Snowflake 2026 Q3 Earnings Beats Revenue Estimates, Narrows Net Loss 11.2%

Snowflake (SNOW) reported fiscal 2026 Q3 earnings on Dec 3, 2025, with revenue rising 28.7% to $1.21 billion and losses narrowing. The company raised its full-year product revenue guidance to $4.446 billion, reflecting confidence in AI-driven growth and strategic partnerships.

Revenue

Snowflake’s total revenue surged to $1.21 billion in Q3 2026, a 28.7% year-over-year increase from $942.09 million. Product revenue, the company’s core offering, accounted for $1.16 billion, driven by robust demand for its data analytics platform. Professional services and other revenue contributed $54.53 million, reflecting steady growth in customer support and integration services. The performance underscores Snowflake’s ability to expand its market share amid heightened adoption of AI and cloud-based solutions.

Earnings/Net Income

Snowflake reduced its net loss to $291.60 million for Q3 2026, a 11.1% improvement from $327.90 million in the prior-year period. The per-share loss narrowed to $0.87 from $0.98, marking a 11.2% reduction. While the company has sustained losses for seven consecutive years, the deceleration in losses highlights progress in operational efficiency and cost management.

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 underperformed significantly over the past three years. This approach yielded a -22.39% return, lagging behind the benchmark’s 73.44% gain. The strategy’s CAGR of -8.82% and excess return of -95.84% underscore its poor performance, indicating a declining portfolio value and investor skepticism about post-earnings momentum.

CEO Commentary

CEO Sridhar Ramaswamy emphasized Snowflake’s Q3 achievements, including $1.16 billion in product revenue (29% YoY growth), 125% net revenue retention, and 615 new customers. He highlighted AI as a key growth driver, with 50% of Q3 bookings tied to AI use cases. Strategic partnerships with SAP and Anthropic, along with innovations like Snowflake Intelligence, were cited as catalysts for future expansion.

Guidance

CFO Brian Robins raised full-year product revenue guidance to $4.446 billion, reflecting 28% YoY growth. Q4 product revenue is projected at $1.195–$1.2 billion (27% YoY growth). Non-GAAP operating margin is targeted at 9% for FY26, with 7% in Q4. The company emphasized disciplined execution, $1.3 billion remaining in share repurchase authorization, and $4.4 billion in cash reserves.

Additional News

1. AI Partnership Expansion: Snowflake announced a $200 million multiyear deal with Anthropic, integrating Claude AI models for over 12,600 customers. This collaboration aims to enhance enterprise data analytics and AI adoption.

2. Insider Sales: VP Christian Kleinerman sold 10,000 shares ($2.5M) and VP Benoit Dageville sold 25,000 shares ($6.2M) under prearranged trading plans, signaling potential confidence in long-term value.

3. Strategic AI Investments: Snowflake expanded its AI ecosystem with integrations to NVIDIA’s CUDA-X libraries and deepened ties with SAP and Palantir, reinforcing its position as a core platform for enterprise AI workflows.