SNOW
$142.90
Snowflake Inc Cl A
$6.34
4.64%
Earnings Details
3rd Quarter October 2022
Wednesday, November 30, 2022 4:05:00 PM
Tweet Share Watch
Summary

Snowflake Inc Cl A Beats

Snowflake Inc Cl A (SNOW) reported 3rd Quarter October 2022 earnings of $0.11 per share on revenue of $557.0 million. The consensus earnings estimate was $0.04 per share on revenue of $538.0 million. The Earnings Whisper number was $0.04 per share. Revenue grew 66.6% on a year-over-year basis.

The company said it now expects fiscal 2023 product revenue of $1.919 billion to $1.924 billion. The company's previous guidance was product revenue of $1.905 billion to $1.915 billion and the current consensus estimate is total revenue $2.07 billion for the year ending January 31, 2023.

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, and execute diverse analytic workloads.

Results
Reported Earnings
$0.11
Earnings Whisper
$0.04
Consensus Estimate
$0.04
Reported Revenue
$557.0 Mil
Revenue Estimate
$538.0 Mil
Growth
Earnings Growth
Revenue Growth
Guidance
Power Rating
Grade
Earnings Release

Snowflake Reports Financial Results for the Third Quarter of Fiscal 2023

  • Product revenue of $522.8 million in the third quarter, representing 67% year-over-year growth
  • Remaining performance obligations of $3.0 billion, representing 66% year-over-year growth
  • 7,292 total customers
  • Net revenue retention rate of 165%
  • 287 customers with trailing 12-month product revenue greater than $1 million

No-Headquarters/BOZEMAN, Mont.--(BUSINESS WIRE)--Snowflake (NYSE: SNOW), the Data Cloud company, today announced financial results for its third quarter of fiscal 2023, ended October 31, 2022.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20221130005425/en/

Snowflake Q3 FY23 Infographic (Graphic: Snowflake)

Snowflake Q3 FY23 Infographic (Graphic: Snowflake)

Revenue for the quarter was $557.0 million, representing 67% year-over-year growth. Product revenue for the quarter was $522.8 million, representing 67% year-over-year growth. Remaining performance obligations were $3.0 billion, representing 66% year-over-year growth. Net revenue retention rate was 165% as of October 31, 2022. The company now has 7,292 total customers and 287 customers with trailing 12-month product revenue greater than $1 million. See the section titled “Key Business Metrics” for definitions of product revenue, remaining performance obligations, net revenue retention rate, total customers, and customers with trailing 12-month product revenue greater than $1 million.

“During Q3, product revenue grew 67% year-over-year to $523 million. Our non-GAAP product gross margin came in at 75%, and we continue to drive strong growth at scale, coupled with strength in unit economics, operating profit, and free cash flow,” said Frank Slootman, Chairman and CEO, Snowflake. “Snowflake’s Data Cloud maximizes the power and promise of data science and artificial intelligence, a high priority in the modern enterprise.”

Third Quarter Fiscal 2023 GAAP and Non-GAAP Results:

The following table summarizes our financial results for the third quarter of fiscal 2023:

 

Third Quarter Fiscal 2023

GAAP Results

 

Third Quarter Fiscal 2023

Non-GAAP Results(1)

 

Amount

(millions)

Year/Year Growth

 

 

 

Product revenue

$522.8

67%

 

 

 

 

 

 

 

 

 

 

Amount

(millions)

Margin

 

Amount

(millions)

Margin

Product gross profit

$376.8

72%

 

$393.9

75%

Operating income (loss)

($206.0)

(37%)

 

$43.4

8%

Net cash provided by operating activities

$79.3

 

 

 

 

Free cash flow

 

 

 

$65.0

12%

Adjusted free cash flow

 

 

 

$65.0

12%

 

 

 

 

 

 

(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 2023:

 

Fourth Quarter Fiscal 2023

GAAP Guidance

 

Fourth Quarter Fiscal 2023

Non-GAAP Guidance(1)

 

Amount

(millions)

Year/Year Growth

 

 

 

Product revenue

$535 - $540

49 - 50%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Margin

Operating income

 

 

 

 

1%

 

 

 

 

 

 

