Snowflake reported a strong Q3 with significant growth in product revenue, operational efficiency, and adoption of new AI and data engineering products. Despite some concerns about storage revenue and federal market challenges, the company's outlook and execution remain positive, supported by a robust go-to-market strategy and global customer engagement.

Company Guidance

In the Snowflake Q3 Fiscal 2025 earnings call, the company discussed impressive growth metrics and provided robust guidance for the future. Product revenue reached $900 million, marking a 29% year-over-year increase, and remaining performance obligations totaled $5.7 billion, reflecting a 55% growth. The non-GAAP operating margin improved to 6%, and Snowflake increased its product revenue outlook for the year to $3.43 billion, anticipating a 29% year-over-year growth. Additionally, the company highlighted the strong adoption of its AI feature family, Snowflake Cortex, and the strategic efforts to streamline operations, which significantly enhanced efficiency and profitability. For Q4, product revenue is expected to be between $906 million and $911 million, representing a 23% year-over-year growth. The call also noted a stable net revenue retention rate of 127% and emphasized the positive impact of new product initiatives like Snowpark, which is on track to make up 3% of product revenue.

Strong Product Revenue Growth

Product revenue for Q3 was $900 million, up 29% year-over-year. Remaining performance obligations grew by 55% to $5.7 billion.

Operational Efficiency and Margin Improvement

Non-GAAP operating margin improved to 6%, and non-GAAP product gross margin stabilized at 76%. The company achieved a non-GAAP adjusted free cash flow margin of 9%.

AI and Data Engineering Features Adoption

Snowflake's AI feature family, Cortex, is showing significant adoption with over 1,000 deployed use cases and more than 3,200 accounts utilizing AI and ML features. Data engineering features are now at a $200 million run rate.

Successful Go-To-Market Strategy

The company increased its FY '25 product revenue guidance due to strong bookings and improved go-to-market operations. Large deals include 3 $50 million-plus total contract value deals.

Global Expansion and Customer Engagement

Record attendance in Snowflake world tours with a 40% increase year-over-year. Significant customer wins include a global telecom giant and Warner Bros. Discovery.

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Snowflake (GB:0A93) Earnings, Revenues Date & History

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GB:0A93 Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
Dec 02, 2020	2021 (Q3)	- / -0.28	-0.318	11.95% (+0.04)	―	―
Mar 03, 2021	2021 (Q4)	-0.17 / -0.16	-0.301	48.17% (+0.14)	―	―
May 26, 2021	2022 (Q1)	-0.15 / -0.12	-0.28	58.21% (+0.16)	―	―
Aug 25, 2021	2022 (Q2)	-0.15 / -0.04	-0.24	82.92% (+0.20)	―	―
Dec 01, 2021	2022 (Q3)	-0.06 / 0.04	-0.28	113.21% (+0.32)	―	―
Mar 02, 2022	2022 (Q4)	0.03 / 0.12	-0.156	177.56% (+0.28)	―	―
May 25, 2022	2023 (Q1)	<0.01 / 0.08	-0.117	164.96% (+0.19)	―	―
Aug 24, 2022	2023 (Q2)	-0.01 / <0.01	-0.041	117.07% (+0.05)	―	―
Nov 30, 2022	2023 (Q3)	0.05 / 0.11	0.037	197.30% (+0.07)
Mar 01, 2023	2023 (Q4)	0.04 / 0.14	0.121	15.70% (+0.02)

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed

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GB:0A93 Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
Nov 20, 2024	$127.73	$172.50	+35.05%
Aug 21, 2024	$133.58	$116.57	-12.74%
May 22, 2024	$162.85	$154.30	-5.25%
Feb 28, 2024	$231.86	$187.41	-19.17%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.

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