, April 30, 2026, January 31, 2026, October 31, 2025, and July 31, 2025, respectively. These amounts are included in cash flow for financing activities and, as a result, do not have an effect on the calculation of free cash flow.

Previous wording

We deliver our platform over the internet as a service. Customers choose to consume our platform under either capacity arrangements, in which they commit to a certain amount of consumption at specified prices, or under on-demand arrangements, in which we charge for use of our platform monthly in arrears. Under capacity arrangements, from which a majority of our revenue is derived, we typically bill our customers annually in advance of their consumption. However, in future periods, we expect to see an increase in capacity contracts providing for quarterly upfront billings and monthly in arrears billings as our customers increasingly want to align consumption and timing of payments. Revenue from on-demand arrangements typically relates to customers with lower usage levels or overage consumption beyond a customer’s contracted usage amount under a capacity contract or following the expiration of a customer’s capacity contract. We recognize revenue as customers consume compute, storage, and data transfer resources under either of these arrangements. Revenue from on-demand arrangements represented approximately 3% and 2% of our revenue for the three months ended April 30, 2026 and 2025, respectively.

Current wording

We deliver our platform over the internet as a service. Customers choose to consume our platform under either capacity arrangements, in which they commit to a certain amount of consumption at specified prices, or under on-demand arrangements, in which we charge for use of our platform monthly in arrears. Under capacity arrangements, from which a majority of our revenue is derived, we typically bill our customers annually in advance of their consumption. However, in future periods, we expect to see an increase in capacity contracts providing for quarterly upfront billings and monthly in arrears billings as our customers increasingly want to align consumption and timing of payments. Revenue from on-demand arrangements typically relates to customers with lower usage levels or overage consumption beyond a customer’s contracted usage amount under a capacity contract or following the expiration of a customer’s capacity contract. We recognize revenue as customers consume compute, storage, and data transfer resources under either of these arrangements. Revenue from on-demand arrangements represented approximately 3% of our revenue for each of the three and six months ended July 31, 2026, and approximately 3% and 2% of our revenue for the three and six months ended July 31, 2025, respectively.

Previous wording

Our customer contracts for capacity typically have a term of one to four years. The weighted-average term of capacity contracts entered into during the three months ended April 30, 2026 is approximately 2.2 years. To the extent our customers enter into such contracts and either consume our platform in excess of their capacity commitments or continue to use our platform after expiration of the contract term, they are charged for their incremental consumption. In many cases, our customer contracts permit customers to roll over any unused capacity to a subsequent order, generally upon the purchase of additional capacity. For those customers who do not have a capacity arrangement, our on-demand arrangements generally have a monthly stated contract term and can be terminated at any time by either the customer or us.

Current wording

Our customer contracts for capacity typically have a term of one to four years. The weighted-average term of capacity contracts entered into during each of the three and six months ended July 31, 2026 is approximately 2.1 years. To the extent our customers enter into such contracts and either consume our platform in excess of their capacity commitments or continue to use our platform after expiration of the contract term, they are charged for their incremental consumption. In many cases, our customer contracts permit customers to roll over any unused capacity to a subsequent order, generally upon the purchase of additional capacity. For those customers who do not have a capacity arrangement, our on-demand arrangements generally have a monthly stated contract term and can be terminated at any time by either the customer or us.

Previous wording

Because customers have flexibility in their consumption, and we generally recognize revenue on consumption and not ratably over the term of the contract, we do not have the visibility into the timing of revenue recognition from any particular customer contract that typical subscription-based software companies may have. As our customer base grows, we expect our ability to forecast customer consumption in the aggregate to improve. However, in any given period, there is a risk that customers will consume our platform more slowly than we expect, including in response to adverse macroeconomic conditions, which may cause fluctuations in our revenue and results of operations.

Current wording

Because customers have flexibility in their consumption, and we generally recognize revenue on consumption and not ratably over the term of the contract, we do not have the visibility into the timing of revenue recognition from any particular customer contract that typical subscription-based software companies may have. As our customer base grows, we expect our ability to forecast customer consumption in the aggregate to improve. However, in any given period, there is a risk that customers will consume our platform more slowly than we expect, including in response to adverse macro- or microeconomic conditions, which may cause fluctuations in our revenue and results of operations.

