EPS of $-0.97 decreased by 49.2% from previous year
Gross margin of 67.2%
Net income of -324.28M
""Our product development engine continues to accelerate, as we launched the same number of tier 1 features to general availability in Q3 as we did in all of fiscal 2024." - Sridhar Ramaswamy, CEO" - Sridhar Ramaswamy
In the third quarter of fiscal 2025, Snowflake Inc (SNOW) reported a stellar performance, achieving a revenue of $942 million, which reflects a year-over-year growth of 28.32%. This momentum surpassed analyst expectations and reinforces the company's status as a leader in the cloud data services sector. Product revenue surged 29% year-over-year, demonstrating strong adoption of its new AI features and data platform capabilities. Management's comments indicate a strategic focus on operational efficiency and customer satisfaction, with a net revenue retention rate stabilizing at 127%. The company has also increased its full-year product revenue guidance to approximately $3.43 billion, marking a growth of 29% compared to the prior year.
Key Performance Indicators
Revenue
942.09M
QoQ: 8.43% | YoY:28.32%
Gross Profit
628.90M
67.18% margin
QoQ: 8.29% | YoY:24.48%
Operating Income
-365.46M
QoQ: -2.86% | YoY:-40.22%
Net Income
-324.28M
QoQ: -2.33% | YoY:-51.35%
EPS
-0.97
QoQ: -2.11% | YoY:-49.23%
Revenue Trend
Margin Analysis
Key Insights
**Revenue:** $942 million (YoY: 28.32%, QoQ: 8.43%)
**Gross Profit:** $628.9 million (Gross Margin: 67.2%)
**Operating Loss:** $365.5 million (Operating Margin: -38.9%)
**Net Income:** -$324.3 million (Net Margin: -34.4%)
**EPS:** -$0.97 (YoY: -49.23%, QoQ: -2.11%)
Financial Highlights
Financial Performance Overview
- Revenue: $942 million (YoY: 28.32%, QoQ: 8.43%)
- Gross Profit: $628.9 million (Gross Margin: 67.2%)
- Operating Loss: $365.5 million (Operating Margin: -38.9%)
- Net Income: -$324.3 million (Net Margin: -34.4%)
- EPS: -$0.97 (YoY: -49.23%, QoQ: -2.11%)
Cash Flow Statement:
- Net Cash Provided by Operating Activities: $101.7 million
- Net Cash Used for Investing Activities: -$267.1 million
- Net Cash Used Provided by Financing Activities: $1.017 billion
- Free Cash Flow: $88.3 million
Balance Sheet Metrics:
- Total Assets: $8.20 billion
- Total Liabilities: $5.27 billion
- Total Stockholders' Equity: $2.93 billion
- Cash and Cash Equivalents: $2.15 billion
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
942.09M
28.32%
8.43%
Gross Profit
628.90M
24.48%
8.29%
Operating Income
-365.46M
-40.22%
-2.86%
Net Income
-324.28M
-51.35%
-2.33%
EPS
-0.97
-49.23%
-2.11%
Key Financial Ratios
currentRatio
1.88
grossProfitMargin
67.2%
operatingProfitMargin
-38.9%
netProfitMargin
-34.4%
returnOnAssets
-3.95%
returnOnEquity
-11.1%
debtEquityRatio
0.89
operatingCashFlowPerShare
$0.31
freeCashFlowPerShare
$0.27
priceToBookRatio
13.06
priceEarningsRatio
-29.49
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management Insights
- Sridhar Ramaswamy, CEO, remarked: "Our customers believe Snowflake is the easiest and most cost-effective enterprise data platform out there." This statement underlines the company's focus on user experience and value.
- Mike Scarpelli, CFO, highlighted a 55% growth in remaining performance obligations (RPO), indicative of anticipated revenue consistency. He stated, "We are seeing large deal volume increases... and expect this momentum to continue in Q4."
- The launch of several new features, such as Snowflake Cortex, points to a strategic effort to enhance the platform's capabilities, aiming for a more competitive edge in the market.
"Our product development engine continues to accelerate, as we launched the same number of tier 1 features to general availability in Q3 as we did in all of fiscal 2024." - Sridhar Ramaswamy, CEO
â Sridhar Ramaswamy
"We believe our contribution from data engineering features like Snowpark, dynamic tables, connectors and Snowpipe Streaming will more than offset the potential loss of storage revenue." - Mike Scarpelli, CFO
â Mike Scarpelli
Forward Guidance
The management provided an optimistic outlook for Q4, with expected product revenue estimates between $906 million and $911 million, translating to a 23% year-over-year growth. Full-year guidance was revised upward to approximately $3.43 billion, reflecting optimism about customer adoption of new products and the ongoing evolution of the data platform industry. Key factors to monitor include the adoption rates of new AI initiatives and their impact on user engagement and consumption patterns in the platform.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
SNOW Focus
67.18%
-38.90%
-11.10%
-29.49%
AI
59.10%
-88.70%
-9.32%
-12.74%
SHOP
51.70%
13.10%
8.18%
31.23%
WDAY
84.80%
7.64%
2.24%
80.40%
INTU
85.30%
48.00%
14.00%
15.58%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Overall, Snowflake Inc. remains an attractive investment opportunity due to its solid growth metrics, innovative product pipeline, and strategic alignment with evolving data consumption trends. However, potential investors should remain cautious of operational losses and competitive risks. Continued execution on management's vision for innovation and efficiency will be critical in solidifying Snowflake's position within the data platform market.
Key Investment Factors
Growth Potential
Snowflake's growth potential is bolstered by its innovative product developments, particularly in AI and data engineering. The enterprise's ongoing shift towards generative AI and open data formats like Apache Iceberg presents significant opportunities for expanding customer usage and increasing consumption revenue.
Profitability Risk
Primary risks include competitive pressure from established players like AWS and Azure, rapid technological changes, and potential stagnation in customer growth if new product offerings do not meet market expectations. The sustainability of current net revenue retention rates in a fluctuating economic environment poses a concern as well.
Financial Position
The financial position remains strong with substantial cash reserves and significant investments in innovation. The operating losses should be monitored closely, yet the cash flow from operations remains positive, indicating healthy core business activities.
SWOT Analysis
Strengths
Strong revenue growth and customer retention rates