8-K: Snowflake Reports Strong Q1 Fiscal 2026 Results, Revenue Up 26%

Snowflake announces its Q1 fiscal 2026 financial results, highlighting a 26% year-over-year revenue increase and a net revenue retention rate of 124%.

Summary

• Snowflake reported its financial results for the first quarter of fiscal year 2026, which ended on April 30, 2025.
• Total revenue reached $1.042 billion, marking a 26% increase compared to the same quarter last year.
• Product revenue specifically grew by 26% year-over-year, totaling $996.8 million.
• The company's net revenue retention rate stood at 124% as of April 30, 2025.
• Snowflake now has 606 customers with trailing 12-month product revenue exceeding $1 million, a 27% increase year-over-year.
• The company also serves 754 Forbes Global 2000 customers, representing a 4% year-over-year growth.
• Remaining performance obligations (RPO) amounted to $6.7 billion, a 34% increase compared to the previous year.
• The company is guiding for product revenue between $1.035 billion and $1.040 billion for the second quarter of fiscal 2026, representing 25% year-over-year growth.
• For the full fiscal year 2026, Snowflake anticipates product revenue of $4.325 billion, a 25% increase year-over-year.
• GAAP operating loss was $(447.3) million, or (43)%.
• Non-GAAP operating income was $91.7 million, or 9%.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong revenue growth and customer retention. While there are GAAP losses, the non-GAAP metrics and future guidance are encouraging, suggesting a healthy business trajectory.

Positives

• Snowflake achieved strong revenue growth, with product revenue up 26% year-over-year.
• The high net revenue retention rate of 124% indicates strong customer loyalty and expansion.
• The increasing number of customers with over $1 million in trailing 12-month revenue demonstrates the company's ability to attract and retain large enterprise clients.
• The significant growth in remaining performance obligations (RPO) suggests a healthy pipeline of future revenue.
• The company is generating positive free cash flow, with $183.4 million reported for the quarter.

Negatives

• The company reported a GAAP operating loss of $(447.3) million for the quarter.
• The company reported a GAAP net loss of $(429.952) million for the quarter.
• The company's GAAP gross margin was 67%, which is lower than the non-GAAP gross margin of 72%.

Risks

• The forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially.
• These risks include general market conditions, competition, and the company's ability to manage growth and develop new products.
• The company's ability to predict customer consumption of its platform is subject to uncertainty, particularly in light of the impact of holidays on customer consumption patterns.
• The company's ability to sublease or terminate certain of its office facility commitments and the impact of related asset impairment.

Future Outlook

Snowflake expects product revenue between $1.035 billion and $1.040 billion for the second quarter of fiscal 2026, representing 25% year-over-year growth. The company anticipates full-year fiscal 2026 product revenue of $4.325 billion, a 25% increase year-over-year. Full year non-GAAP operating income is expected to be 8% and adjusted free cash flow is expected to be 25%.

Management Comments

• Sridhar Ramaswamy, CEO of Snowflake, stated that Snowflake delivered another strong quarter, with product revenue of $997 million, up a strong 26% year-over-year, and remaining performance obligations totaling $6.7 billion.
• He also emphasized the company's mission to empower every enterprise to achieve its full potential through data and AI.

Industry Context

Snowflake's results reflect the ongoing demand for cloud-based data and AI solutions. The company's growth rate is competitive within the industry, as enterprises increasingly rely on data analytics and AI to drive business decisions.

Comparison to Industry Standards

• Snowflake's net revenue retention rate of 124% is strong compared to other SaaS companies, indicating high customer satisfaction and expansion.
• Companies like Datadog and MongoDB also report net revenue retention rates, which are key indicators of their ability to retain and grow their customer base.
• Snowflake's growth rate is competitive with other cloud-based data platform providers such as Amazon Web Services (AWS) and Microsoft Azure, although direct comparisons are difficult due to the broader scope of these companies' offerings.

Stakeholder Impact

• Shareholders will likely react positively to the strong revenue growth and customer retention metrics.
• Employees may be encouraged by the company's continued growth and success.
• Customers will benefit from the ongoing development and enhancement of Snowflake's platform.
• Suppliers and partners may see increased opportunities as Snowflake continues to expand its business.

Next Steps

• The company will hold a conference call on May 21, 2025, to discuss the financial results.
• Investors can access an investor presentation providing additional information and analysis on the Snowflake Investor Relations website.

Key Dates

Keywords

Snowflake, financial results, Q1 2026, revenue, AI Data Cloud, net revenue retention, remaining performance obligations, RPO, GAAP, non-GAAP