0001640147-26-000008
SEC filingSnowflake's FY26 revenue grew 29% driven by 125% net retention and expanding large customers, while free cash flow reached $1.12B.
Snowflake describes itself as the AI Data Cloud, a platform that enables organizations to consolidate data into a single source of truth, apply AI, build data applications, and share data securely. The platform leverages the elasticity of public cloud infrastructure and is delivered as a service with a consumption-based pricing model. The company aims to break down data silos and enable seamless, governed data access across organizations.
The Business section does not disclose formal reporting segments. Instead, the company organizes its platform into product categories: Data Engineering, Analytics, Transactions, AI, Applications, and Collaboration. Each category addresses specific use cases but is not broken out by revenue.
Key products include Snowpark (developer framework with Python, Java, Scala support), Snowpark Container Services (managed container platform for AI models), Snowflake Intelligence (data agents), Snowflake Postgres (fully managed transactional database), and Cortex AI (suite of AI functions including Cortex Analyst and Cortex Search). The Snowflake Marketplace provides access to third-party data sets and data products. The Native Application Framework enables building and distributing applications on the platform. The architecture is multi-cloud across AWS, Azure, and GCP, with 53 regional deployments interconnected via Snowgrid.
Snowflake sells primarily through a direct sales force segmented by industry, size, and region. Many customers start with a self-service trial. The company also leverages resellers, distributors, and a partner network (Snowflake Partner Network) including system integrators, technology providers, and data providers. As of January 31, 2026, Snowflake had 13,328 total customers, including 790 of the Forbes Global 2000, which contributed about 43% of revenue. The net revenue retention rate was 125%, and 733 customers generated over $1 million in trailing 12-month product revenue.
The competitive landscape includes major public cloud providers (AWS, Microsoft Azure, Google Cloud Platform), other cloud-native companies, legacy database vendors, observability providers, and emerging startups. Snowflake competes on factors such as cloud-native architecture, ability to handle diverse data types at scale, multi-cloud consistency, price-performance, security and governance, AI capabilities, and ease of use. The company emphasizes its multi-cloud strategy and seamless data sharing as key differentiators.
Snowflake's growth strategies include continuous platform innovation (e.g., new features like Snowflake Postgres and Cortex Code), acquiring new customers (especially large enterprises and regulated industries), expanding usage within existing customers by encouraging more consumption and use cases, expanding global footprint outside North America, growing the data content and collaboration ecosystem through the Marketplace, and strengthening the partner network with GSIs and foundational model providers.
As of January 31, 2026, Snowflake had 9,060 employees across 36 countries. The research and development organization comprised 2,424 employees, primarily in Bellevue, WA; Menlo Park, CA; and international locations. The company emphasizes a culture driven by core values: Put Customers First, Integrity Always, Think Big, Be Excellent, Make Each Other the Best, Get it Done, Own It, and Embrace Each Other’s Differences. None of the US employees are unionized.
In fiscal year 2026, Snowflake delivered total revenue of $4.68B, up 29% year-over-year, driven by a $1.01B increase in product revenue to $4.47B. Product gross margin improved slightly to 72% from 71%, benefiting from lower personnel costs as a percentage of revenue, partially offset by costs from newer product capabilities. Overall gross margin remained steady at 67%. Operating loss improved to $1.44B (31% of revenue) from $1.46B (40% of revenue), reflecting operating leverage as revenue growth outpaced expense growth. Net loss attributable to Snowflake widened to $1.33B from $1.29B, primarily due to higher stock-based compensation and impairment charges. Free cash flow reached a record $1.12B, up from $884M, driven by strong cash collections from prepaid capacity agreements.
Product revenue, representing 95% of total, grew 29% YoY, fueled by increased consumption from existing customers as evidenced by a net revenue retention rate of 125%. Customers with trailing 12-month product revenue over $1 million grew to 733 from 576, contributing 68% of product revenue. Professional services and other revenue also grew 29% to $211.6M, but maintained a negative gross margin of -31%, as the company invests in consulting and training to drive platform adoption.
Management expects continued investment in R&D and sales to capture market opportunity, with sales and marketing expenses decreasing as a percentage of revenue over time. Product gross margin may fluctuate due to mix, pricing, and investments in AI Technology. No specific numerical guidance was provided, but the company highlighted its $9.8B remaining performance obligations, with 46% expected to be recognized as revenue in the next 12 months. Macroeconomic headwinds and customer consumption patterns remain key uncertainties.
