- Product Revenue Growth: Q3 product revenue reached $1.16 billion, up 29% YoY, with FY 2026 guidance raised to $4.446 billion (28% YoY growth).
- AI Revenue Milestone: Achieved $100 million AI revenue run rate a quarter early, with 1,200 customers using Snowflake Intelligence and AI influencing 50% of bookings.
- Margin Expansion: Non-GAAP product gross margin hit 75.9%, and operating margin expanded 450 bps YoY to 11%, reflecting operational efficiency.
- Customer Growth & Retention: Added 615 new customers, record high, with net revenue retention stable at 125% and RPO growing 37% YoY to $7.88 billion.
- Strategic AI & Partnerships: $200 million Anthropic partnership and AI-driven migration momentum boosted multi-product customer deals and longer-term contracts.
Revenue Growth and Customer Acquisition
The company added a record 615 new customers, and remaining performance obligations totaled $7,880,000,000, with year-over-year growth accelerating to 37%. The net revenue retention rate remained stable at 125%. Sridhar Ramaswamy emphasized that AI is playing a key role in making the power of data come alive in pitches to new customers, with AI influencing more than 50% of new logo acquisitions.
AI-Driven Growth and Product Adoption
The company achieved a major milestone: $100,000,000 in AI revenue run rate, achieved one quarter earlier than anticipated. Snowflake Intelligence has seen rapid adoption, with 1,200 customers harnessing next-generation agentic AI capabilities. The AI capabilities are strengthening customer relationships, and the company is seeing customers land with multiple products at once, rather than just the core data warehouse.
Valuation and Growth Expectations
Given the company's growth prospects, with analysts estimating next year's revenue growth at 28.1%, the current valuation metrics appear to be pricing in a significant amount of growth. The P/S Ratio stands at 20.1, and the EV/EBITDA is -68.59. While the company's growth trajectory is promising, investors should be cautious about the valuation multiples. The ROE (%) is -54.08, and the ROIC (%) is -30.89, indicating that the company is still in a growth phase and investing heavily.
Guidance and Future Outlook
The company raised its fiscal year guidance by $51 million to $4.446 billion, representing 28% year-over-year growth. For FY 2027, the company will provide guidance on the next call, with consumption after the holiday season being the most important input for FY guidance. The hyperscaler outage impacted revenue by $1-2 million in the quarter, but the company remains confident in its go-to-market motion.