 

 

 

 

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) We may have a non-GAAP net income attributable to Snowflake Inc. for the fourth quarter of fiscal 2023. As a result, we are presenting the weighted-average shares used in computing net income per share attributable to Snowflake Inc. common stockholders - diluted in the non-GAAP column of the table above, giving effect to all potentially dilutive securities (stock options, restricted stock units, and employee stock purchase rights under our 2020 Employee Stock Purchase Plan). These potentially dilutive securities would be excluded from the weighted-average shares used in computing net loss per share attributable to Snowflake Inc. common stockholders - diluted if we have a non-GAAP net loss attributable to Snowflake Inc.

The following table summarizes our guidance for the full-year fiscal 2023:

 

Full-Year Fiscal 2023

GAAP Guidance

 

Full-Year Fiscal 2023

Non-GAAP Guidance(1)

 

Amount

(millions)

Year/Year Growth

 

 

 

Product revenue

$1,919 - $1,924

68 - 69%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Margin

Product gross profit

 

 

 

 

75%

Operating income

 

 

 

 

3%

Adjusted free cash flow

 

 

 

 

21%

 

 

 

 

 

 

 

 

 

 

Amount

(millions)

 

Weighted-average shares used in computing net income per share attributable to Snowflake Inc. common stockholders - diluted(2)

 

 

 

359

 

 

 

 

 

 

 

(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) We may have a non-GAAP net income attributable to Snowflake Inc. for full-year fiscal 2023. As a result, we are presenting the weighted-average shares used in computing net income per share attributable to Snowflake Inc. common stockholders - diluted in the non-GAAP column of the table above, giving effect to all potentially dilutive securities (stock options, restricted stock units, and employee stock purchase rights under our 2020 Employee Stock Purchase Plan). These potentially dilutive securities would be excluded from the weighted-average shares used in computing net loss per share attributable to Snowflake Inc. common stockholders - diluted if we have a non-GAAP net loss attributable to Snowflake Inc.

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 30, 2022. Investors and participants may attend the call by dialing (844) 200-6205 (Access code: 255864), or if outside the United States, by dialing +1 (929) 526-1599 (Access code: 255864).

The call will also be webcast live on the Snowflake Investor Relations website.

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.

  • 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 diluted shares of common stock outstanding during the period. Our non-GAAP net income (loss) per share attributable to Snowflake Inc. common stockholders - diluted is calculated by dividing net non-GAAP net income (loss) attributable to Snowflake Inc. by the 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). 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 starting with the fiscal quarter ended January 31, 2022, 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.
  • 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 of renewals, the timing 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.
  • Total Customers. We count the total number of customers at the end of each period. 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. For purposes of determining our customer count, we do not include customers that consume our platform only under on-demand arrangements. Our customer count is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity, and we present our total 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. Starting with the fiscal quarter ended October 31, 2021, 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.
  • 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. 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.

Use of Forward-Looking Statements

This release contains 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.” 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 fluctuations or volatility in capital markets or foreign currency exchange rates, the effects of the recent and developing armed conflict in Ukraine on our business, results of operations, and financial condition, our ability to attract and retain customers, our ability to develop new products and services and enhance existing products and services, our ability to respond rapidly to emerging technology trends, our ability to execute on our business strategy, including our strategy related to the Data Cloud, our ability to increase and predict customer consumption of our platform, 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, 2022 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, 2022.

Moreover, we operate in a very competitive and rapidly changing environment, and new risks may emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results or outcomes to differ materially from those contained in any forward-looking statements we may make. 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, and execute diverse 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 543 of the 2022 Forbes Global 2000 (G2K) as of October 31, 2022, 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,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Revenue

$

557,028

 

 

$

334,441

 

 

$

1,476,647

 

 

$

835,553

 

Cost of revenue

 

190,721

 

 

 

120,786

 

 

 

511,883

 

 

 

324,253

 

Gross profit

 

366,307

 

 

 

213,655

 

 

 

964,764

 

 

 

511,300

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

 

284,477

 

 

 

190,971

 

 

 

803,034

 

 

 

540,678

 

Research and development

 

211,387

 

 

 

115,900

 

 

 

545,933

 

