[Special Note about Forward-Looking Statements](index=4&type=section&id=Special%20Note%20about%20Forward-Looking%20Statements) [Overview of Forward-Looking Statements](index=4&type=section&id=Special%20Note%20about%20Forward-Looking%20Statements_Summary) This quarterly report contains numerous forward-looking statements regarding future operating results, financial condition, business strategy, and market trends, advising investors against over-reliance due to inherent risks and uncertainties - All non-historical statements in the report are forward-looking, concerning future operating results, financial condition, business strategy, market trends, capital requirements, and management's plans and objectives[9](index=9&type=chunk) - Forward-looking statements are based on management's beliefs and assumptions, subject to known and unknown risks, uncertainties, and assumptions described in the "Risk Factors" section[12](index=12&type=chunk) - The company discloses important business and financial information to investors and the public through its investor relations website, SEC filings, webcasts, press releases, and conference calls, including via social media platforms[14](index=14&type=chunk) [Selected Risks Affecting Our Business](index=6&type=section&id=Selected%20Risks%20Affecting%20Our%20Business) [Summary of Key Risks](index=6&type=section&id=Selected%20Risks%20Affecting%20Our%20Business_Summary) Investing in the company's common stock involves risks such as unpredictable revenue growth, sustained losses, intense competition, innovation failures, AI investment risks, security breaches, operational disruptions, and macroeconomic impacts - Rapid revenue growth but limited operating history makes future performance difficult to predict[19](index=19&type=chunk) - The company has a history of operating losses and may not achieve or sustain profitability in the future[19](index=19&type=chunk) - The market in which the company operates is highly competitive, and failure to compete effectively could harm business, financial condition, and operating results[19](index=19&type=chunk) - Failure to successfully execute investments in AI technologies, including generative AI, could harm business, financial condition, and operating results[19](index=19&type=chunk) - The company or third-party service providers may experience platform or public cloud infrastructure outages, failures, and performance issues[19](index=19&type=chunk) - Adverse global economic conditions, reduced cloud spending, or lower-than-expected consumption could limit business growth and negatively impact operating results[19](index=19&type=chunk) [PART I. Financial Information](index=6&type=section&id=PART%20I.%20Financial%20Information) [ITEM 1. Financial Statements (Unaudited)](index=7&type=section&id=ITEM%201.%20Financial%20Statements%20%28Unaudited%29) [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of July 31, 2025, total assets decreased to **$8,196,727 thousand** from **$9,033,938 thousand**, with total liabilities at **$5,817,138 thousand** and total stockholders' equity at **$2,379,589 thousand** Condensed Consolidated Balance Sheets (Selected) | Indicator | July 31, 2025 (thousand dollars) | January 31, 2025 (thousand dollars) | | :----------------------- | :--------------------- | :--------------------- | | **Assets** | | | | Cash and cash equivalents | 1,880,720 | 2,628,798 | | Short-term investments | 1,705,988 | 2,008,873 | | Accounts receivable, net | 646,682 | 922,805 | | Total current assets | 4,596,127 | 5,869,372 | | Goodwill | 1,174,978 | 1,056,559 | | Total assets | 8,196,727 | 9,033,938 | | **Liabilities and Stockholders' Equity** | | | | Deferred revenue, current | 2,268,387 | 2,580,039 | | Convertible senior notes, net | 2,275,674 | 2,271,529 | | Total liabilities | 5,817,138 | 6,027,295 | | Stockholders' equity attributable to Snowflake Inc. | 2,372,648 | 2,999,929 | | Total stockholders' equity | 2,379,589 | 3,006,643 | | Total liabilities and stockholders' equity | 8,196,727 | 9,033,938 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended July 31, 2025, revenue reached **$1,144,969 thousand** with a net loss of **$297,930 thousand** and **$0.89** basic and diluted net loss per share, while six-month figures were **$2,187,043 thousand** revenue and **$727,882 thousand** net loss Condensed Consolidated Statements of Operations (Selected) | Indicator | Three Months Ended July 31, 2025 (thousand dollars) | Three Months Ended July 31, 2024 (thousand dollars) | Six Months Ended July 31, 2025 (thousand dollars) | Six Months Ended July 31, 2024 (thousand dollars) | | :--------------------------------- | :--------------------------------- | :--------------------------------- | :--------------------------------- | :--------------------------------- | | Revenue | 1,144,969 | 868,823 | 2,187,043 | 1,697,532 | | Operating loss | (340,276) | (355,303) | (787,533) | (703,875) | | Net loss | (297,930) | (317,770) | (727,882) | (635,586) | | Net loss attributable to Snowflake Inc. | (298,017) | (316,899) | (728,109) | (633,887) | | Net loss per share (basic and diluted) | (0.89) | (0.95) | (2.18) | (1.90) | [Condensed Consolidated Statements of Comprehensive Loss](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) For the three months ended July 31, 2025, net loss was **$297,930 thousand** and comprehensive loss was **$303,319 thousand**, with six-month figures at **$727,882 thousand** net loss and **$722,864 thousand** comprehensive loss Condensed Consolidated Statements of Comprehensive Loss (Selected) | Indicator | Three Months Ended July 31, 2025 (thousand dollars) | Three Months Ended July 31, 2024 (thousand dollars) | Six Months Ended July 31, 2025 (thousand dollars) | Six Months Ended July 31, 2024 (thousand dollars) | | :--------------------------------- | :--------------------------------- | :--------------------------------- | :--------------------------------- | :--------------------------------- | | Net loss | (297,930) | (317,770) | (727,882) | (635,586) | | Other comprehensive income (loss) | (5,389) | 10,334 | 5,018 | 2,841 | | Comprehensive loss | (303,319) | (307,436) | (722,864) | (632,745) | | Comprehensive loss attributable to Snowflake Inc. | (303,406) | (306,565) | (723,091) | (631,046) | [Condensed Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) As of July 31, 2025, total stockholders' equity decreased to **$2,379,589 thousand** from **$3,006,643 thousand**, primarily influenced by common stock issuance, RSU vesting, stock repurchases, and net loss Condensed Consolidated Statements of Stockholders' Equity (Selected) | Indicator | July 31, 2025 (thousand dollars) | January 31, 2025 (thousand dollars) | | :----------------------- | :--------------------- | :--------------------- | | Common stock | 34 | 34 | | Treasury stock | (56,968) | (59,505) | | Additional paid-in capital | 10,939,122 | 10,355,211 | | Accumulated other comprehensive income (loss) | 2,782 | (2,236) | | Accumulated deficit | (8,512,322) | (7,293,575) | | Stockholders' equity attributable to Snowflake Inc. | 2,372,648 | 2,999,929 | | Non-controlling interests | 6,941 | 6,714 | | Total stockholders' equity | 2,379,589 | 3,006,643 | - On July 3, 2025, all Class B common stock was cancelled, and Class A common stock was re-designated as "Common Stock," with no impact on shares outstanding, additional paid-in capital, or accumulated deficit[21](index=21&type=chunk)[30](index=30&type=chunk)[32](index=32&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended July 31, 2025, operating activities provided **$303,269 thousand** cash, investing activities used **$355,235 thousand**, and financing activities used **$698,096 thousand**, leading to a net decrease of **$737,840 thousand** in cash and equivalents Condensed Consolidated Statements of Cash Flows (Selected) | Cash Flow Activity | Six Months Ended July 31, 2025 (thousand dollars) | Six Months Ended July 31, 2024 (thousand dollars) | | :----------------------- | :--------------------------------- | :--------------------------------- | | Net cash provided by operating activities | 303,269 | 425,333 | | Net cash used in investing activities | (355,235) | 232,900 | | Net cash used in financing activities | (698,096) | (1,124,044) | | Effect of exchange rate changes | 12,222 | (1,909) | | Net decrease in cash, cash equivalents, and restricted cash | (737,840) | (467,720) | | Cash, cash equivalents, and restricted cash at end of period | 1,960,838 | 1,313,257 | [Notes to Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Organization and Description of Business](index=15&type=section&id=Note%201.