SNOW Q2 2023 Earnings

Call Details

• Call Title: Snowflake Inc. Q2 2023 Earnings Call
• Date: August 24, 2022 at 7:00 PM UTC
• Management Team:
  • Jimmy Sexton (Head of Investor Relations)
  • Frank Slootman (Chairman and Chief Executive Officer)
  • Mike Scarpelli (Chief Financial Officer)
  • Christian Kleinerman (Senior Vice President of Product)

Call Summary

Financial Performance

• Product revenue was $466 million, representing 83% year-over-year growth.
• Remaining performance obligations were $2.7 billion, representing 78% year-over-year growth.
• On a reported basis, product gross margin was 75% for the quarter, and non-GAAP product growth margin exceeded 75%.
• Operating margin on the period was 4% on an on-GAAP basis for the quarter.
• Adjusted free cash flow margin was 12% for the quarter, and the company ended the quarter with approximately $5 billion in cash and investments.
• Non-GAAP measures were presented alongside GAAP measures and reconciliations were referenced in the press release and investor presentation.
• Less than 5% of revenue is invoiced in currencies other than U.S. dollars, and constant-currency discussion was deemed immaterial by the company.

ARR / Recurring Revenue Growth

• The company reported that 57% of the $2.7 billion in RPO is expected to be recognized as revenue in the next 12 months.
• Mike stated that the 57% represents a 79% increase compared to the prior-year estimate for the same quarter.
• Snowflake reported a net revenue retention rate of 171% for the quarter.
• The company added 12 Global 2000 customers during the quarter and stated it has 510 Global 2000 customers overall.
• Average trailing 12-month product revenue from newly added Global 2000 customers rose 14% quarter-over-quarter to $1.2 million.
• Management highlighted that several large multi-year contracts are burning down and that co-terming and large Q4 renewals are expected to affect RPO composition.