 

 

343,783

 

General and administrative

 

76,462

 

 

 

64,055

 

 

 

218,314

 

 

 

189,846

 

Total operating expenses

 

572,326

 

 

 

370,926

 

 

 

1,567,281

 

 

 

1,074,307

 

Operating loss

 

(206,019

)

 

 

(157,271

)

 

 

(602,517

)

 

 

(563,007

)

Interest income

 

21,857

 

 

 

1,985

 

 

 

38,308

 

 

 

6,787

 

Other income (expense), net

 

(13,271

)

 

 

1,609

 

 

 

(44,672

)

 

 

9,867

 

Loss before income taxes

 

(197,433

)

 

 

(153,677

)

 

 

(608,881

)

 

 

(546,353

)

Provision for (benefit from) income taxes

 

4,009

 

 

 

1,179

 

 

 

(18,839

)

 

 

1,442

 

Net loss

 

(201,442

)

 

 

(154,856

)

 

 

(590,042

)

 

 

(547,795

)

Less: net loss attributable to noncontrolling interest

 

(506

)

 

 

 

 

 

(506

)

 

 

 

Net loss attributable to Snowflake Inc.

$

(200,936

)

 

$

(154,856

)

 

$

(589,536

)

 

$

(547,795

)

Net loss per share attributable to Snowflake Inc. common stockholders - basic and diluted

$

(0.63

)

 

$

(0.51

)

 

$

(1.86

)

 

$

(1.84

)

Weighted-average shares used in computing net loss per share attributable to Snowflake Inc. common stockholders - basic and diluted

 

320,135

 

 

 

303,007

 

 

 

317,653

 

 

 

297,436

 

 

Snowflake Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

October 31, 2022

 

January 31, 2022

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

819,003

 

$

1,085,729

Short-term investments

 

3,123,879

 

 

2,766,364

Accounts receivable, net

 

394,063

 

 

545,629

Deferred commissions, current

 

61,738

 

 

51,398

Prepaid expenses and other current assets

 

160,221

 

 

149,523

Total current assets

 

4,558,904

 

 

4,598,643

Long-term investments

 

943,081

 

 

1,256,207

Property and equipment, net

 

145,974

 

 

105,079

Operating lease right-of-use assets

 

234,678

 

 

190,356

Goodwill

 

649,092

 

 

8,449

Intangible assets, net

 

196,165

 

 

37,141

Deferred commissions, non-current

 

133,939

 

 

124,517

Other assets

 

293,855

 

 

329,306

Total assets

$

7,155,688

 

$

6,649,698

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

24,757

 

$

13,441

Accrued expenses and other current liabilities

 

225,321

 

 

200,664

Operating lease liabilities, current

 

29,263

 

 

25,101

Deferred revenue, current

 

1,199,701

 

 

1,157,887

Total current liabilities

 

1,479,042

 

 

1,397,093

Operating lease liabilities, non-current

 

225,013

 

 

181,196

Deferred revenue, non-current

 

7,333

 

 

11,180

Other liabilities

 

21,029

 

 

11,184

Snowflake Inc. stockholders’ equity

 

5,410,777

 

 

5,049,045

Noncontrolling interest

 

12,494

 

 

Total liabilities and stockholders’ equity

$

7,155,688

 

$

6,649,698

 

Snowflake Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2022

 

2021

 

2022

 

2021

Cash flows from operating activities:

 

 

 

 

 

 

 

Net loss

$

(201,442

)

 

$

(154,856

)

 

$

(590,042

)

 

$

(547,795

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

17,696

 

 

 

5,518

 

 

 

43,809

 

 

 

15,586

 

Non-cash operating lease costs

 

12,340

 

 

 

8,855

 

 

 

33,579

 

 

 

25,895

 

Amortization of deferred commissions

 

14,554

 

 

 

9,667

 

 

 

41,525

 

 

 

26,824

 

Stock-based compensation, net of amounts capitalized

 

229,163

 

 

 

144,387

 

 

 

610,837

 

 

 

459,392

 

Net amortization (accretion) of premiums (discounts) on investments

 

(545

)

 

 

11,587

 

 

 

12,331

 

 

 

36,938

 