%20Organization%20and%20Description%20of%20Business) Snowflake Inc. provides a cloud-based data platform for data integration, AI application, data app building, and data sharing, operating on a customer-centric, consumption-based business model - Snowflake provides a cloud data platform, helping customers integrate data, apply AI, build data applications, and share data products[39](index=39&type=chunk) - The company employs a customer-centric, consumption-based business model, charging only for resources consumed by customers[39](index=39&type=chunk) - Through its AI Data Cloud, the company builds a network of data providers, consumers, developers, and partners to derive value from datasets in a secure, controlled, and compliant manner[39](index=39&type=chunk) [Note 2. Basis of Presentation and Summary of Significant Accounting Policies](index=15&type=section&id=Note%202.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Financial statements are prepared under GAAP and SEC interim rules, with the company reporting a single operating segment and updating software development cost accounting policies while evaluating new pronouncements - The company's fiscal year ends on January 31[40](index=40&type=chunk) - The company operates and reports as a single operating segment, with the Chief Executive Officer reviewing financial information on a consolidated basis[44](index=44&type=chunk) - Beginning with the three months ended April 30, 2025, the company began marketing the Snowflake platform to public sector customers, requiring related software development costs to be accounted for under ASC 985-20 instead of ASC 350-40[53](index=53&type=chunk) Recently Issued Accounting Pronouncements Not Yet Adopted | ASU Number | Topic | Effective Date (Company) | Impact | | :-------- | :----------------------------------------------------------------- | :--------------- | :--- | | 2023-09 | Income Taxes (Topic 740): Improvements to Income Tax Disclosures | February 1, 2025 | Under evaluation | | 2024-03 | Statement of Income—Reporting Comprehensive Income—Disaggregation of Expense Disclosures (Subtopic 220-40) | February 1, 2027 | Under evaluation | | 2025-05 | Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Accounts Receivable and Contract Assets | February 1, 2026 | Under evaluation | [Note 3. Revenue, Accounts Receivable, Deferred Revenue, and Remaining Performance Obligations](index=18&type=section&id=Note%203.%20Revenue%2C%20Accounts%20Receivable%2C%20Deferred%20Revenue%2C%20and%20Remaining%20Performance%20O%20bligations) Revenue is primarily product-based, accounting for **95%** of total revenue in 2025 and 2024, with no single customer exceeding **10%**; remaining performance obligations (RPO) were **$6.9 billion** as of July 31, 2025, with **50%** expected within 12 months Revenue Composition (thousand dollars) | Revenue Type | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Product revenue | 1,090,496 | 829,250 | 2,087,309 | 1,618,837 | | Professional services and other revenue | 54,473 | 39,573 | 99,734 | 78,695 | | Total | 1,144,969 | 868,823 | 2,187,043 | 1,697,532 | Revenue by Geographic Region (thousand dollars) | Region | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :----------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Americas: United States | 861,469 | 663,630 | 1,645,976 | 1,295,671 | | Americas other | 30,570 | 22,777 | 60,231 | 46,512 | | Europe, Middle East, and Africa | 185,315 | 137,872 | 354,124 | 269,529 | | Asia Pacific and Japan | 67,615 | 44,544 | 126,712 | 85,820 | | Total | 1,144,969 | 868,823 | 2,187,043 | 1,697,532 | - As of July 31, 2025, the company's remaining performance obligations (RPO) were **$6.9 billion**, with approximately **50%** expected to be recognized as revenue within the 12 months ending July 31, 2026[63](index=63&type=chunk) [Note 4. Cash Equivalents, Investments and Strategic Investments](index=19&type=section&id=Note%204.%20Cash%20Equivalents%2C%20Investments%20and%20Strategic%20Investments) As of July 31, 2025, the company held **$4,218,190 thousand** in cash equivalents and investments, primarily money market funds and corporate securities, alongside **$351,028 thousand** in strategic investments, mainly unmarketable equity securities Summary of Cash Equivalents and Investments (as of July 31, 2025, thousand dollars) | Type | Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | | :------------------- | :--------- | :--------- | :--------- | :----------- | | **Cash Equivalents** | | | | | | Money market funds | 1,320,540 | — | — | 1,320,540 | | Time deposits | 115,074 | — | — | 115,074 | | U.S. government securities | 52,853 | — | (3) | 52,850 | | Corporate notes and bonds | 10,836 | — | (2) | 10,834 | | **Investments** | | | | | | Corporate notes and bonds | 1,893,404 | 1,850 | (1,189) | 1,894,065 | | U.S. government and agency securities | 572,230 | 214 | (656) | 571,788 | | Commercial paper | 135,245 | 7 | (161) | 135,091 | | Certificates of deposit | 117,920 | 42 | (14) | 117,948 | | **Total** | 4,218,102 | 2,113 | (2,025) | 4,218,190 | Strategic Investment Types (thousand dollars) | Type | July 31, 2025 | January 31, 2025 | | :--------------------------------- | :------------ | :------------ | | Unmarketable equity securities (measurement alternative) | 325,936 | 281,158 | | Unmarketable equity securities (equity method) | 5,707 | 5,491 | | Marketable equity securities | 8,385 | 13,833 | | Unmarketable debt securities | 11,000 | 750 | | **Total Strategic Investments** | 351,028 | 301,232 | Strategic Equity Investment Related Gains and Losses (thousand dollars) | Gain/Loss Type | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--------------------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Unrealized losses on unmarketable equity securities (impairment) | (5,000) | (7,158) | (31,521) | (25,911) | | Unrealized gains (losses) on marketable equity securities | (980) | 650 | (5,448) | (3,005) | | Realized gains (sales) | 400 | — | 1,704 | 1,713 | | **Total (Other expense, net)** | (5,580) | (6,508) | (35,265) | (27,203) | [Note 5. Fair Value Measurements](index=22&type=section&id=Note%205.%20Fair%20Value%20Measurements) Assets and liabilities are measured using a three-level fair value hierarchy, with **$245,934 thousand** in derivative financial instruments, primarily forward foreign exchange contracts, used to manage foreign currency risk Assets and Liabilities by Fair Value Hierarchy (as of July 31, 2025, thousand dollars) | Type | Level 1 | Level 2 | Level 3 | Total | | :----------------------- | :------ | :-------- | :------ | :------- | | **Assets** | | | | | | Cash equivalents: Money market funds | 1,320,540 | — | — | 1,320,540 | | Short-term investments: Corporate notes and bonds | — | 1,079,287 | — | 1,079,287 | | Long-term investments: Corporate notes and bonds | — | 814,778 | — | 814,778 | | Strategic investments: Marketable equity securities | 8,385 | — | — | 8,385 | | Derivative assets: Forward foreign exchange contracts | — | 7,255 | — | 7,255 | | **Total Assets** | 1,328,925 | 2,904,905 | 11,000 | 4,244,830 | | **Liabilities** | | | | | | Derivative liabilities: Forward foreign exchange contracts | — | (1,458) | — | (1,458) | | **Total Liabilities** | — | (1,458) | — | (1,458) | Notional Amounts of Derivative Financial Instruments (thousand dollars) | Type | July 31, 2025 | January 31, 2025 | | :--------------------------------- | :------------ | :------------ | | Forward foreign exchange contracts not designated as hedging instruments | 167,790 | 222,027 | | Forward foreign exchange contracts designated as cash flow hedges | 78,144 | — | | **Total Derivative Financial Instruments** | 245,934 | 222,027 | [Note 6. Property and Equipment, Net](index=24&type=section&id=Note%206.%20Property%20and%20Equipment%2C%20Net) Net property and equipment decreased to **$283,051 thousand** as of July 31, 2025, from **$296,393 thousand**, reflecting increased depreciation and a **$108,619 thousand** asset impairment charge from the San Mateo office decommissioning Property and Equipment, Net (thousand dollars) | Type | July 31, 2025 | January 31, 2025 | | :----------------------- | :------------ | :------------ | | Leasehold improvements | 117,022 | 97,324 | | Computer, equipment, and software | 65,526 | 49,575 | | Capitalized software development costs | 223,364 | 209,684 | | Property and equipment, gross | 465,251 | 449,834 | | Less: Accumulated depreciation and amortization | (182,200) | (153,441) | | **Property and Equipment, Net** | 283,051 | 296,393 | Depreciation and Amortization Expense (thousand dollars) | Period | Depreciation and Amortization Expense | Amortization of Capitalized Software Development Costs | | :----------------------- | :------------- | :--------------------- | | Three Months Ended July 31, 2025 | 27,000 | 17,000 | | Six Months Ended July 31, 2025 | 51,700 | 33,800 | | Three Months Ended July 31, 2024 | 21,200 | 13,300 | | Six Months Ended July 31, 2024 | 38,000 | 24,200 | - For the six months ended July 31, 2025, the company recognized **$20.8 million** in asset impairment charges, primarily related to the decommissioning of its San Mateo office[80](index=80&type=chunk) [Note 7. Business Combinations](index=25&type=section&id=Note%207.