Snowflake's Financial Performance: A Beat and a Miss
Snowflake beat expectations across several key metrics, with its shares rising over 20% after-hours. Here are the highlights:
Revenue and Earnings
- Revenue: $1.55 billion, up 35% year-over-year (YoY) from $1.15 billion, surpassing analyst consensus of $1.48 billion.
- Adjusted Earnings: $0.62 per share, exceeding forecasts of $0.45 per share.
- Product Revenue: $1.49 billion, a 37% increase YoY from $1.08 billion, comprising 96% of total revenue.
Guidance and Retention
- Full-year product revenue guidance raised to $6.07 billion, representing 36% growth, up from the prior estimate of $5.84 billion.
- Current quarter guidance: $1.588 billion to $1.593 billion, exceeding consensus estimates of roughly $1.50 billion.
- Net revenue retention rate: 126%.
- Added 692 net new customers with 828 spending over $1 million annually.
The Miss: Remaining Performance Obligations (RPO)
While RPO grew 30% YoY, it was roughly $370 million short of analyst models. Snowflake attributes this to various factors, including the timing of customer consumption and contract length.
Profitability
- Non-GAAP operating income: $237.0 million, a 15.3% margin.
- Non-GAAP net income: $235.3 million.
- GAAP loss: $191.7 million, or $0.55 per share, narrowing from the prior year's $297.9 million loss.
- Stock-based compensation charges for the quarter: $456.4 million, significantly higher than non-GAAP operating income.
Growth Drivers
CEO Sridhar Ramaswamy attributed half of the revenue acceleration to AI products, with CoCo, the coding assistant, reaching 9,100 accounts and CoWork, the data question-answering tool, achieving 5,800 accounts.