SNOWFLAKE INVESTOR PRESENTATION Fourth Quarter Fiscal 2025 © 2025 Snowflake Inc. All Rights Reserved Statement Regarding Use of Non-GAAP Financial Measures This presentation includes certain non-GAAP financial measures, which have not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). These non-GAAP financial measures are in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. There are a number o ...

Snowflake Inc. (SNOW) came out with quarterly earnings of $0.30 per share, beating the Zacks Consensus Estimate of $0.17 per share. This compares to earnings of $0.35 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 76.47%. A quarter ago, it was expected that this company would post earnings of $0.15 per share when it actually produced earnings of $0.20, delivering a surprise of 33.33%.Over the last four quarters, the company h ...

Core Insights - Snowflake's fiscal 2025 fourth-quarter financial report showed strong revenue growth despite a decline in adjusted earnings per share, indicating resilience in its business model [2][3]. Financial Performance - Revenue for Q4 2025 reached $986.8 million, a 27% increase from $774.7 million in Q4 2024, surpassing expectations [2][3]. - Adjusted earnings per share (EPS) were $0.30, down 14% from $0.35 in Q4 2024, but still better than analysts' forecasts [2][3]. - Adjusted free cash flow increased by 30% to $423.1 million from $324.3 million year-over-year [2]. - The net revenue retention rate was 126%, a decrease of 5 percentage points from the previous year, but still indicating solid customer spending growth [2][4]. Customer Metrics - Snowflake ended the quarter with 580 customers spending at least $1 million annually, a 28% year-over-year increase, contributing to a total customer count exceeding 11,000 [4]. Future Outlook - For Q1 of fiscal 2026, Snowflake anticipates product revenue growth of 21% to 22% and an adjusted operating margin of 5% [5]. - The company projects a 24% increase in product revenue for the entire fiscal 2026 [5]. - Snowflake expects its product revenue growth rate to accelerate throughout fiscal 2026, driven by AI adoption among customers [7]. Market Reaction - Following the earnings report, Snowflake's shares rose approximately 10% in early after-hours trading, reflecting positive market sentiment despite the decline in adjusted EPS [6].

Core Insights - Snowflake reported strong earnings for Q4 FY2025, with an EPS of $0.30, exceeding analyst expectations of $0.18 by 66.7% [2][6] - Revenue for the quarter reached $986.8 million, surpassing the estimate of $956 million, indicating operational effectiveness despite ongoing operating losses [2][6] Financial Performance - EPS (Non-GAAP) for Q4 FY2025 was $0.30, down 14.3% from $0.35 in Q4 FY2024 [3] - Total revenue increased by 27.4% year-over-year from $774.7 million in Q4 FY2024 [3] - Product revenue was $943.3 million, reflecting a 27.8% increase from $738.1 million in the previous year [3] - Free cash flow for the quarter was $415.4 million, up 28.0% from $324.5 million in Q4 FY2024 [3] Business Model and Strategy - Snowflake operates a cloud-based data platform focusing on data storage, processing, and analytics, benefiting from network effects as more organizations join [4] - The company emphasizes a consumption-based business model, aligning revenue generation with client usage, which encourages scalability [5] - The company is enhancing industry-specific data clouds, particularly in Healthcare and Financial Services, to penetrate niche markets [8] Customer Metrics - The net revenue retention rate was 126%, indicating strong customer retention, although it decreased from 131% the previous year [7] - There was a 27% increase in customers generating over $1 million in annual revenue, totaling 580 [7] Future Outlook - For Fiscal 2026, Snowflake projects product revenue to reach approximately $4.28 billion, with a target product gross profit margin of 75% and an operating income margin of 8% [10] - The company remains optimistic about future growth, focusing on managing operating losses while leveraging network effects and consumption-based pricing [11]