%20Business%20Combinations) In fiscal year 2025, the company acquired Crunchy Data Solutions, Inc. for **$164.5 million** in cash, generating **$118.3 million** in goodwill, primarily for its PostgreSQL technology and talent - On June 6, 2025, the company acquired Crunchy Data Solutions, Inc. for **$164.5 million** in cash, primarily for its PostgreSQL technology and talent[82](index=82&type=chunk) Preliminary Purchase Price Allocation for Crunchy Data Acquisition (thousand dollars) | Asset/Liability | Estimated Fair Value | | :----------------------- | :----------- | | Cash | 221 | | Accounts receivable | 4,323 | | Developed technology intangible assets | 46,000 | | Customer relationship intangible assets | 12,000 | | Deferred revenue | (12,028) | | Other net tangible liabilities | (916) | | Deferred tax liability, net | (3,405) | | **Total Identifiable Net Assets** | 46,195 | | **Goodwill** | 118,256 | | **Total Purchase Consideration** | 164,451 | - The goodwill recognized from this acquisition primarily represents the synergistic market opportunities from integrating the acquired technology with the company's products[84](index=84&type=chunk) Unaudited Pro Forma Financial Information for Crunchy Data (thousand dollars) | Indicator | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Revenue | 1,148,433 | 876,295 | 2,198,714 | 1,711,975 | | Net loss | (304,547) | (329,074) | (744,352) | (657,840) | [Note 8. Intangible Assets and Goodwill](index=27&type=section&id=Note%208.%20Intangible%20Assets%20and%20Goodwill) As of July 31, 2025, net intangible assets totaled **$285,448 thousand**, while goodwill increased to **$1,174,978 thousand**, primarily driven by business combinations Intangible Assets, Net (as of July 31, 2025, thousand dollars) | Type | Gross Carrying Amount | Accumulated Amortization | Net Amount | | :------------------- | :------- | :------- | :--- | | Developed technology | 317,364 | (115,204) | 202,160 | | Developer community | 154,900 | (101,818) | 53,082 | | Assembled workforce | 55,732 | (41,974) | 13,758 | | Customer relationships | 16,400 | (2,068) | 14,332 | | Patents | 8,874 | (8,484) | 390 | | Other | 1,311 | (11) | 1,300 | | **Total Finite-Lived Intangible Assets** | 554,581 | (269,559) | 285,022 | | Indefinite-lived intangible assets—Trademarks | | | 426 | | **Total Intangible Assets, Net** | | | 285,448 | Future Amortization Expense for Intangible Assets (thousand dollars) | Fiscal Year Ending January 31 | Amount | | :-------------------- | :--- | | Remainder of 2026 | 57,429 | | 2027 | 107,594 | | 2028 | 71,015 | | 2029 | 29,203 | | 2030 | 15,923 | | Thereafter | 3,858 | | **Total** | 285,022 | Changes in Goodwill (thousand dollars) | Period | Amount | | :----------------------- | :----- | | Balance as of January 31, 2025 and April 30, 2025 | 1,056,559 | | Additions and related adjustments | 118,419 | | **Balance as of July 31, 2025** | 1,174,978 | [Note 9. Accrued Expenses and Other Current Liabilities](index=28&type=section&id=Note%209.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) As of July 31, 2025, total accrued expenses and other current liabilities increased to **$622,800 thousand** from **$515,454 thousand**, mainly due to higher accrued compensation and cloud infrastructure fees Accrued Expenses and Other Current Liabilities (thousand dollars) | Type | July 31, 2025 | January 31, 2025 | | :--------------------------------- | :------------ | :------------ | | Accrued compensation | 222,333 | 194,630 | | Accrued third-party cloud infrastructure fees | 101,812 | 77,944 | | Employee stock transaction withholding taxes | 52,886 | 14,025 | | Employee contributions under employee stock purchase plan | 40,519 | 46,576 | | Liabilities related to sales, marketing, and business development programs | 30,202 | 44,017 | | Accrued property and equipment purchases | 21,702 | 9,896 | | Accrued taxes | 17,958 | 25,819 | | Accrued professional services | 14,621 | 14,005 | | Other | 120,767 | 88,542 | | **Total Accrued Expenses and Other Current Liabilities** | 622,800 | 515,454 | [Note 10. Convertible Senior Notes](index=28&type=section&id=Note%2010.%20Convertible%20Senior%20Notes) In September 2024, the company issued **$2.3 billion** in 0% convertible senior notes due 2027 and 2029, with conversion triggered by stock price as of July 31, 2025, and capped call transactions in place to mitigate dilution - In September 2024, the company issued **$2.3 billion** in 0% convertible senior notes, including two series due in 2027 and 2029[96](index=96&type=chunk) Convertible Senior Notes Details | Note Series | Initial Conversion Rate per $1,000 Principal Amount | Initial Conversion Price | Initial Shares (thousands) | | :--------- | :-------------------------- | :----------- | :------------------- | | 2027 Notes | 6.3492 | $157.50 | 7,302 | | 2029 Notes | 6.3492 | $157.50 | 7,302 | - For the three months ended July 31, 2025, the Sale Price Trigger was met, allowing holders to convert notes during the three months ending October 31, 2025[106](index=106&type=chunk) Net Carrying Value and Fair Value of Convertible Senior Notes (as of July 31, 2025, thousand dollars) | Note Series | Principal | Unamortized Debt Issuance Costs | Net Carrying Value | Fair Value | Level | | :--------- | :--- | :--------------- | :--------- | :------- | :--- | | 2027 Notes | 1,150,000 | 11,299 | 1,138,701 | 1,742,262 | Level 2 | | 2029 Notes | 1,150,000 | 13,027 | 1,136,973 | 1,779,694 | Level 2 | - The company entered into capped call transactions at a total cost of **$195.5 million**, designed to reduce potential dilution of common stock and/or offset cash payments in excess of principal upon conversion of the notes[109](index=109&type=chunk)[110](index=110&type=chunk) [Note 11. Commitments and Contingencies](index=31&type=section&id=Note%2011.%20Commitments%20and%20Contingencies) The company faces commitments and contingencies including operating leases and legal proceedings, recognizing **$87.8 million** in operating lease ROU asset impairment and **$20.8 million** in property and equipment impairment related to the San Mateo office, with potential losses from lawsuits currently not estimable - For the six months ended July 31, 2025, the company recognized **$87.8 million** in operating lease right-of-use asset impairment and **$20.8 million** in property and equipment impairment, primarily related to the decommissioning of its San Mateo office[114](index=114&type=chunk) - The company faces multiple legal proceedings, including an NLRB charge filed by a former employee, a shareholder class action lawsuit, and several data breach class action lawsuits[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) - The company currently cannot reasonably estimate the range of potential losses for these legal matters but intends to vigorously defend itself[120](index=120&type=chunk)[121](index=121&type=chunk) - As of July 31, 2025, the company had **$20.8 million** in cash collateralized letters of credit, primarily for leased facilities[123](index=123&type=chunk) [Note 12. Equity](index=34&type=section&id=Note%2012.%20Equity) On July 3, 2025, Class A common stock was re-designated as "Common Stock" and Class B was cancelled; the company has a **$1.5 billion** stock repurchase program remaining and grants equity incentives, recognizing related stock-based compensation expense - On July 3, 2025, the company's Class A common stock was re-designated as "Common Stock," and Class B common stock was cancelled, with no impact on shares outstanding, additional paid-in capital, or accumulated deficit[126](index=126&type=chunk) Common Stock Reserved Under Equity Incentive Plans (thousand shares) | Plan | July 31, 2025 | January 31, 2025 | | :----------------------- | :------------ | :------------ | | 2012 Equity Incentive Plan: Options | 15,655 | 20,067 | | 2020 Equity Incentive Plan: Options | 1,586 | 1,586 | | 2020 Equity Incentive Plan: RSUs | 25,267 | 24,790 | | 2020 Equity Incentive Plan: Shares for future grants | 77,906 | 64,834 | | 2020 Employee Stock Purchase Plan: Shares for future grants | 19,230 | 16,446 | | **Total** | 139,644 | 127,723 | Summary of Stock Repurchase Activity (thousand shares, except per share data) | Indicator | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :----------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Number of shares repurchased | — | 2,957 | 3,214 | 5,939 | | Weighted-average repurchase price (per share) | — | $135.28 | $152.63 | $154.29 | | Total purchase price | — | $399,955 | $490,590 | $916,239 | - As of July 31, 2025, **$1.5 billion** remained available for future repurchases under the company's stock repurchase program[128](index=128&type=chunk) Stock-Based Compensation Expense (thousand dollars) | Expense Category | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Cost of revenue | 35,421 | 34,815 | 69,236 | 67,223 | | Sales and marketing | 95,253 | 80,676 | 182,769 | 154,083 | | Research and development | 236,300 | 204,917 | 457,213 | 399,589 | | General and administrative | 37,243 | 35,592 | 74,459 | 67,041 | | **Total Stock-Based Compensation** | 404,217 | 363,846 | 783,677 | 705,077 | - As of July 31, 2025, total unrecognized compensation cost related to unvested awards was **$3.5 billion**, expected to be recognized over a weighted-average period of **2.8 years**[151](index=151&type=chunk) [Note 13. Income Taxes](index=39&type=section&id=Note%2013.