- Product revenue of $698.5 million in the third quarter,
representing 34% year-over-year growth
- 436 customers with trailing 12-month product revenue greater
than $1 million
- Net revenue retention rate of 135%
- 647 Forbes Global 2000 customers
- Remaining performance obligations of $3.7 billion, representing
23% year-over-year growth
Snowflake (NYSE: SNOW), the Data Cloud company, today announced
financial results for its third quarter of fiscal 2024, ended
October 31, 2023.
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the full release here:
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Snowflake Q3 FY24 Infographic (Graphic:
Snowflake)
Revenue for the quarter was $734.2 million, representing 32%
year-over-year growth. Product revenue for the quarter was $698.5
million, representing 34% year-over-year growth. The company now
has 436 customers with trailing 12-month product revenue greater
than $1 million and 647 Forbes Global 2000 customers, representing
52% and 10% year-over-year growth, respectively. Net revenue
retention rate was 135% as of October 31, 2023. Remaining
performance obligations were $3.7 billion, representing 23%
year-over-year growth. Net cash provided by operating activities
was $120.9 million, representing 53% year-over-year growth. See the
section titled “Key Business Metrics” for definitions of product
revenue, customers with trailing 12-month product revenue greater
than $1 million, net revenue retention rate, Forbes Global 2000
customers, and remaining performance obligations.
“During Q3, product revenue grew 34% year-over-year to reach
$698 million and non-GAAP adjusted free cash flow was $111 million,
representing 70% year-over-year growth. These results reflect
strong execution in a broadly stabilizing macro environment," said
Frank Slootman, Chairman and CEO, Snowflake.
Third Quarter Fiscal 2024 GAAP and Non-GAAP Results:
The following table summarizes our financial results for the
third quarter of fiscal 2024:
Third Quarter Fiscal
2024
GAAP Results
Third Quarter Fiscal
2024
Non-GAAP Results(1)
Amount
(millions)
Year/Year Growth
Product revenue
$698.5
34%
Amount
(millions)
Margin
Amount
(millions)
Margin
Product gross profit
$518.5
74%
$547.1
78%
Operating income (loss)
($260.6)
(35%)
$71.9
10%
Net cash provided by operating
activities
$120.9
Free cash flow
$102.3
14%
Adjusted free cash flow
$110.8
15%
(1)
We report non-GAAP financial
measures in addition to, and not as a substitute for, or superior
to, financial measures calculated in accordance with GAAP. See the
section titled “Statement Regarding Use of Non-GAAP Financial
Measures” for an explanation of non-GAAP financial measures, and
the table titled “GAAP to Non-GAAP Reconciliations” for a
reconciliation of GAAP to non-GAAP financial measures.
Note: Fiscal year ends January 31. Numbers are rounded for
presentation purposes.
Financial Outlook:
Our guidance includes GAAP and non-GAAP financial measures.
The following table summarizes our guidance for the fourth
quarter of fiscal 2024:
Fourth Quarter Fiscal
2024
GAAP Guidance
Fourth Quarter Fiscal
2024
Non-GAAP Guidance(1)
Amount
(millions)
Year/Year Growth
Product revenue
$716 - $721
29 - 30%
Margin
Operating income
4%
Amount
(millions)
Weighted-average shares used in
computing net income per share attributable to Snowflake Inc.
common stockholders - diluted(2)
360
(1)
We report non-GAAP financial measures in
addition to, and not as a substitute for, or superior to, financial
measures calculated in accordance with GAAP. See the section titled
“Statement Regarding Use of Non-GAAP Financial Measures” for an
explanation of non-GAAP financial measures.
(2)
The potential impact of future repurchases
under our existing stock repurchase program is not reflected in our
guidance for weighted-average shares used in computing net income
per share attributable to Snowflake Inc. common stockholders -
diluted due to the uncertainty regarding, and the potential
variability of, the timing and amount of repurchases.
The following table summarizes our guidance for the full-year
fiscal 2024:
Full-Year Fiscal 2024
GAAP Guidance
Full-Year Fiscal 2024
Non-GAAP Guidance(1)
Amount
(millions)
Year/Year Growth
Product revenue(2)
$2,650
37%
Margin
Product gross profit
77%
Operating income
7%
Adjusted free cash flow
27%
Amount
(millions)
Weighted-average shares used in
computing net income per share attributable to Snowflake Inc.
common stockholders - diluted(3)
361
(1)
We report non-GAAP financial measures in
addition to, and not as a substitute for, or superior to, financial
measures calculated in accordance with GAAP. See the section titled
“Statement Regarding Use of Non-GAAP Financial Measures” for an
explanation of non-GAAP financial measures.
(2)
The full-year fiscal 2024 product revenue
guidance is based on the higher end of the fourth quarter fiscal
2024 guidance.
