Snowflake Inc. Q2 2025 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended July 31, 2025 (Fiscal Q2 2026). Snowflake Inc. operates a cloud-based data platform (AI Data Cloud) utilizing a consumption-based business model. The company is a large accelerated filer incorporated in Delaware. As of July 31, 2025, the company had 12,062 total customers, including 751 Forbes Global 2000 companies.
Key Financial Metrics
| Metric | Q2 2025 (3 Months) | Q2 2024 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) |
|---|---|---|---|---|
| Revenue | $1,145.0 million | $868.8 million | $2,187.0 million | $1,697.5 million |
| Product Revenue | $1,090.5 million | $829.3 million | $2,087.3 million | $1,618.8 million |
| Gross Profit | $773.2 million | $580.7 million | $1,466.4 million | $1,136.9 million |
| Gross Margin | 68% | 67% | 67% | 67% |
| Operating Loss | $(340.3) million | $(355.3) million | $(787.5) million | $(703.9) million |
| Net Loss (GAAP) | $(298.0) million | $(316.9) million | $(728.1) million | $(633.9) million |
| EPS (Basic & Diluted) | $(0.89) | $(0.95) | $(2.18) | $(1.90) |
| Free Cash Flow (Non-GAAP) | $58.2 million | $58.8 million | $473.6 million* | $137.0 million* |
| Cash & Investments | $4.6 billion (as of July 31, 2025) | |||
| Remaining Performance Obligations (RPO) | $6.9 billion (as of July 31, 2025) |
*YTD Free Cash Flow calculated as sum of Q1 ($415.4M) and Q2 ($58.2M) per MD&A table.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 32% year-over-year (YoY) for the quarter and 29% YoY for the six months, driven primarily by increased consumption from existing customers (Net Revenue Retention Rate of 125%).
- Operating Expenses: Total operating expenses increased 19% YoY for the quarter. General and Administrative (G&A) expenses surged 72% YoY for the six months, largely due to a $108.6 million asset impairment charge related to the cessation of the San Mateo office facility.
- Acquisition: On June 6, 2025, Snowflake acquired Crunchy Data Solutions, Inc. for $164.5 million in cash to bolster PostgreSQL technology capabilities.
- Stock Repurchases: The company repurchased $490.6 million of common stock during the six months ended July 31, 2025, but made no repurchases in Q2 2025. $1.5 billion remains available under the current program.
- Convertible Notes: The "Sale Price Trigger" was met in Q2 2025, allowing holders of the $2.3 billion convertible senior notes to convert at any time during the quarter ending October 31, 2025.
Guidance, Outlook, and Risks
- Outlook: Management expects to continue generating positive net cash flows from operating activities for fiscal 2026. The company anticipates stock-based compensation will decrease as a percentage of revenue over time.
- Legal Proceedings:
- Cybersecurity Litigation: Multiple class actions are pending in the U.S. and Canada alleging failure to secure systems containing consumer data. Oral arguments on motions to dismiss are scheduled for October 6, 2025.
- Securities Litigation: A stockholder class action alleging violations of the Exchange Act is ongoing; the company has filed motions to dismiss.
- NLRB Charge: An appeal is pending regarding a former employee's retaliation claim, with a potential loss range estimated between $0 and $25 million.
- Risks: Key risks include the impact of macroeconomic conditions on customer consumption, competition from public cloud providers (AWS, Azure, GCP), cybersecurity threats, and the potential dilution or cash outflow from the conversion of senior notes.
Investor Verification Checklist
- Impairment Impact: Verify the non-recurring nature of the $108.6 million G&A impairment charge and its effect on future operating leverage.
- Note Conversion Risk: Assess the potential liquidity impact if holders of the $2.3 billion convertible notes elect to convert, given the triggered sale price condition.
- Consumption Trends: Monitor the Net Revenue Retention Rate (125%) and the number of customers with >$1M revenue (654) to validate growth sustainability amidst macroeconomic headwinds.
- Legal Exposure: Track the status of the multidistrict cybersecurity litigation and the NLRB appeal for potential financial liabilities.
- Capital Allocation: Review the remaining $1.5 billion stock repurchase authorization and the company's strategy for deploying cash given the current convertible note structure.