%20Income%20Taxes) Effective tax rates for the three and six months ended July 31, 2025, were **0.0%** and **(0.8%)** respectively, with a full valuation allowance maintained against net deferred tax assets in the U.S. and U.K., and no significant impact from recent tax legislation Effective Tax Rates | Period | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Effective tax rate | 0.0% | (1.2%) | (0.8%) | (1.0%) | - The company maintains a full valuation allowance against its net deferred tax assets in the U.S. and U.K., as it is more likely than not that the deferred tax assets will not be realized[154](index=154&type=chunk) - The Inflation Reduction Act of 2022 and the Beautiful Package Act of 2025 had no material impact on the company's condensed consolidated financial statements for the three and six months ended July 31, 2025[157](index=157&type=chunk)[158](index=158&type=chunk) [Note 14. Net Loss per Share](index=40&type=section&id=Note%2014.%20Net%20Loss%20per%20Share) For the three and six months ended July 31, 2025, basic and diluted net loss per share was **$0.89** and **$2.18** respectively, with potentially dilutive securities excluded due to their anti-dilutive effect Net Loss per Share Calculation (thousand shares, except per share data) | Indicator | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--------------------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Net loss attributable to Snowflake Inc. common stockholders | (298,017) | (316,899) | (728,109) | (633,887) | | Weighted-average shares used in net loss per share calculation | 335,215 | 334,071 | 333,957 | 333,830 | | **Net Loss per Share (basic and diluted)** | (0.89) | (0.95) | (2.18) | (1.90) | Potentially Dilutive Securities Excluded from Diluted Net Loss per Share Calculation (thousand shares) | Security Type | Three and Six Months Ended July 31, 2025 | Three and Six Months Ended July 31, 2024 | | :--------------- | :-------------------------------- | :-------------------------------- | | RSUs | 25,267 | 22,432 | | Stock options | 17,241 | 25,097 | | Conversion options on convertible notes | 14,603 | — | | Unvested restricted common stock | 681 | 500 | | ESPP rights | 275 | 271 | | **Total** | 58,067 | 48,300 | [Note 15. Related Party Transactions](index=41&type=section&id=Note%2015.%20Related%20Party%20Transactions) The company recognized **$5.9 million** and **$10.7 million** in revenue from a related party for the three and six months ended July 31, 2025, respectively, and also made a strategic investment in this entity Related Party Transaction Revenue (thousand dollars) | Period | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Revenue | 5,900 | 2,800 | 10,700 | 5,700 | - For the six months ended July 31, 2025, the company made a strategic investment of approximately **$20.0 million** in unmarketable equity securities in this related party[165](index=165&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) [Overview](index=42&type=section&id=Overview) Snowflake empowers organizations with its AI Data Cloud platform, operating on a consumption-based model; as of July 31, 2025, it served **12,062** customers, including **751** Forbes Global 2000 companies contributing **42%** of six-month revenue, with macroeconomic conditions impacting consumption - The company's vision is to create a data-connected world, enabling organizations to securely and controllably explore, share, and unlock data value through its AI Data Cloud platform[170](index=170&type=chunk) - The company's revenue primarily derives from customer consumption of computing, storage, and data transfer resources on its platform, utilizing a customer-centric, consumption-based business model[171](index=171&type=chunk)[173](index=173&type=chunk) Customer Growth Data | Indicator | July 31, 2025 | January 31, 2025 | | :----------------------- | :------------ | :------------ | | Total customers | 12,062 | 11,078 | | Forbes Global 2000 customers | 751 | 734 | - For the six months ended July 31, 2025, Forbes Global 2000 customers contributed approximately **42%** of the company's revenue[176](index=176&type=chunk) - Macroeconomic conditions, such as inflation and high interest rates, have led customers to rationalize budgets, prioritize cash flow management, and optimize consumption, potentially impacting business[178](index=178&type=chunk) [Key Factors Affecting Our Performance](index=44&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) Future success depends on platform adoption, AI Data Cloud expansion, existing customer consumption growth, and new customer acquisition, supported by continuous R&D investment and a focus on cash flow and long-term profitability - The company's future success largely depends on the market adoption of its platform (including Snowpark and AI technologies) and the expansion of the AI Data Cloud[182](index=182&type=chunk)[183](index=183&type=chunk) - The existing customer base represents a significant opportunity for further platform consumption, and the company will continue to invest in encouraging existing customers to increase consumption and adopt new use cases[184](index=184&type=chunk) - New software releases or hardware improvements may enhance platform efficiency, leading customers to consume fewer resources, which could result in revenue decline if not offset by new workloads[186](index=186&type=chunk) - The company's future success also depends on its ability to acquire new customers, and it will continue to invest heavily in sales and marketing and brand awareness[187](index=187&type=chunk) - The company will continue to invest significantly to grow its business, capitalizing on broad market opportunities while focusing on cash flow and long-term profitability, particularly in data science and AI technologies[188](index=188&type=chunk) [Key Business Metrics](index=46&type=section&id=Key%20Business%20Metrics) Key business metrics include **$1,090.5 million** product revenue, **125%** net revenue retention rate, **654** customers with over **$1 million** product revenue, **751** Forbes Global 2000 customers, and **$6,931.7 million** in remaining performance obligations as of July 31, 2025 Summary of Key Business Metrics | Indicator | Three Months Ended July 31, 2025 | Three Months Ended April 30, 2025 | Three Months Ended January 31, 2025 | Three Months Ended October 31, 2024 | Three Months Ended July 31, 2024 | | :--------------------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Product revenue (million dollars) | 1,090.5 | 996.8 | 943.3 | 900.3 | 829.3 | | Net cash provided by operating activities (million dollars) | 74.9 | 228.4 | 432.7 | 101.7 | 69.9 | | Free cash flow (non-GAAP) (million dollars) | 58.2 | 183.4 | 415.4 | 78.2 | 58.8 | | Net revenue retention rate | 125% | 124% | 126% | 127% | 128% | | Customers with over $1 million in product revenue over trailing 12 months | 654 | 604 | 576 | 537 | 504 | | Forbes Global 2000 customers | 751 | 736 | 734 | 730 | 714 | | Remaining performance obligations (million dollars) | 6,931.7 | 6,686.8 | 6,867.5 | 5,732.3 | 5,230.8 | - Product revenue is a key indicator as it is based on platform consumption rather than contract term, reflecting customer satisfaction and platform value[193](index=193&type=chunk) - Net revenue retention rate measures the growth in platform usage by existing customers, and is expected to decline long-term as consumption growth from long-term customers primarily comes from existing use cases rather than new ones[194](index=194&type=chunk) - Free cash flow is defined as GAAP net cash provided by operating activities less purchases of property and equipment and capitalized software development costs[197](index=197&type=chunk) [Components of Results of Operations](index=49&type=section&id=Components%20of%20Results%20of%20Operations) Revenue primarily stems from consumption-based platform services and professional services, with costs including third-party cloud infrastructure and personnel; operating expenses, mainly personnel-related, are expected to increase in absolute terms but decrease as a percentage of revenue over time - The company's revenue primarily derives from customer consumption of computing, storage, and data transfer resources on its platform, utilizing capacity arrangements or on-demand arrangements[201](index=201&type=chunk)[204](index=204&type=chunk) - Product revenue cost primarily includes third-party cloud infrastructure fees (including GPU-related fees) and personnel-related costs[209](index=209&type=chunk) - Sales and marketing expenses primarily include personnel-related costs, sales commissions, and marketing program expenses[213](index=213&type=chunk) - Research and development expenses primarily include personnel-related costs, contractor service fees, and third-party cloud infrastructure fees (including GPU-related fees) used for platform development[214](index=214&type=chunk) - General and administrative expenses primarily include personnel-related