Previous wording

We intend to continue to invest additional resources in our platform infrastructure and our customer support and professional services organizations to support the growth of our business. Some of these investments, including costs associated with GPUs and AI inference, certain support costs and costs of expanding our business internationally, are incurred in advance of generating revenue, and either the failure to generate anticipated revenue or fluctuations in the timing of revenue could affect our gross margin from period to period.

Current wording

We intend to continue to invest additional resources in our platform infrastructure and our customer support and professional services organizations to support the growth of our business. Some of these investments, including costs associated with AI inference and GPUs, certain support costs and costs of expanding our business internationally, are incurred in advance of generating revenue, and either the failure to generate anticipated revenue or fluctuations in the timing of revenue could affect our gross margin from period to period.

Previous wording

Research and development expenses consist primarily of personnel-related expenses associated with our research and development staff, including salaries, benefits, bonuses, and stock-based compensation. Research and development expenses also include contractor or professional services fees, third-party cloud infrastructure expenses, including those related to AI inference and GPUs, incurred in developing our platform, amortization of acquired intangible assets, and expenses associated with software and subscription services dedicated for use by our research and development organization. Prior to fiscal 2026, research and development expenses related to our cloud platform that qualified as internal-use software development costs were capitalized under Accounting Standards Codification (ASC) Topic 350-40, Internal-use Software (ASC 350-40). During the three months ended April 30, 2025, we began marketing the Snowflake platform to selected public sector customers who will have contractual rights to take possession of our software and who will contract with third parties to host our software. As a result, our ongoing and future software development costs related to the Snowflake platform must be accounted for under ASC 985-20, Costs of Software to be Sold, Leased or Marketed (ASC 985-20). Costs that meet the criteria for capitalization under ASC 985-20 were not material for each of the three months ended April 30, 2026 and 2025. Software development costs capitalized prior to fiscal 2026 in connection with the Snowflake platform are amortized over their remaining useful life and recognized as cost of product revenue. We expect that our research and development expenses will increase in absolute dollars due to business growth, continued investments in our platform, and a decrease in the amount of software development costs eligible for capitalization. However, we expect that our research and development expenses will decrease as a percentage of our revenue over time due to improved spend efficiency, although the percentage may fluctuate from period to period depending on the timing and the extent of these expenses.

Current wording

Research and development expenses consist primarily of personnel-related expenses associated with our research and development staff, including salaries, benefits, bonuses, and stock-based compensation. Research and development expenses also include contractor or professional services fees, third-party cloud infrastructure expenses, including those related to AI inference and GPUs, incurred in developing our platform, amortization of acquired intangible assets, and expenses associated with software and subscription services dedicated for use by our research and development organization. Prior to fiscal 2026, research and development expenses related to our cloud platform that qualified as internal-use software development costs were capitalized under Accounting Standards Codification (ASC) Topic 350-40, Internal-use Software (ASC 350-40). During the three months ended April 30, 2025, we began marketing the Snowflake platform to selected public sector customers who will have contractual rights to take possession of our software and who will contract with third parties to host our software. As a result, our ongoing and future software development costs related to the Snowflake platform must be accounted for under ASC 985-20, Costs of Software to be Sold, Leased or Marketed (ASC 985-20). Costs that meet the criteria for capitalization under ASC 985-20 were not material for each of the six months ended July 31, 2026 and 2025. Software development costs capitalized prior to fiscal 2026 in connection with the Snowflake platform are amortized over their remaining useful life and recognized as cost of product revenue. We expect that our research and development expenses will increase in absolute dollars due to business growth, continued investments in our platform, and a decrease in the amount of software development costs eligible for capitalization. However, we expect that our research and development expenses will decrease as a percentage of our revenue over time due to improved spend efficiency, although the percentage may fluctuate from period to period depending on the timing and the extent of these expenses.

