Snowflake Inc.

Snowflake Inc. operates in the cloud-based data platform market, delivering the AI Data Cloud, a network where customers, partners, developers, data providers, and data consumers can break down data silos and derive value from data sets in secure, governed, and compliant ways. The company's platform is built on three major public clouds across 53 ¹ regional deployments around the world, which are generally interconnected to deliver a consistent, global user experience. The company has a limited operating history and has experienced rapid revenue growth, making it difficult to forecast future results of operations.

The markets in which Snowflake operates are highly competitive and rapidly evolving. Primary competitors named in the filing include large, well-established public cloud providers such as Amazon Web Services (AWS), Microsoft Azure (Azure), and Google Cloud Platform (GCP), as well as less-established public and private cloud companies, other established vendors of legacy database solutions or big data offerings, existing observability solution providers, and new or emerging entrants. The company believes it competes favorably based on factors including its architecture purpose-built for the cloud, ability to support multiple use cases in one platform, multi-cloud availability, and security and governance capabilities. As of January 31, 2026, Snowflake had 13,328 ² total customers, increasing from 10,996 ³ customers as of January 31, 2025, and included 790 ⁴ of the Forbes Global 2000, based on the 2025 Forbes Global 2000 list, which contributed approximately 43% ⁵ of revenue for the fiscal year ended January 31, 2026.

Snowflake generates the substantial majority of its revenue from fees charged to customers based on the compute, storage, and data transfer resources consumed on its platform, operating through a customer-centric, consumption-based business model. Customers typically enter into capacity arrangements with a term of one to four years, or consume the platform under on-demand arrangements where charges are monthly in arrears. The company's cloud-native architecture includes three independently scalable but logically integrated layers across storage, compute, and cloud services. The business benefits from network effects as the AI Data Cloud grows with more customers, partners, data providers, and data consumers.

Snowflake's platform supports a wide range of product categories including analytics, data engineering, AI, applications and collaboration, and transactions. The Analytics product category provides reporting and analytics to improve business intelligence. The Data Engineering products enable organizations to efficiently build and manage streaming and batch data pipelines. The AI product category, which includes Snowflake Intelligence and Snowflake Cortex Agents, enables customers to create data agents and build and deploy ML and embedding models. The Applications product category enables the development, enablement, and use of applications built on the Snowflake platform, including through the Native Application Framework. The Collaboration product category enables organizations to securely share, monetize, and acquire live data, applications, and AI products, including through the Snowflake Marketplace. The Transactions product category, which includes Snowflake Postgres, enables customers to consolidate application and analytical data onto a single platform. Product revenue was $4,472.3 million ⁶ for the fiscal year ended January 31, 2026.

Professional services and other revenue consists primarily of consulting, technical solution services, and training related to the platform. Professional services and other revenue was $211.6 million ⁷ for the fiscal year ended January 31, 2026. The professional services business performs implementation and training services, and the company prices these services based on anticipated cost, expecting to improve the gross profit percentage over time.

During the fiscal year ended January 31, 2026, Snowflake acquired Crunchy Data Solutions, Inc. for $164.5 million ⁸ in cash. On February 2, 2026, subsequent to the fiscal year end, the company acquired Observe, Inc. for preliminary purchase consideration of approximately $596.2 million ⁹, comprised primarily of $286.2 million ¹⁰ in cash and approximately 1.5 million ¹¹ shares of common stock valued at $285.3 million ¹² as of the acquisition date. The company also repurchased 4.9 million ¹³ shares of its outstanding common stock for an aggregate purchase price of $873.5 million ¹⁴ during the fiscal year ended January 31, 2026. In February 2026, the company entered into agreements for new office facilities in the United States and Germany with a total commitment of $85 million ¹⁵, net of tenant incentives. The company recognized asset impairment charges of $108.7 million ¹⁶ during the fiscal year, primarily relating to the cease-use of its San Mateo office facility.

For the fiscal year ended January 31, 2026, total revenue was $4,683.9 million ¹⁷, compared to $3,626.4 million ¹⁸ in the prior fiscal year, representing year-over-year growth of 29% ¹⁹. Product revenue was $4,472.3 million ²⁰, up 29% ²¹ from $3,462.4 million ²² in the prior year. Net loss attributable to Snowflake Inc. was $1,331.6 million ²³ for fiscal 2026, compared to $1,285.6 million ²⁴ in fiscal 2025. Net cash provided by operating activities was $1,221.9 million ²⁵ for fiscal 2026, compared to $959.8 million ²⁶ in the prior year. Non-GAAP free cash flow was $1,120.3 million ²⁷ for fiscal 2026, compared to $884.1 million ²⁸ in fiscal 2025.

A primary growth vector is driving increased usage within the existing customer base. As customers realize the benefits of the platform, they typically increase consumption by processing, storing, and sharing more data, and by leveraging additional use cases enabled by continued innovation. The net revenue retention rate was 125% ²⁹ as of January 31, 2026, and the number of customers that contributed more than $1 million in trailing 12-month product revenue increased from 576 ³⁰ to 733 ³¹ as of January 31, 2025 and 2026, respectively. The company plans to continue investing in sales and marketing to drive more consumption on the platform to grow large customer relationships.

