10-QPeriod: Q2 FY2023

Snowflake Inc. Quarterly Report for Q2 Ended Jul 31, 2022

Filed September 1, 2022For Securities:SNOW

Summary

Snowflake Inc. (SNOW) reported strong revenue growth in its fiscal second quarter ended July 30, 2022, with total revenue increasing by 83% year-over-year to $497.2 million. This growth was primarily driven by a significant increase in product revenue, up 83% to $466.3 million, fueled by continued strong consumption from existing customers, as evidenced by a net revenue retention rate of 171%. The company also saw an increase in customers contributing over $1 million in product revenue, reaching 246. Despite the robust top-line performance, Snowflake continued to incur operating losses, with a net loss of $222.8 million for the quarter, an increase from the prior year's net loss of $189.7 million, largely due to significant investments in sales and marketing, and research and development. The company's balance sheet shows a healthy cash and investment position of approximately $5.0 billion. Snowflake also completed the acquisition of Streamlit, Inc. for $650.8 million during the quarter, which added significant goodwill and intangible assets, reflecting its strategy of investing in talent and developer communities to expand its Data Cloud offerings. While the company is investing heavily for future growth, its ability to achieve profitability remains a key focus for investors.

Financial Highlights

51 data points
Beta

Revenue

$497.25M

65.2% Gross Margin

Net Income

-$222.81M

-44.8% Net Margin

EPS (Diluted)

$-0.70

Total Assets

$7.06B

Cash & Equivalents

$906.66M

Free Cash Flow

$60.59M

Financial Statements
Beta
Revenue$497.25M
Cost of Revenue$173.23M
Gross Profit$324.02M
R&D Expenses$183.75M
Operating Expenses$531.75M
Operating Income-$207.73M
Net Income-$222.81M
EPS (Basic)$-0.70
EPS (Diluted)$-0.70
Shares Outstanding (Basic)318.36M
Shares Outstanding (Diluted)318.36M

Key Highlights

  • 1Revenue surged 83% year-over-year to $497.2 million, driven by strong product revenue growth.
  • 2Net revenue retention rate remained high at 171%, indicating strong customer adoption and expansion.
  • 3The number of customers with over $1 million in trailing 12-month product revenue increased to 246.
  • 4The company incurred a net loss of $222.8 million, reflecting ongoing significant investments in growth.
  • 5Cash, cash equivalents, and investments totaled approximately $5.0 billion, providing ample liquidity.
  • 6Acquisition of Streamlit, Inc. for $650.8 million in March 2022, aimed at strengthening its developer community and data application capabilities.
  • 7Operating expenses, particularly sales and marketing and R&D, increased significantly, driving the net loss.

Frequently Asked Questions

Snowflake reported a substantial 83% year-over-year increase in total revenue, reaching $497.2 million for the quarter ended July 30, 2022. Product revenue, the primary driver, grew by 83% to $466.3 million.

Snowflake's net revenue retention rate was 171% as of July 31, 2022. This high rate indicates that existing customers are increasing their consumption and spending on Snowflake's platform, demonstrating strong customer satisfaction and product value.

Snowflake continues to operate at a loss. The company reported a net loss of $222.8 million for the quarter, an increase from the $189.7 million loss in the same period last year. This is attributed to substantial ongoing investments in sales and marketing, research and development, and general operations to fuel growth.

The company maintains a strong liquidity position, with cash, cash equivalents, and investments totaling approximately $5.0 billion as of July 31, 2022. This provides significant financial flexibility for ongoing operations and strategic initiatives.