To The Moon

$Snowflake(SNOW)$ is expected to report their quarterly earnings for fiscal Q4 2025, the consensus estimate for revenues is anticipated at $952.67 million, indicating an increase of 22.97% from the year-ago quarter’s reported figure.

For the consensus EPS forecast, the market is looking at 18 cents per share which will be a decrease of 51.43% from same period last year.

Snowflake (SNOW) Last Earnings Call Saw Share Price Gain 32.37%

SNOW had a positive calls on 20 Nov 2024 which has give investors a 32.37% gain on the share price since.

Snowflake reported a strong Q3 with significant growth in product revenue, operational efficiency, and adoption of new AI and data engineering products.

Despite some concerns about storage revenue and federal market challenges, the company's outlook and execution remain positive, supported by a robust go-to-market strategy and global customer engagement.

Snowflake (SNOW) Guidance To Focus On Stable Net Revenue Retention Rate

In the Snowflake Q3 Fiscal 2025 earnings call, the company discussed impressive growth metrics and provided robust guidance for the future. Product revenue reached $900 million, marking a 29% year-over-year increase, and remaining performance obligations totaled $5.7 billion, reflecting a 55% growth. The non-GAAP operating margin improved to 6%, and Snowflake increased its product revenue outlook for the year to $3.43 billion, anticipating a 29% year-over-year growth. Additionally, the company highlighted the strong adoption of its AI feature family, Snowflake Cortex, and the strategic efforts to streamline operations, which significantly enhanced efficiency and profitability.

For Q4, product revenue is expected to be between $906 million and $911 million, representing a 23% year-over-year growth. The call also noted a stable net revenue retention rate of 127% and emphasized the positive impact of new product initiatives like Snowpark, which is on track to make up 3% of product revenue.

Here Are Some Key Metrics Investors Should Look Out For SNOW Earnings

Revenue Growth

SNOW saw strong product revenue growth where product revenue for Q3 was $900 million, up 29% year-over-year. Remaining performance obligations grew by 55% to $5.7 billion.

Analysts expect continued revenue growth, though the rate may be moderating. Key factors driving revenue include the adoption of Snowflake's data platform, particularly its new AI initiatives.

Earnings Per Share (EPS): There are varying forecasts for EPS, and looking at how SNOW has performed in terms of EPS, it has beaten the previous EPS forecast, so if the key metrics remains strong for SNOW, we could be seeing an EPS surprise.

Margins: Gross margin performance is a point of focus, with debates on the impact of AI investments and competition.

Storage Revenue Concerns: With approximately 500 accounts adopting Iceberg and storage remaining 11% of consumption, there are potential headwinds from customers moving to Iceberg, though the impact is expected to be minimal.

AI Initiatives

Snowflake's AI feature family, Cortex, is showing significant adoption with over 1,000 deployed use cases and more than 3,200 accounts utilizing AI and ML features. Data engineering features are now at a $200 million run rate.

Snowflake's AI solutions, like Cortex and Snowpark, are expected to play a significant role. Their adoption and impact on revenue are crucial.

Competition

The company increased its FY '25 product revenue guidance due to strong bookings and improved go-to-market operations. Large deals include 3 $50 million-plus total contract value deals.

Intensifying competition from companies like Databricks is a factor to consider, as it can put pressure on pricing and profitability.

Customer Growth

In fiscal Q3 2025, SNOW has record attendance in Snowflake world tours with a 40% increase year-over-year. Significant customer wins include a global telecom giant and Warner Bros. Discovery.

Growth in customer numbers, especially those with high spending, is a key indicator of Snowflake's health. Though in fiscal Q3 2025, Federal remains a very small part of the business with continued focus needed for growth. Efficiency concerns in government spending could impact future growth.

Operational Efficiency and Margin Improvement

Non-GAAP operating margin improved to 6%, and non-GAAP product gross margin stabilized at 76%. The company achieved a non-GAAP adjusted free cash flow margin of 9%.

Technical Analysis - Exponential Moving Average (EMA)

SNOW looks to be trading in a volatile trend, as of yesterday (24 Feb) trading, we can see that SNOW is trading below the 50-day period, which we can see that there is selling pressure seen from RSI, which signal a bearish momentum.

So the bulls might be trying to attempt for daily uptrend, but this would very much depend if market would be still experiencing selling pressure for the tech stocks.

So this could be an opportunities to buy into SNOW as SNOW should do well in the upcoming to be reported quarter.

Summary

I think analysts general consensus is that Snowflake will continue to grow revenue, but profitability may be impacted by increased investments. Snowflake's Q4 2025 earnings will be closely watched for its revenue growth, the impact of its AI initiatives, and its ability to maintain profitability in a competitive market.

But the current price after yesterday (24 Feb) selling pressure might present an opportunity for investors who are looking to get into tech stocks with low target price.

Appreciate if you could share your thoughts in the comment section whether you think SNOW could post revenue growth and EPS could beat estimates like previous fiscal Q3 2025 quarter.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.