(3)
The potential impact of future repurchases
under our existing stock repurchase program is not reflected in our
guidance for weighted-average shares used in computing net income
per share attributable to Snowflake Inc. common stockholders -
diluted due to the uncertainty regarding, and the potential
variability of, the timing and amount of repurchases.
A reconciliation of non-GAAP guidance measures to corresponding
GAAP guidance measures is not available on a forward-looking basis
without unreasonable effort due to the uncertainty regarding, and
the potential variability of, expenses that may be incurred in the
future. Stock-based compensation-related charges, including
employer payroll tax-related items on employee stock transactions,
are impacted by the timing of employee stock transactions, the
future fair market value of our common stock, and our future hiring
and retention needs, all of which are difficult to predict and
subject to constant change. We have provided a reconciliation of
GAAP to non-GAAP financial measures in the financial statement
tables for our historical non-GAAP financial results included in
this release. Our fiscal year ends January 31, and numbers are
rounded for presentation purposes.
Conference Call Details
We will host a conference call today, beginning at 3 p.m.
Mountain Time on November 29, 2023. Investors and participants may
attend the call by dialing (833) 470-1428 (Access code: 973189), or
if outside the United States, by dialing +1 (929) 526-1599 (Access
code: 973189).
The call will also be webcast live on the Snowflake Investor
Relations website at https://investors.snowflake.com.
An audio replay of the conference call and webcast will be
available two hours after its completion and will be accessible for
30 days on the Snowflake Investor Relations website.
Investor Presentation Details
An investor presentation providing additional information and
analysis can be found at https://investors.snowflake.com.
Statement Regarding Use of Non‑GAAP Financial
Measures
We report the following non-GAAP financial measures, which have
not been prepared in accordance with generally accepted accounting
principles in the United States (GAAP), in addition to, and not as
a substitute for, or superior to, financial measures calculated in
accordance with GAAP.
- Non-GAAP Product gross profit, Operating income (loss), Net
income (loss), Net income (loss) attributable to Snowflake Inc.,
and Net income (loss) per share attributable to Snowflake Inc.
common stockholders - basic and diluted. Our non-GAAP product
gross profit, operating income (loss), net income (loss), and net
income (loss) attributable to Snowflake Inc. measures exclude the
effect of (i) stock-based compensation-related charges, including
employer payroll tax-related items on employee stock transactions,
(ii) amortization of acquired intangibles, (iii) expenses
associated with acquisitions and strategic investments, (iv)
adjustments attributable to noncontrolling interest, and (v) the
related income tax effect of these adjustments as well as the
non-recurring income tax expense or benefit associated with
acquisitions. Our non-GAAP net income (loss) per share attributable
to Snowflake Inc. common stockholders - basic is calculated by
dividing non-GAAP net income (loss) attributable to Snowflake Inc.
by the weighted-average number of shares of common stock
outstanding during the period. Our non-GAAP net income per share
attributable to Snowflake Inc. common stockholders - diluted is
calculated by dividing non-GAAP net income attributable to
Snowflake Inc. by the non-GAAP weighted-average number of diluted
shares outstanding, giving effect to all potentially dilutive
common stock equivalents (stock options, restricted stock units,
and employee stock purchase rights under our 2020 Employee Stock
Purchase Plan). The potential dilutive effect of outstanding
restricted stock units with performance conditions not yet
satisfied is included in the non-GAAP weighted-average number of
diluted shares at forecasted attainment levels to the extent we
believe it is probable that the performance conditions will be met.
Non-GAAP net loss per share attributable to Snowflake Inc. common
stockholders - diluted is the same as Non-GAAP net loss per share
attributable to Snowflake Inc. common stockholders - basic as the
inclusion of all potential dilutive common stock equivalents would
be anti-dilutive. Amounts attributable to noncontrolling interest
were not material for all periods presented. We believe the
presentation of operating results that exclude these non-cash or
non-recurring items provides useful supplemental information to
investors and facilitates the analysis of our operating results and
comparison of operating results across reporting periods.
- Free cash flow. Free cash flow is defined as net cash
provided by (used in) operating activities reduced by purchases of
property and equipment and capitalized internal-use software
development costs. Cash outflows for employee payroll tax items
related to the net share settlement of equity awards are included
in cash flow for financing activities and, as a result, do not have
an effect on the calculation of free cash flow. Free cash flow
margin is calculated as free cash flow as a percentage of revenue.
We believe these measures provide useful supplemental information
to investors because they are indicators of the strength and
performance of our core business operations.
