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Snowflake (SNOW) Q1 Loss Narrows Y/Y, Product Revenues Surge

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Snowflake Inc. (SNOW - Free Report) reported first-quarter fiscal 2022 loss of 70 cents per share, which was much narrower than a loss of $1.72 per share in the year-ago quarter. The Zacks Consensus Estimate for the fiscal first quarter was pegged at a loss of 16 cents per share.

Moreover, revenues of $228.9 million beat the consensus mark by 8.4% and also surged 110.4% year over year.

This solid outperformance was led by robust adoption of Snowflake’s cloud-native software architecture.

Snowflake Inc. Price, Consensus and EPS Surprise

Snowflake Inc. Price, Consensus and EPS Surprise

Snowflake Inc. price-consensus-eps-surprise-chart | Snowflake Inc. Quote

Quarter Details

Product Revenues (93.4% of total revenues) soared 110% year over year to $213.8 million driven by growth in Media and telecom, technology, financial services and health care customers.

As of Apr 30, 2021 the company had 4,532 total customers and 104 customers with trailing 12-month product revenues greater than $1 million, an increase from 77 in the previous quarter. The company’s key enterprise wins in the reported quarter included Datadog (DDOG - Free Report) , Equifax (EFX - Free Report) and Walgreens Boots Alliance (WBA - Free Report) .

Remaining performance obligations were $1.4 billion, up 206% year over year, driven by more multimillion-dollar relationships with particular strength in the telecom and technology sectors.

Professional Services Revenues (6.6% of total revenues) surged 115.5% year over year to $15.1 million.

In the fiscal first quarter, the company added 393 net new customers, including three 7-figure new logos. These customers accounted for 1% of revenues.

Net revenue retention rate was 168% as of Apr 30, 2021.

EMEA bookings grew more than 200% and Asia Pacific bookings grew more than 300% year over year.

Meanwhile, non-GAAP gross margin expanded 610 bps year over year to 68.3%. Favorable cloud service agreements, growing scales across regions and enterprise customer success contributed to steady gross margin improvements.

Research & development expenses, as a percentage of revenues, decreased 410 bps on a year-over-year basis to 21%. Moreover, general & administrative (G&A) expenses, as a percentage of revenues, were 13.8%, down 600 bps year over year.

Sales & marketing expenses, as a percentage of revenues, contracted to 49.2% on a year-over- basis from 84.1% in the year ago quarter.

Total operating expenses, as a percentage of revenues, were 84%, which contracted from 129% in the year-ago quarter.

Balance Sheet & Cash Flow

As of Apr 30, 2021, Snowflake had cash, cash equivalents and short-term investments of $3.93 billion compared with $3.9 million as of Jan 31, 2021.  

Free cash flow was $23.3 million compared with $17.2 million in the previous quarter.

Guidance

For the second quarter of fiscal 2022, Snowflake expects Product revenues in the range of $235-$240 million, indicating growth of 88-92% year over year.

Non-GAAP loss from operations margin is expected at 19%.

For fiscal 2022, this Zacks Rank #3 (Hold) company expects Product revenues in the range of $1.02-$1.03 billion, indicating growth of 84-87% year over year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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