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Highlights:
- Product revenue jumps 29% YoY to $900.3 million
- Net revenue retention rate holds strong at 127%
- Customer base with $1M+ revenue grows 25% YoY to 542 customers
Snowflake (NASDAQ:SNOW), a leader in cloud-based data warehousing, reported strong financial results for the third quarter of fiscal year 2025, showcasing impressive growth across key metrics. The company posted total revenue of $942.1 million, up 28% year-over-year (YoY), driven by continued demand for its cloud data platform. Product revenue, the company’s core offering, surged to $900.3 million, reflecting a 29% YoY increase.
A standout metric for Snowflake was its net revenue retention rate, which remained exceptionally high at 127%. This is a critical indicator of the company's ability to expand existing customer accounts and drive sustained growth. With strong retention, Snowflake continues to demonstrate that its cloud data platform is delivering significant value to its customers, which includes enterprises looking to harness the power of data analytics.
Snowflake also revealed that it now serves 542 customers with trailing 12-month product revenue exceeding $1 million, marking a 25% YoY increase. This growth in high-value customers demonstrates the expanding reach of Snowflake’s platform in large organizations, further validating its position as a leader in the cloud data market.
Remaining performance obligations (RPO), which represent the contracted revenue expected to be recognized in future periods, also saw a substantial increase, growing 55% YoY to $5.7 billion. This indicates strong forward-looking visibility for Snowflake’s revenue streams and reflects a solid pipeline of business in the quarters ahead.
For Q4 FY2025, Snowflake provided strong guidance, projecting product revenue between $906 million and $911 million, which represents a 23% YoY growth rate. While this growth rate shows a slight deceleration compared to Q3’s 29% growth, it still highlights the company’s ability to maintain a robust growth trajectory. Additionally, Snowflake expects full-year FY2025 product revenue to reach $3.43 billion, up 29% YoY, underlining its continued growth in the cloud data sector.
The company also reported a non-GAAP operating income of $58.9 million with a 6% margin, demonstrating its operational efficiency and profitability on an adjusted basis. However, Snowflake posted a GAAP operating loss of $365.5 million, which is a point of concern for investors who monitor the company's GAAP financials.
Free cash flow margin also showed a decline, dropping to 8% from 11% in the prior quarter. While still positive, this decrease indicates that Snowflake's cash flow growth is slowing, which may be attributed to increased investments and operating expenses aimed at supporting its rapid growth.
