Snowflake Reports Financial Results for the Second Quarter of Fiscal 2025

Rhea-AI Summary

Snowflake (NYSE: SNOW) reported strong financial results for Q2 FY2025. Product revenue reached $829.3 million, up 30% year-over-year. The company's net revenue retention rate was 127%, with 510 customers generating over $1 million in trailing 12-month product revenue. Snowflake now serves 736 Forbes Global 2000 customers. Remaining performance obligations grew 48% year-over-year to $5.2 billion. The company authorized an additional $2.5 billion for stock repurchases through March 2027. CEO Sridhar Ramaswamy highlighted strong product innovation and early traction in AI products. For Q3 FY2025, Snowflake projects product revenue between $850-$855 million, representing 22% year-over-year growth. The full-year FY2025 product revenue guidance was raised to $3,356 million, a 26% increase.

Positive

• Product revenue increased 30% year-over-year to $829.3 million
• Net revenue retention rate of 127%
• Remaining performance obligations grew 48% year-over-year to $5.2 billion
• Authorized additional $2.5 billion for stock repurchases
• Raised full-year product revenue guidance to $3,356 million (26% growth)

Negative

• GAAP operating loss of $355.3 million (41% of revenue)
• Projected slowdown in product revenue growth to 22% for Q3 FY2025

Insights

Financial Analyst

Snowflake's Q2 FY2025 results demonstrate robust growth, with product revenue reaching $829.3 million, up 30% year-over-year. The net revenue retention rate of 127% indicates strong customer loyalty and upselling success. The company's customer base expansion is impressive, now boasting 510 customers with over $1 million in trailing 12-month product revenue.

The remaining performance obligations of $5.2 billion, growing 48% year-over-year, suggest a healthy pipeline. However, the GAAP operating loss of $355.3 million is concerning, although non-GAAP operating income shows profitability. The authorization of an additional $2.5 billion for stock repurchases signals confidence in the company's financial position and potential undervaluation of its stock.

Tech Expert

Snowflake's performance reflects the growing demand for cloud data platforms and AI-driven solutions. The company's focus on innovation, particularly in AI products, is timely given the industry's rapid shift towards AI-powered data analytics. The strong customer growth among Forbes Global 2000 companies indicates increasing enterprise adoption of Snowflake's technologies.

The emphasis on the "network effect of collaboration" suggests Snowflake is leveraging its platform to create a robust ecosystem, potentially increasing switching costs for customers. This strategy, combined with AI innovations, could lead to sustained competitive advantage in the crowded cloud data market. However, the tech sector's volatility and intense competition from major cloud providers remain key challenges to monitor.

Market Research Analyst

Snowflake's Q2 results and raised guidance reflect a positive market reception to its AI-focused strategy. The 30% year-over-year product revenue growth outpaces many competitors in the cloud data space, indicating potential market share gains. The company's ability to attract and retain high-value customers, as evidenced by the 28% growth in million-dollar customers, suggests strong product-market fit and effective enterprise sales strategies.

However, investors should note the decelerating growth rate compared to previous years, which is typical for maturing tech companies. The stock repurchase program may help support the share price, but it's essential to monitor how this balances with investments in R&D and market expansion. The company's performance in the emerging AI market segment will be important for maintaining its growth trajectory and justifying its valuation multiples.

• Product revenue of $829.3 million in the second quarter, representing 30% year-over-year growth
• Net revenue retention rate of 127%
• 510 customers with trailing 12-month product revenue greater than $1 million
• 736 Forbes Global 2000 customers
• Remaining performance obligations of $5.2 billion, representing 48% year-over-year growth
• Authorized the repurchase of an additional $2.5 billion under our stock repurchase program through March 2027

No-Headquarters/BOZEMAN, Mont.--(BUSINESS WIRE)-- Snowflake (NYSE: SNOW), the AI Data Cloud company, today announced financial results for its second quarter of fiscal 2025, ended July 31, 2024.