costs for finance, legal, human resources, facilities, and administrative staff, as well as external professional service fees[216](index=216&type=chunk) - The company expects sales and marketing, research and development, and general and administrative expenses to increase in absolute terms but decrease as a percentage of revenue over time[213](index=213&type=chunk)[214](index=214&type=chunk)[216](index=216&type=chunk) [Results of Operations](index=53&type=section&id=Results%20of%20Operations) For the three months ended July 31, 2025, revenue grew **32%** to **$1,144,969 thousand**, net loss narrowed to **$297,930 thousand**, product revenue increased **32%**, professional services revenue grew **38%**, gross margin remained at **68%**, and total operating expenses as a percentage of revenue decreased from **108%** to **98%** Condensed Consolidated Statements of Operations Data (thousand dollars) | Indicator | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :----------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Revenue | 1,144,969 | 868,823 | 2,187,043 | 1,697,532 | | Cost of revenue | 371,815 | 288,078 | 720,601 | 560,595 | | Gross profit | 773,154 | 580,745 | 1,466,442 | 1,136,937 | | Total operating expenses | 1,113,430 | 936,048 | 2,253,975 | 1,840,812 | | Operating loss | (340,276) | (355,303) | (787,533) | (703,875) | | Net loss | (297,930) | (317,770) | (727,882) | (635,586) | Operating Statement Data as Percentage of Revenue | Indicator | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :----------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Revenue | 100% | 100% | 100% | 100% | | Cost of revenue | 32% | 33% | 33% | 33% | | Gross profit | 68% | 67% | 67% | 67% | | Sales and marketing | 44% | 46% | 44% | 47% | | Research and development | 44% | 51% | 44% | 50% | | General and administrative | 10% | 11% | 15% | 11% | | Operating loss | (30%) | (41%) | (36%) | (41%) | | Net loss | (26%) | (36%) | (33%) | (37%) | - Product revenue grew **32%** and **29%** for the three and six months ended July 31, 2025, respectively, primarily driven by increased platform consumption from existing customers[227](index=227&type=chunk) - As of July 31, 2025, there were **654** customers with product revenue exceeding **$1 million** over the trailing 12 months, an increase from **504** as of July 31, 2024[228](index=228&type=chunk) - Product gross margin remained at **72%** for both 2025 and 2024 periods, primarily due to a decrease in stock-based compensation expense as a percentage of product revenue, partially offset by costs for new product capabilities and features[233](index=233&type=chunk) - For the six months ended July 31, 2025, the company recognized **$108.6 million** in asset impairment charges, primarily related to the decommissioning of its San Mateo office, recorded within general and administrative expenses[240](index=240&type=chunk) [Liquidity and Capital Resources](index=59&type=section&id=Liquidity%20and%20Capital%20Resources) As of July 31, 2025, the company held **$4.6 billion** in cash and investments, with **$6.9 billion** in remaining performance obligations, utilizing customer payments and convertible notes for operations, acquisitions, and repurchases, expecting sufficient liquidity for future needs - As of July 31, 2025, the company's primary liquidity sources were cash, cash equivalents, and short-term and long-term investments, totaling **$4.6 billion**[248](index=248&type=chunk) - As of July 31, 2025, remaining performance obligations (RPO) were **$6.9 billion**[249](index=249&type=chunk) - The company's primary uses of cash include personnel-related expenses, third-party cloud infrastructure fees (including GPUs for AI technology development), sales and marketing expenses, acquisitions, and stock repurchases[250](index=250&type=chunk) - In September 2024, the company issued **$2.3 billion** in 0% convertible senior notes, generating net proceeds of approximately **$2.27 billion**[251](index=251&type=chunk) - The company's stock repurchase program authorizes repurchases of up to **$4.5 billion** of common stock, with **$1.5 billion** remaining available for future repurchases as of July 31, 2025[255](index=255&type=chunk)[256](index=256&type=chunk) Summary of Cash Flows (thousand dollars) | Cash Flow Activity | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :----------------------- | :----------------------- | :----------------------- | | Net cash provided by operating activities | 303,269 | 425,333 | | Net cash used in investing activities | (355,235) | 232,900 | | Net cash used in financing activities | (698,096) | (1,124,044) | - For the six months ended July 31, 2025, net cash provided by operating activities decreased by **$122 million**, primarily due to increased cash expenditures supporting business growth and the timing of payments and collections, partially offset by increased customer collections[262](index=262&type=chunk) [Critical Accounting Estimates](index=62&type=section&id=Critical%20Accounting%20Estimates) Financial statement preparation relies on management's significant accounting estimates and assumptions, with no material changes to critical estimates as of July 31, 2025 - The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts[267](index=267&type=chunk) - As of July 31, 2025, there were no material changes to critical accounting estimates[268](index=268&type=chunk) [Recent Accounting Pronouncements](index=63&type=section&id=Recent%20Accounting%20Pronouncements) For a discussion of recent accounting pronouncements, refer to Note 2, "Basis of Presentation and Summary of Significant Accounting Policies," in the condensed consolidated financial statements [ITEM 3. Quantitative and Qualitative Disclosures about Market Risk](index=64&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces interest rate, foreign currency, and other market risks; a **100 basis point** interest rate change would impact **$4.6 billion** in cash and investments by approximately **$17.5 million** to **$18.0 million**, with foreign exchange risk managed via forward contracts and strategic investments subject to market volatility - As of July 31, 2025, the company held **$4.6 billion** in cash, cash equivalents, and short-term and long-term investments[270](index=270&type=chunk) - Assuming a **100 basis point** increase or decrease in interest rates, the market value of the company's cash equivalents and investments as of July 31, 2025, would decrease by **$17.5 million** or increase by **$18.0 million**, respectively[270](index=270&type=chunk) - The company uses forward foreign exchange contracts to hedge a portion of its net foreign currency-denominated monetary asset and liability positions and certain intercompany balances, and designates them as cash flow hedges to manage fluctuations in forecasted operating expenses and capital expenditures[274](index=274&type=chunk) - The company's strategic investments, primarily unmarketable equity securities, are subject to market-related risks that could result in significant decreases or increases in their carrying values[276](index=276&type=chunk) Strategic Investment Types (thousand dollars) | Type | July 31, 2025 | January 31, 2025 | | :--------------------------------- | :------------ | :------------ | | Unmarketable equity securities (measurement alternative) | 325,936 | 281,158 | | Unmarketable equity securities (equity method) | 5,707 | 5,491 | | Marketable equity securities | 8,385 | 13,833 | | Unmarketable debt securities | 11,000 | 750 | | **Total Strategic Investments** | 351,028 | 301,232 | [ITEM 4. Controls and Procedures](index=66&type=section&id=ITEM%204.%20Controls%20and%20Procedures) As of July 31, 2025, disclosure controls and procedures were deemed effective, ensuring timely information reporting, with no material internal control changes this quarter, though inherent system limitations are acknowledged - As of July 31, 2025, the company's disclosure controls and procedures were determined to be effective[280](index=280&type=chunk) - There were no material changes to internal controls over financial reporting during the quarter ended July 31, 2025[281](index=281&type=chunk) - Management believes that disclosure controls and procedures and internal controls over financial reporting are designed to provide reasonable assurance, but all control systems have inherent limitations and cannot prevent or detect all errors and fraud[282](index=282&type=chunk) [PART II. Other Information](index=67&type=section&id=PART%20II.%20Other%20Information) [ITEM 1. Legal Proceedings](index=67&type=section&id=ITEM%201.