TLDR

Q1 2026 product revenue rose 26% Y/Y to $997 million.
Net revenue retention stood at 124%, showing strong customer loyalty.
Remaining performance obligations grew 34% Y/Y to $6.7 billion.
SNOW added 451 net new customers in Q1, up 19% Y/Y.
FY26 revenue guided at $4.325 billion, up 25% Y/Y.

As of 11:00 AM EDT, Snowflake Inc. (NYSE: SNOW) stock traded at $198.12, up 10.61% following the release of its Q1 2026 earnings on May 21. The data cloud company beat Wall Street expectations with solid revenue growth, expanding customer base, and healthy operating metrics.

Snowflake Inc. (SNOW) 

Q1 product revenue reached $997 million, representing a 26% year-over-year increase. Net new customers totaled 451, a 19% jump from the same period last year.

Thoughts on Snowflake Earnings Report $SNOW:
🟢 Positive
Revenue: Q1 product revenue grew +26.2% YoY to $997M, beating estimates by 3.9%
RPO: Reached $6.70B, up +34.3% YoY
Billings: Increased +36.1% YoY to $770M
Operating Margin: Expanded to 8.8%, up +4.4 PPs YoY
EPS: Non-GAAP… pic.twitter.com/apImtfYzHY

— Sergey (@SergeyCYW) May 22, 2025

Recurring Revenue and Customer Metrics Show Strength

Snowflake’s remaining performance obligations came in at $6.7 billion, rising 34% year-over-year. Net revenue retention was reported at 124%, reflecting strong customer satisfaction and expansion, although slightly below previous peaks.

The company emphasized customer momentum, launching over 125 product capabilities during the quarter, double the number introduced in Q1 2025.

Margins Improve, Cash Position Remains Strong

Snowflake’s non-GAAP product gross margin was 75.7%, while non-GAAP operating margin improved to 9%, up 442 basis points from a year ago. Adjusted free cash flow margin reached 20%.

Snowflake ended the quarter with $4.9 billion in total cash, equivalents, and investments. The company repurchased 3.2 million shares for $491 million at an average price of $152.63.

Capital expenditures increased in Q1 due to investments in new headquarters and office buildouts, potentially limiting near-term cash flow.

FY26 Guidance Maintains Growth Trajectory

Snowflake maintained a robust outlook for FY26. It expects product revenue to reach $4.325 billion, up 25% year-over-year. Non-GAAP product gross margin is expected to hold at approximately 75%, while operating margin is guided at 8%. Adjusted free cash flow margin is projected to hit 25%.

Despite this optimism, the company flagged challenges. Competition from large cloud providers like Microsoft and AWS remains a concern. Also, macroeconomic uncertainty may affect future customer budgets and expansion.

Returns Outperform Market Benchmarks

As of May 22, Snowflake’s year-to-date return stood at 27.9%, sharply outperforming the S&P 500’s decline of 0.71%. On a one-year basis, SNOW delivered a 20.9% gain, more than double the index’s 10.04% return.

Though the company has a 39.57% three-year return, it still trails the S&P 500’s 49.69%. Over a five-year period, SNOW has declined 19.39%, compared to the index’s nearly 98% gain.

Snowflake’s solid Q1 and encouraging guidance suggest ongoing growth, even as competitive and economic pressures persist. Its next earnings date is expected between August 19 and August 25, 2025.

 

The post Snowflake Inc. (SNOW) Stock: Surges Over 10% on Strong Q126 Results and Solid FY26 Guidance appeared first on CoinCentral.

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Filed under: News - @ May 22, 2025 4:26 pm