Snowflake Q2 FY25 Infographic (Graphic: Snowflake)

Revenue for the quarter was $868.8 million, representing 29% year-over-year growth. Product revenue for the quarter was $829.3 million, representing 30% year-over-year growth. Net revenue retention rate was 127% as of July 31, 2024. The company now has 510 customers with trailing 12-month product revenue greater than $1 million and 736 Forbes Global 2000 customers, representing 28% and 5% year-over-year growth, respectively. Remaining performance obligations were $5.2 billion, representing 48% year-over-year growth. See the section titled “Key Business Metrics” for definitions of product revenue, net revenue retention rate, customers with trailing 12-month product revenue greater than $1 million, Forbes Global 2000 customers, and remaining performance obligations.

"Snowflake delivered another strong quarter, surpassing the high end of our Q2 product revenue guidance and, as a result, we're raising our product revenue guidance for the year," said Sridhar Ramaswamy, CEO of Snowflake. "Product revenue was up 30% year-over-year at $829 million, while remaining performance obligations were $5.2 billion, up 48% year-over-year. The quarter was hallmarked by innovation and product delivery, and great traction in the early stages of our new AI products. With the combination of our platform, the network effect of collaboration and our AI innovations, we have a huge opportunity ahead to deliver even greater value to our customers."

Second Quarter Fiscal 2025 GAAP and Non-GAAP Results:

The following table summarizes our financial results for the second quarter of fiscal 2025:

		Second Quarter Fiscal 2025 GAAP Results						Second Quarter Fiscal 2025 Non-GAAP Results(1)
		Amount (millions)		Year/Year Growth
Product revenue		$829.3		30%
		Amount (millions)		Margin				Amount (millions)		Margin
Product gross profit		$593.7		72%				$633.8		76%
Operating income (loss)		($355.3)		(41%)				$43.7		5%
Net cash provided by operating activities		$69.9		8%		(2)
Free cash flow								$58.8		7%
Adjusted free cash flow								$66.0		8%

(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.
(2)		Calculated as net cash provided by operating activities as a percentage of revenue.
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 third quarter of fiscal 2025:

		Third Quarter Fiscal 2025 GAAP Guidance						Third Quarter Fiscal 2025 Non-GAAP Guidance(1)
		Amount (millions)		Year/Year Growth
Product revenue		$850 - $855		22%
										Margin
Operating income										3%
								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)		The potential impact of future repurchases under our 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 2025:

		Full-Year Fiscal 2025 GAAP Guidance						Full-Year Fiscal 2025 Non-GAAP Guidance(1)
		Amount (millions)		Year/Year Growth
Product revenue		$3,356		26%
										Margin
Product gross profit										75%
Operating income										3%
Adjusted free cash flow										26%
								Amount (millions)
Weighted-average shares used in computing net income per share attributable to Snowflake Inc. common stockholders—diluted(2)								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 potential impact of future repurchases under our 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. These factors could be material to our results computed in accordance with GAAP. 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.

Stock Repurchase Program

In February 2023, our board of directors authorized a stock repurchase program of up to $2.0 billion of our outstanding common stock. As of July 31, 2024, $491.9 million remained available for future repurchases under the stock repurchase program. In August 2024, our board of directors authorized the repurchase of an additional $2.5 billion of our outstanding common stock under the stock repurchase program and extended the expiration date of the stock repurchase program from March 2025 to March 2027. Repurchases may be effected, from time to time, either on the open market (including via pre-set trading plans), in privately negotiated transactions, or through other transactions in accordance with applicable securities laws.

The timing and amount of any repurchases will be determined by management based on an evaluation of market conditions and other factors. The program does not obligate Snowflake to acquire any particular amount of common stock, and the repurchase program may be suspended or discontinued at any time at Snowflake’s discretion.

Conference Call Details

The conference call will begin at 3 p.m. Mountain Time on August 21, 2024. Investors and participants may attend the call by dialing (833) 470-1428 (Access code: 788782). For investors and participants outside the United States, see global dial-in numbers here (Access code: 788782).

