EPS of $-0.99 decreased by 94.1% from previous year
Gross margin of 66.2%
Net income of -327.47M
""We are innovating better than ever and firing on all cylinders and we have an enormous opportunity ahead of us." - Sridhar Ramaswamy" - Sridhar Ramaswamy
Snowflake Inc (SNOW) Q4 2025 Financial Results: Building Momentum through Innovation and Operational Rigor
Executive Summary
Snowflake Inc delivered impressive financial results for the fourth quarter of fiscal year 2025, reporting revenues of $986.77 million, a significant 28% increase year-over-year. The company emphasized its operational efficiencies and strong customer base, seeing product revenue grow by 30% year-over-year, backed by a net revenue retention rate of 126%. Despite a reported net loss of $327.47 million, management remains optimistic about future growth potentials, driven by strategic innovations in AI and data sharing capabilities. CEO Sridhar Ramaswamy highlighted that Snowflake is positioned as a leading force in the data and AI industry, setting a robust foundation for its upcoming fiscal year 2026 guidance which expects product revenue of approximately $4.28 billion, growing 24% year-over-year.
Key Performance Indicators
Revenue
986.77M
QoQ: 4.74% | YoY:27.37%
Gross Profit
653.59M
66.23% margin
QoQ: 3.93% | YoY:22.65%
Operating Income
-386.68M
QoQ: -5.81% | YoY:-40.35%
Net Income
-327.47M
QoQ: -0.99% | YoY:-93.37%
EPS
-0.99
QoQ: -2.06% | YoY:-94.12%
Revenue Trend
Margin Analysis
Key Insights
**Revenue:** $986.77 Million (up 28% YoY)
**Net Income:** -$327.47 Million (Net Income Margin: -33%)
**EPS (Diluted):** -$0.99
**Gross Profit:** $653.59 Million (Gross Margin: 66.2%)
**Operating Income:** -$386.68 Million (Operating Margin: -39.2%)
Financial Highlights
Financial Overview:
- Revenue: $986.77 Million (up 28% YoY)
- Net Income: -$327.47 Million (Net Income Margin: -33%)
- EPS (Diluted): -$0.99
- Gross Profit: $653.59 Million (Gross Margin: 66.2%)
- Operating Income: -$386.68 Million (Operating Margin: -39.2%)
- Remaining Performance Obligations (RPO): $6.9 Billion (up 33% YoY)
Cash Flow and Balance Sheet:
- Net Cash from Operating Activities: $432.73 Million
- Cash and Cash Equivalents: $2.63 Billion
- Total Assets: $9.03 Billion
- Total Liabilities: $6.03 Billion
- Total Stockholders' Equity: $2.99 Billion
Ratios:
- Current Ratio: 1.78
- Quick Ratio: 1.78
- Net Revenue Retention Rate: 126%
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
986.77M
27.37%
4.74%
Gross Profit
653.59M
22.65%
3.93%
Operating Income
-386.68M
-40.35%
-5.81%
Net Income
-327.47M
-93.37%
-0.99%
EPS
-0.99
-94.12%
-2.06%
Key Financial Ratios
currentRatio
1.78
grossProfitMargin
66.2%
operatingProfitMargin
-39.2%
netProfitMargin
-33.2%
returnOnAssets
-3.62%
returnOnEquity
-10.6%
debtEquityRatio
0.87
operatingCashFlowPerShare
$1.31
freeCashFlowPerShare
$1.27
priceToBookRatio
19.51
priceEarningsRatio
-45.93
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key Themes from the Earnings Call:
- Growth Momentum: Sridhar Ramaswamy celebrated the growth achieved in product revenue, attributing it to improved product cohesion and greater efficiency within operations.
- Strategic Investments: Focus on enhancing AI capabilities and data sharing, fostering greater customer engagement and usage of their platform.
- Operational Efficiency: Management cited the importance of streamlined processes to deliver sustained revenue growth while controlling operational expenses.
- Customer-centric Innovations: Boasting partnerships with major brands and a growing customer base, the firm reiterated the ease with which new customers transition to and harness the platform's capabilities, significantly boosting their operations.
"We are innovating better than ever and firing on all cylinders and we have an enormous opportunity ahead of us." - Sridhar Ramaswamy
â Sridhar Ramaswamy
"In FY â25, product revenue grew 30% year-over-year to reach $3.5 billion. Our core business is strong." - Mike Scarpelli},
â Mike Scarpelli
Forward Guidance
Looking ahead, Snowflake projects Q1 product revenue between $955 million and $960 million, reflecting 21% to 22% growth YoY. Management expects to see an increase in non-GAAP operating margins to 5% for Q1 and anticipates a stronger Q2 and Q3 as new product features roll out and are adopted. For FY 2026, a revenue target of $4.28 billion has been set, supported by existing customer migrations and rising demand for innovative AI integrations. Management emphasized the importance of AI-driven solutions as a major growth lever, predicting substantial revenue generation in the latter half of the fiscal year.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
SNOW Focus
66.23%
-39.20%
-10.60%
-45.93%
AI
59.60%
-95.10%
-8.35%
-9.47%
SHOP
48.10%
16.50%
11.20%
26.62%
WDAY
75.60%
3.39%
1.04%
185.28%
INTU
75.40%
-4.74%
-0.11%
-2,265.73%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Given Snowflake's robust growth trajectory, solid customer relationships, and continued investment in innovative technologies, the company is well-positioned for the future. Though challenges remain, particularly concerning operational complexity and profitability, the overall market dynamics favor growth in data analytics and AI sectors. Investors should closely monitor the success of new product features throughout FY 2026 and assess customer uptake of emerging technologies as a key indicator of success.
Key Investment Factors
Growth Potential
Snowflake is poised to capture significant growth through its strong customer retention rate of 126% and ongoing investments in AI and data technologies. The forecasted revenue growth of 24% for FY 2026 indicates a robust demand trajectory.
Profitability Risk
Potential risks include increasing operational expenses leading to substantial net losses, volatility in the tech market, and reliance on large enterprise clients for revenue. The company must manage headwinds associated with competition and evolving customer demands effectively.
Financial Position
Snowflake maintains a healthy financial position with ample liquidity and a solid asset base of $9.03 billion against total liabilities of $6.03 billion, allowing for long-term strategic investments.
SWOT Analysis
Strengths
Strong product innovation trajectory in AI and data sharing.
High customer retention rate of 126% indicating strong satisfaction and loyalty.
Solid commercial partnerships with large enterprises validating platform value.
Weaknesses
Operating losses reflecting the need for stronger profitability measures.
High dependence on a limited number of large corporate customers can pose risks.
Competition in the data and AI industry may affect future growth rates.
Opportunities
Expansion of product features related to AI driving potential new revenue streams.
Geographical expansion into emerging markets with growing data needs.
Development of further partnerships with major platforms to enhance service offerings.
Threats
Intense competition from existing and emerging data platforms.
Economic uncertainties that may impact customer IT budgets and spending behavior.