Snowflake 2026 Q3 Earnings Revenue Surges 28.7% Despite Narrowing Losses

Snowflake (SNOW) reported Q3 2026 results that exceeded revenue expectations while narrowing losses year-over-year. The company raised full-year guidance, signaling confidence in sustained growth despite margin pressures.

Revenue

Snowflake’s total revenue surged 28.7% to $1.21 billion in Q3 2026, driven by robust product revenue of $1.16 billion, which accounted for 95.9% of total revenue. Professional services and other revenue contributed $54.53 million, complementing the core business. The performance marked a 29% year-over-year increase in product revenue, underscoring strong demand for its data analytics platform.

Earnings/Net Income

The company narrowed its net loss to $291.60 million (or $0.87 per share) in Q3 2026, a 11.1% reduction from the $327.90 million loss in the prior-year period. While the improvement reflects operational efficiency, Snowflake has sustained losses for seven consecutive years, highlighting ongoing financial challenges.

Post-Earnings Price Action Review

A strategy of buying SNOW when it beats revenue and selling in 30 days resulted in a -25.58% return, significantly underperforming the benchmark’s 53.57% gain. The approach exhibited a maximum drawdown of 0.00%, a Sharpe ratio of -0.12, and a volatility of 59.11%. These metrics underscore the stock’s high-risk profile and the difficulty of capitalizing on short-term earnings-driven momentum.

CEO Commentary

CEO Sridhar Ramaswamy highlighted Q3’s 29% product revenue growth and 37% year-over-year RPO expansion. He emphasized AI as a “core growth driver,” noting $100 million in AI revenue run rate achieved ahead of schedule and partnerships with SAP and Anthropic. The CEO expressed confidence in Snowflake’s ecosystem expansion and customer retention, with 125% net revenue retention.

Guidance

CFO Brian Robins raised FY 2026 product revenue guidance to $4.446 billion (28% YoY growth) and set Q4 2026 guidance at $1.195–$1.2 billion. Non-GAAP operating margin is targeted at 9% for FY 2026, with gross margin at 75%. The CFO acknowledged a $1 million–$2 million Q3 revenue impact from a cloud outage but reiterated long-term growth confidence.

Additional News

Snowflake announced a $200 million multi-year AI partnership with Anthropic, integrating Claude models into its platform to enhance agentic AI capabilities. The company also surpassed $2 billion in AWS Marketplace sales in 2025, reinforcing its cloud ecosystem. However, insider selling intensified, with 231 sales reported in six months, including significant transactions by former CEO Frank Slootman.

Key Takeaways

Snowflake’s Q3 results reflect strong revenue growth and AI traction, but margin pressures and valuation concerns persist. While strategic partnerships and AI monetization offer long-term potential, investors remain cautious about near-term profitability and execution risks.