- Adjusted free cash flow. Adjusted free cash flow is
defined as free cash flow plus (minus) net cash paid (received) on
employer and employee payroll tax-related items on employee stock
transactions. Employee payroll tax-related items on employee stock
transactions are generally pass-through transactions that are
expected to have a net zero impact on free cash flow over time, but
that may impact free cash flow in any given fiscal quarter due to
differences between the time that we receive funds from our
employees and the time we remit those funds to applicable tax
authorities. We believe that excluding the effects of these payroll
tax-related items will enhance stockholders' ability to evaluate
our free cash flow performance, including on a quarter-over-quarter
basis. Adjusted free cash flow margin is calculated as adjusted
free cash flow as a percentage of revenue. We believe these
measures provide useful supplemental information to investors
because they are indicators of the strength and performance of our
core business operations.
We use these non-GAAP financial measures internally for
financial and operational decision-making purposes and as a means
to evaluate period-to-period comparisons. Non-GAAP financial
measures are not meant to be considered in isolation or as a
substitute for comparable GAAP financial measures and should be
read only in conjunction with our condensed consolidated financial
statements prepared in accordance with GAAP. Our presentation of
non-GAAP financial measures may not be comparable to similar
measures used by other companies. We encourage investors to
carefully consider our results under GAAP, as well as our
supplemental non-GAAP information and the reconciliation between
these presentations, to more fully understand our business. Please
see the tables included at the end of this release for the
reconciliation of GAAP to non-GAAP results.
Key Business Metrics
We monitor our key business metrics, including (i) free cash
flow and (ii) the other metrics set forth below to help us evaluate
our business and growth trends, establish budgets, measure the
effectiveness of our sales and marketing efforts, and assess
operational efficiencies. See the section titled “Statement
Regarding Use of Non-GAAP Financial Measures” for the definition of
free cash flow. The calculation of our key business metrics may
differ from other similarly titled metrics used by other companies,
securities analysts, or investors.
- Product Revenue. Product revenue is a key metric
for us because we recognize revenue based on platform consumption,
which is inherently variable at our customers’ discretion, and not
based on the amount and duration of contract terms. Product revenue
is primarily derived from the consumption of compute, storage, and
data transfer resources, which are consumed by customers on our
platform as a single, integrated offering. Customers have the
flexibility to consume more than their contracted capacity during
the contract term and may have the ability to roll over unused
capacity to future periods, generally upon the purchase of
additional capacity at renewal. Our consumption-based business
model distinguishes us from subscription-based software companies
that generally recognize revenue ratably over the contract term and
may not permit rollover. Because customers have flexibility in the
timing of their consumption, which can exceed their contracted
capacity or extend beyond the original contract term in many cases,
the amount of product revenue recognized in a given period is an
important indicator of customer satisfaction and the value derived
from our platform. Product revenue excludes our professional
services and other revenue.
- Customers with Trailing 12-Month Product Revenue Greater
than $1 Million. To calculate the number of customers
with trailing 12-month product revenue greater than $1 million, we
count the number of customers under capacity arrangements that
contributed more than $1 million in product revenue in the trailing
12 months. For purposes of determining our customer count, we treat
each customer account, including accounts for end-customers under a
reseller arrangement, that has at least one corresponding capacity
contract as a unique customer, and a single organization with
multiple divisions, segments, or subsidiaries may be counted as
multiple customers. We do not include customers that consume our
platform only under on-demand arrangements for purposes of
determining our customer count. Our customer count is subject to
adjustments for acquisitions, consolidations, spin-offs, and other
market activity, and we present our customer count for historical
periods reflecting these adjustments.
- Net Revenue Retention Rate. To calculate net
revenue retention rate, we first specify a measurement period
consisting of the trailing two years from our current period end.
Next, we define as our measurement cohort the population of
customers under capacity contracts that used our platform at any
point in the first month of the first year of the measurement
period. The cohorts used to calculate net revenue retention rate
include end-customers under a reseller arrangement. We then
calculate our net revenue retention rate as the quotient obtained
by dividing our product revenue from this cohort in the second year
of the measurement period by our product revenue from this cohort
in the first year of the measurement period. Any customer in the
cohort that did not use our platform in the second year remains in
the calculation and contributes zero product revenue in the second
year. Our net revenue retention rate is subject to adjustments for
acquisitions, consolidations, spin-offs, and other market activity,
and we present our net revenue retention rate for historical
periods reflecting these adjustments. Since we will continue to
attribute the historical product revenue to the consolidated
contract, consolidation of capacity contracts within a customer’s
organization typically will not impact our net revenue retention
rate unless one of those customers was not a customer at any point
in the first month of the first year of the measurement
period.
- Forbes Global 2000 Customers. Our Forbes Global 2000
customer count is a subset of our customer count based on the 2023
Forbes Global 2000 list. Our Forbes Global 2000 customer count is
subject to adjustments for annual updates to the list by Forbes, as
well as acquisitions, consolidations, spin-offs, and other market
activity with respect to such customers, and we present our Forbes
Global 2000 customer count for historical periods reflecting these
adjustments.