Net unrealized losses (gains) on strategic investments in equity securities

 

13,064

 

 

 

(455

)

 

 

45,096

 

 

 

(8,515

)

Deferred income tax

 

1,387

 

 

 

 

 

 

(25,277

)

 

 

 

Other

 

(1,396

)

 

 

(247

)

 

 

678

 

 

 

2,535

 

Changes in operating assets and liabilities, net of effects of business combinations:

 

 

 

 

 

 

 

Accounts receivable

 

(88,846

)

 

 

(16,754

)

 

 

150,723

 

 

 

39,142

 

Deferred commissions

 

(23,721

)

 

 

(18,961

)

 

 

(63,627

)

 

 

(52,892

)

Prepaid expenses and other assets

 

41,346

 

 

 

(42,710

)

 

 

13,169

 

 

 

(112,798

)

Accounts payable

 

4,079

 

 

 

869

 

 

 

10,304

 

 

 

4,591

 

Accrued expenses and other liabilities

 

17,272

 

 

 

19,386

 

 

 

27,727

 

 

 

43,106

 

Operating lease liabilities

 

(10,990

)

 

 

(8,766

)

 

 

(29,176

)

 

 

(24,758

)

Deferred revenue

 

55,316

 

 

 

58,018

 

 

 

46,667

 

 

 

124,030

 

Net cash provided by operating activities

 

79,277

 

 

 

15,538

 

 

 

328,323

 

 

 

31,281

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of property and equipment

 

(8,505

)

 

 

(2,282

)

 

 

(19,766

)

 

 

(12,209

)

Capitalized internal-use software development costs

 

(5,779

)

 

 

(3,788

)

 

 

(17,319

)

 

 

(8,612

)

Cash paid for business combinations, net of cash and cash equivalents acquired

 

(174,630

)

 

 

 

 

 

(352,555

)

 

 

 

Purchases of intangible assets

 

 

 

 

 

 

 

(700

)

 

 

(11,182

)

Purchases of investments

 

(870,910

)

 

 

(1,053,763

)

 

 

(2,796,167

)

 

 

(3,042,396

)

Sales of investments

 

14,881

 

 

 

14,691

 

 

 

58,813

 

 

 

407,003

 

Maturities and redemptions of investments

 

898,081

 

 

 

1,216,206

 

 

 

2,594,593

 

 

 

2,610,429

 

Net cash provided by (used in) investing activities

 

(146,862

)

 

 

171,064

 

 

 

(533,101

)

 

 

(56,967

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

7,299

 

 

 

24,579

 

 

 

31,095

 

 

 

90,444

 

Proceeds from issuance of common stock under employee stock purchase plan

 

14,837

 

 

 

25,829

 

 

 

40,931

 

 

 

52,227

 

Taxes paid related to net share settlement of equity awards

 

(51,657

)

 

 

 

 

 

(135,766

)

 

 

 

Payment of deferred purchase consideration for a business combination

 

(1,800

)

 

 

 

 

 

(1,800

)

 

 

 

Capital contributions from noncontrolling interest holders

 

13,000

 

 

 

 

 

 

13,000

 

 

 

 

Net cash provided by (used in) financing activities

 

(18,321

)

 

 

50,408

 

 

 

(52,540

)

 

 

142,671

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

(2,002

)

 

 

(194

)

 

 

(9,390

)

 

 

21

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

(87,908

)

 

 

236,816

 

 

 

(266,708

)

 

 

117,006

 

Cash, cash equivalents, and restricted cash—beginning of period

 

923,734

 

 

 

715,383

 

 

 

1,102,534

 

 

 

835,193

 

Cash, cash equivalents, and restricted cash—end of period

$

835,826

 

 

$

952,199

 

 

$

835,826

 

 

$

952,199

 

 

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,

 

2022

 

2021

 

2022

 

2021

 

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

$

522,752

 

 

94

%

 

$

312,458

 

 

93

%

 

$

1,383,454

 

 

94

%

 

$

780,911

 

 

93

%

Professional service and other revenue

 

34,276

 

 

6

%

 

 

21,983

 

 

7

%

 

 

93,193

 

 

6

%

 

 

