Snowflake Inc.
CEO : Mr. Sridhar Ramaswamy Ph.D.
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2025 Q3 | 28.3% YoY | 40.6% | 49.2% | 2024-11-20 |
Mike Scarpelli says,
Revenue and Growth
- Net revenue retention rates stabilized at 127%.
- New product initiatives, such as Snowpark, contribute to growth by representing 3% of product revenue.
- Approximately 500 accounts have adopted Iceberg, with storage remaining 11% of consumption, indicating minimal impact from the transition.
- Q3 product revenue outperformed expectations, benefiting from strong execution in core business areas.
Bookings and Margins
- Strong bookings with $350 million-plus total contract value deals signed in Q3.
- Non-GAAP product gross margin stabilized at 76%, while non-GAAP operating margin exceeded guidance at 6%.
- Non-GAAP adjusted free cash flow margin was 9%, supported by robust bookings.
- About 80% of customers pay annually in advance, aiding in cash flow stability.
Financial Strategies and Share Repurchases
- Issued $1.15 billion in 0% convertible senior notes due in 2027 and 2029, respectively.
- Proceeds were used for capped calls, share repurchase, with remaining funds earmarked for further stock repurchases, acquisitions, and corporate purposes.
- Year-to-date share repurchases totaled $1.9 billion, buying back 14.8 million shares at an average price of $130.87 per share.
- Remaining $2 billion authorization for share repurchases through March 2027.
Cash Position and Guidance
- Ended the quarter with $5 billion in cash, cash equivalents, and investments.
- Q4 product revenue guidance set between $906 million and $911 million, indicating a 23% year-over-year growth.
- Full year FY ’25 product revenue guidance raised to approximately $3.43 billion, representing 29% year-over-year growth.
Margins and Operational Efficiency
- FY ’25 non-GAAP product gross margin guidance increased to 76%.
- FY ’25 non-GAAP operating margin guidance increased to 5%.
- Expected non-GAAP adjusted free cash flow margin for FY ’25 is approximately 26%.
- Commitment to investing in innovation and revenue-driving functions while optimizing cost structure for sustainable growth.
Sridhar Ramaswamy says,
Core Business Focus and Analytics
- Analytics continues to be a crucial element for modern businesses. The ability to quickly act on data in real-time sets successful companies apart.
- Companies like Hyatt and Disney are integrating data insights at scale, showcasing the long-term potential of analytics.
- The transition from analytics to machine learning demonstrates a seamless flow into enhanced business capabilities.
AI and Machine Learning Advancements
- Products like Cortex AI highlight the potential of transforming unstructured data into actionable structured data.
- Recent announcements focus on multimodal models that redefine traditional analytics tasks.
- Investment in companies such as Datavolo enhances Snowflake’s capabilities by bringing additional data resources.
AI Applications and Use Cases
- Over 1,000 deployed AI use cases indicate a strong integration of AI into business processes.
- AI is emphasized as a business accelerant rather than a novelty, enhancing the value delivered to customers.
- Acquisitions like TruEra support the creation of reliable AI applications through improved observability.
Customer Success and Use Cases
- Successful collaborations with major companies like Siemens, Bayer, and Zoom demonstrate the value derived from AI products.
- These partnerships validate the effectiveness and scalability of Snowflake’s AI-driven solutions.
- Public endorsements from these corporations underline the credibility and impact of Snowflake’s platform.
Future Outlook and Strategic Investments
- The distinction between structured and unstructured data is becoming increasingly irrelevant.
- Strategic investments and partnerships are aimed at expanding the data platform’s capabilities.
- Snowflake is positioned to lead in a new era where data-driven decision-making is more dynamic and comprehensive.
Q & A sessions,
Expansion of Data Handling Capabilities
- Snowflake is targeting a larger data space with the introduction of Datavolo, capable of handling data not traditionally managed by Snowflake’s platform.
- This product includes over 100 different connectors, allowing data integration from various platforms and deployment in customer VPCs.
- The growth potential for data engineering and data products is projected to reach several hundred billion dollars over the next decade.
AI and Data Engineering Enhancements
- The Cortex Search product enables cost-effective AI applications, such as building chatbots for as little as $10.
- Key focus areas in AI are trustworthiness, reliability, and efficiency, with ongoing improvements in AI products like Cortex Analyst.
- Partnerships, such as the one with Anthropic, enhance Snowflake’s capabilities in AI and data integration, offering a unified interface for various business tasks.
Operational and Revenue Optimization
- Efficiency improvements across the sales organization are underway, with strategic hiring and team combination efforts contributing to operational savings.
- Snowpark is expected to contribute 3% of the company’s annual revenue, with promising year-over-year growth.
- Snowflake emphasizes thoughtful human resource management without resorting to mass layoffs, ensuring optimal performance management.
Product Adoption and Market Opportunities
- The company is observing an uptick in new product adoption, with Cortex entering an early growth stage.
- Snowflake is capitalizing on open data estates, enabling sophisticated data pipelines with minimal SQL knowledge.
- Significant opportunity exists in leveraging AI and data engineering to utilize vast amounts of untapped cloud storage data.
Financial Guidance and Long-term Vision
- Snowflake’s expansion into data engineering and AI is aligned with an anticipated market growth of several hundred billion dollars over the next 10 years.
- The company’s strategic initiatives are focused on creating a seamless, integrated platform to maximize customer value and consumption.
| Product | Current Status | Projected Contribution |
|---|---|---|
| Datavolo | Newly introduced, with extensive connector support | Key driver for expanding data handling capabilities |
| Cortex Search | Beginning growth phase | Enable cost-effective AI chatbot creation |
| Snowpark | Tracking as expected | 3% of annual revenue, growing year-over-year |
No bad stock 