- Remaining Performance Obligations. Remaining
performance obligations (RPO) represent the amount of contracted
future revenue that has not yet been recognized, including (i)
deferred revenue and (ii) non-cancelable contracted amounts that
will be invoiced and recognized as revenue in future periods. RPO
excludes performance obligations from on-demand arrangements and
certain time and materials contracts that are billed in arrears.
Portions of RPO that are not yet invoiced and are denominated in
foreign currencies are revalued into U.S. dollars each period based
on the applicable period-end exchange rates. RPO is not necessarily
indicative of future product revenue growth because it does not
account for the timing of customers’ consumption or their
consumption of more than their contracted capacity. Moreover, RPO
is influenced by a number of factors, including the timing and size
of renewals, the timing and size of purchases of additional
capacity, average contract terms, seasonality, changes in foreign
currency exchange rates, and the extent to which customers are
permitted to roll over unused capacity to future periods, generally
upon the purchase of additional capacity at renewal.
Use of Forward‑Looking Statements
This release and the accompanying oral presentation contain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, regarding our
performance, including but not limited to statements in the section
titled “Financial Outlook.” Words such as “guidance,” “outlook,”
“expect,” “anticipate,” “should,” “believe,” “hope,” “target,”
“project,” “plan,” “goals,” “estimate,” “potential,” “predict,”
“may,” “will,” “might,” “could,” “intend,” “shall,” and variations
of these terms or the negative of these terms and similar
expressions are intended to identify these forward-looking
statements. The forward-looking statements contained in this
release and the accompanying oral presentation are subject to known
and unknown risks, uncertainties, assumptions, and other factors
that may cause actual results or outcomes to be materially
different from any future results or outcomes expressed or implied
by the forward-looking statements. These risks, uncertainties,
assumptions, and other factors include, but are not limited to,
those related to our business and financial performance; general
market and business conditions, downturns, or uncertainty,
including higher inflation, higher interest rates, and fluctuations
or volatility in capital markets or foreign currency exchange
rates; our ability to attract and retain customers; the extent to
which customers continue to optimize consumption, including by
reducing storage through shorter data retention policies; the
extent to which customers continue to rationalize budgets and
prioritize cash flow management, including through shortened
contract durations; our ability to develop new products and
services and enhance existing products and services; the growth of
successful native applications on the Snowflake Marketplace; our
ability to respond rapidly to emerging technology trends, including
the use of artificial intelligence; our ability to execute on our
business strategy, including our strategy related to the Data
Cloud, Snowpark, and Snowflake Marketplace; our ability to increase
and predict customer consumption of our platform, particularly in
light of the impact of holidays on customer consumption patterns;
our ability to compete effectively; and our ability to manage
growth.
Further information on these and additional risks,
uncertainties, and other factors that could cause actual outcomes
and results to differ materially from those included in or
contemplated by the forward-looking statements contained in this
release are included under the caption “Risk Factors” and elsewhere
in our Form 10-Q for the fiscal quarter ended July 31, 2023 and
other filings and reports we make with the Securities and Exchange
Commission from time to time, including our Form 10-Q that will be
filed for the fiscal quarter ended October 31, 2023.
Moreover, we operate in a very competitive and rapidly changing
environment, and new risks may emerge from time to time. It is not
possible to predict all risks, nor can we assess the impact of all
factors on our business or the extent to which any factor(s) may
cause actual results or outcomes to differ materially from those
contained in any forward-looking statements we may make. As a
result of these risks, uncertainties, assumptions, and other
factors, you should not rely on any forward-looking statements as
predictions of future events. Forward-looking statements speak only
as of the date the statements are made and are based on information
available to us at the time those statements are made and/or
management's good faith belief as of that time with respect to
future events. Except as required by law, we undertake no
obligation, and do not intend, to update these forward-looking
statements, to review or confirm analysts’ expectations, or to
provide interim reports or updates on the progress of the current
financial quarter.
About Snowflake
Snowflake enables every organization to mobilize their data with
Snowflake’s Data Cloud. Customers use the Data Cloud to unite
siloed data, discover and securely share data, power data
applications, and execute diverse AI/ML and analytic workloads.
Wherever data or users live, Snowflake delivers a single data
experience that spans multiple clouds and geographies. Thousands of
customers across many industries, including 647 of the 2023 Forbes
Global 2000 (G2K) as of October 31, 2023, use Snowflake Data Cloud
to power their businesses. Learn more at snowflake.com.
Source: Snowflake Inc.
Snowflake Inc.