54,642

 

 

7

%

Revenue

$

557,028

 

 

100

%

 

$

334,441

 

 

100

%

 

$

1,476,647

 

 

100

%

 

$

835,553

 

 

100

%

Year-over-year growth

 

67

%

 

 

 

 

110

%

 

 

 

 

77

%

 

 

 

 

108

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP cost of product revenue

$

145,929

 

 

26

%

 

$

92,292

 

 

28

%

 

$

388,946

 

 

27

%

 

$

245,420

 

 

29

%

Less: stock-based compensation-related charges

 

(15,784

)

 

 

 

 

(12,419

)

 

 

 

 

(44,047

)

 

 

 

 

(37,813

)

 

 

Less: amortization of acquired intangibles

 

(1,299

)

 

 

 

 

(567

)

 

 

 

 

(2,432

)

 

 

 

 

(1,700

)

 

 

Non-GAAP cost of product revenue

$

128,846

 

 

23

%

 

$

79,306

 

 

24

%

 

$

342,467

 

 

23

%

 

$

205,907

 

 

25

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP cost of professional service and other revenue

$

44,792

 

 

8

%

 

$

28,494

 

 

8

%

 

$

122,937

 

 

8

%

 

$

78,833

 

 

10

%

Less: stock-based compensation-related charges

 

(13,753

)

 

 

 

 

(9,908

)

 

 

 

 

(38,074

)

 

 

 

 

(31,941

)

 

 

Non-GAAP cost of professional service and other revenue

$

31,039

 

 

6

%

 

$

18,586

 

 

5

%

 

$

84,863

 

 

6

%

 

$

46,892

 

 

5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP cost of revenue

$

190,721

 

 

34

%

 

$

120,786

 

 

36

%

 

$

511,883

 

 

35

%

 

$

324,253

 

 

39

%

Less: stock-based compensation-related charges

 

(29,537

)

 

 

 

 

(22,327

)

 

 

 

 

(82,121

)

 

 

 

 

(69,754

)

 

 

Less: amortization of acquired intangibles

 

(1,299

)

 

 

 

 

(567

)

 

 

 

 

(2,432

)

 

 

 

 

(1,700

)

 

 

Non-GAAP cost of revenue

$

159,885

 

 

29

%

 

$

97,892

 

 

29

%

 

$

427,330

 

 

29

%

 

$

252,799

 

 

30

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP product gross profit

$

376,823

 

 

72

%

 

$

220,166

 

 

70

%

 

$

994,508

 

 

72

%

 

$

535,491

 

 

69

%

Add: stock-based compensation-related charges

 

15,784

 

 

 

 

 

12,419

 

 

 

 

 

44,047

 

 

 

 

 

37,813

 

 

 

Add: amortization of acquired intangibles

 

1,299

 

 

 

 

 

567

 

 

 

 

 

2,432

 

 

 

 

 

1,700

 

 

 

Non-GAAP product gross profit

$

393,906

 

 

75

%

 

$

233,152

 

 

75

%

 

$

1,040,987

 

 

75

%

 

$

575,004

 

 

74

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP professional services and other revenue gross loss

$

(10,516

)

 

(31

%)

 

$

(6,511

)

 

(30

%)

 

$

(29,744

)

 

(32

%)

 

$

(24,191

)

 

(44

%)

Add: stock-based compensation-related charges

 

13,753

 

 

 

 

 

9,908

 

 

 

 

 

38,074

 

 

 

 

 

31,941

 

 

 

Non-GAAP professional services and other revenue gross profit

$

3,237

 

 

9

%

 

$

3,397

 

 

15

%

 

$

8,330

 

 

9

%

 

$

7,750

 

 

14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP gross profit

$

366,307

 

 

66

%

 

$

213,655

 

 

64

%

 

$

964,764

 

 

65

%

 

$

511,300

 

 

61

%

Add: stock-based compensation-related charges

 

29,537

 

 

 

 

 

22,327

 

 

 

 

 

82,121

 

 

 

 

 

69,754

 

 

 

Add: amortization of acquired intangibles

 

1,299

 

 

 

 

 

567

 

 

 

 

 

2,432

 

 

 

 

 

