Home / Business and Economy / Snowflake Stock Dives Despite Revenue Surge
Snowflake Stock Dives Despite Revenue Surge
6 Dec
Summary
- Snowflake reported a $294 million net loss in Q3 fiscal 2026.
- Quarterly revenue rose 29% year-over-year to $1.21 billion.
- Product revenue growth slowed to 29% from 32% in the prior quarter.
Snowflake experienced a stock decline in after-hours trading following the release of its fiscal third-quarter results. While revenue growth remained strong, reaching $1.21 billion with a 29% year-over-year increase, the company posted a significant GAAP net loss of $294 million. This marks an ongoing trend, with cumulative net losses for the first nine months of fiscal 2026 reaching approximately $1.02 billion.
The company's operational expenses are heavily influenced by stock-based compensation, which amounted to $442 million in the quarter. Despite a non-GAAP operating margin of 11%, the GAAP operating margin was -27%. Although Snowflake generates positive free cash flow and targets a 25% adjusted free cash flow margin for fiscal 2026, the persistent GAAP losses underscore a continued reliance on stock-based compensation.
Furthermore, Snowflake's growth trajectory shows signs of deceleration. Product revenue saw a 29% increase year-over-year, a slight slowdown from the 32% growth recorded in the previous quarter. This deceleration, coupled with the substantial net losses and high valuation, has led to market skepticism despite the company's emphasis on artificial intelligence and its ability to add large customers.
