0001640147-26-000008
SEC filingSnowflake's FY2026 product revenue grew 29% to $4.47B, with product gross margin improving to 72%, driven by increased consumption from existing customers.
Snowflake Inc. positions itself as a cloud computing platform that puts data and artificial intelligence (AI) at its core, delivering the AI Data Cloud. The platform enables organizations to consolidate data into a single source of truth, break down data silos, and derive value from data in secure, governed, and compliant ways. Snowflake operates on a consumption-based business model delivered as a service.
Snowflake does not report operating segments; the business is managed as a single segment. The filing focuses on product categories and customer use cases rather than financial segments.
The platform supports six product categories: Data Engineering, Analytics, Transactions, AI, Applications, and Collaboration. Key named products include Snowpark (Java, Scala, Python), Snowpark Container Services, Snowflake Intelligence, Snowflake Cortex Agents, Snowflake Postgres, Unistore, Snowflake Marketplace, and the Native Application Framework. In February 2026, Snowflake acquired Observe, Inc., an AI-powered observability leader, to deliver next-generation observability built on open standards.
Snowflake sells primarily through a direct sales team segmented by customer industry, size, and region, supported by self-service trials. The sales team is complemented by resellers, distributors, and a robust partner network (Snowflake Partner Network) including system integrators, technology providers, and strategic alliances. As of January 31, 2026, Snowflake had 13,328 total customers, including 790 of the Forbes Global 2000, which contributed approximately 43% of revenue. The net revenue retention rate was 125%, and customers with more than $1 million in trailing 12-month product revenue increased from 576 to 733 year-over-year.
The market is highly competitive and rapidly evolving. Named competitors include large public cloud providers (Amazon Web Services, Microsoft Azure, Google Cloud Platform), less-established cloud companies, legacy database and big data vendors, existing observability providers (given the Observe acquisition), and new or emerging entrants. Snowflake competes on factors such as architecture purpose-built for the cloud, scalability, multi-use case support, seamless data sharing, pricing transparency, AI capabilities, and security.
Snowflake's growth strategies are explicitly outlined: (1) innovate and advance the platform through R&D, (2) drive growth by acquiring new customers, especially larger organizations, (3) drive increased usage within the existing customer base, (4) expand global footprint outside North America, (5) expand data content and collaboration across the ecosystem, and (6) grow and invest in the partner network, including high-impact alliances with enterprise SaaS platforms and foundational model providers.
As of January 31, 2026, Snowflake employed 9,060 people across 36 countries. R&D employees numbered 2,424, located primarily in Bellevue, WA; Menlo Park, CA; and internationally in Berlin, Toronto, Warsaw, and San José. None of the U.S. employees are unionized. The company emphasizes its culture driven by eight core values: Put Customers First, Integrity Always, Think Big, Be Excellent, Make Each Other the Best, Get it Done, Own It, and Embrace Each Other’s Differences.
Snowflake's fiscal 2026 results demonstrated robust top-line growth and improving profitability metrics. Total revenue increased 29% YoY to $4.68B, driven by product revenue of $4.47B (also up 29%). The product gross margin improved 100 bps to 72%, supported by lower personnel-related costs and restructuring benefits, partially offset by costs from new product launches. Overall gross margin remained stable at 67%. Operating loss narrowed to $1.44B (31% of revenue) from $1.46B (40% of revenue), a 900 bps improvement, reflecting operating leverage despite higher absolute expenses. Net loss attributable to Snowflake widened to $1.33B from $1.29B, primarily due to higher interest expense and investment impairments. Free cash flow grew 27% to $1.12B, outpacing revenue growth and highlighting strong cash generation.
Product revenue remains the core driver, constituting 95% of total revenue. Growth was fueled by existing customers, as evidenced by a net revenue retention rate of 125% and an increase in customers with >$1M trailing 12-month product revenue to 733 (from 576). Professional services and other revenue grew 29% to $212M but remains a small, margin-dilutive segment (gross margin of -31%). The customer base expanded to 13,328, including 790 Forbes Global 2000 customers (up from 750). Remaining performance obligations (RPO) surged 42% to $9.77B, with 46% expected to be recognized within 12 months, indicating strong near-term revenue visibility.