Condensed Consolidated
Statements of Operations
(in thousands, except per
share data)
(unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2023
2022
2023
2022
Revenue
$
734,173
$
557,028
$
2,031,790
$
1,476,647
Cost of revenue
228,948
190,721
656,754
511,883
Gross profit
505,225
366,307
1,375,036
964,764
Operating expenses:
Sales and marketing
355,079
284,477
1,029,925
803,034
Research and development
332,065
211,387
923,473
545,933
General and administrative
78,704
76,462
240,906
218,314
Total operating expenses
765,848
572,326
2,194,304
1,567,281
Operating loss
(260,623
)
(206,019
)
(819,268
)
(602,517
)
Interest income
53,491
21,857
146,902
38,308
Other expense, net
(4,170
)
(13,271
)
(2,646
)
(44,672
)
Loss before income taxes
(211,302
)
(197,433
)
(675,012
)
(608,881
)
Provision for (benefit from) income
taxes
3,392
4,009
(6,934
)
(18,839
)
Net loss
(214,694
)
(201,442
)
(668,078
)
(590,042
)
Less: net loss attributable to
noncontrolling interest
(443
)
(506
)
(1,333
)
(506
)
Net loss attributable to Snowflake
Inc.
$
(214,251
)
$
(200,936
)
$
(666,745
)
$
(589,536
)
Net loss per share attributable to
Snowflake Inc. common stockholders - basic and diluted
$
(0.65
)
$
(0.63
)
$
(2.04
)
$
(1.86
)
Weighted-average shares used in computing
net loss per share attributable to Snowflake Inc. common
stockholders - basic and diluted
329,310
320,135
326,964
317,653
Snowflake Inc.
Condensed Consolidated Balance
Sheets
(in thousands)
(unaudited)
October 31, 2023
January 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
982,182
$
939,902
Short-term investments
2,566,357
3,067,966
Accounts receivable, net
511,034
715,821
Deferred commissions, current
74,574
67,901
Prepaid expenses and other current
assets
178,136
193,100
Total current assets
4,312,283
4,984,690
Long-term investments
947,829
1,073,023
Property and equipment, net
216,380
160,823
Operating lease right-of-use assets
254,236
231,266
Goodwill
784,405
657,370
Intangible assets, net
329,767
186,013
Deferred commissions, non-current
150,362
145,286
Other assets
269,117
283,851
Total assets
$
7,264,379
$
7,722,322
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
75,456
$
23,672
Accrued expenses and other current
liabilities
318,281
269,069
Operating lease liabilities, current
33,348
27,301
Deferred revenue, current
1,605,587
1,673,475
Total current liabilities
2,032,672
1,993,517
Operating lease liabilities,
non-current
253,029
224,357
Deferred revenue, non-current
12,082
11,463
Other liabilities
25,829
24,370
Snowflake Inc. stockholders’ equity
4,929,921
5,456,436
Noncontrolling interest
10,846
12,179
Total liabilities and stockholders’
equity
$
7,264,379
$
7,722,322
Snowflake Inc.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2023
2022
2023
2022
Cash flows from operating
activities:
Net loss
$
(214,694
)
$
(201,442
)
$
(668,078
)
$
(590,042
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
32,470
17,696
84,917
43,809
Non-cash operating lease costs
13,488
12,340
39,141
33,579
Amortization of deferred commissions
18,869
14,554
54,722
41,525
Stock-based compensation, net of amounts
capitalized
298,286
229,163
862,517
610,837
Net amortization (accretion) of premiums
(discounts) on investments
(16,234
)
(545
)
(49,226
)
12,331
Net unrealized losses (gains) on strategic
investments in equity securities
1,790
13,064
(1,105
)
45,096
Deferred income tax
(213
)
1,387
(13,107
)
(25,277
)
Other
2,474
(1,396
)
14,286
678
Changes in operating assets and
liabilities, net of effects of business combinations:
Accounts receivable
(104,705
)
(88,846
)
205,138
150,723
Deferred commissions
(25,478
)
(23,721
)
(66,470
)
(63,627
)
Prepaid expenses and other assets
4,658
41,346
51,574
13,169
Accounts payable
34,203
4,079
51,672
10,304
Accrued expenses and other liabilities
6,603
17,272
33,709
27,727
Operating lease liabilities
(12,716
)
(10,990
)
(28,739
)
(29,176
)
Deferred revenue
82,106
55,316
(67,409
)
46,667
Net cash provided by operating
activities
120,907
79,277
503,542
328,323
Cash flows from investing
activities:
Purchases of property and equipment
(8,746
)
(8,505
)
(22,014
)
(19,766
)
Capitalized internal-use software
development costs
(9,889
)
(5,779
)
(27,104
)
(17,319
)
Cash paid for business combinations, net
of cash, cash equivalents, and restricted cash acquired
(14,963
)
(174,630
)
(279,534
)
(352,555
)
Purchases of intangible assets
(1,264
)
—
(28,744
)
(700
)
Purchases of investments
(369,365
)
(870,910
)
(2,095,329
)
(2,796,167
)
Sales of investments
4,000
14,881
11,266
58,813
Maturities and redemptions of
investments
971,087
898,081
2,751,148
2,594,593
Net cash provided by (used in) investing
activities
570,860
(146,862
)
309,689
(533,101
)
Cash flows from financing
activities:
Proceeds from exercise of stock
options
7,335
7,299
38,854
31,095
Proceeds from issuance of common stock
under employee stock purchase plan
24,169
14,837
61,234
40,931
Taxes paid related to net share settlement
of equity awards
(91,118
)
(51,657
)
(273,828
)
(135,766
)
Repurchases of common stock
(400,038
)
—
(591,732
)
—
Capital contributions from noncontrolling
interest holders
—
13,000
—
13,000
Payments of deferred purchase
consideration for business combinations
—
(1,800
)
—
(1,800
)
Net cash used in financing activities
(459,652
)
(18,321
)
(765,472
)
(52,540
)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(5,600
)
(2,002
)
(4,595
)
(9,390
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
226,515
(87,908
)
43,164
(266,708
)
Cash, cash equivalents, and restricted
cash—beginning of period
773,380
923,734
956,731
1,102,534
Cash, cash equivalents, and restricted
cash—end of period
$
999,895
$
835,826
$
999,895
$
835,826
Snowflake Inc.
