0001640147-25-000187
SEC filingSnowflake's product revenue grew 32% YoY, driven by existing customer consumption, with gross margin stable and operating loss narrowing.
For the three months ended July 31, 2025, Snowflake reported total revenue of $1.14B, up 32% YoY, driven primarily by product revenue of $1.09B (+32% YoY). The growth was attributed to increased consumption from existing customers, evidenced by a net revenue retention rate of 125%. Product gross margin remained flat at 72% as improvements from scale were offset by new product investments. Professional services revenue grew 38% to $54.5M, but gross margin improved to (28%) from (33%) YoY. Total gross margin expanded 1 percentage point to 68%. Operating expenses grew 19% YoY, but as a percentage of revenue declined to 98% from 108%, reflecting operating leverage. Sales and marketing expenses increased 25% but dropped to 44% of revenue from 46%. R&D expenses rose 12% to 44% of revenue from 51%. G&A expenses increased 22% to 10% of revenue from 11%, but included $108.6M of asset impairment charges (non-recurring). Operating loss improved to $340M (30% of revenue) from $355M (41% of revenue). Net loss narrowed to $298M from $317M.
Product remains the dominant segment, contributing 95% of revenue. Its growth rate of 32% YoY reflects strong consumption trends across the customer base. Professional services, while small, grew 38% YoY as the company expanded its services organization to support customer adoption. The negative gross margin for professional services improved due to better cost management, but remains dilutive to overall margins.
The MD&A did not provide explicit numerical guidance for future periods. However, management highlighted ongoing investments in AI Technology and platform expansion, particularly through the Crunchy Data acquisition. The company expects R&D expenses to increase in absolute dollars but decrease as a percentage of revenue over time. Sales and marketing expenses are also expected to remain the largest operating expense but decline relative to revenue. No changes to critical accounting estimates were noted. The company believes its liquidity, including $4.6B in cash and investments, is sufficient for the next 12 months.
As of July 31, 2025, Snowflake held $1.881B in cash and cash equivalents and $2.719B in marketable securities (total $4.600B of cash and investments). Total debt was $2.276B (net of unamortized debt issuance costs) from the 0% convertible senior notes due 2027 and 2029. Stockholders' equity stood at $2.380B, down from $3.007B at January 31, 2025, primarily due to net losses and stock repurchases. The company's remaining performance obligations (RPO) were $6.9B, with approximately 50% expected to be recognized as revenue in the next 12 months.
Snowflake has operating lease liabilities of $38.1M (current) and $378.5M (non-current). Additionally, the company has committed $38.4M for leases signed but not yet commenced. Other contractual commitments mainly relate to third-party cloud infrastructure and subscription arrangements, but no aggregate figure is disclosed. The company also has contingent liabilities from legal proceedings, but no material loss accrual has been recorded.
During the six months ended July 31, 2025, Snowflake repurchased 3.214 million shares for $490.6M, leaving $1.5B remaining under its $2.5B authorization (extended to March 2027). No dividends were paid. Capital expenditures (property and equipment) were $61.7M (2.8% of revenue), and there were no capitalized software development costs in the period. The company issued $2.3B convertible notes in September 2024 (net proceeds ~$2.27B) and used $195.5M for capped call transactions and $399.6M for stock repurchases in connection with the offering.
Snowflake operates as a single reportable segment. Revenue for Q2 FY2026 was $1,144.969M, with a geographic breakdown: United States $861.5M (75.3%), Other Americas $30.6M (2.7%), EMEA $185.3M (16.2%), and Asia-Pacific and Japan $67.6M (5.9%). Product revenue was $1,090.5M, and professional services revenue was $54.5M. Operating loss was $340.3M (29.7% margin), driven by heavy investment in sales and marketing ($502.0M) and R&D ($492.0M).