Previous wording

General and administrative expenses consist primarily of personnel-related expenses for our finance, legal, human resources, facilities, and administrative personnel, including salaries, benefits, bonuses, and stock-based compensation. General and administrative expenses also include external legal, accounting, and other professional services fees, software and subscription services dedicated for use by our general and administrative functions, insurance, unallocated lease costs associated with unused office facilities to accommodate planned headcount growth, and other corporate expenses. We expect that our general and administrative expenses will increase in absolute dollars as our business grows but will decrease as a percentage of our revenue over time due to improved spend efficiency, although the percentage may fluctuate from period to period depending on the timing and the extent of these expenses. In addition, during the three months ended April 30, 2025, we recognized asset impairment charges of $106.5 million as general and administrative expenses, primarily relating to the cease-use of our San Mateo office facility. See Note 11, “Commitments and Contingencies,” to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

Current wording

General and administrative expenses consist primarily of personnel-related expenses for our finance, legal, human resources, facilities, and administrative personnel, including salaries, benefits, bonuses, and stock-based compensation. General and administrative expenses also include external legal, accounting, and other professional services fees, software and subscription services dedicated for use by our general and administrative functions, insurance, unallocated lease costs associated with unused office facilities to accommodate planned headcount growth, and other corporate expenses. We expect that our general and administrative expenses will increase in absolute dollars as our business grows but will decrease as a percentage of our revenue over time due to improved spend efficiency, although the percentage may fluctuate from period to period depending on the timing and the extent of these expenses. In addition, during the six months ended July 31, 2025, we recognized asset impairment charges of $108.6 million as general and administrative expenses, primarily relating to the cease-use of our San Mateo office facility. See Note 11, “Commitments and Contingencies,” to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

Previous wording

The overall increase in stock-based compensation for the three months ended April 30, 2026, compared to the three months ended April 30, 2025, was primarily attributable to additional equity awards granted to new and existing employees, partially offset by the effects of equity awards that became forfeited or fully vested.

Current wording

The overall increase in stock-based compensation for the three and six months ended July 31, 2026, compared to the three and six months ended July 31, 2025, was primarily attributable to additional equity awards granted to new and existing employees, partially offset by the effects of equity awards that became forfeited or fully vested.

Previous wording

As of April 30, 2026, total compensation cost related to unvested awards not yet recognized was approximately $3.8 billion, which will be recognized over a weighted-average period of 2.9 years. See Note 12, “Equity,” to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

Current wording

As of July 31, 2026, total compensation cost related to unvested awards not yet recognized was approximately $3.8 billion, which will be recognized over a weighted-average period of 2.6 years. See Note 12, “Equity,” to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

Previous wording

Comparison of the Three Months Ended April 30, 2026 and 2025

Current wording

Comparison of the Three and Six Months Ended July 31, 2026 and 2025

Previous wording

Product revenue increased $337.5 million for the three months ended April 30, 2026, compared to the three months ended April 30, 2025, primarily due to increased consumption of our platform by existing customers, as evidenced by our net revenue retention rate of 126% as of April 30, 2026.

Current wording

Product revenue increased $401.4 million and $738.9 million for the three and six months ended July 31, 2026, compared to the three and six months ended July 31, 2025, respectively, primarily due to increased consumption of our platform by existing customers, as evidenced by our net revenue retention rate of 126% as of July 31, 2026.

Previous wording

We had 779 customers with product revenue of greater than $1 million for the trailing 12 months ended April 30, 2026, an increase from 604 such customers as of April 30, 2025. Such customers represented approximately 68% and 66% of our product revenue for the trailing 12 months ended April 30, 2026 and 2025, respectively. Within these customers, we had 144 and 64 customers with product revenue of greater than $5 million and $10 million, respectively, for the trailing 12 months ended April 30, 2026. The substantial majority of our revenue was derived from existing customers under capacity arrangements, which represented approximately 97% and 98% of our revenue for the three months ended April 30, 2026 and 2025, respectively. The preceding historical metrics reflect any adjustments for acquisitions, consolidations, spin-offs, and other market activity. For purposes of determining revenue derived from (i) customers with trailing 12-month product revenue greater than $1 million, (ii) new customers, and (iii) existing customers, we treat each customer account, including accounts for end-customers under a reseller arrangement, that has at least one corresponding capacity contract as a unique customer, and a single organization with multiple divisions, segments, or subsidiaries may be counted as multiple customers.

