Executive Summary
In Q2 2025, Snowflake Inc (SNOW) delivered impressive financial results, reporting a revenue of $868.8 million, marking a robust growth of 30% year-over-year. The company's healthy performance was further highlighted by the increase in Remaining Performance Obligations (RPO), reaching $5.2 billion, which grew by 48% year-over-year. This strong quarter prompted management to raise product revenue guidance for the fiscal year, reflecting confidence in continued demand and innovation. CEO Sridhar Ramaswamy noted that the company has accelerated its innovation pipeline, successfully launching numerous products, emphasising AI capabilities as a critical growth driver moving forward.
Despite these positive indicators, the company reported a net loss of $316.9 million and an operating income margin of -40.9%, prompting concerns over profitability amidst aggressive spending on Research & Development (R&D) and marketing. The continued investment in AI and the introduction of new services aim to enhance customer engagement and drive future revenue growth, with a targeted non-GAAP operating margin of 3% for Q3 2025. Investors are advised to closely monitor Snowflake's spending strategies, competitive positioning, and product adoption rates as the company navigates expansion in a challenging economic environment.
Key Performance Indicators
QoQ: -1.93% | YoY:-24.49%
Key Insights
1. **Revenue**: $868.8 million (up 30% YOY, 4.84% QoQ)
2. **Net Income**: -$316.9 million
3. **RPO**: $5.2 billion (up 48% YOY)
4. **Gross Profit Margin**: 66.84%
5. **Operating Loss**: -$355.3 million
6. **Operating Margin**: -40.89%
7. **Cash Flow from Operations**: $69.9 million
8. **Free Cash Flow**: $58.8 million
9. **Cash and Cash Equivalents**: $1.3 billion
10. **Total Assets**: $6.9 billion...
Financial Highlights
1. Revenue: $868.8 million (up 30% YOY, 4.84% QoQ)
2. Net Income: -$316.9 million
3. RPO: $5.2 billion (up 48% YOY)
4. Gross Profit Margin: 66.84%
5. Operating Loss: -$355.3 million
6. Operating Margin: -40.89%
7. Cash Flow from Operations: $69.9 million
8. Free Cash Flow: $58.8 million
9. Cash and Cash Equivalents: $1.3 billion
10. Total Assets: $6.9 billion
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
868.82M |
28.90% |
4.84% |
| Gross Profit |
580.75M |
27.46% |
4.41% |
| Operating Income |
-355.30M |
-24.49% |
-1.93% |
| Net Income |
-316.90M |
-39.68% |
0.03% |
| EPS |
-0.95 |
-37.68% |
0.00% |
Key Financial Ratios
operatingProfitMargin
-40.9%
operatingCashFlowPerShare
$0.21
freeCashFlowPerShare
$0.18
priceEarningsRatio
-34.36
Management Commentary
- Sridhar Ramaswamy (CEO): "I'm proud of the team and how we accelerated our innovation pipeline. Our product delivery momentum continues to be strong...We are leveraging the power of AI to make all of these easier to create, maintain and use."
- Mike Scarpelli (CFO): "We delivered strong bookings in the quarter. RPO grew 48% year-on-year to reach more than $5.2 billion."
- Management noted that approximately 80% of customers are paying annually in advance, indicating a strong cash flow position and customer retention.
"Our customers are adopting the new capabilities at an incredible base." - Sridhar Ramaswamy, CEO
— Sridhar Ramaswamy
"We are making Snowflake the best cloud for computation, collaboration, and application on all data." - Sridhar Ramaswamy, CEO
— Sridhar Ramaswamy
Forward Guidance
Management reiterated confidence in their new product offerings, especially in AI with expectations to see material contributions from Cortex and Snowpark in FY 2026. For Q3, product revenue is expected between $850 million and $855 million. With an anticipated full-year product revenue of approximately $3.356 billion, representing a 26% year-over-year growth. The company is maintaining its margin guidance, projecting a non-GAAP product margin of approximately 75%.