%20Legal%20Proceedings) The company faces no materially adverse legal proceedings but is defending multiple class action lawsuits, including a federal securities class action and data breach-related cases, with potential losses currently not reasonably estimable - The company currently has no legal proceedings that would materially adversely affect its business, operating results, financial condition, or cash flows[285](index=285&type=chunk) - The company faces a federal shareholder class action lawsuit alleging violations of Sections 10(b) and 20(a) of the Exchange Act[287](index=287&type=chunk) - The company faces multiple class action lawsuits related to a data breach, alleging failure to take reasonable measures to protect consumer data[288](index=288&type=chunk) - The company currently cannot reasonably estimate the range of potential losses for these legal matters but intends to vigorously defend itself[287](index=287&type=chunk)[288](index=288&type=chunk) [ITEM 1A. Risk Factors](index=68&type=section&id=ITEM%201A.%20Risk%20Factors) [Risks Related to Our Business and Operations](index=68&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Operations) The company faces business and operational risks including unpredictable performance, sustained losses, intense competition, innovation failures, security breaches, platform disruptions, financial volatility, and challenges in sales, talent, and brand management, alongside macroeconomic and partnership dependencies - The company's rapid revenue growth but limited operating history makes future performance difficult to predict, and revenue growth may slow or decline[291](index=291&type=chunk)[292](index=292&type=chunk) - The company has a history of operating losses and may not achieve or sustain profitability in the future, with costs and expenses expected to increase[295](index=295&type=chunk) - The market in which the company operates is highly competitive, with major competitors including large public cloud providers and traditional database solution vendors, and competition may lead to pricing pressure and reduced gross margins[296](index=296&type=chunk)[297](index=297&type=chunk)[299](index=299&type=chunk)[301](index=301&type=chunk) - Failure to continuously innovate in response to customer demands and new technologies (especially AI technology), or to successfully execute AI technology investments, could harm the business[302](index=302&type=chunk)[305](index=305&type=chunk) - Security breaches or unauthorized access to customer data, whether by the company or third-party service providers, could harm reputation, reduce platform demand, and lead to significant liabilities[306](index=306&type=chunk)[309](index=309&type=chunk)[310](index=310&type=chunk)[312](index=312&type=chunk)[314](index=314&type=chunk) - Platform or dependent public cloud and internet infrastructure outages, failures, or performance issues could lead to reduced platform usage, increased expenses, and harm to brand and reputation[317](index=317&type=chunk)[319](index=319&type=chunk) - The company's financial performance is expected to fluctuate, making future results difficult to predict, and failure to meet analyst or investor expectations could cause stock price decline[320](index=320&type=chunk)[322](index=322&type=chunk) - Failure to effectively develop and expand sales and marketing capabilities could harm the ability to increase the customer base and achieve broader market acceptance[323](index=323&type=chunk) - Selling to large customers involves longer sales cycles, more complex customer requirements, and higher upfront sales costs[324](index=324&type=chunk) - Doing business with federal, state, local, and foreign governments and highly regulated organizations presents risks from special contractual terms, non-standard product deployments, and additional compliance processes, rules, and regulations[326](index=326&type=chunk)[330](index=330&type=chunk)[331](index=331&type=chunk)[332](index=332&type=chunk)[333](index=333&type=chunk) - Loss of key members of the management team or inability to attract and retain executives and employees necessary to support operations and growth could harm the business and future growth prospects[334](index=334&type=chunk)[337](index=337&type=chunk)[338](index=338&type=chunk) - Adverse industry or global economic conditions, reduced cloud spending, or lower-than-expected consumption could limit business growth and negatively impact operating results[339](index=339&type=chunk)[340](index=340&type=chunk) - The company's growth depends on the development, expansion, and success of its partnerships, and failure to manage them effectively could impact customer acquisition and platform consumption[341](index=341&type=chunk)[342](index=342&type=chunk) - Failure to maintain and enhance brand and reputation could adversely affect business and operating results[344](index=344&type=chunk)[345](index=345&type=chunk) - Acquisitions, strategic investments, collaborations, or alliances may be difficult to identify, bring integration challenges, distract management, disrupt business, dilute shareholder value, and adversely affect business, financial condition, and operating results[348](index=348&type=chunk)[349](index=349&type=chunk)[350](index=350&type=chunk) [Risks Related to Our International Operations](index=83&type=section&id=Risks%20Related%20to%20Our%20International%20Operations) International operations face risks from diverse data privacy regulations, data localization, political and economic shifts, trade uncertainties, labor laws, distributed workforce management, currency fluctuations, and anti-corruption laws, with China operations posing specific functional, customer experience, and liability risks - The company's international business and operations involve various risks, including slower public cloud adoption, differing data privacy and security regulations, data localization requirements, changes in political and economic environments, uncertainties in trade relations and laws, differences in labor regulations, complexities of managing a distributed workforce, foreign currency fluctuations, and anti-corruption law risks[355](index=355&type=chunk)[357](index=357&type=chunk) - Providing platform services to Chinese affiliates of multinational corporations through a Chinese operating partner introduces risks related to functionality, customer experience, and potential liability or brand damage from the operating partner's actions or inactions[358](index=358&type=chunk) - Geopolitical, economic, and national security tensions related to China could lead to further restrictions on the company's ability to operate in China, increased business scrutiny, new regulations, or reluctance of certain customers to engage with the company[359](index=359&type=chunk) - Operating in China also presents risks such as intellectual property protection uncertainties, cyber incident risks, ambiguous or inconsistently enforced laws and regulations, changes in tax regulations, economic or political instability, and foreign exchange controls[361](index=361&type=chunk) [Risks Related to Our Capital and Liquidity](index=86&type=section&id=Risks%20Related%20to%20Our%20Capital%20and%20Liquidity) The company may require additional capital, risking dilution if financing is unavailable or costly; debt repayment, including convertible notes, demands substantial cash flow, with conversion triggers potentially impacting liquidity, while foreign currency fluctuations and inaccurate accounting estimates pose further risks - The company may need additional capital to support business growth, but financing may not be available on acceptable terms or at all, leading to dilution of existing shareholders' equity[362](index=362&type=chunk) - Repaying debt, including convertible senior notes, requires significant cash, and insufficient operating cash flow could lead to default risk[363](index=363&type=chunk) - If the conditional conversion features of the convertible notes are triggered, the company may be required to settle conversion obligations in cash, impacting liquidity, or the notes may be reclassified as current liabilities[365](index=365&type=chunk) - The company faces foreign currency fluctuation risks, which could negatively impact operating results and cash holdings, and a stronger U.S. dollar could increase the cost for international customers to use the platform[366](index=366&type=chunk) - Inaccurate key accounting estimates or judgments could adversely affect operating results[367](index=367&type=chunk) [Risks Related to Our Intellectual Property](index=87&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Intellectual property may not adequately protect the business or provide a competitive advantage due to patent failures, legal uncertainties, and enforcement difficulties; IP disputes could lead to costly litigation and management distraction, while improper open-source software use risks legal fees and business disruption - The company's intellectual property may not adequately protect its business or provide a competitive advantage due to failure to obtain patents, uncertainties in intellectual property protection laws, and enforcement difficulties[368](index=368&type=chunk)[369](index=369&type=chunk) - The company may become involved in intellectual property disputes, leading to high litigation costs, management distraction, potentially significant damages, or the need to redesign products[371](index=371&type=chunk)[373](index=373&type=chunk)[374](index=374&type=chunk) - Improper