Current wording

We had 828 customers with product revenue of greater than $1 million for the trailing 12 months ended July 31, 2026, an increase from 654 such customers as of July 31, 2025. Such customers represented approximately 68% and 67% of our product revenue for the trailing 12 months ended July 31, 2026 and 2025, respectively. Within these customers, we had 156 and 65 customers with product revenue of greater than $5 million and $10 million, respectively, for the trailing 12 months ended July 31, 2026. The substantial majority of our revenue was derived from existing customers under capacity arrangements, which represented approximately 97% and 96% of our revenue for the three and six months ended July 31, 2026, respectively, and 98% of our revenue for each of the three and six months ended July 31, 2025. The preceding historical metrics reflect any adjustments for acquisitions, consolidations, spin-offs, and other market activity. For purposes of determining revenue derived from (i) customers with trailing 12-month product revenue greater than $1 million, (ii) new customers, and (iii) existing customers, we treat each customer account, including accounts for end-customers under a reseller arrangement, that has at least one corresponding capacity contract as a unique customer, and a single organization with multiple divisions, segments, or subsidiaries may be counted as multiple customers.

Previous wording

Professional services and other revenue increased $11.4 million for the three months ended April 30, 2026, compared to the three months ended April 30, 2025, as our professional services organization continues to expand and evolve to help our customers further realize the benefits of our platform.

Current wording

Professional services and other revenue increased $0.5 million and $11.8 million for the three and six months ended July 31, 2026, compared to the three and six months ended July 31, 2025, respectively, as our professional services organization continues to expand and evolve to help our customers further realize the benefits of our platform.

Previous wording

Cost of product revenue increased $101.6 million for the three months ended April 30, 2026, compared to the three months ended April 30, 2025, primarily due to an increase of $86.0 million in third-party cloud infrastructure expenses (including those related to AI inference and GPUs), mainly as a result of increased customer consumption of our platform. Amortization of acquired developed technology intangible assets also increased $11.9 million for the three months ended April 30, 2026, compared to the same period in the prior year.

Current wording

Cost of product revenue increased $132.1 million and $233.7 million for the three and six months ended July 31, 2026, compared to the three and six months ended July 31, 2025, respectively. These increases were primarily due to an increase of $113.6 million and $199.7 million in third-party cloud infrastructure expenses (including those related to AI inference and GPUs) for the three and six months ended July 31, 2026, respectively, compared to the same periods in the prior year, mainly as a result of increased customer consumption of our platform. Amortization of acquired developed technology intangible assets also increased $11.9 million and $23.7 million for the three and six months ended July 31, 2026, respectively, compared to the same periods in the prior year.

Previous wording

Our product gross margin remained flat at 71% for each of the three months ended April 30, 2026 and 2025, respectively, primarily due to the decrease in personnel-related costs as a percentage of product revenue and higher volume-based discounts for our purchases of third-party cloud infrastructure, offset by costs attributable to newly launched product capabilities and features that have not yet reached economies of scale. We expect our product gross margin to fluctuate from period to period due to a number of factors, including, but not limited to: (i) fluctuations in the mix and timing of customers’ consumption, which is inherently variable at our customers’ discretion, (ii) our pricing model and discounting practices, (iii) the extent of our investments in new product capabilities, features, and operations, such as investments in AI Technology and performance improvements that may make our platform or the underlying cloud infrastructure more efficient, (iv) new product offerings that are margin compressive, and (v) stock-based compensation.

