Summary
Snowflake's fiscal 2025 third quarter revenue rose 28.3% to $942.1 million. Gross profit increased 23.0% to $621.2 million. Gross margin slipped to 65.9%, down 2.9 percentage points, as revenue growth outpaced gross profit growth. GAAP operating loss widened to $365.5 million. Operating margin was -38.8%, down 3.3 percentage points. Net loss widened to $324.3 million. Diluted loss per share was -$0.98. The gap between GAAP and non-GAAP results remains wide because of stock-based compensation and other charges.
Operationally, remaining performance obligations reached $5.7 billion, up 54.1% from the prior-year quarter. Current deferred revenue was $1.97 billion, up 23.0%. Net revenue retention rate was 127%, down from 131% at January 31, 2024. The company had 542 customers with trailing 12-month product revenue above $1 million, up from 432 a year earlier. Forbes Global 2000 customers totaled 754. Total customers were 10,618, up from 9,390 at January 31, 2024. Management expects about 50% of RPO to be recognized as revenue in the twelve months ending October 31, 2025. The weighted-average remaining life of capacity contracts was 2.3 years. These metrics point to continued expansion within large customers, even as net revenue retention has cooled from earlier levels.
Cash generation moderated. Operating cash flow was $101.7 million, down 15.9% from the prior-year quarter. Capital expenditures were $13.4 million, up 53.7%. Non-GAAP free cash flow was $78.2 million, down from $102.3 million. Non-GAAP adjusted free cash flow was $86.8 million. The company reported non-GAAP operating income of $58.9 million and non-GAAP net income of $73.3 million. GAAP results continued to absorb large stock-based compensation and restructuring charges. Restructuring charges related to a majority-owned subsidiary added $17.5 million of expense in the quarter. The company also carried a sizable deferred revenue balance, which it says is not a meaningful indicator of future revenue timing.
For the first nine months of fiscal 2025, revenue rose 29.9% to $2.64 billion. Gross profit rose 27.9% to $1.76 billion. Gross margin was 66.6%, down 1.1 percentage points. Operating loss widened to $1.07 billion. Operating margin was -40.5%, down 0.2 percentage points. Net loss widened to $958.2 million. Diluted loss per share was -$2.88. Operating cash flow rose 4.7% to $527.0 million. Capital expenditures rose 59.0% to $35.0 million. These figures show the same pattern as the quarter: strong top-line growth, but GAAP losses are widening.
Guidance points to slower sequential product revenue growth. For the fourth quarter of fiscal 2025, product revenue is guided to $906 million to $911 million, representing 23% year-over-year growth. For the full fiscal year 2025, product revenue guidance is $3,430 million, representing 29% growth. Full-year non-GAAP product gross margin is guided to 76%, non-GAAP operating margin to 5%, and adjusted free cash flow margin to 26%. The outlook assumes the higher end of fourth-quarter product revenue guidance. The company expects product revenue growth to decelerate from 29% in the third quarter to 23% in the fourth quarter. It also faces easier or tougher comparisons depending on consumption patterns, which remain hard to predict.
Risks remain familiar. Customers continue to optimize consumption and rationalize budgets, and some are shortening contract durations. Macroeconomic uncertainty, inflation, high interest rates, and foreign currency volatility could pressure spending. Holiday periods can disrupt consumption patterns. Competition is intense, and the company faces execution risk in AI and new product adoption. Cybersecurity threats directed at customers could damage reputation and demand. Snowflake also relies on public cloud providers for infrastructure. In September 2024, the company issued convertible senior notes and used part of the proceeds to repurchase common stock. It also entered into capped call transactions. As of October 31, 2024, a significant amount remained available under its stock repurchase program.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $942.1M | $868.8M | +8.4% | $734.2M | +28.3% |
| Gross profit | $621.2M | $580.7M | +7.0% | $505.2M | +23.0% |
| Gross margin | 65.9% | 66.8% | -0.9 pp | 68.8% | -2.9 pp |
| Research & development | $442.4M | $437.7M | +1.1% | $332.1M | +33.2% |
| Sales & marketing | $438.0M | $400.6M | +9.3% | $355.1M | +23.3% |
| General & administrative | $106.3M | $97.8M | +8.7% | $78.7M | +35.0% |
| Total operating expenses | $986.7M | $936.0M | +5.4% | $765.8M | +28.8% |
| Operating income (loss) | -$365.5M | -$355.3M | -2.9% | -$260.6M | -40.2% |
| Operating margin | -38.8% | -40.9% | +2.1 pp | -35.5% | -3.3 pp |
| Net income (loss) | -$327.9M | -$317.8M | -3.2% | -$214.7M | -52.7% |
| Net margin | -34.8% | -36.6% | +1.8 pp | -29.2% | -5.6 pp |
| Diluted EPS | -$0.98 | -$0.95 | -$0.03 | -$0.65 | -$0.33 |
| Customers | 2 | 2 | ±0.0% | — | — |
Risks
Snowflake disclosed that in May 2024 a threat actor accessed a number of customers' Snowflake accounts through customer failures under the shared responsibility model, and additional similar attacks have occurred since. The company faces multiple lawsuits, regulatory investigations, and lawmaker inquiries, with risk of customer churn, indemnity claims, insurance shortfalls, and reputational harm.