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, Net income, Net income attributable to Snowflake Inc., and Net income per share attributable to Snowflake Inc. common stockholders—basic and diluted. Non-GAAP product gross profit, operating income, net income, and net income attributable to Snowflake Inc. are each defined as the respective GAAP measure, excluding, as applicable, 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. Non-GAAP product gross margin is calculated as non-GAAP product gross profit as a percentage of product revenue. Non-GAAP operating margin is calculated as non-GAAP operating income as a percentage of revenue. Our non-GAAP net income per share attributable to Snowflake Inc. common stockholders—basic is calculated by dividing non-GAAP net income 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. 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 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 by customers on our platform. 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.

• 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.

• 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.

• Forbes Global 2000 Customers. Our Forbes Global 2000 customer count is a subset of our customer count based on the 2024 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. Other than statements of historical fact, all statements contained in this release and accompanying oral presentation are forward-looking statements, including statements regarding (i) our future operating results, targets, or financial position; (ii) our business strategy, plans, or priorities; (iii) the release, adoption, and use of our new or enhanced products, services, and technology offerings, including those that are under development or not generally available; (iv) market size and growth, trends, and competitive considerations; (v) our vision, strategy and expected benefits relating to artificial intelligence, Snowpark, Snowflake Marketplace, the AI Data Cloud, and AI Data Clouds for specific industries, including the expected benefits and network effects of the AI Data Cloud; and (vi) the integration, interoperability, and availability of our products, services, and technology offerings with and on third-party products and platforms, including public cloud platforms.

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, fluctuations or volatility in capital markets or foreign currency exchange rates, and geopolitical instability; our ability to attract and retain customers; the extent to which customers continue to optimize consumption; the impact of new or optimized product features and pricing strategies on consumption, including Iceberg tables and tiered storage pricing; 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 extent to which customer adoption of new product capabilities results in durable consumption; 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 artificial intelligence, the AI 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; the impact of cybersecurity threat activity directed at our customers and any resulting reputational or financial damage; 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 April 30, 2024 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 July 31, 2024.

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 makes enterprise AI easy, efficient and trusted. Thousands of companies around the globe, including hundreds of the world’s largest, use Snowflake’s AI Data Cloud to share data, build applications, and power their business with AI. The era of enterprise AI is here. Learn more at snowflake.com (NYSE: SNOW).

Source: Snowflake Inc.

Snowflake Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
		Three Months Ended July 31,								Six Months Ended July 31,
		2024				2023				2024				2023
Revenue		$	868,823			$	674,018			$	1,697,532			$	1,297,617
Cost of revenue			288,078				218,392				560,595				427,806
Gross profit			580,745				455,626				1,136,937				869,811
Operating expenses:
Sales and marketing			400,625				343,288				801,447				674,846
Research and development			437,660				313,996				848,454				591,408
General and administrative			97,763				83,749				190,911				162,202
Total operating expenses			936,048				741,033				1,840,812				1,428,456
Operating loss			(355,303	)			(285,407	)			(703,875	)			(558,645	)
Interest income			49,265				50,280				104,044				93,411
Other income (expense), net			(7,946	)			4,086				(29,248	)			1,524
Loss before income taxes			(313,984	)			(231,041	)			(629,079	)			(463,710	)
Provision for (benefit from) income taxes			3,786				(3,721	)			6,507				(10,326	)
Net loss			(317,770	)			(227,320	)			(635,586	)			(453,384	)
Less: net loss attributable to noncontrolling interest			(871	)			(453	)			(1,699	)			(890	)
Net loss attributable to Snowflake Inc.		$	(316,899	)		$	(226,867	)		$	(633,887	)		$	(452,494	)
Net loss per share attributable to Snowflake Inc. common stockholders—basic and diluted		$	(0.95	)		$	(0.69	)		$	(1.90	)		$	(1.39	)
Weighted-average shares used in computing net loss per share attributable to Snowflake Inc. common stockholders—basic and diluted			334,071				327,335				333,830				325,772