Current wording

Our product gross margin was 71% for each of the three and six months ended July 31, 2026, compared to 72% for each of the three and six months ended July 31, 2025, primarily due to costs attributable to newly launched product capabilities and features that have not yet reached economies of scale, partially offset by higher discounts for our purchases of third-party cloud infrastructure. We expect our product gross margin to fluctuate from period to period due to a number of factors, including, but not limited to: (i) fluctuations in the mix and timing of customers’ consumption, which is inherently variable at our customers’ discretion, (ii) our pricing model and discounting practices, (iii) the extent of our investments in new product capabilities, features, and operations, such as investments in AI and performance improvements that may make our platform or the underlying cloud infrastructure more efficient, (iv) new product offerings that are margin compressive, and (v) stock-based compensation.

Previous wording

Cost of professional services and other revenue increased $14.1 million for the three months ended April 30, 2026, compared to the three months ended April 30, 2025, primarily due to an increase in personnel-related costs and allocated overhead costs for the three months ended April 30, 2026 as a result of increased headcount.

Current wording

Cost of professional services and other revenue increased $6.2 million and $20.3 million for the three and six months ended July 31, 2026, compared to the three and six months ended July 31, 2025, respectively. These increases were primarily due to an increase of $8.9 million and $24.3 million in personnel-related costs and allocated overhead costs for the three and six months ended July 31, 2026, respectively, compared to the same periods in the prior year, as a result of increased headcount. These increases were partially offset by a decrease of $4.1 million and $6.4 million in costs of contracted third-party partners and software tools for the three and six months ended July 31, 2026, respectively, as compared to the same periods in the prior year.

Previous wording

Professional services and other gross margin was (37%) and (40%) for the three months ended April 30, 2026 and 2025, respectively. We do not believe the year-over-year changes in professional services and other gross margins are meaningful given that our professional services and other revenue represents a small percentage of our revenue.

Current wording

Professional services and other gross margin was (38%) and (37%) for the three and six months ended July 31, 2026, respectively, compared to (28%) and (33%) for the three and six months ended July 31, 2025, respectively. We do not believe the year-over-year changes in professional services and other gross margins are meaningful given that our professional services and other revenue represents a small percentage of our revenue.

Previous wording

Sales and marketing expenses increased $130.4 million for the three months ended April 30, 2026, compared to the three months ended April 30, 2025, primarily due to an increase of $63.5 million in personnel-related costs (excluding commission expenses) and allocated overhead costs, as a result of increased headcount, stock-based compensation, and overall costs to support the growth in our business. The increase in personnel-related costs included a $10.5 million increase in stock-based compensation for the three months ended April 30, 2026, compared to the same period in the prior year, primarily related to additional equity awards granted to existing and new employees, partially offset by the effects of equity awards that became forfeited or fully vested.

Current wording

Sales and marketing expenses increased $109.7 million and $240.1 million for the three and six months ended July 31, 2026, compared to the three and six months ended July 31, 2025, respectively. These increases were primarily due to an increase of $38.2 million and $101.7 million in personnel-related costs (excluding commission expenses) and allocated overhead costs for the three and six months ended July 31, 2026, respectively, compared to the same periods in the prior year, as a result of increased headcount, stock-based compensation, and overall costs to support the growth in our business. The increases in personnel-related costs included a $6.9 million and $17.4 million increase in stock-based compensation for the three and six months ended July 31, 2026, respectively, compared to the same periods in the prior year, primarily related to additional equity awards granted to new and existing employees, partially offset by the effects of equity awards that became forfeited or fully vested.

Previous wording

In addition, expenses associated with sales commissions and draws paid to our sales force and certain referral fees paid to third parties, including amortization of deferred commissions, increased $36.4 million for the three months ended April 30, 2026, compared to the same period in the prior year, primarily due to increases in the annualized contract value of our customer contracts and customers’ consumption of our platform. Advertising costs and other expenses associated with our sales, marketing and business development programs, as well as travel-related expenses increased $11.7 million. The remaining increase was primarily attributable to increased expenses associated with third-party cloud marketplace sales transactions and amortization of acquired intangible assets.

