Snowflake (SNOW) risk factors, 2025 10-K

Risks Related to Our Business and Operations

1. 01We have experienced rapid revenue growth and have a limited operating history, both of which make it difficult to forecast our future results of operations
2. 02We may not have visibility into our future financial position and results of operations
3. 03We have a history of operating losses and may not achieve or sustain profitability in the future
4. 04The markets in which we operate are highly competitive, and if we do not compete effectively, our business, financial condition, and results of operations could be harmed
5. 05If we fail to innovate in response to changing customer needs, new technologies, or other market requirements, our business, financial condition, and results of operations could be harmed
6. 06If we are not successful in executing our investments in AI Technology, including generative AI Technology, our business, financial condition, and results of operations could be harmed
7. 07Any litigation against us could be costly and time-consuming to defend
8. 08We or our third-party service providers could suffer disruptions, outages, defects, and other performance and quality problems with our platform or with the public cloud and internet infrastructure on which it relies
9. 09We expect fluctuations in our financial results, making it difficult to project future results, and if we fail to meet the expectations of securities analysts or investors with respect to our results of operations, our stock price could decline
10. 10Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our products and platform
11. 11Sales efforts to large customers involve risks that may not be present or that are present to a lesser extent with respect to sales to smaller organizations
12. 12We do business with federal, state, local, and foreign governments and agencies, and heavily regulated organizations; as a result, we face heightened risks related to special contract terms, non-standard product deployments, and compliance with additional processes, rules, and regulations
13. 13Our success depends in part on the continued services of our executive officers, as well as our other key employees in the areas of research and development and sales and marketing
14. 14Unfavorable conditions in our industry or the global economy, or reductions in cloud spending, or lower than expected consumption, could limit our ability to grow our business and negatively affect our results of operations
15. 15Our growth depends on the development, expansion, and success of our partner relationships
16. 16If we are unable to successfully manage the growth of our professional services business and improve our profit margin from these services, our operating results could be harmed
17. 17If we are unable to maintain and enhance our brand and reputation, our business and results of operations may be adversely affected
18. 18If the availability of our platform does not meet our service-level commitments to our customers, our revenue may be negatively impacted
19. 19We assume liability for data breaches, intellectual property infringement, and other claims, which exposes us to substantial potential liability
20. 20Acquisitions, strategic investments, partnerships, or alliances could be difficult to identify, pose integration challenges, divert the attention of management, disrupt our business, dilute stockholder value, and adversely affect our business, financial condition, and results of operations
21. 21Seasonality may cause fluctuations in our remaining performance obligations or in customer consumption
22. 22Natural disasters, public health crises, and other catastrophic events could have an adverse impact on our business, operations, and the markets and communities in which we, our partners, and our customers operate
23. 23Our customers are also subject to the risk of catastrophic events. If those events occur, demand for our platform may decrease
24. 24Our current operations are international in scope, and we plan further geographic expansion, creating a variety of operational challenges
25. 25As we are offering our platform through a Chinese-owned operating partner to Chinese affiliates of certain multi-national customers, risks associated with economic, political, and social events in China could negatively affect our business, financial condition, results of operations and growth prospects
26. 26We may require additional capital to support the growth of our business, and this capital might not be available on acceptable terms, if at all
27. 27Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt
28. 28We may not have enough available cash or the ability to raise the funds necessary to pay cash upon conversion of the Notes or to repurchase the Notes upon a fundamental change, and any future debt may contain limitations on our ability to do so
29. 29The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results
30. 30We are exposed to fluctuations in currency exchange rates, which could negatively affect our results of operations and our ability to invest and hold our cash
31. 31If our estimates or judgments relating to our critical accounting estimates prove to be incorrect, our results of operations could be adversely affected

Risks Related to Our Intellectual Property

1. 32Our intellectual property rights may not protect our business or provide us with a competitive advantage
2. 33We may become subject to intellectual property disputes, which are costly and may subject us to significant liability and increased costs of doing business
3. 34If we use open-source software inconsistent with our policies and procedures or the license terms applicable to such software, we could be subject to legal expenses, damages, or costly remediation or disruption to our business

Risks Related to Our Legal, Regulatory, and Tax Environment

1. 35We are subject to stringent and changing obligations related to data, including data privacy and security, and the failure or perceived failure to comply with these obligations could result in significant fines and liability or otherwise result in substantial harm to our business and prospects
2. 36Issues in the development and use of AI Technology, combined with an uncertain regulatory environment, may result in reputational harm, liability, or other adverse consequences to our business operations
3. 37We are subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, financial condition, and results of operations
4. 38We may be held responsible for the actions of our employees, agents, customers, partners, suppliers and other third parties with which we do business if such actions violate our policies and applicable law. As we expand internationally and into the public sector market, our risks under these laws may increase
5. 39Increasing scrutiny and changing expectations from global regulations, our investors, customers, and employees with respect to ESG may impact our reputation and business
6. 40We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls
7. 41If our channel partners fail to obtain appropriate import, export, or re-export licenses or permits, we may also be adversely affected through reputational harm, as well as other negative consequences, including government investigations and penalties
8. 42Our international operations may subject us to greater than anticipated tax liabilities
9. 43Changes in tax laws or tax rulings could materially affect our financial position, results of operations, and cash flows
10. 44Our ability to use our net operating loss carryforwards may be limited
11. 45Changes in our effective tax rate or tax liability may have an adverse effect on our results of operations

Risks Related to the Ownership of Our Common Stock

1. 46Our stock price may be volatile, and the value of our common stock may decline
2. 47Conversion of the Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock
3. 48The capped call transactions may affect the value of the Notes and the market price of our common stock
4. 49We are subject to counterparty risk with respect to the capped call transactions
5. 50Our issuance of additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans, or otherwise will dilute all other stockholders
6. 51We may not realize the anticipated long-term stockholder value of our stock repurchase program, and any failure to repurchase our common stock after we have announced our intention to do so may negatively impact our stock price
7. 52If securities or industry analysts publish unfavorable or inaccurate research about our business, the market price or trading volume of our common stock could decline
8. 53We do not intend to pay dividends for the foreseeable future and, as a result, the ability of the holders of our common stock to achieve a return on their investment will depend on appreciation in the price of our common stock
9. 54We incur significant costs operating as a public company, and our management is required to devote substantial time to compliance with our public company responsibilities and corporate governance practices
10. 55As a result of being a public company, we are obligated to develop and maintain proper and effective internal control over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our common stock
11. 56Anti-takeover provisions in our charter documents, the Indentures, and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price of our common stock