Snowflake is investing significantly in AI Technology, including Snowflake Cortex, but competitors may develop or adopt AI faster, GPU access is constrained and in high demand, and customer use depends on regulatory and internal compliance approvals. MD&A also highlights AI adoption as a key factor affecting platform adoption.
AWS, Azure, and GCP are both critical infrastructure providers and primary competitors, and a substantial majority of Snowflake's business runs on AWS. These providers could bundle competing products, offer unfavorable pricing, or treat Snowflake differently, and Snowflake's support for open data formats may reduce switching costs for customers.
Adverse macroeconomic conditions are causing customers to rationalize budgets, prioritize cash flow, shorten contract duration, and optimize consumption, including through shorter data retention policies. Snowflake's net revenue retention rate was 127% as of October 31, 2024, down from 131% as of January 31, 2024.
Because revenue is consumption-based rather than subscription-based, Snowflake lacks visibility into the timing of revenue recognition. Customers may consume less than expected, and new software or hardware efficiency improvements, such as Iceberg tables that allow compute without storage, can reduce resource consumption without offsetting new workloads.
Snowflake experienced executive turnover with the CEO retirement in February 2024 and the EVP Engineering and Support resignation in July 2024. Since the beginning of fiscal 2025 its stock price has declined significantly, which may impair retention of key employees and require additional equity or cash compensation.
Snowflake is subject to a securities class action and several class actions related to security matters, and has received regulator and congressional information requests. These matters could result in substantial costs, management distraction, fines, and further reputational harm.
Sales to large enterprises involve longer sales cycles, stronger customer leverage on pricing, more complex compliance and vendor diligence, and less predictability. Snowflake also states that consumption growth from large enterprises has historically taken longer than from smaller enterprises.
Expansion into highly regulated markets such as financial services, healthcare, and the public sector, plus data sovereignty requirements, increases compliance costs and requires additional contractual, deployment, and data governance processes.
In September 2024 Snowflake issued $2.3 billion aggregate principal amount of 0% convertible senior notes due 2027 and 2029, along with capped call transactions. Conversion may dilute stockholders, and Snowflake is exposed to counterparty credit risk on the capped calls.
Snowflake commits to minimum service-level availability and relies on AWS, Azure, and GCP. Interruptions could require service credits, reduce revenue, and harm reputation, and in some cases Snowflake may not have contractual recourse against public cloud providers for availability losses.
Future growth increasingly depends on data providers, data consumers, application developers, global system integrators, managed service providers, and resellers. If Snowflake cannot develop or maintain enough qualified partners, customer implementations and migrations may slow.
SaaS KPIs
All quarters →Net Revenue Retention Rate
Total Customers
Remaining Performance Obligations
Non-GAAP Operating Margin
Adjusted Free Cash Flow Margin
Free Cash Flow Margin
Adjusted Free Cash Flow
Product Revenue
Forbes Global 2000 Customers
Free Cash Flow
Customers with Trailing 12-Month Product Revenue > $1 Million
Customers with Trailing 12-Month Product Revenue > $10 Million
Customers with Trailing 12-Month Product Revenue > $5 Million
Summary, forecast, risks and KPIs are extracted from Snowflake Inc.'s SEC filings for Q3 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.