Current wording

In addition, expenses associated with sales commissions and draws paid to our sales force and certain referral fees paid to third parties, including amortization of deferred commissions, increased $54.7 million and $91.1 million for the three and six months ended July 31, 2026, respectively, compared to the same periods in the prior year, primarily due to increases in the annualized contract value of our customer contracts and customers’ consumption of our platform. The remaining increases in sales and marketing expenses for the three and six months ended July 31, 2026, compared to the same periods in the prior year, were primarily attributable to increased expenses associated with third-party cloud marketplace sales transactions and amortization of acquired intangible assets.

Previous wording

Research and development expenses increased $62.5 million for the three months ended April 30, 2026, compared to the three months ended April 30, 2025, primarily due to an increase of $39.6 million in personnel-related costs and allocated overhead costs as a result of increased stock-based compensation, headcount, and overall costs to support the growth in our business. The increase in personnel-related costs included a $16.8 million increase in stock-based compensation, primarily related to additional equity awards granted to new and existing employees, partially offset by the effects of equity awards that became forfeited or fully vested.

Current wording

In addition, personnel-related costs and allocated overhead costs increased $30.3 million and $69.9 million for the three and six months ended July 31, 2026, respectively, compared to the same periods in the prior year, as a result of increased stock-based compensation, headcount, and overall costs to support the growth in our business. The increases in personnel-related costs included a $13.8 million and $30.7 million increase in stock-based compensation for the three and six months ended July 31, 2026, respectively, compared to the same periods in the prior year, primarily related to additional equity awards granted to new and existing employees, partially offset by the effects of equity awards that became forfeited or fully vested.

Previous wording

General and administrative expenses decreased $80.9 million for the three months ended April 30, 2026, compared to the three months ended April 30, 2025, primarily driven by a decrease of $88.8 million in asset impairment charges related to office facility exits. During the three months ended April 30, 2025, we recognized asset impairment charges of $106.5 million, primarily relating to the cease-use of our San Mateo office facility. See Note 11, “Commitments and Contingencies,” to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional details.

Current wording

General and administrative expenses decreased by $79.7 million for the six months ended July 31, 2026, compared to the six months ended July 31, 2025, primarily driven by a decrease of $90.9 million in asset impairment charges related to office facility exits. During the six months ended July 31, 2025, we recognized asset impairment charges of $108.6 million, primarily relating to the cease-use of our San Mateo office facility. See Note 11, “Commitments and Contingencies,” to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional details.

Previous wording

Interest income decreased $12.0 million during the three months ended April 30, 2026, compared to the three months ended April 30, 2025, primarily driven by lower weighted average annual yields as well as a decrease in the average balance of our cash equivalents and investments in available-for-sale marketable debt securities. See Note 4, “Cash Equivalents, Investments, and Strategic Investments,” to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details on our cash equivalents and investments.

Current wording

Interest income decreased $7.5 million and $19.5 million during the three and six months ended July 31, 2026, compared to the three and six months ended July 31, 2025, respectively, primarily driven by lower weighted average annual yields as well as a decrease in the average balance of our cash equivalents and investments in available-for-sale marketable debt securities. See Note 4, “Cash Equivalents, Investments, and Strategic Investments,” to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details on our cash equivalents and investments.

Previous wording

Other expense, net decreased $18.5 million for the three months ended April 30, 2026, compared to the three months ended April 30, 2025, primarily due to a decrease in impairments and changes in net unrealized gains (losses) on our strategic investments, partially offset by changes in net realized gains (losses) on strategic investments in equity securities and the fair value of non-marketable debt security under the fair value option. See Note 4, “Cash Equivalents, Investments, and Strategic Investments,” to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

Current wording

Other income (expense), net increased $39.7 million and $58.2 million for the three and six months ended July 31, 2026, compared to the three and six months ended July 31, 2025, respectively, primarily due to higher upward adjustments and net realized gains in our non-marketable securities. See Note 4, “Cash Equivalents, Investments, and Strategic Investments,” to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

Previous wording

Our benefit from income taxes was $1.1 million for the three months ended April 30, 2026, compared to our provision for income taxes of $5.7 million for the three months ended April 30, 2025, due to the partial release of valuation allowances associated with a business combination completed during the three months ended April 30, 2026.

