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Call sheet · Q4'25

Snowflake (SNOW)

Q4'25 earnings call · held February 26, 2025 · compared with the Q3'25 call · management-credibility review
11/12
Disclosure score
2 medium, 5 low flags
Financial quality
Bottom line
The sleeper story everyone's missing: data engineering features quietly hit a $200M+ run rate while AI gets all the attention - this is contracted workload growth, not experimental spend. Yes, they delivered 30% growth at $3.5B scale, but the real tell is operational leverage finally working: 9% operating margins beating 6% guidance on the same revenue. The binding constraint isn't demand (customers are exhausting capacity early) or competition (they're displacing legacy players) - it's execution bandwidth as they scale 400+ new features while maintaining the easy-to-use advantage. Most revealing quote: large customers choosing pay-as-you-go over early renewal because 'their consumption has gone over what they predicted' - that's acceleration, not conservatism. My view changes if Q1 shows those exhausted-capacity customers haven't signed new deals within the promised 6-month window, or if the second-half growth acceleration fails to materialize from specific new product contributions.

The 30-second version

  • THE SLEEPER STORY: New products hitting $200M+ run rate with second-half acceleration baked in
  • 30% growth at $3.5B scale, but the real story is operational leverage finally kicking in
  • Large customers burning through capacity early - consumption acceleration, not demand softening

What changed this quarter

MetricQ3'25Q4'25Change
Product Revenue$734M (+32% YoY)$943M (+28% YoY)Deceleration but beat by ~$33M
FY25 Product Revenue$3.43B guided$3.5B actual (+30% YoY)Beat full year by $70M
Remaining Performance Obligations$5.7B (+55% YoY)$6.9B (+33% YoY)Growth rate compressed 22 pts
Net Revenue Retention127% (stable)126% (still healthy)Dropped 1 pt, in 'mid-120s' range
Non-GAAP Operating Margin6% guided for Q49% actualBeat by 300 bps
FY25 Operating Margin5% guided6% actualBeat full year by 100 bps
FY26 Product Revenue GuideNo guide$4.28B (+24% YoY)24% growth at massive scale
FY26 Operating Margin GuideNo guide8% target200 bps expansion planned
AI/ML Weekly Users3,200+ accounts4,000+ customers weekly+25% adoption acceleration
Snowpark RevenueOn track for ~3%3% of FY25 product revenueDelivered as promised

Accountability tracked

8 new promises made3 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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This is a free preview. The full write-up and promise ledger are published to subscribers on Substack.
Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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