GAAP to Non-GAAP
Reconciliations
(in thousands, except per
share data and percentages)
(unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2023
2022
2023
2022
Amount
Amount as a % of
Revenue
Amount
Amount as a % of
Revenue
Amount
Amount as a % of
Revenue
Amount
Amount as a % of
Revenue
Revenue:
Product revenue
$
698,478
95%
$
522,752
94%
$
1,928,759
95%
$
1,383,454
94%
Professional services and other
revenue
35,695
5%
34,276
6%
103,031
5%
93,193
6%
Revenue
$
734,173
100%
$
557,028
100%
$
2,031,790
100%
$
1,476,647
100%
Year-over-year growth
32
%
67
%
38
%
77
%
Cost of revenue:
GAAP cost of product revenue
$
180,000
24%
$
145,929
26%
$
508,424
25%
$
388,946
27%
Less: stock-based compensation-related
charges
(19,434
)
(15,784
)
(57,972
)
(44,047
)
Less: amortization of acquired
intangibles
(9,185
)
(1,299
)
(21,643
)
(2,432
)
Non-GAAP cost of product revenue
$
151,381
21%
$
128,846
23%
$
428,809
21%
$
342,467
23%
GAAP cost of professional services and
other revenue
$
48,948
7%
$
44,792
8%
$
148,330
7%
$
122,937
8%
Less: stock-based compensation-related
charges
(14,420
)
(13,753
)
(44,851
)
(38,074
)
Less: amortization of acquired
intangibles
(1,663
)
—
(4,771
)
—
Non-GAAP cost of professional services and
other revenue
$
32,865
4%
$
31,039
6%
$
98,708
5%
$
84,863
6%
GAAP cost of revenue
$
228,948
31%
$
190,721
34%
$
656,754
32%
$
511,883
35%
Less: stock-based compensation-related
charges
(33,854
)
(29,537
)
(102,823
)
(82,121
)
Less: amortization of acquired
intangibles
(10,848
)
(1,299
)
(26,414
)
(2,432
)
Non-GAAP cost of revenue
$
184,246
25%
$
159,885
29%
$
527,517
26%
$
427,330
29%
Gross profit (loss):
GAAP product gross profit
$
518,478
74%
$
376,823
72%
$
1,420,335
74%
$
994,508
72%
Add: stock-based compensation-related
charges
19,434
15,784
57,972
44,047
Add: amortization of acquired
intangibles
9,185
1,299
21,643
2,432
Non-GAAP product gross profit
$
547,097
78%
$
393,906
75%
$
1,499,950
78%
$
1,040,987
75%
GAAP professional services and other
revenue gross loss
$
(13,253
)
(37%)
$
(10,516
)
(31%)
$
(45,299
)
(44%)
$
(29,744
)
(32%)
Add: stock-based compensation-related
charges
14,420
13,753
44,851
38,074
Add: amortization of acquired
intangibles
1,663
—
4,771
—
Non-GAAP professional services and other
revenue gross profit
$
2,830
8%
$
3,237
9%
$
4,323
4%
$
8,330
9%
GAAP gross profit
$
505,225
69%
$
366,307
66%
$
1,375,036
68%
$
964,764
65%
Add: stock-based compensation-related
charges
33,854
29,537
102,823
82,121
Add: amortization of acquired
intangibles
10,848
1,299
26,414
2,432
Non-GAAP gross profit
$
549,927
75%
$
397,143
71%
$
1,504,273
74%
$
1,049,317
71%
Gross margin:
GAAP product gross margin
74
%
72
%
74
%
72
%
Add: stock-based compensation-related
charges as a % of product revenue
3
%
3
%
3
%
3
%
Add: amortization of acquired intangibles
as a % of product revenue
1
%
—
%
1
%
—
%
Non-GAAP product gross margin
78
%
75
%
78
%
75
%
GAAP professional services and other
revenue gross margin
(37
%)
(31
%)
(44
%)
(32
%)
Add: stock-based compensation-related
charges as a % of professional services and other revenue
40
%
40
%
43
%
41
%
Add: amortization of acquired intangibles
as a % of professional services and other revenue
5
%
—
%
5
%
—
%
Non-GAAP professional services and other
revenue gross margin
8
%
9
%
4
%
9
%
GAAP gross margin