Management emphasized continued investment in growth, particularly in AI and data science capabilities, while targeting improved spend efficiency. They expect sales and marketing expenses to decrease as a percentage of revenue over time, and R&D expenses to decline as a percentage as well, though absolute dollars will rise. The company anticipates positive operating cash flows in fiscal 2027. Key strategic priorities include expanding the AI Data Cloud, driving consumption within existing customers, and acquiring new customers, especially large enterprises. The recent acquisitions of Crunchy Data and Observe underscore this focus. Macroeconomic uncertainties remain a headwind, with customers rationalizing budgets and optimizing consumption, but the underlying demand trend appears robust.
As of January 31, 2026, Snowflake held $2.83B in cash and equivalents and $1.96B in marketable securities (short- and long-term investments), totaling $4.78B in liquidity. The company has no outstanding debt beyond its convertible senior notes: $2.28B net carrying value (2027 and 2029 notes). Stockholders' equity stands at $1.92B. The balance sheet remains debt-light with no near-term maturities, providing ample flexibility.
Snowflake's total non-cancelable purchase commitments with remaining terms exceeding one year amounted to $2.68B as of January 31, 2026. The largest components are long-term cloud infrastructure agreements, including a $1.0B commitment (June 2023 – May 2028) and a $530M commitment (November 2025 – October 2030). Timing is weighted toward the next three years: $656M due within 1 year, $1.46B in 1–3 years, and $568M beyond 3 years. Additionally, operating lease obligations total $590.6M (undiscounted), offset by $26.6M in sublease receipts.
During fiscal 2026, Snowflake repurchased $873.5M of common stock (including $399.6M in connection with the September 2024 note offering). No new buyback authorization was disclosed. No dividends were paid. The company issued $0 in new debt and made no principal repayments; the $8.3M net increase in convertible notes carrying value reflects amortization of issuance costs. Capital expenditures totaled $101.6M (2.2% of revenue), primarily for property and equipment, with no capitalized software development costs in fiscal 2026.
Snowflake operates as a single reportable segment. Geographic revenue (based on customer location) for fiscal 2026: United States $3.52B (75%), EMEA $763.7M (16%), Asia-Pacific & Japan $271.0M (6%), and Other Americas $125.3M (3%). No individual country outside the U.S. exceeded 10% of total revenue. The single-segment structure limits granularity, but the geographic breakdown highlights U.S. dominance and growing international contributions.
Snowflake operates in highly competitive markets dominated by public cloud providers (AWS, Azure, GCP) that also serve as infrastructure partners. The adoption of open data formats (Iceberg) reduces customer lock-in, while AI advancements bring new competitors and substitution threats. The company must continuously innovate in AI, data sharing, and hybrid offerings to maintain its position.
The May 2024 cybersecurity incidents, stemming from customer failures to enable MFA, resulted in lawsuits, regulatory inquiries, and reputational damage. The shared responsibility model means Snowflake may face liability even when not at fault. Platform availability depends on third-party cloud infrastructure; outages could trigger service credits and customer churn.
Snowflake's consumption-based revenue model creates limited visibility into future revenue. Revenue growth has slowed from 67% (FY2024 to FY2025) to 29% (FY2025 to FY2026). The company has a history of operating losses (net loss $1.3B in FY2026) and expects costs to rise. The $2.0B convertible notes introduce dilution and cash repayment risks, mitigated by capped call transactions that themselves carry counterparty risk.
Snowflake faces stringent data privacy regulations (GDPR, CCPA, emerging state AI laws) and export controls that could restrict international operations. Expansion in China via a local partner exposes the company to geopolitical tensions, regulatory uncertainty, and intellectual property risks. The evolving AI regulatory landscape (e.g., EU AI Act) may impose compliance burdens on Snowflake's AI offerings.
Leadership transitions (CEO, CFO, CRO changes since 2024) and intense competition for AI-skilled personnel pose execution challenges. Stock price volatility affects equity-based compensation, making retention harder. The company's requirement for in-office work may disadvantage it against remote-friendly competitors.
The provided document excerpt does not contain the actual cash flow statement data. It only includes the auditor's report and index. Therefore, no analysis can be performed.