Financial Performance - Fourth quarter revenue was $986.8 million, representing 27% year-over-year growth[2] - Product revenue for the quarter was $943.3 million, reflecting a 28% year-over-year increase[4] - Full-year product revenue totaled $3,462.4 million, marking a 30% year-over-year increase[6] - Revenue for the three months ended January 31, 2025, was $986.77 million, a 27.4% increase from $774.70 million in the same period of 2024[24] - Total revenue for the twelve months ended January 31, 2025, reached $3.63 billion, a 29% increase compared to the previous year[30] Customer Metrics - Net revenue retention rate stood at 126% as of January 31, 2025[2] - The company has 580 customers with trailing 12-month product revenue exceeding $1 million, a 27% year-over-year growth[2] - The number of customers with trailing 12-month product revenue greater than $1 million increased to 1,200, reflecting a growth of 15% year-over-year[16] - Snowflake's customer base includes over 11,000 companies globally, with hundreds from the Forbes Global 2000 list[21] Future Guidance - Guidance for first quarter fiscal 2026 projects product revenue between $955 million and $960 million, representing a growth of 21% to 22%[7] - Full-year fiscal 2026 product revenue guidance is set at $4,280 million, reflecting a 24% year-over-year growth[8] - Snowflake aims to enhance its AI Data Cloud offerings, targeting a market growth of 25% in the next fiscal year[17] - The company anticipates continued growth in product revenue driven by increased consumption and new product features[18] Profitability and Margins - Product gross profit margin for the fourth quarter was 71% under GAAP and 76% under non-GAAP[5] - Non-GAAP product gross profit margin was reported at 75%, with operating income of $100 million and net income attributable to Snowflake Inc. of $80 million[15] - Non-GAAP gross profit for the three months ended January 31, 2025, was $716.2 million, reflecting a gross margin of 73%[30] - The GAAP gross profit margin for the twelve months ended January 31, 2025, was 67%[30] - Product gross margin was reported at 71%, compared to 74% in the previous period[31] Operating Expenses - Operating income for the fourth quarter was reported at a loss of $386.7 million under GAAP, but a profit of $92.8 million under non-GAAP[5] - Total operating expenses increased to $1,040,264, representing a 10% increase year-over-year[31] - Research and development expenses for the three months ended January 31, 2025, were $492.49 million, up from $364.48 million in the same period of 2024, a 35.1% increase[24] - Marketing expenses were reported at $432,683, representing 44% of total revenue[31] - General and administrative expenses were $115,091, accounting for 11% of total revenue[31] Cash Flow and Liquidity - Free cash flow for the period was $150 million, resulting in a free cash flow margin of 20%[15] - Adjusted free cash flow was reported at $160 million, with an adjusted free cash flow margin of 21%[15] - Non-GAAP free cash flow reached $415.4 million, representing a 42% increase compared to $324.5 million in the previous quarter[33] - Cash and cash equivalents as of January 31, 2025, were $2.63 billion, up from $1.76 billion a year earlier, marking a 49.0% increase[26] - Net cash provided by operating activities for the twelve months ended January 31, 2025, was $959.76 million, compared to $848.12 million in 2024, a 13.1% increase[28] Losses and Restructuring - Operating loss for the three months ended January 31, 2025, was $(386.68) million, compared to $(275.51) million in the same period of 2024, indicating a 40.4% increase in losses[24] - Net loss attributable to Snowflake Inc. for the twelve months ended January 31, 2025, was $(1.29) billion, compared to $(837.99) million in 2024, representing a 53.4% increase in losses[24] - The company incurred restructuring charges of $7.7 million for the twelve months ended January 31, 2025[30] - GAAP net loss amounted to $325,724, which is a 33% increase from the prior year[32] Stock and Shares - The weighted-average shares used in computing GAAP net loss per share were 331,432[32] - Weighted-average shares used in computing non-GAAP net income per share attributable to common stockholders—diluted was 370,683 for the latest quarter, up from 363,757 in the previous quarter[33] - Non-GAAP net income per share attributable to Snowflake Inc. was reported at $0.34[32] - Non-GAAP net income per share attributable to common stockholders was $0.30 for the latest quarter, compared to $0.35 in the previous quarter, reflecting a decrease of approximately 14.3%[33]

Core Viewpoint - The market is anticipating Snowflake Inc's quarterly earnings report, with the stock showing positive movement ahead of the announcement, indicating investor optimism despite a historically poor post-earnings performance [1][2]. Company Performance - Snowflake's stock is currently up 1.7% at $167.15, aiming to end a five-day losing streak, having bounced off a support level at $160, which previously saw a post-earnings bull gap of 32.7% in November [1]. - The stock remains 8.1% higher in 2025, reflecting a positive long-term outlook [1]. Historical Context - Over the past two years, Snowflake has had a disappointing record of post-earnings performance, with only two instances of gains in the next-day sessions, both occurring in November [2]. - Options traders are anticipating an 18.7% price movement for the stock following the earnings report, which is larger than the average 14% movement observed over the last eight quarters [2]. Analyst Sentiment - Analysts are showing optimism leading up to the earnings report, with multiple price-target hikes in the last two weeks and upgrades to "buy" from Wolfe Research and BTIG [3]. - Out of 42 analysts covering Snowflake, 34 have a "buy" or better rating, indicating strong confidence in the stock [3]. Options Activity - Call trading activity is robust, with a 50-day call/put volume ratio of 3.29, ranking in the 98th percentile of its annual range, and a 10-day call/put volume ratio of 3.61, ranking in the 85th percentile [4].

Core Insights - The analysis focuses on the growth prospects of companies and employs the Discounted Cash Flow (DCF) model for valuation purposes, providing insights on cash flow generation under various business models [1]. Group 1 - The analysis is conducted by the HedgeMix team, emphasizing a careful review of each company's growth potential [1]. - The DCF model is highlighted as a key tool for valuation, allowing for a detailed understanding of cash flow generation [1].

