Snowflake (SNOW) Earnings Preview: Fiscal Q3 2025

By: Melissa Otto, CFA
Snowflake SNOW Earnings Preview Fiscal Q4 2024

Snowflake Inc. (NYSE: SNOW) will report fiscal Q3 2025 results on Wednesday, November 20, 2024, after the market close. Here are the key numbers that we’re watching.

Snowflake – Consensus Expectations for Q3 2025, Past Earnings Surprises, Revisions, and CAGR
Snowflake Image 1

Source: Visible Alpha consensus (November 20, 2024). “Previous Surprises” indicate the direction that specific line items beat or missed. “Consensus Revisions” show the trajectory of line items from a given date.

Snowflake’s Q3 2025 Earnings Preview

According to Visible Alpha consensus, total revenues of $859 million and operating income of $30 million are expected for Q3 2025. Operating profit expectations for the Q3 have moved up more than 10% from $27 million in August to now $30 million. However, these estimates are significantly lower than the initial estimates in January 2024. While expectations have come down for FY 2025, overall growth continues to be driven by the strength of Snowflake’s data platform and the potential network effects of moving more data there. The company made several AI-related announcements this week at its Build conference. It will be interesting to hear the company’s commentary on the outlook for their AI-related products in the earnings call.

Currently, there is debate about gross margin performance. Based on Visible Alpha consensus, the non-GAAP gross margin estimates range from 74% to 77% for Q3 2025. For FY 2025, Visible Alpha consensus for gross margin has moved up to 76% from 75% last quarter, but is still below the 77% previously expected at the beginning of the year.

The stock has been a significant underperformer this year and has traded down 7% since last quarter’s release, and by 37% since January 2024. Could the Q3 release provide a positive catalyst for the stock?

Figure 2: Snowflake Revisions
Snowflake Image 2

Source: Visible Alpha consensus (November 20, 2024). Stock price data courtesy of FactSet. Snowflake’s current stock price is as of the market close on November 19, 2024.

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About Melissa Otto, CFA

Melissa is Head of TMT Research at Visible Alpha. She spent 20+ years as an equity analyst and portfolio manager. At TIAA/Nuveen, Melissa specialized in covering global technology and consumer stocks and the Pan-Asia region. She also managed one of Fidelity's equity research teams as a director of research. In addition to her equity investing career, Melissa worked directly with software engineering teams at Bloomberg, Microsoft, and MSCI building cloud-based solutions to centralize and aggregate critical investment data for investors. Melissa studied Japanese at Harvard University, received her MA in economics from Brandeis University and MS degree from the University of Pennsylvania, and is a CFA charterholder. She is certified in Azure Fundamentals and Agile Project Management.

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