use of open-source software or violation of its license terms could result in legal fees, damages, costly remedial measures, or business disruption[375](index=375&type=chunk) [Risks Related to Our Legal, Regulatory, and Tax Environment](index=89&type=section&id=Risks%20Related%20to%20Our%20Legal%2C%20Regulatory%2C%20and%20Tax%20Environment) The company faces strict data privacy, AI regulation, anti-corruption, and ESG obligations, with non-compliance risking fines, liabilities, and reputational harm; government export controls and international tax changes could impact competitiveness and financial condition, while net operating loss carryforward use may be limited - The company is subject to strict and evolving data privacy and protection laws, regulations, and obligations, and non-compliance could lead to substantial fines, liabilities, or business harm[376](index=376&type=chunk)[378](index=378&type=chunk)[379](index=379&type=chunk)[380](index=380&type=chunk) - The development and use of AI technologies (including generative AI) exist in an uncertain regulatory environment, potentially leading to reputational harm, legal liability, or other adverse consequences for business operations, including intellectual property and privacy law risks[381](index=381&type=chunk)[382](index=382&type=chunk)[383](index=383&type=chunk) - The company is subject to anti-corruption, anti-bribery, and anti-money laundering laws, and non-compliance could result in criminal or civil liability and harm the business[384](index=384&type=chunk)[386](index=386&type=chunk) - Increased scrutiny and expectations regarding ESG (Environmental, Social, and Governance) from global regulators, investors, customers, and employees could lead to additional compliance risks and costs, and impact the company's reputation and business[387](index=387&type=chunk)[388](index=388&type=chunk)[389](index=389&type=chunk) - Government export and import controls could harm the company's competitiveness in international markets or result in liability for violations[390](index=390&type=chunk)[393](index=393&type=chunk) - International operations may lead to unexpected tax liabilities, and changes in tax laws or tax rulings could have a significant impact on financial condition, operating results, and cash flows[394](index=394&type=chunk)[395](index=395&type=chunk)[397](index=397&type=chunk) - The use of the company's net operating loss carryforwards (NOLs) may be limited, which could accelerate or permanently increase state taxes[398](index=398&type=chunk)[400](index=400&type=chunk) [Risks Related to the Ownership of Our Common Stock](index=96&type=section&id=Risks%20Related%20to%20the%20Ownership%20of%20Our%20Common%20Stock) Common stock price volatility is influenced by financial performance, market expectations, and macroeconomic conditions; convertible notes and additional equity issuance may dilute shareholders, while stock repurchases might not yield expected value; unfavorable analyst reports, no dividends, high public company costs, internal control failures, and anti-takeover provisions further impact ownership risks - The company's common stock price may be highly volatile, influenced by various factors including financial performance, market expectations, legal and regulatory changes, and macroeconomic conditions, potentially leading to securities class action litigation[404](index=404&type=chunk) - The conversion of convertible notes may dilute existing shareholders' equity or depress the common stock price due to potential stock sales[405](index=405&type=chunk) - Capped call transactions may affect the value of the convertible notes and the market price of common stock[407](index=407&type=chunk)[408](index=408&type=chunk) - The company's issuance of additional equity (including shares from convertible note conversions) will dilute the equity interests of all other shareholders[410](index=410&type=chunk) - The stock repurchase program may not achieve the intended long-term shareholder value, and failure to repurchase shares as planned could negatively impact the stock price[411](index=411&type=chunk)[413](index=413&type=chunk) - Unfavorable or inaccurate research reports published by securities or industry analysts could lead to a decline in the market price or trading volume of the company's common stock[414](index=414&type=chunk) - The company does not intend to pay dividends in the foreseeable future, so shareholder returns will depend on the appreciation of the common stock price[415](index=415&type=chunk) - As a public company, the company incurs high operating costs, and management must dedicate significant time to complying with public company responsibilities and corporate governance practices[416](index=416&type=chunk) - Failure to maintain proper and effective internal controls over financial reporting could harm investor confidence in the company and negatively impact the value of common stock[417](index=417&type=chunk)[418](index=418&type=chunk) - Anti-takeover provisions in the company's charter documents, the convertible notes indenture, and Delaware law may make it more difficult for the company to be acquired and limit shareholders' attempts to replace management[419](index=419&type=chunk)[420](index=420&type=chunk) - The company's charter designates the Delaware Court of Chancery and the U.S. federal district courts as exclusive forums for certain disputes, which may limit shareholders' ability to choose a judicial forum[422](index=422&type=chunk)[424](index=424&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=101&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity securities were sold this quarter, and the company did not repurchase any shares under its authorized stock repurchase program during the three months ended July 31, 2025 - No unregistered equity securities sales occurred this quarter[425](index=425&type=chunk) - For the three months ended July 31, 2025, the company did not repurchase any shares under its authorized stock repurchase program[426](index=426&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=101&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred - No defaults upon senior securities[427](index=427&type=chunk) [ITEM 4. Mine Safety Disclosures](index=101&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[428](index=428&type=chunk) [ITEM 5. Other Information](index=101&type=section&id=ITEM%205.%20Other%20Information) During the most recent fiscal quarter, no "Rule 10b5-1 trading arrangements" or "non-Rule 10b5-1 trading arrangements" were adopted or terminated by the com

Company Performance - Snowflake's stock has increased approximately 40% year-to-date [1] - The company's earnings grew 94% in the quarter [1][6] - Product revenue growth is at 32% [1][6] - Overall revenues grew 31% [6] - Operating margins rose 610 basis points [2] Strategic Developments - Snowflake has a new CEO with massive industry experience, replacing the retiring CFO [1] - The company launched approximately 200 new products in the past year [4] Market Position and Future Outlook - Snowflake is gaining momentum due to AI and data center trends [2] - The company is gaining more market share and is a unique pure play in its space [4] - Operating margins are expected to potentially reach 15% in the coming years [5] - Potential for acquisition exists due to its unique product [5]

Group 1 - Snowflake Inc. is positioned at the intersection of enterprise data and AI adoption, which is transforming business operations [1] - Companies are beginning to recognize that their data infrastructure is a critical asset [1]

Core Insights - The article discusses the recent financial performance of a leading technology company, highlighting a significant increase in revenue and net income compared to the previous year [1] Financial Performance - The company reported a revenue of $50 billion for the last quarter, representing a 20% increase year-over-year [1] - Net income reached $10 billion, which is a 25% increase compared to the same quarter last year [1] - Earnings per share (EPS) rose to $5, up from $4 in the previous year, indicating strong profitability [1] Market Position - The company has strengthened its market position, capturing an additional 5% market share in the technology sector [1] - The growth is attributed to increased demand for its cloud services and innovative product offerings [1] Future Outlook - Analysts project continued growth, with expected revenue growth of 15% for the next fiscal year [1] - The company plans to invest $2 billion in research and development to enhance its product lineup and maintain competitive advantage [1]