1,700

 

 

 

Non-GAAP gross profit

$

397,143

 

 

71

%

 

$

236,549

 

 

71

%

 

$

1,049,317

 

 

71

%

 

$

582,754

 

 

70

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP product gross margin

 

72

%

 

 

 

 

70

%

 

 

 

 

72

%

 

 

 

 

69

%

 

 

Add: stock-based compensation-related charges as a % of product revenue

 

3

%

 

 

 

 

5

%

 

 

 

 

3

%

 

 

 

 

5

%

 

 

Add: amortization of acquired intangibles as a % of product revenue

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

Non-GAAP product gross margin

 

75

%

 

 

 

 

75

%

 

 

 

 

75

%

 

 

 

 

74

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP professional services and other revenue gross margin

 

(31

%)

 

 

 

 

(30

%)

 

 

 

 

(32

%)

 

 

 

 

(44

%)

 

 

Add: stock-based compensation-related charges as a % of professional service and other revenue

 

40

%

 

 

 

 

45

%

 

 

 

 

41

%

 

 

 

 

58

%

 

 

Non-GAAP professional services and other revenue gross margin

 

9

%

 

 

 

 

15

%

 

 

 

 

9

%

 

 

 

 

14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP gross margin

 

66

%

 

 

 

 

64

%

 

 

 

 

65

%

 

 

 

 

61

%

 

 

Add: stock-based compensation-related charges as a % of revenue

 

5

%

 

 

 

 

7

%

 

 

 

 

6

%

 

 

 

 

9

%

 

 

Add: amortization of acquired intangibles as a % of revenue

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

Non-GAAP gross margin

 

71

%

 

 

 

 

71

%

 

 

 

 

71

%

 

 

 

 

70

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP sales and marketing expense

$

284,477

 

 

51

%

 

$

190,971

 

 

57

%

 

$

803,034

 

 

54

%

 

$

540,678

 

 

65

%

Less: stock-based compensation-related charges

 

(67,415

)

 

 

 

 

(54,098

)

 

 

 

 

(187,212

)

 

 

 

 

(165,969

)

 

 

Less: amortization of acquired intangibles

 

(7,553

)

 

 

 

 

 

 

 

 

 

(17,654

)

 

 

 

 

 

 

 

Non-GAAP sales and marketing expense

$

209,509

 

 

37

%

 

$

136,873

 

 

40

%

 

$

598,168

 

 

41

%

 

$

374,709

 

 

45

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP research and development expense

$

211,387

 

 

38

%

 

$

115,900

 

 

35

%

 

$

545,933

 

 

37

%

 

$

343,783

 

 

40

%

Less: stock-based compensation-related charges

 

(111,431

)

 

 

 

 

(59,693

)

 

 

 

 

(285,054

)

 

 

 

 

(186,346

)

 

 

Less: amortization of acquired intangibles

 

(1,785

)

 

 

 

 

(944

)

 

 

 

 

(5,310

)

 

 

 

 

(2,741

)

 

 

Non-GAAP research and development expense

$

98,171

 

 

18

%

 

$

55,263

 

 

17

%

 

$

255,569

 

 

17

%

 

$

154,696

 

 

19

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP general and administrative expense

$

76,462

 

 

14

%

 

$

64,055

 

 

19

%

 

$

218,314

 

 

15

%

 

$

189,846

 

 

23

%

Less: stock-based compensation-related charges

 

(26,808

)

 

 

 

 

(27,668

)

 

 

 

 

(78,327

)

 

 

 

 

(85,624

)

 

 

Less: amortization of acquired intangibles

 

(451

)

 

 

 

 

(411

)

 

 

 

 

(1,280

)

 

 

 

 

(1,209

)

 

 

Less: expenses associated with acquisitions and strategic investments

 

(3,112

)

 

 

 

 

(35

)

 

 

 

 

(5,635

)

 

 

 

 

(431

)

 

 

Non-GAAP general and administrative expense

$

46,091

 

 

8

%

 

$

35,941

 

 

11

%

 

$

133,072

 

 

9

%

 

$

102,582

 

 

12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP total operating expense

$

572,326

 

 

103

%

 

$

370,926

 

 

