Snowflake 2026 Q3 Earnings Earnings Improve as Net Loss Narrows 11.1%

Snowflake (SNOW) reported fiscal 2026 Q3 earnings on Dec 3, 2025, with revenue rising 28.7% to $1.21 billion and losses narrowing by 11.2% per share. The company beat revenue estimates and in-line guidance, signaling steady growth amid ongoing losses.

Revenue

Product revenue led the way with $1.16 billion, while professional services and other revenue added $54.53 million, contributing to a total of $1.21 billion. This marked a 28.7% year-over-year increase, driven by strong demand for Snowflake’s cloud data analytics solutions.

Earnings/Net Income

Snowflake narrowed its net loss to $291.60 million ($0.87 per share) in Q3 2026, a 11.1% reduction from the $327.90 million loss ($0.98 per share) in Q3 2025. The narrowing of the per-share loss indicates progress, albeit with continued net losses.

Post-Earnings Price Action Review

The strategy of purchasing shares following a quarterly revenue decline proved unsuccessful, yielding a -22.39% return over 30 days, significantly underperforming the benchmark’s 73.44% gain. This resulted in an excess return of -95.84% and a CAGR of -8.82%, underscoring the strategy’s high risk and negative returns. A maximum drawdown of 0.00% and a Sharpe ratio of -0.27 further highlighted the volatility and underperformance.

CEO Commentary

CEO Sridhar Ramaswamy highlighted $1.16 billion in product revenue (29% YoY growth) and 37% YoY RPO growth of $7.88 billion. He emphasized AI as a core driver, with 7,300 accounts using AI weekly and a $100 million AI revenue run rate achieved a quarter early. Strategic priorities include expanding partnerships (e.g., SAP, Anthropic, Google Cloud) and advancing AI integration via Snowflake Intelligence and OpenFlow.

Guidance

CFO Brian Robins set Q4 product revenue guidance at $1.195–$1.2 billion (27% YoY growth) and FY 2026 product revenue of $4.446 billion. Non-GAAP gross margin is targeted at 75%, operating margin at 9%, and adjusted free cash flow margin at 25%, reflecting disciplined execution and consumption trends.

Additional News

1. M&A Activity: Snowflake expanded its partnership with Anthropic in a $200 million multi-year deal, making Claude accessible to 12,600 customers. This collaboration aims to enhance enterprise AI capabilities through data analytics integration.

2. C-Level Changes: Executive sales activity included VP Kleinerman selling $2.5M of shares and Officer Dageville disposing of $6.2M, both executed under prearranged trading plans. These transactions reflect strategic portfolio management by insiders.

3. Analyst Price Target Hikes: Pre-earnings, brokers like BTIG and Bank of America raised Snowflake’s price targets to $312 and $310, respectively, citing AI-driven growth and strong enterprise adoption.