Yahoo Finance

• Product Revenue: $997 million, up 26% year-over-year.

• Remaining Performance Obligations: $6.7 billion, 34% year-over-year growth.

• Net Revenue Retention: 124%.

• Non-GAAP Product Gross Margin: 75.7%.

• Non-GAAP Operating Margin: 9%, up 442 basis points year-over-year.

• Non-GAAP Adjusted Free Cash Flow Margin: 20%.

• Net New Customers: 451, 19% year-over-year growth.

• Share Repurchase: $491 million used to repurchase 3.2 million shares at an average price of $152.63 per share.

• Cash and Investments: $4.9 billion in cash, cash equivalents, short-term and long-term investments.

• Q2 Product Revenue Guidance: Between $1.035 billion and $1.04 billion, representing 25% year-over-year growth.

• FY26 Revenue Guidance: $4.325 billion, representing 25% year-over-year growth.

• FY26 Non-GAAP Product Gross Margin Guidance: Approximately 75%.

• FY26 Non-GAAP Operating Margin Guidance: 8%.

• FY26 Non-GAAP Adjusted Free Cash Flow Margin Guidance: 25%.

• Warning! GuruFocus has detected 6 Warning Signs with SNOW.

Release Date: May 21, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Product revenue for Q1 was $997 million, up 26% year-over-year, showing strong growth.

• Remaining performance obligations totaled $6.7 billion with year-over-year growth of 34%.

• Net revenue retention was a healthy 124%, indicating strong customer loyalty and expansion.

• Snowflake added 451 net new customers in Q1, growing 19% year-over-year.

• The company launched over 125 product capabilities this quarter, a 100% increase over Q1 of last year.

Negative Points

• Despite strong growth, the net revenue retention rate of 124% is lower than previous highs, indicating potential challenges in upselling or expanding within existing accounts.

• The company faces ongoing competition from hyperscalers like Microsoft and AWS, which could impact market share.

• CapEx was significantly up due to new headquarters and office buildouts, which may impact short-term cash flow.

• The macroeconomic environment remains uncertain, which could affect future customer spending and growth.

• The company's operating margin guidance for the fiscal year remains unchanged, suggesting limited short-term profitability improvements.

Q & A Highlights

Q: How was consumption exiting the quarter and through the month of May? A: Sridhar Ramaswamy, CEO, stated that they do not comment on consumption within a quarter. However, he noted that Q1 consumption was very strong, and the results reflect this. Despite Q1 having one less day compared to the previous year, they feel very good about their consumption. Michael Scarpelli, CFO, added that the Q2 guidance is based on observed customer behaviors.