Snowflake Inc. (NYSE: SNOW) just delivered another blockbuster quarter, proving once again why it’s the undisputed leader in the AI Data Cloud race. On December 3, 2025, the company reported Q3 FY2026 results that smashed expectations, with total revenue soaring 29% year-over-year to $1.21 billion—a figure so robust it rounded out to that coveted 30% growth narrative investors crave. At the heart of this boom? Unstoppable AI momentum, including a 250% surge in Cortex AI usage, which is transforming how enterprises wield data for competitive edges. For investors eyeing sustainable growth in a volatile market, these numbers aren’t just headlines—they’re a vote of confidence in Snowflake’s ability to monetize the AI revolution. As CEO Sridhar Ramaswamy quipped during the earnings call, “We’re not just riding the AI wave; we’re engineering the board.” Let’s break it down: the metrics, AI’s turbocharge, and what it means for your portfolio.
Q3 FY2026 Metrics: A Snapshot of Scalable Strength
Snowflake’s Q3 wasn’t a fluke—it was precision execution. Product revenue, the core of Snowflake’s moat, clocked in at $1.16 billion, up 29% from last year and beating analyst consensus by $30 million. This reflects deepening penetration among large enterprises, with net revenue retention (NRR) holding steady at a stellar 125%—meaning customers aren’t just sticking around; they’re expanding aggressively.
Non-GAAP diluted EPS came in at $0.35, a 94% jump year-over-year and a comfortable beat over the $0.31 estimate, signaling improving profitability amid heavy AI investments. Remaining performance obligations (RPO) ballooned to $7.88 billion, a 37% increase, providing a rock-solid visibility into future cash flows—up from $7.5 billion in Q2. Free cash flow margin hit 9%, with operating cash flow at $137.5 million, underscoring operational leverage even as R&D spend rose to $494 million to fuel AI R&D.
To put this in perspective, here’s a table comparing Q3 FY2026 to Q2 FY2026 KPIs, highlighting the quarter’s acceleration:
| Metric | Q3 FY2026 | Q2 FY2026 | QoQ Change | YoY Change |
|---|---|---|---|---|
| Total Revenue | $1.21B | $1.14B | +6% | +29% |
| Product Revenue | $1.16B | $1.09B | +6% | +29% |
| Non-GAAP EPS | $0.35 | $0.35 | Flat | +94% |
| RPO | $7.88B | $7.5B | +5% | +37% |
| NRR | 125% | 125% | Flat | N/A |
| Non-GAAP Op Margin | 11% | 11% | Flat | N/A |
These figures, sourced from the earnings release, show consistent execution with AI as the growth engine. X analysts were quick to applaud: @EarningsAnatomy posted, “SNOW Q3: $1.21B rev (+29% YoY), RPO $7.88B—AI investments paying off big, but watch margins”, capturing the balanced optimism.
AI Contributions: The Cortex Catalyst Behind the Boom
Snowflake’s revenue rocket is no accident—it’s propelled by AI innovations that are resonating with customers. Cortex AI, Snowflake’s generative AI suite, saw usage explode 250% quarter-over-quarter, hitting a $100 million run-rate a full quarter ahead of schedule. This isn’t hype; it’s tangible value: Enterprises are deploying Cortex for everything from natural language querying to agentic workflows, where AI doesn’t just analyze data—it acts on it.
Take agentic workflows as a prime example. In Q3, Snowflake rolled out enhanced Model Context Protocol (MCP) integrations, allowing AI agents to securely invoke tools like database queries or external APIs without data leaving the platform. A Fortune 500 bank, for instance, used Cortex agents to automate fraud detection, processing petabyte-scale transaction logs in real-time and flagging anomalies with 95% accuracy—slashing false positives by 40% and saving millions. This isn’t isolated; 688 customers now generate over $1 million in trailing 12-month product revenue, up 29% YoY, many crediting AI expansions.
The earnings call transcript reveals the depth: Ramaswamy detailed how partnerships with Anthropic ($200M investment) and Accenture are accelerating Cortex adoption, with weekly AI users up 300%. X lit up with reactions: @AnalyStock_ai tweeted, “SNOW Q3: 28% rev growth, 250% Cortex spike—AI is the real MVP here”, echoing the sentiment that Snowflake’s AI moat is widening.
Investor Implications: Why This Boom Matters for Your Portfolio
For investors, Q3 FY2026 is a green light with guardrails. The 30% revenue clip reaffirms Snowflake’s premium valuation (forward P/S ~15x), but improving margins (non-GAAP op margin at 11%) and $113.6 million in free cash flow signal a path to GAAP profitability by FY2028. RPO’s 37% surge provides a buffer against macro headwinds, with 766 Global 2000 customers (up 4%) locking in multi-year commitments.
Agentic workflows exemplify the upside: Beyond fraud, they’re enabling “AI-first” enterprises. A retail giant deployed Cortex agents for dynamic pricing, integrating real-time inventory with market data to boost margins by 5%—a scalable model that’s drawing nine-figure deals. Risks? Elevated R&D (41% of revenue) could pressure short-term margins, as Q4 guidance implies a dip to 7% op margin amid AI capex. Yet, with FY2026 product revenue guided at $4.446 billion (+28% YoY), the trajectory points to 25% adjusted FCF margins long-term.
X investors are aligned: @moneyvize_app analyzed, “SNOW Q3: $1.21B rev beat, RPO record—AI tailwinds intact despite margin guide”, urging buys near $240 for 20-30% upside. In a market favoring AI pure-plays, Snowflake’s ecosystem (200+ partners) de-risks execution, making it a hold-and-grow staple.
The Road Ahead: AI as Snowflake’s Endgame
Q3 FY2026 cements Snowflake’s thesis: AI isn’t a feature—it’s the fabric of future revenue. With Cortex’s explosive growth and agentic innovations turning data into dollars, investors have reason for optimism. As the company eyes $10 billion in annual revenue by 2030, this quarter’s results are a pivotal checkpoint on that ascent.