Snowflake Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
		July 31, 2024				January 31, 2024
Assets
Current assets:
Cash and cash equivalents		$	1,282,045			$	1,762,749
Short-term investments			1,948,462				2,083,499
Accounts receivable, net			431,597				926,902
Deferred commissions, current			86,899				86,096
Prepaid expenses and other current assets			149,085				180,018
Total current assets			3,898,088				5,039,264
Long-term investments			697,406				916,307
Property and equipment, net			264,778				247,464
Operating lease right-of-use assets			272,459				252,128
Goodwill			984,076				975,906
Intangible assets, net			286,538				331,411
Deferred commissions, non-current			177,457				187,093
Other assets			363,084				273,810
Total assets		$	6,943,886			$	8,223,383
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	134,537			$	51,721
Accrued expenses and other current liabilities			448,926				446,860
Operating lease liabilities, current			32,843				33,944
Deferred revenue, current			1,848,376				2,198,705
Total current liabilities			2,464,682				2,731,230
Operating lease liabilities, non-current			279,969				254,037
Deferred revenue, non-current			12,280				14,402
Other liabilities			49,367				33,120
Snowflake Inc. stockholders’ equity			4,129,001				5,180,308
Noncontrolling interest			8,587				10,286
Total liabilities and stockholders’ equity		$	6,943,886			$	8,223,383

Snowflake Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
		Three Months Ended July 31,								Six Months Ended July 31,
		2024				2023				2024				2023
Cash flows from operating activities:
Net loss		$	(317,770	)		$	(227,320	)		$	(635,586	)		$	(453,384	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization			45,111				29,284				85,332				52,447
Non-cash operating lease costs			13,846				12,784				27,568				25,653
Amortization of deferred commissions			22,822				18,181				45,586				35,853
Stock-based compensation, net of amounts capitalized			356,000				299,722				687,936				564,231
Net accretion of discounts on investments			(12,780	)			(17,661	)			(24,772	)			(32,992	)
Net realized and unrealized losses (gains) on strategic investments in equity securities			6,508				(5,309	)			27,203				(2,895	)
Deferred income tax			49				(4,026	)			49				(12,894	)
Other			1,249				1,834				1,918				11,812
Changes in operating assets and liabilities, net of effects of business combinations:
Accounts receivable			(87,127	)			(53,050	)			492,192				309,843
Deferred commissions			(21,814	)			(24,552	)			(36,754	)			(40,992	)
Prepaid expenses and other assets			34,458				41,389				33,347				46,916
Accounts payable			70,181				20,562				91,425				17,469
Accrued expenses and other liabilities			59,325				35,648				4,637				27,106
Operating lease liabilities			(11,915	)			(5,260	)			(25,289	)			(16,023	)
Deferred revenue			(88,278	)			(39,035	)			(349,459	)			(149,515	)
Net cash provided by operating activities			69,865				83,191				425,333				382,635
Cash flows from investing activities:
Purchases of property and equipment			(5,043	)			(6,298	)			(21,562	)			(13,268	)
Capitalized internal-use software development costs			(5,992	)			(7,874	)			(13,396	)			(17,215	)
Cash paid for business combinations, net of cash, cash equivalents, and restricted cash acquired			(8,906	)			(141,459	)			(8,906	)			(264,571	)
Purchases of intangible assets			—				(27,480	)			—				(27,480	)
Purchases of investments			(196,481	)			(688,678	)			(1,274,742	)			(1,725,964	)
Sales of investments			10,437				1,614				40,797				7,266
Maturities and redemptions of investments			590,063				971,217				1,511,458				1,780,061
Settlement of cash flow hedges			—				—				(749	)			—
Net cash provided by (used in) investing activities			384,078				101,042				232,900				(261,171	)
Cash flows from financing activities:
Proceeds from exercise of stock options			12,978				16,149				23,664				31,519
Proceeds from issuance of common stock under employee stock purchase plan			—				—				46,735				37,065
Taxes paid related to net share settlement of equity awards			(103,524	)			(98,311	)			(278,114	)			(182,710	)
Repurchases of common stock			(400,000	)			—				(916,329	)			(191,694	)
Net cash used in financing activities			(490,546	)			(82,162	)			(1,124,044	)			(305,820	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			724				470				(1,909	)			1,005
Net increase (decrease) in cash, cash equivalents, and restricted cash			(35,879	)			102,541				(467,720	)			(183,351	)
Cash, cash equivalents, and restricted cash—beginning of period			1,349,136				670,839				1,780,977				956,731
Cash, cash equivalents, and restricted cash—end of period		$	1,313,257			$	773,380			$	1,313,257			$	773,380

