Snowflake’s Q3 2025 Earnings Report

Snowflake (NYSE:SNOW), a cloud data platform provider, announced its third-quarter 2025 revenue at $1.21 billion. This marks a 28.7% increase compared to the previous year and exceeds Wall Street expectations. The company reported non-GAAP earnings per share at $0.35, which is 12.5% above what analysts anticipated.

There’s a question on many investors’ minds: is now the right time to buy Snowflake shares?

• Revenue: $1.21 billion, surpassing the analyst forecast of $1.18 billion (resulting in 28.7% year-over-year growth, a 2.4% beat).

• Adjusted EPS: $0.35 compared to expectations of $0.31 (12.5% beat).

• Adjusted operating profit: $131.3 million against expectations of $108.2 million (margin of 10.8%, a 21.3% beat).

• Product revenue guidance: Midpoint for Q4 2025 is projected at $1.2 billion.

• Operating profit margin: -27.2%, improving from -38.8% during the same period last year.

• Free cash flow margin: 9.4%, up from 5.1% in the prior quarter.

• Customers: There are 688 customers spending over $1 million annually.

• Net revenue retention rate: 125%, consistent with the last quarter.

• Billings: Reached $1.36 billion at the end of the quarter, reflecting a year-over-year increase of 27.7%.

• Market capitalization: Currently stands at $87.97 billion.

The company, which has a distinctive architecture reminiscent of a snowflake, offers a platform that allows organizations to manage and analyze data across various cloud services.

In terms of long-term performance, Snowflake has demonstrated significant quality over time. Although many companies might see short-term success, high-performing businesses often have years of consistent growth. Snowflake’s revenue has surged at a compound annual growth rate of 55.1% over the last five years, exceeding the typical growth rates observed in software companies. This suggests its products are resonating well with customers.

While Snowflake’s annual sales growth of 29.4% in the last two years is slightly below the five-year average, it still indicates healthy demand amidst evolving industry trends.

Looking ahead, analysts forecast sales growth of 23.4% for the next year—although this signifies a deceleration, it remains a positive indication of the expected market success for the company’s offerings.

As software continues to permeate virtually all sectors, the demand for development tools is skyrocketing. Such tools play a critical role in monitoring cloud infrastructure, integrating media capabilities, and ensuring seamless streaming experiences.

It’s worth noting that billing, often termed as “cash earnings,” refers to the actual cash a company collects from customers over a certain time frame, differing from revenue recognition which is typically spread out over longer contract terms.

In this recent quarter, Snowflake’s revenue climbed to $1.36 billion, showcasing robust year-over-year growth of 30.4%. This consistent performance reflects solid demand and enhances the company’s liquidity, laying a solid foundation for future growth.

The Software-as-a-Service model often ensures that customers tend to increase their spending over time, which is a strong positive for high valuations. In terms of the net revenue retention rate, Snowflake reported 125%, reflecting a 25% revenue growth from existing customers, even without adding new clients within the last year.

This suggests that customers value and are satisfied with the software, which is reassuring. Despite beating revenue estimates, the stock still fell by 8.5% following the announcement—perhaps investors were expecting even more?

So, is Snowflake a good buy right now? While the recent quarter’s results are important, the long-term fundamentals and valuation should weigh more heavily in investment decisions.