Current wording

Our provision for income taxes increased $3.4 million for the three months ended July 31, 2026, compared to the three months ended July 31, 2025, primarily attributable to an increase in our foreign earnings for the three months ended July 31, 2026, and the partial release of valuation allowances associated with a business combination completed during the three months ended July 31, 2025.

Previous wording

As of April 30, 2026, our principal sources of liquidity were cash, cash equivalents, and short-term and long-term investments totaling approximately $4.4 billion. Our cash equivalents and investments primarily consist of corporate notes and bonds, money market funds, U.S. government and agency securities, time deposits, certificates of deposit, asset-backed securities, and commercial paper.

Current wording

As of July 31, 2026, our principal sources of liquidity were cash, cash equivalents, and short-term and long-term investments totaling approximately $4.3 billion. Our cash equivalents and investments primarily consist of corporate notes and bonds, money market funds, U.S. government and agency securities, asset-backed securities, time deposits, commercial paper, and certificates of deposit.

Previous wording

As of April 30, 2026, our RPO was approximately $9.2 billion. Our RPO represents the amount of contracted future revenue that has not yet been recognized, including (i) deferred revenue and (ii) non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods, but that are not recorded on the balance sheet. Portions of RPO that are not yet invoiced and are denominated in foreign currencies are revalued into U.S. dollars each period based on the applicable period-end exchange rates.

Current wording

As of July 31, 2026, our RPO was approximately $9.0 billion. Our RPO represents the amount of contracted future revenue that has not yet been recognized, including (i) deferred revenue and (ii) non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods, but that are not recorded on the balance sheet. Portions of RPO that are not yet invoiced and are denominated in foreign currencies are revalued into U.S. dollars each period based on the applicable period-end exchange rates.

Previous wording

Our primary sources of cash are payments received from our customers as well as net proceeds from the issuance of our convertible senior notes. Our primary uses of cash include personnel-related expenses, third-party cloud infrastructure expenses (including those related to GPUs and AI inference), sales and marketing expenses, overhead costs, acquisitions and strategic investments we may make from time to time, and repurchases of our common stock under our authorized stock repurchase program. As of April 30, 2026, our material cash requirements from known contractual obligations and commitments relate primarily to (i) third-party cloud infrastructure agreements, (ii) our convertible senior notes, (iii) operating leases for office facilities, and (iv) subscription arrangements used to facilitate our operations at the enterprise level. These agreements are enforceable and legally binding and specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. Other than the amended cloud infrastructure agreement entered into during the three months ended April 30, 2026, as described below, there were no material changes outside of the ordinary course of business in our commitments and contractual obligations disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026, which was filed with the SEC on March 20, 2026. See Note 11, “Commitments and Contingencies,” to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional details.

Current wording

Our primary sources of cash are payments received from our customers as well as net proceeds from the issuance of our convertible senior notes. Our primary uses of cash include personnel-related expenses, third-party cloud infrastructure expenses (including those related to AI inference and GPUs), sales and marketing expenses, overhead costs, acquisitions and strategic investments we may make from time to time, and repurchases of our common stock under our authorized stock repurchase program. As of July 31, 2026, our material cash requirements from known contractual obligations and commitments relate primarily to (i) third-party cloud infrastructure agreements, (ii) our convertible senior notes, (iii) operating leases for office facilities, and (iv) subscription arrangements used to facilitate our operations at the enterprise level. These agreements are enforceable and legally binding and specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. Other than the amended third-party AI service provider and cloud infrastructure agreements entered into during the six months ended July 31, 2026, as described below, there were no material changes outside of the ordinary course of business in our commitments and contractual obligations disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026, which was filed with the SEC on March 20, 2026. See Note 11, “Commitments and Contingencies,” to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional details.

