Snowflake Q4 Earnings Beat Estimates, Revenues Up Y/Y, Shares Fall

Snowflake SNOW reported fourth-quarter fiscal 2026 non-GAAP earnings of 32 cents per share, beating the Zacks Consensus Estimate by 19.18%. The company reported earnings of 30 cents per share in the year-ago quarter.

Revenues of $1.28 billion beat the consensus mark by 2.42% and rose 30.1% year over year. Americas, EMEA (Europe, the Middle East, and Africa), and APJ (Asia Pacific and Japan) contributed 78%, 16%, and 6% to revenues, respectively.

Snowflake shares have plunged 0.81% in after-hours trading.

SNOW’s Q4 Details

Snowflake’s product revenues were $1.22 billion, which accounted for 96% of total revenues. The figure represents a year-over-year increase of 30%. Professional Services and other revenues were $57.4 million, which contributed 4% of total revenues, representing a 32% year-over-year increase.

Snowflake Inc. Price, Consensus and EPS Surprise

Snowflake Inc. price-consensus-eps-surprise-chart | Snowflake Inc. Quote

In the fiscal fourth quarter, Snowflake saw a net revenue retention rate of 125% for existing customers. The company reported 21% year-over-year growth in the number of customers, reaching 13,328 in the fiscal fourth quarter. The company now has 733 customers with trailing 12-month product revenues greater than $1 million (up 27% year over year) and 790 Forbes Global 2000 customers. In the fourth quarter of fiscal 2026, the company added 740 net new customers, representing 40% year-over-year growth.

The non-GAAP gross margin contracted 90 basis points (bps) year over year to 71.7%. Product gross margin was 75% in the reported quarter.

Research & development expenses, as a percentage of revenues, decreased 290 bps on a year-over-year basis to 20.5%. General & administrative expenses, as a percentage of revenues, were 5.5%, down 100 bps year over year. Sales and marketing expenses, as a percentage of revenues, expanded 160 bps on a year-over-year basis to 34.9%.

Operating margin expanded 140 bps on a year-over-year basis to 10.8%.

SNOW’s Balance Sheet & Cash Flow Details

As of Jan. 31, 2026, Snowflake had cash, cash equivalents, and short-term investments of $4.02 billion compared with $3.36 billion as of Oct. 31, 2025.

The remaining performance obligations at the end of the fourth quarter of fiscal 2026 were $9.77 billion, up 42% year over year.

The adjusted free cash flow was $782.2 million in the reported quarter.

SNOW Offers Positive Guidance

For the first quarter of fiscal 2027, Snowflake expects product revenues in the range of $1.262-$1.267 billion. The projection range indicates year-over-year growth of 27%. The operating margin is expected to be 9% for the fiscal first quarter.

For fiscal 2027, Snowflake expects product revenues of $5.660 billion, indicating 27% year-over-year growth. The company anticipates a product gross margin of 75%, an operating margin of 12.5% and a free cash flow margin of 23%.

SNOW’s Zacks Rank & Stocks to Consider

Currently, Snowflake has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector are ATN International ATNI, Broadcom AVGO, and Credo Technology CRDO. While Credo Technology sports a Zacks Rank #1 (Strong Buy), ATN International and Broadcom carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

ATN International is set to report fourth-quarter 2025 results on March 5. ATN International shares have surged 79.8% in the trailing six-month period.

Broadcom is slated to report first-quarter fiscal 2026 results on March 4. Broadcom shares have gained 10.6% in the trailing six-month period.

Credo Technology is set to report third-quarter fiscal 2026 results on March 2. Credo Technology shares have gained 4.7% in the trailing six-month period.

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This article originally published on Zacks Investment Research (zacks.com).

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