0001640147-25-000211
SEC filingRevenue grew 29% YoY driven by consumption; gross margin expanded to 68%; free cash flow increased to $113.6M in Q3 FY26.
Revenue for the three months ended October 31, 2025 was $1.21B, up 29% year-over-year, driven primarily by increased consumption from existing customers. Product revenue, representing 96% of total revenue, grew 29% to $1.16B. Gross profit rose 32% to $822M, yielding a total gross margin of 68%, up from 66% in the prior year. Product gross margin improved to 72% from 71%, benefiting from lower restructuring costs and stock-based compensation as a percentage of revenue, partially offset by costs for new product capabilities. Operating loss narrowed to $329M from $365M, with operating margin improving from -38.8% to -27.2% due to revenue growth outpacing expense increases. Net loss attributable to Snowflake was $294M, compared to $324M in the prior year quarter.
Product segment revenue grew 29% YoY to $1.16B, with gross margin expanding to 72%. The growth was fueled by a net revenue retention rate of 125% and an increase in customers with over $1M in trailing product revenue (688 vs 534 a year ago). Professional services and other revenue grew 30% to $54.5M but remained a small portion of total revenue. Its gross margin improved to -28% from -37%, though losses persist as the company invests in customer success.
Management expects to continue investing in sales and marketing, research and development, and platform capabilities, including AI Technology. They anticipate sales and marketing and R&D expenses to decrease as a percentage of revenue over time but increase in absolute dollars. Product gross margin is expected to fluctuate due to customer consumption mix, pricing, and new product investments. The company expects to maintain positive free cash flow for fiscal 2026, supported by strong cash collections and a $7.88B remaining performance obligation balance. Recent acquisitions and cloud infrastructure commitments underscore long-term growth investments.
As of October 31, 2025, Snowflake held $1.94 billion in cash and cash equivalents and $2.45 billion in marketable securities (short- and long-term investments). Total debt consisted of $2.28 billion net carrying value of convertible senior notes (principal $2.3 billion), resulting in a net cash position of $2.11 billion when subtracting debt from cash and investments. Shareholders' equity stood at $2.13 billion. The company's deferred revenue totaled $2.43 billion, while remaining performance obligations (RPO) reached $7.9 billion, with 48% expected to be recognized over the following 12 months.
After the balance sheet date, Snowflake entered into significant contractual commitments: (1) an amendment to a cloud infrastructure agreement committing at least $530 million from November 2025 to October 2030, and (2) a renewal and expansion of an AI services agreement committing at least $200 million over three years (December 2025–November 2028), with annual minimums of $50 million, $70 million, and $80 million. These commitments replace a prior $171.3 million cloud commitment that was superseded by the amendment.
During the nine months ended October 31, 2025, Snowflake repurchased 4.3 million shares for $723.5 million, leaving approximately $1.3 billion available under the board-authorized repurchase program (expires March 2027). No dividends were paid. The company issued no new debt and made no debt repayments; its convertible notes (2027 and 2029) remain outstanding. Capital expenditures totaled $85.6 million (2.5% of revenue), primarily for property and equipment; no software development costs were capitalized in fiscal 2026.
Snowflake operates as a single reportable segment. For the three months ended October 31, 2025, revenue was $1.21 billion. Geographic breakdown: United States $912.6 million (75%), EMEA $199.4 million (16%), Asia-Pacific and Japan $68.7 million (6%), and Other Americas $32.2 million (3%). No individual country outside the U.S. exceeded 10% of revenue. The single-segment structure simplifies analysis but limits granular operating income disclosure at the segment level.