10-QPeriod: Q3 FY2024

Snowflake Inc. Quarterly Report for Q3 Ended Oct 31, 2023

Filed December 1, 2023For Securities:SNOW

Summary

Snowflake Inc. reported revenue of $734.2 million for the three months ended October 31, 2023, representing a 32% year-over-year increase, and $2.0 billion for the nine months ended October 31, 2023, a 38% increase. Despite top-line growth, the company continued to report a net loss, amounting to $214.3 million for the quarter and $666.7 million for the nine months. This loss is largely driven by significant operating expenses, particularly in sales and marketing and research and development, which together represented 104% of revenue for the quarter. The company is actively managing its expenses and is focused on long-term growth, as evidenced by its substantial investment in R&D and its ongoing stock repurchase program. The company's net revenue retention rate remained strong at 135% as of October 31, 2023, indicating good customer loyalty and expansion within the existing customer base. The company is navigating a challenging macroeconomic environment, which is leading some customers to rationalize budgets and optimize consumption. However, Snowflake's consumption-based model and its position in the growing Data Cloud market provide a strong foundation. The company ended the period with a healthy cash position of $4.5 billion, providing ample liquidity for ongoing operations and strategic investments. Key strategic initiatives include the continued expansion of the Data Cloud and investments in AI/ML technologies.

Financial Highlights

53 data points
Beta

Revenue

$734.17M

68.8% Gross Margin

Net Income

-$214.25M

-29.2% Net Margin

EPS (Diluted)

$-0.65

Total Assets

$7.26B

Cash & Equivalents

$999.89M

Free Cash Flow

$112.16M

Financial Statements
Beta
Revenue$734.17M
Cost of Revenue$228.95M
Gross Profit$505.23M
R&D Expenses$332.06M
Operating Expenses$765.85M
Operating Income-$260.62M
Net Income-$214.25M
EPS (Basic)$-0.65
EPS (Diluted)$-0.65
Shares Outstanding (Basic)329.31M
Shares Outstanding (Diluted)329.31M

Key Highlights

  • 1Revenue grew 32% year-over-year to $734.2 million for the third quarter of fiscal year 2024.
  • 2Net loss widened to $214.3 million for the third quarter, compared to $200.9 million in the prior year.
  • 3Operating expenses remain high, with Sales & Marketing and R&D combined at 104% of revenue for the quarter.
  • 4Net revenue retention rate remained strong at 135% as of October 31, 2023.
  • 5The company repurchased $591.7 million of common stock during the first nine months of the fiscal year.
  • 6Cash, cash equivalents, and investments totaled $4.5 billion at the end of the period, providing strong liquidity.
  • 7The company made several strategic acquisitions during the period, including Neeva Inc., Mountain US Corporation, and LeapYear Technologies, Inc.

Frequently Asked Questions

For the three months ended October 31, 2023, Snowflake reported revenue of $734.2 million, an increase of 32% compared to the same period last year. For the nine months ended October 31, 2023, revenue was $2.0 billion, a 38% increase year-over-year.

Snowflake continues to operate at a net loss. For the three months ended October 31, 2023, the net loss attributable to Snowflake Inc. was $214.3 million. For the nine months ended October 31, 2023, the net loss was $666.7 million.

Snowflake reported a strong net revenue retention rate of 135% as of October 31, 2023. This indicates that customers who were with Snowflake at the beginning of the period increased their spending by an average of 35% by the end of the period, demonstrating good customer stickiness and expansion.

Snowflake ended the period with a robust liquidity position, reporting $4.5 billion in cash, cash equivalents, and investments. The company actively repurchased approximately $591.7 million of its common stock during the first nine months of the fiscal year under its authorized $2.0 billion repurchase program, signaling confidence and a commitment to returning capital to shareholders.