Previous wording

In April 2026, we amended one of our third-party cloud infrastructure agreements (April 2026 Amendment). Under the amended agreement, we have committed to a cumulative minimum spend of $6.0 billion over a five-year contract term ending March 31, 2031 with minimum spend for each contract year ranging from $900.0 million to $1.25 billion. We are required to pay the difference if we fail to meet the cumulative spend or minimum spend for any contract year, and such payments can be applied to qualifying spending on cloud infrastructure services during the term of the April 2026 Amendment. We are no longer required to fulfill the remaining non-cancelable purchase commitment under the agreement prior to the April 2026 Amendment.

Current wording

In April 2026, we amended one of our third-party cloud infrastructure agreements (April 2026 Amendment). Under the amended agreement, we have committed to a cumulative minimum spend of $6.0 billion over a five-year contract term ending March 31, 2031 with minimum spend for each contract year ranging from $900.0 million to $1.25 billion. We are required to pay the difference if we fail to meet the cumulative spend or minimum spend for any contract year, and such payments can be applied to qualifying spending on cloud infrastructure services during the term of the April 2026 Amendment. We are no longer required to fulfill the remaining non-cancelable purchase commitment under the agreement prior to the April 2026 Amendment. In June 2026, we further amended the agreement by committing to utilize incremental exabytes of storage at certain contracted rates over a 10-year contract term that extends the term for such storage from March 2031 to May 2036. The incremental exabytes of storage may be subject to adjustments based on our actual usage. We estimate the aggregate minimum purchase obligation for the incremental exabytes of storage to be approximately $58 million as of July 31, 2026.

Previous wording

On February 2, 2026, we acquired all of the outstanding capital stock of Observe, Inc., a privately-held company that built an AI-powered observability platform. The preliminary purchase consideration was $595.8 million, which was comprised primarily of $285.7 million in cash and approximately 1.5 million shares of our common stock valued at $285.3 million as of the acquisition date.

Current wording

On February 2, 2026, we acquired all of the outstanding capital stock of Observe, a privately-held company that built an AI-powered observability platform. The preliminary purchase consideration was $595.8 million, which was comprised primarily of $285.7 million in cash and approximately 1.5 million shares of our common stock valued at $285.3 million as of the acquisition date.

Previous wording

In September 2024, we issued an aggregate principal amount of $2.3 billion of convertible senior notes in a private placement to qualified institutional buyers, comprising of (i) $1.15 billion aggregate principal amount of 0% convertible senior notes due 2027 (2027 Notes) and (ii) $1.15 billion aggregate principal amount of 0% convertible senior notes due 2029 (2029 Notes, and together with the 2027 Notes, the Notes). The Notes are general, senior unsecured obligations. The 2027 Notes will mature on October 1, 2027 and the 2029 Notes will mature on October 1, 2029, in each case unless earlier converted, redeemed, or repurchased. Upon conversion of the Notes, we may satisfy our conversion obligation by paying or delivering, as the case may be, cash, shares of our common stock or a combination of both, at our election. The total proceeds from the issuance of the Notes were approximately $2.27 billion, net of $31.2 million of debt issuance costs. The outstanding principal of the 2027 Notes and the 2029 Notes was $1.15 billion each as of each of April 30, 2026 and January 31, 2026.

Current wording

In September 2024, we issued an aggregate principal amount of $2.3 billion of convertible senior notes in a private placement to qualified institutional buyers, comprising of (i) $1.15 billion aggregate principal amount of 0% convertible senior notes due 2027 (2027 Notes) and (ii) $1.15 billion aggregate principal amount of 0% convertible senior notes due 2029 (2029 Notes, and together with the 2027 Notes, the Notes). The Notes are general, senior unsecured obligations. The 2027 Notes will mature on October 1, 2027 and the 2029 Notes will mature on October 1, 2029, in each case unless earlier converted, redeemed, or repurchased. Upon conversion of the Notes, we may satisfy our conversion obligation by paying or delivering, as the case may be, cash, shares of our common stock or a combination of both, at our election. The total proceeds from the issuance of the Notes were approximately $2.27 billion, net of $31.2 million of debt issuance costs. The outstanding principal of the 2027 Notes and the 2029 Notes was $1.15 billion each as of July 31, 2026 and January 31, 2026.