Snowflake's (NYSE:SNOW) Q4 CY2025 Sales Beat Estimates

Cloud data platform provider Snowflake (NYSE:SNOW) reported revenue ahead of Wall Street’s expectations in Q4 CY2025, with sales up 30.1% year on year to $1.28 billion. Its non-GAAP profit of $0.32 per share was 17.8% above analysts’ consensus estimates.

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Company Overview

Named after the unique architecture of its data warehouse which resembles a snowflake pattern, Snowflake (NYSE:SNOW) provides a cloud-based data platform that enables organizations to consolidate, analyze, and share data across multiple cloud providers.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, Snowflake’s 51.2% annualized revenue growth over the last five years was incredible. Its growth surpassed the average software company and shows its offerings resonate with customers, a great starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. Snowflake’s annualized revenue growth of 29.2% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, Snowflake reported wonderful year-on-year revenue growth of 30.1%, and its $1.28 billion of revenue exceeded Wall Street’s estimates by 2.1%.

Looking ahead, sell-side analysts expect revenue to grow 23.5% over the next 12 months, a deceleration versus the last two years. Still, this projection is commendable and indicates the market is forecasting success for its products and services.

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Billings

Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.

Snowflake’s billings punched in at $2.21 billion in Q4, and over the last four quarters, its growth was fantastic as it averaged 36% year-on-year increases. This alternate topline metric grew faster than total sales, meaning the company collects cash upfront and then recognizes the revenue over the length of its contracts - a boost for its liquidity and future revenue prospects.

Customer Retention

One of the best parts about the software-as-a-service business model (and a reason why they trade at high valuation multiples) is that customers typically spend more on a company’s products and services over time.

Snowflake’s net revenue retention rate, a key performance metric measuring how much money existing customers from a year ago are spending today, was 125% in Q4. This means Snowflake would’ve grown its revenue by 24.8% even if it didn’t win any new customers over the last 12 months.

Snowflake has a good net retention rate, proving that customers are satisfied with its software and getting more value from it over time, which is always great to see.

Key Takeaways from Snowflake’s Q4 Results

We were impressed by how significantly Snowflake blew past analysts’ billings expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. On the other hand, Q1 adjusted operating margin guidance came in below expectations. Overall, we think this was a mixed quarter. Investors were likely hoping for more, and shares traded down 3.7% to $163.63 immediately after reporting.

So should you invest in Snowflake right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).