69
%
66
%
68
%
65
%
Add: stock-based compensation-related
charges as a % of revenue
5
%
5
%
5
%
6
%
Add: amortization of acquired intangibles
as a % of revenue
1
%
—
%
1
%
—
%
Non-GAAP gross margin
75
%
71
%
74
%
71
%
Operating expenses:
GAAP sales and marketing expense
$
355,079
48%
$
284,477
51%
$
1,029,925
51%
$
803,034
54%
Less: stock-based compensation-related
charges
(78,411
)
(67,415
)
(242,858
)
(187,212
)
Less: amortization of acquired
intangibles
(7,575
)
(7,553
)
(22,435
)
(17,654
)
Non-GAAP sales and marketing expense
$
269,093
37%
$
209,509
37%
$
764,632
38%
$
598,168
41%
GAAP research and development expense
$
332,065
45%
$
211,387
38%
$
923,473
45%
$
545,933
37%
Less: stock-based compensation-related
charges
(169,526
)
(111,431
)
(482,412
)
(285,054
)
Less: amortization of acquired
intangibles
(3,624
)
(1,785
)
(8,702
)
(5,310
)
Non-GAAP research and development
expense
$
158,915
21%
$
98,171
18%
$
432,359
21%
$
255,569
17%
GAAP general and administrative
expense
$
78,704
11%
$
76,462
14%
$
240,906
12%
$
218,314
15%
Less: stock-based compensation-related
charges
(25,566
)
(26,808
)
(81,126
)
(78,327
)
Less: amortization of acquired
intangibles
(451
)
(451
)
(1,338
)
(1,280
)
Less: expenses associated with
acquisitions and strategic investments
(2,706
)
(3,112
)
(9,904
)
(5,635
)
Non-GAAP general and administrative
expense
$
49,981
7%
$
46,091
8%
$
148,538
7%
$
133,072
9%
GAAP total operating expense
$
765,848
104%
$
572,326
103%
$
2,194,304
108%
$
1,567,281
106%
Less: stock-based compensation-related
charges
(273,503
)
(205,654
)
(806,396
)
(550,593
)
Less: amortization of acquired
intangibles
(11,650
)
(9,789
)
(32,475
)
(24,244
)
Less: expenses associated with
acquisitions and strategic investments
(2,706
)
(3,112
)
(9,904
)
(5,635
)
Non-GAAP total operating expense
$
477,989
65%
$
353,771
63%
$
1,345,529
66%
$
986,809
67%
Operating income (loss):
GAAP operating loss
$
(260,623
)
(35%)
$
(206,019
)
(37%)
$
(819,268
)
(40%)
$
(602,517
)
(41%)
Add: stock-based compensation-related
charges(1)
307,357
235,191
909,219
632,714
Add: amortization of acquired
intangibles
22,498
11,088
58,889
26,676
Add: expenses associated with acquisitions
and strategic investments
2,706
3,112
9,904
5,635
Non-GAAP operating income
$
71,938
10%
$
43,372
8%
$
158,744
8%
$
62,508
4%
Operating margin:
GAAP operating margin
(35
%)
(37
%)
(40
%)
(41
%)
Add: stock-based compensation-related
charges as a % of revenue
42
%
42
%
45
%
43
%
Add: amortization of acquired intangibles
as a % of revenue
3
%
2
%
3
%
2
%
Add: expenses associated with acquisitions
and strategic investments as a % of revenue
—
%
1
%
—
%
—
%
Non-GAAP operating margin
10
%
8
%
8
%
4
%
Net income (loss):
GAAP net loss
$
(214,694
)
(29%)
$
(201,442
)
(36%)
$
(668,078
)
(33%)
$
(590,042
)
(40%)
Add: stock-based compensation-related
charges(1)
307,357
235,191
909,219
632,714
Add: amortization of acquired
intangibles
22,498
11,088
58,889
26,676
Add: expenses associated with acquisitions
and strategic investments
2,706
3,112
9,904
5,635
Income tax expenses effect related to the
above adjustments
(28,136
)
(9,501
)
(85,714
)
(33,437
)
Non-GAAP net income
$
89,731
12%
$
38,448
7%
$
224,220
11%
$
41,546
3%
Net income (loss) attributable to
Snowflake Inc.:
GAAP net loss attributable to Snowflake
Inc.
