Snowflake Q1 Earnings Beat Estimates, Revenues Up Y/Y, Shares Rise

Snowflake SNOW reported first-quarter fiscal 2026 non-GAAP earnings of 24 cents per share, beating the Zacks Consensus Estimate by 9.09%. The company reported earnings of 14 cents per share in the year-ago quarter.Revenues of $1.04 billion beat the consensus mark by 3.74% and rallied 25.7% year over year. Americas, EMEA (Europe, the Middle East and Africa) and APJ (Asia Pacific and Japan) contributed 78%, 16% and 6% to revenues, respectively.Snowflake shares gained 10.88% in pre-market trading. Its shares have returned 16% against the Zacks Computer & Technology sector’s decline of 2%.Top-Line DetailsSnowflake’s product revenues contributed 95.7% to total revenues. The figure was $996.8 million, up 26.2% year over year.Snowflake Inc. Price, Consensus and EPS Surprise Snowflake Inc. price-consensus-eps-surprise-chart | Snowflake Inc. QuoteProfessional Services and other revenues contributed 4.3% to total revenues. The figure was $45.3 million, up 15.7% year over year.In the fiscal first quarter, Snowflake witnessed a net revenue retention rate of 124% for existing customers, down from 126% reported in the previous quarter.The company reported 18.8% year-over-year growth in the number of customers, reaching 11,578 in the reported quarter. The company now has 606 customers with trailing 12-month product revenues greater than $1 million (up 27% year over year) and 754 Forbes Global 2000 customers (up 4% year over year). In the reported quarter, SNOW added 451 net new customers, representing a 19% increase year over year.In the first quarter of fiscal 2026, the company expanded AI offerings significantly, with more than 5,200 accounts using AI/ML weekly.Operating DetailsThe non-GAAP gross margin contracted 90 basis points (bps) year over year to 72.4%.The product gross margin continued to expand, driven by product improvements, favourable cloud agreement pricing, improving scale and a growing enterprise customer base.Research & development expenses, as a percentage of revenues, decreased 160 bps on a year-over-year basis to 22.9%.General & administrative expenses, as a percentage of revenues, were 6.1%, down 80 bps year over year.Sales and marketing expenses, as a percentage of revenues, declined 340 bps on a year-over-year basis to 34.3%.Total operating expenses, as a percentage of revenues, were 63.4% compared with 69.1% reported in the year-ago quarter.Operating income was $91.7 million in the reported quarter, compared with $36.2 million reported in the year-ago quarter.Balance Sheet & Cash FlowAs of April 30, 2025, Snowflake had cash, cash equivalents and short-term investments of $3.91 billion compared with $4.63 billion as of Jan. 31, 2025.The remaining performance obligations at the end of the first quarter of fiscal 2026 were $6.7 billion, up 34% year over year. Snowflake expects nearly 50% to be recognized as revenue over the next 12 months.The adjusted free cash flow was $2.06 billion in the reported quarter compared with the previous quarter’s $4.23 billion.GuidanceFor the second quarter of fiscal 2026, Snowflake expects product revenues in the range of $1.03-$1.04 billion. The projection range indicates year-over-year growth of 25%.The operating margin is expected to be 8% for the fiscal second quarter.(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)Zacks Rank & Stocks to ConsiderCurrently, Snowflake has a Zacks Rank #3 (Hold).Broadcom AVGO, PagerDuty PD and GitLab GTLB are some better-ranked stocks that investors can consider in the broader sector. Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Broadcom shares have returned 25.8% year to date. AVGO is scheduled to release second-quarter fiscal 2025 results on June 5.PagerDuty shares have lost 6.7% year to date. PD is set to report its first-quarter fiscal 2026 results on May 29.Gitlab’s shares have lost 7.4% year to date. GTLB is set to release its first-quarter fiscal 2026 results on June 10.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Broadcom Inc. (AVGO): Free Stock Analysis Report Snowflake Inc. (SNOW): Free Stock Analysis Report PagerDuty (PD): Free Stock Analysis Report GitLab Inc. (GTLB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks