atlasAdd
2026-04-03 · earnings-review · Snowflake delivered a strong Q4 with revenue re-accelerating to 30 · Conviction 3.5/5
Open analysis → · PDF unavailable
Preview
# SNOW — Earnings Review Q4 FY25 (Atlas)
> Date: 2026-04-03
> Quarter: Q4 FY25 (DB) = Q4 FY2026 (Snowflake), ended January 31, 2026
> Reported: February 25, 2026
> Market cap: ~$52.4B | EV/TTM Rev: ~10.7x | Revenue growth: 30.1% YoY
> Stock price: ~$153 (as of 2026-04-02)
## Verdict
Snowflake delivered a strong Q4 with revenue re-accelerating to 30.1% YoY, RPO surging 42% (second consecutive acceleration quarter), NRR stabilizing at 125%, and non-GAAP operating margin expanding to 11.0%. The leading indicator divergence — RPO +42% vs revenue +30% — is the single most important signal and argues for continued revenue re-acceleration. The quarter was better than I expected on almost every metric. What gives me pause: management refused to update AI ARR for the second consecutive quarter (a red flag when the growth narrative is AI-driven), non-GAAP gross margin compressed another 100bps, and GAAP losses remain staggering at $1.33B for the year. At ~10.7x EV/TTM revenue for a 30% grower with accelerating bookings, the risk-reward tilts positive.
**Conviction: 3.5/5** — lean-positive. The RPO divergence, customer adds (+40%), and $10M+ customer growth (+56%) are too bullish to ignore. SBC and competitive concerns cap conviction.
## Qualification Gate
| Criterion | Threshold | SNOW Q4 FY25 | Result |
|-----------|-----------|--------------|--------|
| Revenue YoY growth | >30% (>40% preferred) | 30.1% | PASS (borderline) |
| Gross margin | >60% (>70% preferred) | 66.8% GAAP / 72.0% Non-GAAP | PASS |
| Revenue per quarter | >$50M | $1,284M | PASS |
| Data availability | 4+ quarters | 16 quarters | PASS |
| Share dilution | <10% annual | ~3.3% gross, ~1% net of buybacks | PASS |
| GAAP profitability trajectory | Improving or positive | Op margin: -39.2% to -24.8% (+14.4pp YoY) | PASS (improving) |
**Gate: PASS**
## Six-Factor Score
| Factor | Rating | Detail |
|--------|--------|--------|
| Growth | Adequate | 30.1% YoY total revenue, 30.0% product revenue. At the
*…truncated*
Preview
# SNOW — Earnings Review Q4 FY25
> Date: 2026-04-06
> Quarter: Q4 FY25 (DB) = Q4 FY2026 (Snowflake), ended January 31, 2026
> Reported: February 25, 2026
> Price: $148.59 | Market cap: ~$50.9B | EV: ~$48.4B | EV/TTM Rev: 10.3x
## Verdict
**The LAND motion that broke my thesis in 2022 has reversed spectacularly.** 740 net new customers in Q4 (+40% YoY), record for any quarter, ever. RPO surging +42% — 12 percentage points above revenue growth for a second consecutive quarter. This is a textbook bullish divergence. Revenue re-accelerated to 30.1% YoY after bottoming at 25.8%. Non-GAAP operating margin expanded 450bps to 10.5%.
The problem? SBC is **$1.6B/yr** (34% of revenue). GAAP operating loss of $1.4B. Management deflected on AI ARR for the second straight quarter — when a company stops giving you a number, the number usually isn't as pretty as the narrative. And non-GAAP gross margins compressed 100bps to 72%.
At ~10.3x EV/TTM revenue for a 30% grower with 42% RPO growth, the stock is historically cheap for SNOW. But the SBC burden means you're paying for real growth with real dilution.
**Thesis: Intact — Strengthening.** Leading indicators are the strongest since the 2021 hypergrowth era.
---
## The Numbers
### Revenue — QoQ Grid (Years Across, Quarters Down)
| Q | FY22 QoQ | FY23 QoQ | FY24 QoQ | FY25 QoQ |
|---|----------|----------|----------|----------|
| **Q1** | — | 5.9% | 7.0% | 5.6% |
| **Q2** | 17.7% | 8.1% | 4.8% | **9.9%** |
| **Q3** | 12.0% | 8.9% | 8.4% | 5.9% |
| **Q4** | 5.7% | 5.5% | 4.7% | **5.9%** |
Q4 FY25's 5.9% QoQ is the **best Q4 in three years** (vs 4.7% and 5.5%). That's +1.2pp vs same quarter last year. Small? 1 percentage point QoQ annualises to roughly 4% — this matters.
Q2 FY25 at 9.9% was an outlier — best Q2 ever, by a mile. Q3 FY25 at 5.9% was weaker than Q3 FY24's 8.4%. Mixed signals sequentially, but the YoY trend is unmistakable.