Snowflake Inc.
GAAP to Non-GAAP Reconciliations
(in thousands, except per share data and percentages)
(unaudited)
		Three Months Ended July 31,														Six Months Ended July 31,
		2024							2023							2024							2023
		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		$	829,250			95%			$	640,209			95%			$	1,618,837			95%			$	1,230,281			95%
Professional services and other revenue			39,573			5%				33,809			5%				78,695			5%				67,336			5%
Revenue		$	868,823			100%			$	674,018			100%			$	1,697,532			100%			$	1,297,617			100%
Year-over-year growth			29	%						36	%						31	%						41	%
Cost of revenue:
GAAP cost of product revenue		$	235,582						$	169,046						$	455,239						$	328,424
Adjustments:
Stock-based compensation-related charges			(29,778	)						(19,738	)						(57,013	)						(38,538	)
Amortization of acquired intangibles			(10,336	)						(7,877	)						(20,483	)						(12,458	)
Non-GAAP cost of product revenue		$	195,468						$	141,431						$	377,743						$	277,428
GAAP cost of professional services and other revenue		$	52,496						$	49,346						$	105,356						$	99,382
Adjustments:
Stock-based compensation-related charges			(13,689	)						(15,511	)						(27,604	)						(30,431	)
Amortization of acquired intangibles			(1,662	)						(1,662	)						(3,289	)						(3,108	)
Non-GAAP cost of professional services and other revenue		$	37,145						$	32,173						$	74,463						$	65,843
GAAP cost of revenue		$	288,078			33%			$	218,392			32%			$	560,595			33%			$	427,806			33%
Adjustments:
Stock-based compensation-related charges			(43,467	)						(35,249	)						(84,617	)						(68,969	)
Amortization of acquired intangibles			(11,998	)						(9,539	)						(23,772	)						(15,566	)
Non-GAAP cost of revenue		$	232,613			27%			$	173,604			26%			$	452,206			27%			$	343,271			26%
Gross profit (loss):
GAAP product gross profit		$	593,668						$	471,163						$	1,163,598						$	901,857
Adjustments:
Stock-based compensation-related charges			29,778							19,738							57,013							38,538
Amortization of acquired intangibles			10,336							7,877							20,483							12,458
Non-GAAP product gross profit		$	633,782						$	498,778						$	1,241,094						$	952,853
GAAP professional services and other revenue gross loss		$	(12,923	)					$	(15,537	)					$	(26,661	)					$	(32,046	)
Adjustments:
Stock-based compensation-related charges			13,689							15,511							27,604							30,431
Amortization of acquired intangibles			1,662							1,662							3,289							3,108
Non-GAAP professional services and other revenue gross profit		$	2,428						$	1,636						$	4,232						$	1,493
GAAP gross profit		$	580,745			67%			$	455,626			68%			$	1,136,937			67%			$	869,811			67%
Adjustments:
Stock-based compensation-related charges			43,467							35,249							84,617							68,969
Amortization of acquired intangibles			11,998							9,539							23,772							15,566
Non-GAAP gross profit		$	636,210			73%			$	500,414			74%			$	1,245,326			73%			$	954,346			74%
Gross margin:
GAAP product gross margin			72	%						74	%						72	%						73	%
Adjustments:
Stock-based compensation-related charges as a % of product revenue			3	%						3	%						4	%						3	%
Amortization of acquired intangibles as a % of product revenue			1	%						1	%						1	%						1	%
Non-GAAP product gross margin			76	%						78	%						77	%						77	%
GAAP professional services and other revenue gross margin			(33	%)						(46	%)						(34	%)						(48	%)
Adjustments:
Stock-based compensation-related charges as a % of professional services and other revenue			35	%						46	%						35	%						45	%
Amortization of acquired intangibles as a % of professional services and other revenue			4	%						5	%						4	%						5	%
Non-GAAP professional services and other revenue gross margin			6	%						5	%						5	%						2	%
GAAP gross margin			67	%						68	%						67	%						67	%
Adjustments:
Stock-based compensation-related charges as a % of revenue			5	%						5	%						5	%						6	%
Amortization of acquired intangibles as a % of revenue			1	%						1	%						1	%						1	%
Non-GAAP gross margin			73	%						74	%						73	%						74	%
Operating expenses:
GAAP sales and marketing expense		$	400,625			46%			$	343,288			51%			$	801,447			47%			$	674,846			52%
Adjustments:
Stock-based compensation-related charges			(83,740	)						(84,822	)						(164,361	)						(164,447	)
Amortization of acquired intangibles			(7,801	)						(7,553	)						(15,431	)						(14,860	)
Non-GAAP sales and marketing expense		$	309,084			35%			$	250,913			37%			$	621,655			36%			$	495,539			38%
GAAP research and development expense		$	437,660			51%			$	313,996			47%			$	848,454			50%			$	591,408			46%
Adjustments:
Stock-based compensation-related charges			(209,735	)						(166,258	)						(413,776	)						(312,886	)
Amortization of acquired intangibles			(3,679	)						(3,254	)						(7,279	)						(5,078	)
Non-GAAP research and development expense		$	224,246			26%			$	144,484			21%			$	427,399			25%			$	273,444			21%
GAAP general and administrative expense		$	97,763			11%			$	83,749			12%			$	190,911			11%			$	162,202			12%
Adjustments:
Stock-based compensation-related charges			(36,395	)						(27,912	)						(70,972	)						(55,560	)
