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Snowflake (SNOW) Tops Estimates in Q3 Earnings, Revenues Up Y/Y

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Snowflake (SNOW - Free Report) reported third-quarter fiscal 2022 non-GAAP earnings of 4 cents per share, beating the Zacks Consensus Estimate by 166.7%. The company had reported a loss of 28 cents in the year-ago quarter.

Revenues of $334.4 million beat the consensus mark by 30% and jumped 109.5% year over year.

Quarter Details

Snowflake’s product revenues contributed 93.4% to total revenues. The figure was $312.5 million, up 110.4% year over year.

Professional Services and other revenues contributed 6.6% to total revenues. The figure was $22 million, up 97.1% year over year.
 

Snowflake Inc. Price, Consensus and EPS Surprise

Snowflake Inc. Price, Consensus and EPS Surprise

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

 

In the fiscal third quarter, the company witnessed net revenue retention rate of 173% for existing customers. Snowflake reported a 52% year-over-year growth in the number of customers, reaching 5,416 in the reported quarter. Snowflake had 148 customers that accounted for more than $100k in product revenues.

Non-GAAP gross margin expanded 370 basis points (bps) year over year to 70.7% compared with 67.1% in the year-ago quarter.

Research & development expenses, as a percentage of revenues, decreased 520 bps on a year-over-year basis to 16.5%. General & administrative expenses, as a percentage of revenues, were 10.7%, down 560 bps year over year. Sales and marketing expenses, as a percentage of revenues, reached 40.9% compared with 59.1% reported in the year-ago quarter.

Total operating expenses, as a percentage of revenues, were 68.2% compared with 97.2% reported in the year-ago quarter.

Operating income was $8.5 million in the reported quarter against an operating loss of $48.1 million in the year-ago quarter.

Balance Sheet & Cash Flow

As of Oct 31, 2021, Snowflake had cash, cash equivalents and short-term investments of $3.89 billion.

Free cash flow was $9.5 million in the reported quarter.

Guidance

For fourth-quarter fiscal 2022, Snowflake expects product revenues in the range of $345-$350 million.

For fiscal 2022, Snowfall expects product revenues in the range of $1.126-$1.131 billion, suggesting year-on-year growth of 103%-104%.

Non-GAAP loss from operations is expected to be 74%.

Non-GAAP adjusted free cash flow is expected to be 8% in fiscal 2022.

Zacks Rank & Stocks to Consider

Snowflake currently has a Zacks Rank #3 (Hold).

SNOW shares are up 10.5% versus the Zacks Internet Software industry’s decline of 17.8% and Computer & Technology sector’s return of 22.7% year to date.

Some of the better-ranked stocks in the Computer & Technology sector are Nova Measuring Instruments (NVMI - Free Report) , Advanced Micro Devices (AMD - Free Report) and Pinterest (PINS - Free Report)

Nova Measuring sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The long-term earnings growth rate is pegged at 32.2%.

Nova Measuring’s shares have returned 83% year to date compared with the Zacks Electronics-Semiconductors industry’s growth of 36.7% and the Computer & Technology sector’s return of 22.7%.

The long-term earnings growth rate for AMD, a Zacks Rank #2 (Buy) stock, is currently pegged at 46.2%.

AMD shares have returned 62.6% year to date compared with the Electronics-Semiconductors industry’s growth of 36.7% and the Computer & Technology sector’s return of 22.7%.

Pinterest, currently sporting a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 52.73%.

PINS shares have dropped 43.4% compared with the Zacks Internet Software industry’s decline of 17.8% and the Computer & Technology sector’s return of 22.7% year to date.


In-Depth Zacks Research for the Tickers Above


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Advanced Micro Devices, Inc. (AMD) - free report >>

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Snowflake Inc. (SNOW) - free report >>

Pinterest, Inc. (PINS) - free report >>

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