Snowflake Inc. Reports 28% Revenue Growth to $942.1 Million in Q3 Fiscal 2025

Snowflake Inc. reported significant financial results for the third quarter of fiscal 2025, ending October 31, 2024, with total revenue reaching $942.1 million, a 28% increase from $734.2 million in the same period last year. Product revenue, which constitutes the majority of the company's income, rose by 29% to $900.3 million, driven by increased consumption from existing customers. However, the company also reported a net loss of $327.9 million, compared to a loss of $214.7 million in the prior year, reflecting ongoing investments in growth and increased operating expenses.

The company's operating expenses surged to $986.7 million for the quarter, up from $765.8 million a year earlier, primarily due to higher costs in sales and marketing, research and development, and general administrative functions. Sales and marketing expenses alone increased by 23% to $438.0 million, while research and development costs rose by 33% to $442.4 million. This increase in expenses is attributed to a growing workforce and investments in product development, particularly in artificial intelligence and machine learning technologies.

Snowflake's customer base expanded to 10,618 as of October 31, 2024, up from 9,390 at the end of January 2024. The company reported a net revenue retention rate of 127%, indicating strong growth in usage among existing customers. Notably, the number of customers generating over $1 million in product revenue in the trailing twelve months increased to 542, compared to 432 a year ago. The company also highlighted its geographic expansion, with significant revenue contributions from the Americas, EMEA, and Asia-Pacific regions.

In terms of strategic developments, Snowflake completed two acquisitions during the nine months ended October 31, 2024, totaling $19.2 million, aimed at enhancing its technology and talent pool. Additionally, the company issued $2.3 billion in convertible senior notes in September 2024, which will support its growth initiatives and stock repurchase program. The board authorized an additional $2.5 billion for stock repurchases, reflecting confidence in the company's long-term prospects.

Looking ahead, Snowflake anticipates continued revenue growth driven by increased customer consumption and the expansion of its AI Data Cloud offerings. However, the company remains cautious about macroeconomic conditions that could impact customer spending and consumption patterns. The management emphasized its commitment to investing in innovation and scaling operations to capture the growing demand for cloud-based data solutions.