10-QPeriod: Q1 FY2024

Snowflake Inc. Quarterly Report for Q1 Ended Apr 30, 2023

Filed June 2, 2023For Securities:SNOW

Summary

Snowflake Inc.'s (SNOW) 10-Q filing for the period ending April 30, 2023, reveals robust revenue growth, with total revenue increasing by 48% year-over-year to $623.6 million. This growth was primarily driven by a 50% surge in product revenue, reaching $590.1 million, indicating strong customer consumption of its cloud-based data platform. Despite the impressive top-line performance, the company continues to operate at a net loss, reporting a net loss attributable to Snowflake Inc. of $225.6 million for the quarter, compared to $165.8 million in the prior year. This widening loss, coupled with increased operating expenses, particularly in research and development (up 84%), reflects continued significant investment in growth and platform development. The company also announced a new $2 billion stock repurchase program, demonstrating confidence in its financial position and commitment to returning value to shareholders.

Financial Highlights

53 data points
Beta

Revenue

$623.60M

66.4% Gross Margin

Net Income

-$225.63M

-36.2% Net Margin

EPS (Diluted)

$-0.70

Total Assets

$7.45B

Cash & Equivalents

$670.84M

Free Cash Flow

$292.47M

Financial Statements
Beta
Revenue$623.60M
Cost of Revenue$209.41M
Gross Profit$414.19M
R&D Expenses$277.41M
Operating Expenses$687.42M
Operating Income-$273.24M
Net Income-$225.63M
EPS (Basic)$-0.70
EPS (Diluted)$-0.70
Shares Outstanding (Basic)324.16M
Shares Outstanding (Diluted)324.16M

Key Highlights

  • 1Revenue increased by 48% year-over-year to $623.6 million, driven by a 50% increase in product revenue to $590.1 million.
  • 2Net loss attributable to Snowflake Inc. widened to $225.6 million from $165.8 million in the prior year's quarter.
  • 3Operating expenses increased significantly, with Research & Development expenses up 84% year-over-year, reflecting continued investment in growth.
  • 4The company repurchased approximately $191.7 million of its common stock during the quarter under a new $2 billion stock repurchase program authorized in February 2023.
  • 5Remaining Performance Obligations (RPO) stood at $3.4 billion as of April 30, 2023.
  • 6Free Cash Flow was positive at $283.1 million for the quarter, indicating strong operational cash generation despite the net loss.
  • 7Total customers grew to 8,167 as of April 30, 2023, up from 7,850 as of January 31, 2023.

Frequently Asked Questions

Snowflake reported a significant increase in revenue, with total revenue growing 48% year-over-year to $623.6 million for the three months ended April 30, 2023. Product revenue, a key driver, increased by 50% to $590.1 million, indicating strong customer adoption and consumption of the platform.

No, Snowflake continues to operate at a net loss. For the three months ended April 30, 2023, the net loss attributable to Snowflake Inc. was $225.6 million, an increase from $165.8 million in the same period last year. This widening loss is a result of increased operating expenses, particularly in research and development, as the company invests heavily in growth and innovation.

Despite the net loss, Snowflake generated a positive Free Cash Flow of $283.1 million for the quarter. This demonstrates the company's ability to generate cash from its operations, which is a positive sign for financial health and supports its growth initiatives and strategic investments, including its stock repurchase program.

The company identifies several risks, including intense competition from cloud providers and other tech companies, the risk of not achieving or sustaining profitability, potential disruptions and security breaches of its platform and underlying cloud infrastructure, and the challenges of innovating and adapting to evolving customer needs and market trends. Macroeconomic conditions and customer budget rationalization are also noted as potential headwinds.