Snowflake 2026 Q3 Earnings Beats Estimates with 28.7% Revenue Growth, 11.2% EPS Improvement

Snowflake (SNOW) delivered third-quarter revenue of $1.21 billion, surpassing analyst estimates of $1.18 billion, driven by 28.7% year-over-year growth. The company narrowed its net loss to $291.60 million, a 11.1% reduction compared to the prior year. However, shares fell 8% post-earnings as guidance for 27% revenue growth fell short of investor expectations for 30% acceleration.

Revenue

Snowflake’s total revenue rose to $1.21 billion in 2026 Q3, up from $942.09 million in 2025 Q3. Product revenue led the growth at $1.16 billion, reflecting a 29% year-over-year increase, while professional services and other revenue contributed $54.53 million. The performance underscores strong demand for Snowflake’s data analytics solutions, particularly in AI integration.

Earnings/Net Income

The company improved its loss per share to $0.87 in 2026 Q3 from $0.98 in 2025 Q3, a 11.2% improvement. Net losses narrowed to $291.60 million, down from $327.90 million, but Snowflake remains unprofitable for the seventh consecutive year, highlighting ongoing financial challenges despite operational progress.

Post-Earnings Price Action Review

The strategy of buying Snowflake shares on the earnings release date after a revenue decline quarter-over-quarter and holding for 30 days has yielded poor performance over the past three years. The strategy resulted in a -22.39% return, significantly underperforming the benchmark return of 73.44%. The excess return was -95.84%, and the strategy’s CAGR was -8.82%, indicating substantial losses and a declining portfolio value over the period.

Despite beating earnings estimates, Snowflake’s stock fell 8% in after-hours trading as investors reacted to guidance that implied slower growth than anticipated. The stock had surged 72% year-to-date before the report, creating high expectations that were not met.

CEO Commentary

CEO Sridhar Ramaswamy highlighted strong Q3 performance, including $7.88 billion in RPO growth and a $100 million AI revenue run rate achieved a quarter early. He emphasized AI as a core growth driver and outlined strategic priorities such as expanding partnerships with SAP, Anthropic, and Google Gemini AI, while maintaining operational rigor and customer retention metrics.

Guidance

CFO Brian Robins provided Q4 product revenue guidance of $1.195–$1.2 billion (27% YoY growth) and FY 2026 product revenue of $4.446 billion (28% YoY growth). Non-GAAP operating margin is targeted at 9% for FY 2026, with gross margin at 75% and adjusted free cash flow margin at 25%. Robins reiterated confidence in long-term growth and margin expansion.

Additional News

Snowflake announced a $200 million multiyear partnership with Anthropic to integrate Claude AI models into its platform, expanding access for 12,600+ customers. Executives also disclosed significant insider sales: Vice President Christian Kleinerman sold 10,000 shares ($2.5M) and Officer Benoit Dageville sold 25,000 shares ($6.2M) under prearranged trading plans. These transactions occurred amid heightened investor scrutiny of stock price volatility and growth expectations.

The company also deepened collaborations with Accenture and AWS, surpassing $2 billion in AWS Marketplace sales this year. These strategic moves aim to solidify Snowflake’s position in the AI-driven data analytics market.