Amortization of acquired intangibles			(451	)						(451	)						(892	)						(887	)
Expenses associated with acquisitions and strategic investments			(1,783	)						(4,569	)						(2,765	)						(7,198	)
Non-GAAP general and administrative expense		$	59,134			7%			$	50,817			8%			$	116,282			7%			$	98,557			8%
GAAP total operating expenses		$	936,048			108%			$	741,033			110%			$	1,840,812			108%			$	1,428,456			110%
Adjustments:
Stock-based compensation-related charges			(329,870	)						(278,992	)						(649,109	)						(532,893	)
Amortization of acquired intangibles			(11,931	)						(11,258	)						(23,602	)						(20,825	)
Expenses associated with acquisitions and strategic investments			(1,783	)						(4,569	)						(2,765	)						(7,198	)
Non-GAAP total operating expenses		$	592,464			68%			$	446,214			66%			$	1,165,336			68%			$	867,540			67%
Operating income (loss):
GAAP operating loss		$	(355,303	)		(41%)			$	(285,407	)		(42%)			$	(703,875	)		(41%)			$	(558,645	)		(43%)
Adjustments:
Stock-based compensation-related charges(1)			373,337							314,241							733,726							601,862
Amortization of acquired intangibles			23,929							20,797							47,374							36,391
Expenses associated with acquisitions and strategic investments			1,783							4,569							2,765							7,198
Non-GAAP operating income		$	43,746			5%			$	54,200			8%			$	79,990			5%			$	86,806			7%
Operating margin:
GAAP operating margin			(41	%)						(42	%)						(41	%)						(43	%)
Adjustments:
Stock-based compensation-related charges as a % of revenue			43	%						46	%						43	%						46	%
Amortization of acquired intangibles as a % of revenue			3	%						3	%						3	%						3	%
Expenses associated with acquisitions and strategic investments as a % of revenue			—	%						1	%						—	%						1	%
Non-GAAP operating margin			5	%						8	%						5	%						7	%
Net income (loss):
GAAP net loss		$	(317,770	)		(36%)			$	(227,320	)		(34%)			$	(635,586	)		(37%)			$	(453,384	)		(35%)
Adjustments:
Stock-based compensation-related charges(1)			373,337							314,241							733,726							601,862
Amortization of acquired intangibles			23,929							20,797							47,374							36,391
Expenses associated with acquisitions and strategic investments			1,783							4,569							2,765							7,198
Income tax effect related to the above adjustments and acquisitions			(18,183	)						(31,947	)						(33,738	)						(57,578	)
Non-GAAP net income		$	63,096			7%			$	80,340			12%			$	114,541			7%			$	134,489			10%
Net income (loss) attributable to Snowflake Inc.:
GAAP net loss attributable to Snowflake Inc.		$	(316,899	)		(36%)			$	(226,867	)		(34%)			$	(633,887	)		(37%)			$	(452,494	)		(35%)
Adjustments:
Stock-based compensation-related charges(1)			373,337							314,241							733,726							601,862
Amortization of acquired intangibles			23,929							20,797							47,374							36,391
Expenses associated with acquisitions and strategic investments			1,783							4,569							2,765							7,198
Income tax effect related to the above adjustments and acquisitions			(18,183	)						(31,947	)						(33,738	)						(57,578	)
Adjustments attributable to noncontrolling interest, net of tax			(117	)						(50	)						(230	)						(110	)
Non-GAAP net income attributable to Snowflake Inc.		$	63,850			7%			$	80,743			12%			$	116,010			7%			$	135,269			10%
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		$	(0.95	)					$	(0.69	)					$	(1.90	)					$	(1.39	)
Weighted-average shares used in computing GAAP net loss per share attributable to Snowflake Inc. common stockholders—basic and diluted			334,071							327,335							333,830							325,772
Non-GAAP net income per share attributable to Snowflake Inc. common stockholders—basic		$	0.19						$	0.25						$	0.35						$	0.41
Weighted-average shares used in computing non-GAAP net income per share attributable to Snowflake Inc. common stockholders—basic			334,071							327,335							333,830							325,772
Non-GAAP net income per share attributable to Snowflake Inc. common stockholders—diluted		$	0.18						$	0.22						$	0.32						$	0.37
Non-GAAP weighted-average shares used in computing non-GAAP net income per share attributable to Snowflake Inc. common stockholders—diluted(2)			359,319							363,033							361,323							361,697
Free cash flow and adjusted free cash flow:
GAAP net cash provided by operating activities		$	69,865			8%			$	83,191			12%			$	425,333			25%			$	382,635			29%
Adjustments:
Purchases of property and equipment			(5,043	)						(6,298	)						(21,562	)						(13,268	)
Capitalized internal-use software development costs			(5,992	)						(7,874	)						(13,396	)						(17,215	)
Non-GAAP free cash flow			58,830			7%				69,019			10%				390,375			23%				352,152			27%
Adjustments:
Net cash paid on payroll tax-related items on employee stock transactions(3)			7,121							19,138							41,267							22,923
Non-GAAP adjusted free cash flow		$	65,951			8%			$	88,157			13%			$	431,642			25%			$	375,075			29%
Non-GAAP free cash flow margin			7	%						10	%						23	%						27	%
Non-GAAP adjusted free cash flow margin			8	%						13	%						25	%						29	%