Another major growth vector is the expansion of the global footprint and the AI Data Cloud ecosystem. The company sees a significant opportunity to expand the use of its platform outside of North America and continues to make investments in sales and marketing, research and development, customer support, and public cloud deployments across the EMEA, Asia-Pacific and Japan (APJ), and Latin America regions. The company also plans to continue investing in adding new customers, partners, data providers, data consumers, and forms of sharing to connect on the platform, and to drive market awareness of the AI Data Cloud. The growth of the partner network, including system integrators, technology and software providers, and foundational model providers, is expected to accelerate platform adoption and consumption.

The company expects its product gross margin to fluctuate from period to period due to factors including fluctuations in the mix and timing of customers' consumption, pricing model and discounting practices, investments in new product capabilities and features such as AI Technology, new product offerings that are margin compressive, and stock-based compensation. The company expects stock-based compensation to remain substantial even if it is successful in reducing it as a percentage of revenue. Stock-based compensation, net of amounts capitalized, represented 34% ³² of revenue for fiscal 2026 and 41% ³³ for fiscal 2025. The company expects sales and marketing expenses to increase in absolute dollars but decrease as a percentage of revenue over time due to improved spend efficiency. Research and development expenses are expected to increase in absolute dollars due to business growth, continued investments in the platform, and a decrease in the amount of software development costs eligible for capitalization, but decrease as a percentage of revenue over time.

The company expects to continue to generate positive net cash flows from operating activities for fiscal 2027. The company's future capital requirements will depend on many factors including revenue growth rate, expenditures related to headcount growth, the timing and amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts, the price at which it is able to purchase public cloud capacity, existing commitments to third-party cloud providers, expenses associated with international expansion, the introduction of platform enhancements, the continuing market adoption of the platform, and the volume and timing of stock repurchases.

During the fiscal year ended January 31, 2026, the company repurchased 4.9 million ³⁴ shares of its outstanding common stock for an aggregate purchase price of $873.5 million ³⁵. As of January 31, 2026, approximately $1.1 billion ³⁶ remained available for future repurchases under the stock repurchase program. Subsequent to January 31, 2026, and through March 20, 2026, the company repurchased an additional 1.7 million ³⁷ shares for $300.0 million ³⁸. The company expects to continue to invest significant resources in research and development to improve its platform, including in the areas of data science and AI Technology. Capitalized software development costs were $0 ³⁹ for fiscal 2026, compared to $29.4 million ⁴⁰ in fiscal 2025, due to a change in accounting treatment for software development costs related to the Snowflake platform.

The company faces structural headwinds from adverse macroeconomic conditions, including inflation, high interest rates, fluctuations or volatility in capital markets or foreign currency exchange rates, tariffs and trade wars, and geopolitical and military conflicts. These conditions have caused, and may continue to cause, customers to rationalize budgets, prioritize cash flow management, including through shortened contract duration, and optimize consumption, including by reducing storage through shorter data retention policies. The company also faces execution risks related to its ability to innovate in response to changing customer needs and new technologies, particularly in AI, and to successfully execute an effective AI strategy.

Geographic and regulatory factors present constraints. The company's international operations expose it to risks including slower than anticipated public cloud adoption by international businesses, differing and potentially more onerous regulations relating to data privacy and security and AI Technology, data localization laws, and challenges in managing a business in new markets. The company is subject to stringent and changing obligations related to data privacy and security, including the GDPR, CCPA, and other evolving regulations, and any failure to comply could result in significant fines and liability. The company also faces risks related to doing business with federal, state, local, and foreign governments and heavily regulated organizations, which involve heightened compliance costs and risks.

The company faces material risks from its history of operating losses and may not achieve or sustain profitability, with net losses of $1.3 billion ⁴¹, $1.3 billion ⁴², and $838.0 million ⁴³ for fiscal years 2026, 2025, and 2024, respectively, and an accumulated deficit of $9.5 billion ⁴⁴ as of January 31, 2026. The markets are highly competitive, with primary competitors including AWS, Azure, and GCP, which also serve as the company's cloud infrastructure providers, creating potential conflicts of interest. The company's consumption-based revenue model provides limited visibility into future financial results, as customer consumption fluctuates and is subject to risks including optimization efforts and macroeconomic conditions. Cybersecurity incidents pose a significant risk; the company has been subject to numerous lawsuits, regulatory investigations, and lawmaker inquiries following customer security incidents in May 2024, even though the company did not identify evidence suggesting the activity was caused by a vulnerability in its own systems. The company's ability to use its net operating loss carryforwards may be limited; as of January 31, 2026, it had U.S. federal NOL carryforwards of $7.3 billion ⁴⁵, of which $7.2 billion ⁴⁶ may be carried forward indefinitely with utilization limited to 80% of taxable income.

Management's message emphasizes the company's vision of delivering the AI Data Cloud to enable a world where data and AI turn possibilities into reality. Key themes include the company's focus on innovation, particularly in AI and transactions, as evidenced by the launch of Snowflake Intelligence, Snowflake Cortex Agents, and Snowflake Postgres. Management highlights the company's customer-centric, consumption-based business model and the powerful network effects of the AI Data Cloud. Strategic priorities emphasized for the period ahead include innovating and advancing the platform, driving growth by acquiring new customers, driving increased usage within the existing customer base, expanding the global footprint, expanding data content and collaboration across the global ecosystem, and growing and investing in the partner network.