### Revenue — YoY Grid
| Q | FY22-23 | FY23-24 | FY24-25 |
|---|---------|---------|-
*…truncated*
Rolling earnings (raw)
# SNOW — Earnings Rolling Summary
> Last updated: 2026-04-03
> Covers: Q1 FY25 (Mar-25) → Q4 FY25 (Dec-25) (4 quarters)
> Latest ER file: atlas/analyses/SNOW/SNOW_earnings-review_Q4_FY25.md
> Note: DB labels Q4 FY25 = Snowflake's actual Q4 FY2026 (ended Jan 31, 2026)
## Trajectory
Revenue re-accelerated from a 25.8% YoY trough (Q1 FY25) to 30.1% (Q4 FY25) after 8 quarters of deceleration from 48%. The re-acceleration is underpinned by AI workload growth (9,100+ Cortex accounts, $100M AI ARR ahead of schedule) and record bookings (RPO +42% YoY, $400M+ largest deal). Non-GAAP operating margin expanded from 6% to 10.5% in FY25, guided to 12.5% in FY26 (DB). NRR stabilized at 125% after 13 quarters of decline.
## Promise Tracker
| Quarter | Promise | Delivered? | Notes |
|---------|---------|-----------|-------|
| Q4 FY25 | Q1 FY26 product revenue $1,262-$1,267M (+27%) | Pending | Guidance issued Feb 25, 2026 |
| Q4 FY25 | FY26 product revenue ~$5,660M (+27%) | Pending | Includes ~1ppt from Observe acquisition |
| Q4 FY25 | FY26 non-GAAP op margin 12.5% | Pending | +200bps vs FY25 |
| Q4 FY25 | FY26 non-GAAP adj FCF margin 23% | Pending | Includes ~150bps Observe headwind |
| Q4 FY25 | SBC to 27% of revenue FY26 | Pending | Down from 34% FY25 |
| Q4 FY25 | Non-GAAP product gross margin 75% FY26 | Pending | Down from 75.8% FY25 |
| Q4 FY25 | Investor Day week of June 1, 2026 | Pending | Announced on Q4 call |
## Language Shift Monitor
| Topic | Q1 FY25 | Q2 FY25 | Q3 FY25 | Q4 FY25 |
|-------|---------|---------|---------|---------|
| Demand | — no transcript — | — no transcript — | — no transcript — | Confident: "promise is real," "long runway of durable high growth," RPO acceleration cited |
| Competition | — | — | — | Dismissive of alternatives: "winners = single source of truth + governance + model choice," no competitor named |
| Margins/Efficiency | — | — | — | Constructive/hedged: AI margins lower initially, "will do what is right to drive growth" at op margin level |
| Product/Innovation | — | — | — | Emphatic: Cortex Code "game changer," "massive accelerant," "transformational." 430+ capabilities in FY |
*Only Q4 FY25 transcript available. Prior quarter transcripts needed for longitudinal comparison.*
## Analyst Concern Tracker
| Concern | First Raised | Status | Resolution |
|---------|-------------|--------|------------|
| NRR structural decline (158% → 124%) | Multi-quarter | Monitoring | Stabilized at 125%. CFO: "no decline." AI-driven expansion may provide floor. |
| Non-GAAP gross margin compression | Q4 FY25 | Active | GM 73% → 72% YoY. AI workloads carry lower margins. Management: "growth first, margins managed at op line." |
| AI ARR quantification stopped | Q4 FY25 | Active | Two analysts asked, both deflected. $100M ARR disclosed at Q3, no Q4 update. |
| Guidance conservatism / upside potential | Q4 FY25 | Monitoring | CEO: "a lot of upside," guidance "very conservative." RPO +42% vs guide +27%. |
| SBC as % of revenue | Multi-quarter | Monitoring | 41% → 34% → guided 27%. Trajectory correct. Still enormous in absolute terms ($1.6B). |
| December 2025 outage (reliability) | Q4 FY25 | Active | 13-hour, 10-region outage. Second incident in a week. No churn impact visible yet. |
## Quarter-by-Quarter Verdict
| | Q1 FY25 | Q2 FY25 | Q3 FY25 | Q4 FY25 |
|---|---------|---------|---------|---------|
| Revenue ($m) | 1,042 | 1,145 | 1,213 | 1,284 |
| YoY % | 25.8% | 31.8% | 28.7% | 30.1% |
| Beat % | N/A | N/A | N/A | N/A |
| Key Signal | Trough growth; AI narrative early | First re-acceleration | $100M AI ARR ahead of schedule | RPO +42%, largest deal $400M+, 7 nine-figure contracts |
| Concern | NRR declining, deceleration | — | GM compression starting | AI ARR non-disclosure, Dec outage, Databricks gap closing |
## Recent Conferences
| Date | Event | Key Incremental Info |
|------|-------|---------------------|
| — | None tracked | Prior quarter transcripts/conference data not available |
> Full notes: N/A
## Source Log
| Date | Persona | What was changed |
|------|---------|-----------------|
| 2026-04-02 | atlas | Created _ROLLING.md from stock-analysis. Populated Q1-Q4 FY25 financial grid, promise tracker (Q4 FY25 guidance), language shift (Q4 only — prior transcripts unavailable), analyst concerns, quarter verdicts. |
| 2026-04-03 | atlas | Earnings review Q4 FY25. Updated header with ER file reference. All sections unchanged (content created <24h ago for stock analysis accurately covers Q4 FY25 ER data). Added this source log entry. |
| 2026-04-06 | wsm | Earnings review Q4 FY25. No changes to financial data or trackers (atlas content accurate). Added this source log entry. Analysis at ~/.claude/skills/wsm/analyses/SNOW/SNOW_earnings-review_Q4_FY25.md. Key WSM-specific insight: LAND motion reversal (740 net new customers +40%) directly invalidates the thesis break WSM called in Jan 2022. RPO +42% divergence is the alpha signal. |