Core Viewpoint - Snowflake's recent fiscal second-quarter results show strong growth and improved metrics, but the stock's high valuation raises concerns about its long-term potential [1][2][10] Financial Performance - Fiscal Q2 product revenue increased by 32% year over year to $1.09 billion, with net revenue retention (NRR) rising to 125% [1][4] - Full-year product revenue guidance was raised to approximately $4.4 billion, indicating 27% growth, while Q3 guidance is set between $1.125 billion and $1.130 billion, reflecting 25% to 26% growth [4] - GAAP net loss narrowed to $298 million in Q2 from $430 million in Q1, and improved from a $317 million loss in the same quarter last year [7] - Free cash flow decreased to about $58 million in fiscal Q2, down from $183 million in Q1 and $59 million in the year-ago quarter [9] Customer Metrics - The number of customers spending over $1 million annually reached 654, and remaining performance obligations (RPO) hit $6.9 billion, up 33% year over year [4] - AI is becoming a significant driver for customer acquisition, influencing nearly 50% of new customers in Q2 and powering 25% of all deployed use cases [6] Valuation Concerns - Snowflake's market capitalization is approximately $77 billion, equating to about 19 times sales, which is significantly higher than Alphabet's 8 times and Microsoft's 13 times [10] - The high price-to-sales multiple suggests that investors are expecting near-perfect execution, leaving little room for error [10][11] Future Outlook - Sustained acceleration in product revenue and improving GAAP profitability are necessary for a stronger valuation case [12] - The current stock price does not provide a margin of safety given the significant GAAP losses and stock-based compensation [11][13]

Core Insights - Snowflake (SNOW) and Alphabet (GOOGL) are significant players in the cloud data and analytics market, with Snowflake focusing on cloud data warehousing and analytics, while Alphabet offers similar services through Google Cloud's BigQuery [1][2] Market Overview - The global cloud analytics market was valued at $35.39 billion in 2024 and is projected to reach $130.63 billion by 2030, with a CAGR of 25.5% from 2025 to 2030, indicating strong growth potential for both Snowflake and Alphabet [2] Snowflake (SNOW) Performance - Snowflake reported a net revenue retention rate of 125% in Q2 fiscal 2026, with a 19% year-over-year increase in customers, totaling 12,062 [3][10] - The company launched around 250 new capabilities in the first half of fiscal 2026, enhancing data management and AI-driven insights [4] - Over 6,100 customers are utilizing Snowflake's AI and ML technology weekly, reflecting strong engagement [5] - Snowflake's collaboration with OpenAI, Anthropic, and Microsoft Azure has contributed to its growth, with Azure showing 40% year-over-year growth in Q2 fiscal 2026 [6][10] Alphabet (GOOGL) Performance - Alphabet's Google Cloud revenues increased by 31.7% year-over-year to $13.62 billion in Q2 2025, showcasing rapid growth in the cloud computing market [8][10] - Google Cloud has established a strong partnership with NVIDIA, being the first cloud provider to offer NVIDIA's latest GPUs [9] - Google Cloud operates 42 cloud regions and 127 zones globally, positioning itself as the third-largest cloud provider [11] Stock Performance and Valuation - Year-to-date, SNOW shares surged 48.5%, outperforming GOOGL's 21.8% gain, driven by a strong portfolio and expanding partnerships [10][12] - Both companies are currently considered overvalued, with SNOW trading at a forward Price/Sales ratio of 14.74X, compared to GOOGL's 7.70X [14] Earnings Estimates - The Zacks Consensus Estimate for SNOW's fiscal 2026 earnings is $1.08 per share, reflecting a 30.12% year-over-year increase [17] - Alphabet's 2025 earnings estimate is $10 per share, indicating a 24.38% year-over-year increase [17] Conclusion - Both SNOW and GOOGL are well-positioned to benefit from the growing cloud analytics market, but Alphabet's broader ecosystem and stronger infrastructure may offer more stability and growth potential for investors [20]

Leadership Change - GitLab's CFO is departing to assume the same role at Snowflake [1] Market Reaction - Shares of the software security platform, GitLab, experienced a decline [1]

Group 1: Investment Philosophy - The distinction between value and growth investing is often misunderstood, as both rely on future growth potential and intrinsic value [1] Group 2: Burlington Stores Inc. (NYSE: BURL) - Burlington Stores is currently trading at $293.04, with a 12-month price forecast of $344.29, indicating a potential upside of 17.49% [2] - The stock is rated as a Buy by Wall Street analysts, with a consensus price target suggesting a 19% upside from current prices [4] - The earnings per share (EPS) forecast for Burlington is $3.84, representing a 141% increase from the current EPS of $1.59 [3] Group 3: Snowflake Inc. (NYSE: SNOW) - Snowflake's current price is $229.21, with a 12-month price forecast of $255.53, indicating an 11.48% upside [5] - The company is positioned favorably in the AI ecosystem, as its cloud computing services are essential for data management, which is critical for AI systems [6] - Snowflake's EPS is expected to rise from $1.07 to $1.52, justifying its high price-to-book (P/B) ratio of 26.5x compared to the sector average of 9.4x [7][8] Group 4: Cameco Corp. (NYSE: CCJ) - Cameco's current stock price is $77.12, with a 12-month price forecast of $83.32, indicating an 8.04% upside [9] - The company is experiencing increased institutional interest, with $1.5 billion in stock purchases in the last quarter [10] - Cameco's price-to-earnings (P/E) ratio is 89.1x, significantly higher than the mining industry's average of 17.0x, reflecting long-term growth expectations in nuclear energy [11]

Core Insights - Snowflake (SNOW) is experiencing significant growth driven by its focus on the AI Data Cloud, which is becoming a key growth catalyst for the company [1] Financial Performance - In Q2 of fiscal 2026, Snowflake reported product revenues of $1.09 billion, marking a 32% year-over-year increase, indicating strong demand for its AI Data Cloud [2][10] - Approximately 50% of new customer acquisitions in Q2 were influenced by AI, with 25% of all deployed use cases involving AI [2] - The consensus estimate for SNOW's fiscal 2026 earnings is $1.08 per share, reflecting a 30.12% year-over-year increase [13] Strategic Partnerships - Snowflake has partnered with Siemens to integrate its AI Data Cloud with Siemens Industrial Edge, enhancing data connectivity for manufacturers [3] - Collaborations with OpenAI, Anthropic, and Microsoft Azure are expanding Snowflake's reach and AI capabilities, with Azure showing a 40% year-over-year growth in Q2 [4] Product Development - The company launched approximately 250 new capabilities in the first half of fiscal 2026, including Snowflake Intelligence and Cortex AI SQL, which enhance data management and AI-driven insights [5][10] Competitive Landscape - Snowflake faces strong competition from Amazon (AWS) and Alphabet (Google Cloud), which offer similar AI Data Cloud solutions [6][7] - Amazon's AWS and Alphabet's Google Cloud leverage their extensive ecosystems to attract enterprises, posing challenges for Snowflake's market dominance [6][7] Stock Performance and Valuation - Snowflake's shares have appreciated 51.3% year to date, outperforming the broader Zacks Computer & Technology sector and the Zacks Internet Software industry [8] - The stock is trading at a premium with a forward 12-month Price/Sales ratio of 15.02X compared to the industry's 5.68X [11]

Core Viewpoint - AI is accelerating differentiation in the software industry, leading to a "winner-takes-all" scenario rather than a complete disruption of the SaaS model [1][2][5] Group 1: Impact of AI on Software Industry - AI will create a significant divide in valuations among software companies, with high-growth companies seeing their enterprise value/revenue (EV/Revenue) median nearly double since 2022, reaching 11.7 times, while low-growth companies remain stagnant at around 4.9 times [2][11] - The report outlines three potential scenarios for AI's impact on software vendors: a pessimistic scenario where AI disrupts existing suppliers, a base case where innovative giants successfully commercialize AI products, and an optimistic scenario where existing giants lead AI innovation [6][7][8][9] Group 2: Investment Opportunities - A "weatherproof AI investment portfolio" has been proposed, including companies like Microsoft, MongoDB, and Snowflake, which are expected to benefit from AI-driven data growth and product cycles [4][15] - Microsoft is identified as a core winner due to its investments in AI infrastructure, applications, and search [16] - MongoDB and Snowflake are recognized as leading data management platforms that will benefit from the increasing data volume driven by AI [16] - Companies like Datadog and Dynatrace are well-positioned due to their consumption-based models, which mitigate risks associated with seat-based pricing [17] - CrowdStrike, Palo Alto Networks, and Rubrik are expected to benefit from the critical nature of cybersecurity, maintaining high budget priorities regardless of AI developments [17] - Intuit and Pegasystems are highlighted for their strong market positions, with Intuit leveraging its data footprint and Pegasystems offering unique AI workflow solutions [18]