$
(214,251
)
(29%)
$
(200,936
)
(36%)
$
(666,745
)
(33%)
$
(589,536
)
(40%)
Add: stock-based compensation-related
charges(1)
307,357
235,191
909,219
632,714
Add: amortization of acquired
intangibles
22,498
11,088
58,889
26,676
Add: expenses associated with acquisitions
and strategic investments
2,706
3,112
9,904
5,635
Income tax expenses effect related to the
above adjustments
(28,136
)
(9,501
)
(85,714
)
(33,437
)
Adjustments attributable to noncontrolling
interest, net of tax
(64
)
(375
)
(174
)
(375
)
Non-GAAP net income attributable to
Snowflake Inc.
$
90,110
12%
$
38,579
7%
$
225,379
11%
$
41,677
3%
Net income (loss) per share
attributable to Snowflake Inc. common stockholders - basic and
diluted:
GAAP net loss per share attributable to
Snowflake Inc. common stockholders - basic and diluted
$
(0.65
)
$
(0.63
)
$
(2.04
)
$
(1.86
)
Weighted-average shares used in computing
GAAP net loss per share attributable to Snowflake Inc. common
stockholders - basic and diluted
329,310
320,135
326,964
317,653
Non-GAAP net income per share attributable
to Snowflake Inc. common stockholders - basic
$
0.27
$
0.12
$
0.69
$
0.13
Weighted-average shares used in computing
non-GAAP net income per share attributable to Snowflake Inc. common
stockholders - basic
329,310
320,135
326,964
317,653
Non-GAAP net income per share attributable
to Snowflake Inc. common stockholders - diluted
$
0.25
$
0.11
$
0.62
$
0.12
Non-GAAP weighted-average shares used in
computing non-GAAP net income per share attributable to Snowflake
Inc. common stockholders - diluted(2)
361,667
359,850
361,488
359,010
Free cash flow and adjusted free cash
flow:
GAAP net cash provided by operating
activities
$
120,907
16%
$
79,277
14%
$
503,542
25%
$
328,323
22%
Less: purchases of property and
equipment
(8,746
)
(8,505
)
(22,014
)
(19,766
)
Less: capitalized internal-use software
development costs
(9,889
)
(5,779
)
(27,104
)
(17,319
)
Non-GAAP free cash flow
102,272
14%
64,993
12%
454,424
22%
291,238
20%
Add: net cash paid on payroll tax-related
items on employee stock transactions(3)
8,541
52
31,464
13,893
Non-GAAP adjusted free cash flow
$
110,813
15%
$
65,045
12%
$
485,888
24%
$
305,131
21%
Non-GAAP free cash flow margin
14
%
12
%
22
%
20
%
Non-GAAP adjusted free cash flow
margin
15
%
12
%
24
%
21
%
(1)
Stock-based compensation-related
charges included employer payroll tax-related expenses on employee
stock transactions of approximately $6.2 million and $34.5 million
for the three and nine months ended October 31, 2023, respectively,
and $4.6 million and $18.7 million for the three and nine months
ended October 31, 2022, respectively.
(2)
For the periods in which we had
non-GAAP net income, the non-GAAP weighted-average shares used in
computing non-GAAP net income per share attributable to Snowflake
Inc. common stockholders - diluted included the effect of all
potentially dilutive common stock equivalents (stock options,
restricted stock units, and employee stock purchase rights under
our 2020 Employee Stock Purchase Plan). The potential dilutive
effect of outstanding restricted stock units with performance
conditions not yet satisfied is included in the non-GAAP
weighted-average number of diluted shares at forecasted attainment
levels to the extent we believe it is probable that the performance
conditions will be met. These potentially dilutive securities were
excluded from the weighted-average shares used in computing
non-GAAP net loss per share attributable to Snowflake Inc. common
stockholders - diluted when we were in a non-GAAP net loss
position.
(3)
The amounts for the three and
nine months ended October 31, 2023 do not include employee payroll
taxes of $91.1 million and $273.8 million, respectively, and the
amounts for the three and nine months ended October 31, 2022 do not
include employee payroll taxes of $51.7 million and $135.8 million,
respectively, related to net share settlement of employee
restricted stock units, which were reflected as cash outflows for
financing activities.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231129673643/en/
Investor Contact Jimmy Sexton IR@snowflake.com
Press Contact Eszter Szikora Press@snowflake.com
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