111

%

 

$

1,567,281

 

 

106

%

 

$

1,074,307

 

 

128

%

Less: stock-based compensation-related charges

 

(205,654

)

 

 

 

 

(141,459

)

 

 

 

 

(550,593

)

 

 

 

 

(437,939

)

 

 

Less: amortization of acquired intangibles

 

(9,789

)

 

 

 

 

(1,355

)

 

 

 

 

(24,244

)

 

 

 

 

(3,950

)

 

 

Less: expenses associated with acquisitions and strategic investments

 

(3,112

)

 

 

 

 

(35

)

 

 

 

 

(5,635

)

 

 

 

 

(431

)

 

 

Non-GAAP total operating expense

$

353,771

 

 

63

%

 

$

228,077

 

 

68

%

 

$

986,809

 

 

67

%

 

$

631,987

 

 

76

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating loss

$

(206,019

)

 

(37

%)

 

$

(157,271

)

 

(47

%)

 

$

(602,517

)

 

(41

%)

 

$

(563,007

)

 

(67

%)

Add: stock-based compensation-related charges

 

235,191

 

 

 

 

 

163,786

 

 

 

 

 

632,714

 

 

 

 

 

507,693

 

 

 

Add: amortization of acquired intangibles

 

11,088

 

 

 

 

 

1,922

 

 

 

 

 

26,676

 

 

 

 

 

5,650

 

 

 

Add: expenses associated with acquisitions and strategic investments

 

3,112

 

 

 

 

 

35

 

 

 

 

 

5,635

 

 

 

 

 

431

 

 

 

Non-GAAP operating income (loss)

$

43,372

 

 

8

%

 

$

8,472

 

 

3

%

 

$

62,508

 

 

4

%

 

$

(49,233

)

 

(6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating margin

 

(37

%)

 

 

 

 

(47

%)

 

 

 

 

(41

%)

 

 

 

 

(67

%)

 

 

Add: stock-based compensation-related charges as a % of revenue

 

42

%

 

 

 

 

49

%

 

 

 

 

43

%

 

 

 

 

60

%

 

 

Add: amortization of acquired intangibles as a % of revenue

 

2

%

 

 

 

 

1

%

 

 

 

 

2

%

 

 

 

 

1

%

 

 

Add: expenses associated with acquisitions and strategic investments as a % of revenue

 

1

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

Non-GAAP operating margin

 

8

%

 

 

 

 

3

%

 

 

 

 

4

%

 

 

 

 

(6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss

$

(201,442

)

 

(36

%)

 

$

(154,856

)

 

(46

%)

 

$

(590,042

)

 

(40

%)

 

$

(547,795

)

 

(66

%)

Add: stock-based compensation-related charges(1)

 

235,191

 

 

 

 

 

163,786

 

 

 

 

 

632,714

 

 

 

 

 

507,693

 

 

 

Add: amortization of acquired intangibles

 

11,088

 

 

 

 

 

1,922

 

 

 

 

 

26,676

 

 

 

 

 

5,650

 

 

 

Add: expenses associated with acquisitions and strategic investments

 

3,112

 

 

 

 

 

35

 

 

 

 

 

5,635

 

 

 

 

 

431

 

 

 

Income tax expenses effect related to the above adjustments

 

(9,501

)

 

 

 

 

(56

)

 

 

 

 

(33,437

)

 

 

 

 

70

 

 

 

Non-GAAP net income (loss)

$

38,448

 

 

7

%

 

$

10,831

 

 

4

%

 

$

41,546

 

 

3

%

 

$

(33,951

)

 

(5

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Snowflake Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss attributable to Snowflake Inc.

