In First Earnings Report Since Going Public Snowflake Sees 199% Revenue Growth

Snowflake shares debuted on the New York Stock Exchange in September as Berkshire Hathaway and Salesforce invested.

This week the data-warehousing software maker issued its first quarterly financial results as a public company and reported a loss of $1.01 a share in earnings. Revenue was reported at $159.6 million, representing a 199% growth.

In the previous quarter the company delivered 121% company growth. Losses narrowed from $1.92 per share in the year-ago quarter, while gross margin fell to 58.2% from 59.6%.
Despite the revenue jump, shares fell 8% in extended trading on Wednesday.

The company said it now has 65 customers contributing over $1 million in product revenue over the trailing 12 months.

CEO Frank Slootman said on the earnings call, “We saw strong consumption trends across our customer base in Q3, but product revenue growing 115% year-on-year to a $148 million, and a net revenue retention rate of 162%. Coupled with this rapid growth, we continue to see
improving unit economics cash flow and operating efficiency.”

He added, “Our growth is driven by long-term secular trends in data science and analytics enabled by cloud scale computing. With the onslaught of digital transformation, data operations have become the beating heart of the modern enterprise. The pandemic has been more or less neutral to our business. Some businesses were negatively affected in terms of demand sentiment, but other stepped up their data strategy given the new complexities of the health crisis and economic effects. It bears repeating that Snowflake is not a SaaS business model. We’re consumption company and our reported revenue has a direct relationship with the consumption of our platform during the period.”

He further said, “Over the past year Snowflake has augmented it’s selling motion to campaign some of the largest enterprises and institutions in the world. Snowflake is well represented now in 8 of the Fortune 10 and we added 12 Fortune 500 customers in Q3, including Fiserv and GEICO. Interest in Snowflake is growing. We hosted our Snowflake Data Cloud Summit two weeks ago with over 40,000 registrations, up from 15,000 registrations at our Snowflake Summit in June.”

Looking ahead for the fiscal fourth quarter, the company expects $162 million to $167 million in product revenue, which represented 93% of total revenue in the fiscal third quarter.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.