Snowflake - $SNOW - Earnings Analysis: Strong product revenue growth and high net revenue retention rate.
Business Model
Snowflake generates revenue primarily through consumption of compute, storage, and data transfer resources on its platform. Customers have flexibility in timing of consumption.
Revenue Sources
- Product revenue is derived from consumption of compute, storage, and data transfer resources.
- Professional services and other revenue comprise a smaller portion of total revenue.
Income Statement Analysis
- Revenue increased by 27% year-over-year.
- Cost of revenue increased by 38% year-over-year.
- Operating expenses increased by 29% year-over-year.
- Operating loss increased by 40% year-over-year.
- Net loss increased by 92% year-over-year.
Balance Sheet Analysis
- Total assets increased by 10% year-over-year.
- Total stockholders' equity decreased by 42% year-over-year.
- Total Liabilities increased by 132% year-over-year.
Cash Flow Analysis
- Net cash provided by operating activities increased by 26% year-over-year.
- Net cash provided by investing activities decreased by 57% year-over-year.
- Net cash used in financing activities increased by 36% year-over-year.
- Net increase in cash decreased by 32% year-over-year.
Capital Allocation
In FY25, Snowflake used $1.9 billion to repurchase 14.8 million shares. The company has $2 billion remaining on its repurchase authorization through March 2027.
Management Commentary
Our core business is very strong
We are obsessed with driving product cohesion.
Product revenue for Q4 was $943,000,000 up a strong 28% year over year.
Our net revenue retention was a very healthy 126%.
Overall Sentiment: Positive and confident, highlighting strong growth, product innovation, and customer focus.
Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.