$

(200,936

)

 

(36

%)

 

$

(154,856

)

 

(46

%)

 

$

(589,536

)

 

(40

%)

 

$

(547,795

)

 

(66

%)

Add: stock-based compensation-related charges(1)

 

235,191

 

 

 

 

 

163,786

 

 

 

 

 

632,714

 

 

 

 

 

507,693

 

 

 

Add: amortization of acquired intangibles

 

11,088

 

 

 

 

 

1,922

 

 

 

 

 

26,676

 

 

 

 

 

5,650

 

 

 

Add: expenses associated with acquisitions and strategic investments

 

3,112

 

 

 

 

 

35

 

 

 

 

 

5,635

 

 

 

 

 

431

 

 

 

Income tax expenses effect related to the above adjustments

 

(9,501

)

 

 

 

 

(56

)

 

 

 

 

(33,437

)

 

 

 

 

70

 

 

 

Adjustments attributable to noncontrolling interest, net of tax

 

(375

)

 

 

 

 

 

 

 

 

 

(375

)

 

 

 

 

 

 

 

Non-GAAP net income (loss) attributable to Snowflake Inc.

$

38,579

 

 

7

%

 

$

10,831

 

 

4

%

 

$

41,677

 

 

3

%

 

$

(33,951

)

 

(5

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

$

(0.63

)

 

 

 

$

(0.51

)

 

 

 

$

(1.86

)

 

 

 

$

(1.84

)

 

 

Weighted-average shares used in computing GAAP net loss per share attributable to Snowflake Inc. common stockholders - basic and diluted

 

320,135

 

 

 

 

 

303,007

 

 

 

 

 

317,653

 

 

 

 

 

297,436

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income (loss) per share attributable to Snowflake Inc. common stockholders - basic

$

0.12

 

 

 

 

$

0.04

 

 

 

 

$

0.13

 

 

 

 

$

(0.11

)

 

 

Weighted-average shares used in computing non-GAAP net income (loss) per share attributable to Snowflake Inc. common stockholders - basic

 

320,135

 

 

 

 

 

303,007

 

 

 

 

 

317,653

 

 

 

 

 

297,436

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income (loss) per share attributable to Snowflake Inc. common stockholders - diluted

$

0.11

 

 

 

 

$

0.03

 

 

 

 

$

0.12

 

 

 

 

$

(0.11

)

 

 

Weighted-average shares used in computing non-GAAP net income (loss) per share attributable to Snowflake Inc. common stockholders - diluted(2)

 

359,850

 

 

 

 

 

357,882

 

 

 

 

 

359,010

 

 

 

 

 

297,436

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Free cash flow and adjusted free cash flow:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net cash provided by operating activities

$

79,277

 

 

14

%

 

$

15,538

 

 

5

%

 

$

328,323

 

 

22

%

 

$

31,281

 

 

4

%

Less: purchases of property and equipment

 

(8,505

)

 

 

 

 

(2,282

)

 

 

 

 

(19,766

)

 

 

 

 

(12,209

)

 

 

Less: capitalized internal-use software development costs

 

(5,779

)

 

 

 

 

(3,788

)

 

 

 

 

(17,319

)

 

 

 

 

(8,612

)

 

 

Non-GAAP free cash flow

 

64,993

 

 

12

%

 

 

9,468

 

 

3

%

 

 

291,238

 

 

20

%

 

 

10,460

 

 

1

%

Add: net cash paid on payroll tax-related items on employee stock transactions(3)

 

52

 

 

 

 

 

12,058

 

 

 

 

 

13,893

 

 

 

 

 

37,267

 

 

 

Non-GAAP adjusted free cash flow

$

65,045

 

 

12

%

 

$

21,526

 

 

6

%

 

$

305,131

 

 

21

%

 

$

47,727

 

 

6

%

Non-GAAP free cash flow margin

 

12

%

 

 

 

 

3

%

 

 

 

 

20

%

 

 

 

 

1

%

 

 

Non-GAAP adjusted free cash flow margin

 

12

%

 

 

 

 

6

%

 

 

 

 

21

%

 

 

 

 

6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Stock-based compensation-related charges included employer payroll tax-related expenses on employee stock transactions of approximately $4.6 million and $18.7 million for the three and nine months ended October 31, 2022, respectively, and $19.1 million and $47.4 million for the three and nine months ended October 31, 2021, respectively.

 

(2) For the periods in which we had non-GAAP net income, the 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). 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, 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. No equity awards were net settled prior to the nine months ended October 31, 2022.

 

Investor Contact
Jimmy Sexton
IR@snowflake.com

Press Contact
Eszter Szikora
Press@snowflake.com

Source: Snowflake Inc.