Snowflake Reports Strong Q4 Growth, Announces Strategic Outlook

Snowflake's Q4 results highlight a 28% year-over-year revenue increase, leading to an optimistic outlook for fiscal 2026. The company's focus on AI and data integration promises further growth opportunities.

Date: 27-02-2025

AI Rating: 7

Earnings Performance Overview

Snowflake reported a strong quarter, with product revenue for Q4 reaching $943 million, marking a 28% year-over-year increase. The company also highlighted a non-GAAP operating margin of 9%, up from previous quarters, indicating improved operational efficiency.

Revenue Growth and Retention

For FY '25, the total product revenue reached $3.5 billion, growing 30% year over year. The remaining performance obligations, a key indicator of future revenue, totaled $6.9 billion with a 33% growth year-over-year. Additionally, net revenue retention stood at a healthy 126%, showing strong customer engagement and satisfaction.

Cash Flow and Margins

The non-GAAP adjusted free cash flow margin for FY '25 was reported at 26%. Moreover, Snowflake plans a 25% adjusted free cash flow margin for FY '26, indicating confidence in maintaining strong cash generation relative to revenue.

Future Growth Expectations

Looking ahead, Snowflake's guidance for Q1 projects product revenue between $955 million and $960 million, representing a year-over-year growth of approximately 21-22%. For FY '26, they forecast product revenue of approximately $4.28 billion, an anticipated growth rate of 24%. Such guidance suggests robust growth driven by new products and solid core business performance.

Stocks: SNOW