Snowflake released its Q4 FY26 earnings, reporting total revenue of $1.25 billion, which matched consensus estimates, and earnings per share of $0.35, a $0.04 or 12.5% beat over the $0.31 consensus estimate.
The earnings beat was driven by disciplined cost management and a favorable mix of high‑margin AI‑enabled workloads. Snowflake’s AI‑driven product portfolio continued to expand, generating stronger pricing power and higher contribution margins that offset modest increases in operating expenses.
Management guided for a non‑GAAP operating margin of 7% in Q4, down from 11% in Q3, signaling margin compression as the company invests in AI capabilities and scales its platform. The guidance also reflects a cautious outlook on revenue growth, with the company maintaining its full‑year product revenue target of $4.446 billion while acknowledging potential deceleration in the near term.
CEO Sridhar Ramaswamy highlighted the company’s progress, noting that product revenue rose 29% year‑over‑year to $1.16 billion in Q3 and that remaining performance obligations reached $7.88 billion, up 37% year‑over‑year. He emphasized Snowflake’s mission to empower enterprises through data and AI, underscoring the strategic importance of its AI‑centric growth model.
Investors focused on the guidance and margin outlook, weighing the company’s continued AI monetization against the reported margin compression and cautious revenue growth forecast. The market’s reaction underscored the importance of forward‑looking metrics in assessing Snowflake’s trajectory.
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