Snowflake Inc. (NYSE:SNOW) reported stunning fourth-quarter earnings for fiscal 2025, previously ended January 31, 2025, signaling strong growth and continued investor enthusiasm. Shares surged by 13.9% after-hours on Wednesday following the company’s announcement of results eclipsing analyst expectations.
The data cloud company recorded revenue of $986.8 million for the quarter, representing a remarkable 27% increase compared to the same period last year, when revenue stood at $774.7 million. Notably, this figure also surpassed the consensus estimate of $956.22 million, as reported by FactSet.
After adjustments, Snowflake’s earnings per share landed at $0.30, beating the anticipated $0.17 by around $0.13. The product revenue, which is considered a key performance indicator for the firm, hit $943.3 million, marking a 28% growth year-over-year. This impressive growth led Sridhar Ramaswamy, CEO of Snowflake, to declare, "We delivered another strong quarter, with product revenue of $943 million, up 28% year-over-year. Today, Snowflake is the most consequential data and AI company in the world," emphasizing the company's role at the forefront of AI integration.
On the operational side, Snowflake reported 580 customers with trailing 12-month product revenue exceeding $1 million, reflecting significant growth—up 28% from the previous year. The overall customer base has now exceeded 11,000, showcasing the widespread adoption of its platform.
Looking toward the future, Snowflake has projected optimistic growth rates for the upcoming fiscal year. For the first quarter of fiscal 2026, the company anticipates product revenue growth of 21% to 22%, estimating between $955 million and $960 million. Overall, it forecasts product revenue for fiscal 2026 to increase by 24%, reaching approximately $4.28 billion. This expectation exceeds the average analyst estimate of $4.21 billion.
The growth projections are bolstered by the recently expanded partnership with Microsoft (NASDAQ:MSFT), which will integrate OpenAI models directly within Snowflake's Cortex AI service. This strategic move is part of Snowflake's continuous adaptation to customer needs and the growing shift toward AI-driven solutions, with the expected benefits fostering additional revenue gains.
Interestingly, Snowflake’s consistent performance has continued to attract attention, especially considering the stock has rebounded from lows—trading up about 10% after the earnings report amid prevailing optimism.
Another noteworthy change came from within the company itself, as Chief Financial Officer Michael Scarpelli announced his retirement, with plans to remain until a suitable successor is found and transition to an advisory role. His departure coincides with this notable period of growth for Snowflake and highlights the company's momentum.
Despite facing challenges such as adjusted EPS declining by approximately 14%, the overall performance presents confidence among investors. "While adjusted EPS still declined by about 14%, that's a far mejor result than analysts were anticipating," stated experts following the earnings release. This statement emphasizes how even downturns can show relative strength against market expectations.
Performance indicators such as the net revenue retention rate stood at 126% as of January 31, 2025, slightly down from the historic high of 131% reported during the same quarter the previous year. This measure, which assesses how much existing customers are increasing their spending, showcases the resilience and dependency businesses have on Snowflake's offerings.
With business budgets increasingly accommodating costs associated with cloud-based solutions, Snowflake's offerings align perfectly with this trend. The company remains at the forefront as businesses look to leverage its expansive cloud capabilities to support data and AI integration for operational effectiveness.
Analysts anticipate positive adjustments will continue, as mentioned by Snowflake's guidance on performance improvements for the coming fiscal year. The adjusted operating margin is expected to reach 5% for Q1, with expectations of increasing to 8% over fiscal 2026. This predicts greater efficiency and profitability as the company ramps up its services and customer outreach.
Snowflake's latest earnings report clearly encapsulates its impressive growth story fueled by AI and deep market penetration. Investors and analysts alike are tuning their expectations toward the promising horizon of fiscal 2026, with many anticipating continued strength and innovation as pivotal themes with Snowflake's transformational role within the data analytics arena.