SNOW Q1 2023 Earnings

Call Details

• Call Title: Snowflake Inc. Q1 2023 Earnings Call
• Date: May 25, 2022 at 9:00 PM UTC
• Management Team:
  • Frank Slootman (Chairman and Chief Executive Officer)
  • Mike Scarpelli (Chief Financial Officer)
  • Christian Kleinerman (Executive Vice President of Product)
  • Jimmy Sexton (Head of Investor Relations)

Call Summary

Financial Performance

• Product revenue for Q1 was $394M, representing 84% year-on-year growth.
• Remaining performance obligations were $2.6B, representing 82% year-on-year growth.
• Non-GAAP adjusted free cash flow for the quarter was $181M, and adjusted free cash flow margin for Q1 was 43%.
• Non-GAAP product gross margin in Q1 was 75% and non-GAAP operating margin in Q1 was 0%.
• The company ended the quarter with over $5B in cash, cash equivalents, and investments and zero debt.
• Of the $2.6B in RPO, approximately 53% is expected to be recognized as revenue in the next 12 months, representing 79% year-on-year growth for that portion.
• The company reported four eight-figure deals in the quarter, up from two in the same quarter last year.

Guidance

• Q2 product revenue guidance is $435M to $440M, which implies year-on-year growth of 71% to 73%.
• Q2 non-GAAP operating margin is expected to be negative 2%, and diluted weighted average shares outstanding are expected to be 358 million.
• Full year fiscal 2023 product revenue guidance is $1.885B to $1.9B, representing year-on-year growth of 65% to 67%.
• Full year fiscal 2023 non-GAAP targets include 74.5% product gross margin, 1% operating margin, and 16% adjusted free cash flow margin.
• Fiscal 2029 reiterated long-term targets include $10B in product revenue growing 30% year on year with non-GAAP product gross margin of approximately 78%, 20% operating margin, and 25% adjusted free cash flow margin.
• The company stated that Q2 will include summit-related expenses that will largely recur in future Q2 quarters.