Core Viewpoint - Snowflake (SNOW) is expected to report its fourth-quarter fiscal 2025 results on February 26, with revenue estimates indicating a year-over-year increase of 22.97% to $952.67 million, while earnings per share are projected to decrease by 51.43% to 17 cents [1][2]. Group 1: Financial Performance Expectations - The Zacks Consensus Estimate for revenues is pegged at $952.67 million, indicating an increase of 22.97% from the year-ago quarter's reported figure [2]. - The consensus mark for earnings has been stable in the past 30 days at 17 cents per share, suggesting a decrease of 51.43% from the year-ago quarter's reported figure [2]. - SNOW's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, with an average surprise of 35.39% [3]. Group 2: Key Factors Impacting Performance - SNOW has been facing increased GPU-related costs due to aggressive investments in AI initiatives, which are expected to keep margins under pressure [5]. - Competition from companies like Databricks is intensifying, leading to pricing pressure that may hurt profitability [5]. - However, top-line growth is anticipated to benefit from the growing adoption of Iceberg and Snowpark, along with increased traction for the AI solution, Cortex [6]. Group 3: Client and Market Position - As of the end of the third quarter of fiscal 2025, SNOW had over 1,000 deployed use cases and more than 3,200 accounts utilizing its AI and machine learning features [7]. - The company had 18 Global 2000 customers at the end of the third quarter, indicating strong momentum that is expected to continue [7]. - Snowflake shares have appreciated 15.2% year to date, outperforming the Zacks Computer & Technology sector's decline of 0.6% [8]. Group 4: Valuation and Market Sentiment - SNOW stock is currently trading at a premium, with a forward 12-month price-to-sales (P/S) ratio of 13.2X compared to the broader sector's 6.45X, suggesting a stretched valuation [11]. - The stock is trading above the 50-day and 200-day moving averages, indicating a bullish trend [14]. Group 5: Strategic Initiatives and Partnerships - Snowflake is benefiting from innovations such as Apache Iceberg, Hybrid tables, and Cortex Large Language Model, which are helping to win new clients [16]. - Partnerships with major players like Amazon, Microsoft, and NVIDIA enhance data interoperability and support the company's growth [16][17]. - The planned acquisition of Datavolo is expected to strengthen Snowflake's platform by enhancing support for structured and unstructured data [20].

Core Viewpoint - Snowflake's stock has seen a significant increase of 47% over the last six months, with an analyst upgrade to an outperform rating and a price target of $235, indicating a potential upside of 24% from the current price of $189 [1] Group 1: Stock Performance and Analyst Ratings - Wolfe Research analyst Alex Zukin upgraded Snowflake's stock to an outperform rating with a price target of $235, suggesting a 24% upside from the current share price of $189 [1] - The stock's price-to-sales multiple has nearly doubled recently, indicating a shift in valuation [2] Group 2: Revenue Growth and Product Outlook - Despite challenges such as a CEO change and increasing competition, Snowflake has launched new cloud products, including Snowflake Cortex, which is gaining strong adoption [3] - Management has raised its product revenue outlook for the full year, with product revenue growing 29% year-over-year in fiscal Q3, and guidance suggests the same growth rate for the full year [4] Group 3: Future Projections and Valuation - For Snowflake to reach the analyst's price target of $235, it must meet Wall Street's consensus estimate of $4.43 billion in revenue next year while maintaining its current price-to-sales multiple [5] - To sustain returns beyond 2025, Snowflake needs to continue innovating and improve margins, as its net loss has exceeded $1.1 billion on a trailing-12-month basis [6]

Group 1 - Snowflake Inc. (SNOW) is expected to report quarterly earnings of $0.17 per share, a decline of 51.4% year-over-year, with revenues forecasted at $952.67 million, reflecting a 23% increase compared to the same period last year [1] - The consensus EPS estimate for the quarter has remained unchanged over the past 30 days, indicating analysts' reassessment of their initial projections [1] - Analysts predict 'Revenue- Product revenue' at $910.47 million, a change of +23.4% from the prior-year quarter, and 'Revenue- Professional services and other revenue' at $42.70 million, indicating a +16.6% change from the year-ago quarter [4] Group 2 - The estimate for 'Remaining performance obligations' is projected to reach $6.71 billion, compared to $5.20 billion from the previous year [4] - Analysts estimate 'Total customers' at 11,035, up from 9,437 year-over-year, and 'Customers with trailing 12-month product revenue greater than $1 million' at 572, compared to 461 in the same quarter last year [5] - The expected 'GAAP Product gross profit' is $642.35 million, an increase from $545.31 million reported in the same quarter last year [6] Group 3 - Snowflake shares have increased by +5.7% over the past month, outperforming the +2.2% move of the Zacks S&P 500 composite [6] - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to mirror overall market performance in the near future [6]