As of January 31, 2026, Snowflake held $2.83B in cash and cash equivalents and $1.96B in short-term and long-term investments (available-for-sale debt securities), totaling $3.96B in liquid assets. Total stockholders' equity was $1.92B, down from $3.01B a year earlier, primarily due to $873.5M in share repurchases and a $1.33B net loss. The company's convertible senior notes had a net carrying value of $2.28B (principal $2.3B), classified as non-current.
Total non-cancelable purchase commitments as of January 31, 2026 were $2.68B. Key components include:
Two significant cloud infrastructure agreements: (1) $1.0B aggregate commitment between June 2023 and May 2028 (remaining $530.5M) and (2) $530M commitment between November 2025 and October 2030 (remaining $518.0M). Operating lease payments total $590.6M, partially offset by $26.6M in sublease receipts.
In fiscal 2026, Snowflake repurchased $873.5M of its common stock (4.9M shares) and spent $101.6M on property and equipment (2.2% of revenue). No dividends were paid. The company issued $2.3B in convertible senior notes in September 2024 (0% coupon, 2027 and 2029 maturities), netting $2.27B after issuance costs. Capped call transactions costing $195.5M were entered into to reduce potential dilution.
The company operates as a single reportable segment. Revenue by geography (based on customer location): Americas (US $3.52B, other Americas $125M), EMEA $764M, Asia-Pacific/Japan $271M. No single customer represented 10% or more of revenue or accounts receivable. Long-lived assets in the US were $393M vs. $131M in other countries.
Snowflake faces intensifying competition from public cloud providers (AWS, Azure, GCP) that are both partners and rivals. The adoption of open data formats like Apache Iceberg reduces customer lock-in, while AI model providers may vertically integrate into data storage. Revenue growth slowed to $4.7B in FY2026 from $3.6B in FY2025, and the company warns that further deceleration is possible due to customer optimization, budget rationalization, and AI-driven shifts. The consumption-based revenue model limits visibility into future performance.
Net losses remained at $1.3B for the second consecutive year, with an accumulated deficit of $9.5B. The company expects costs to rise as it invests in AI, R&D, and cloud infrastructure. Dependence on AWS, Azure, and GCP for infrastructure creates pricing and competitive risks; minimum commitments could increase costs. The convertible notes (due 2027 and 2029) pose dilution risk, and the capped call transactions may not fully offset this.
The May 2024 customer account breaches—resulting from customers' failure to implement MFA—led to multiple lawsuits, regulatory inquiries, and reputational harm. The shared responsibility model means Snowflake may face liability even when not at fault. The company highlights increased attack surface from new products (e.g., AI features, distributed endpoints) and evolving regulations (GDPR, CCPA, FedRAMP, NIS2).
Snowflake is investing heavily in AI Technology, but faces execution risks: GPU access, talent competition, and regulatory uncertainty (EU AI Act, state laws like Texas and Colorado). Flawed AI outputs (hallucinations, biased data) could lead to liability. The company also uses third-party AI components, which may have limited liability protections.
International operations (25% of revenue) expose Snowflake to data sovereignty laws, tariffs, and geopolitical tensions. The China model—operating through a local partner—carries risks of IP theft, regulatory complexity, and U.S.-China conflict. Government sales involve lengthy procurement, bid protests, and compliance with FedRAMP and False Claims Act.
Snowflake faces evolving data privacy laws (GDPR, CCPA, India's DPDP Act), AI-specific regulations, and export controls. The company is subject to a securities class action and a copyright infringement lawsuit over LLM training. Anti-corruption laws (FCPA, UK Bribery Act) pose risks as international sales grow.
The provided text is an excerpt from the auditor's report and index for Snowflake Inc.'s 10-K filing. It explicitly references the consolidated statements of cash flows on page 90, but no numerical data from that statement is included in the input. Without the actual cash flow figures—such as net cash provided by operating activities, capital expenditures, or financing activities—any analysis of cash flow quality, free cash flow, or capital returns is impossible. The excerpt only contains the audit opinion, critical audit matter descriptions, and general information. Therefore, no cash flow metrics can be derived or commented upon.