(1)		Stock-based compensation-related charges included employer payroll tax-related expenses on employee stock transactions of approximately $9.6 million and $31.5 million for the three and six months ended July 31, 2024, respectively, and $12.4 million and $28.3 million for the three and six months ended July 31, 2023, 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.
(3)		The amounts for the three and six months ended July 31, 2024 do not include employee payroll taxes of $103.5 million and $278.1 million, respectively, and the amounts for the three and six months ended July 31, 2023 do not include employee payroll taxes of $98.3 million and $182.7 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/20240821053167/en/

Investor Contact

Jimmy Sexton

IR@snowflake.com



Press Contact

Eszter Szikora

Press@snowflake.com

Source: Snowflake Inc.

FAQ

What was Snowflake's (SNOW) product revenue for Q2 FY2025?

Snowflake's product revenue for Q2 FY2025 was $829.3 million, representing a 30% year-over-year growth.

How many customers does Snowflake (SNOW) have with over $1 million in trailing 12-month product revenue?

As of Q2 FY2025, Snowflake has 510 customers with trailing 12-month product revenue greater than $1 million.

What is Snowflake's (SNOW) net revenue retention rate as of July 31, 2024?

Snowflake's net revenue retention rate was 127% as of July 31, 2024.

What is Snowflake's (SNOW) product revenue guidance for Q3 FY2025?

Snowflake projects product revenue between $850-$855 million for Q3 FY2025, representing 22% year-over-year growth.