On November 29, 2023, Snowflake Inc (SNOW, Financial) released its 8-K filing, revealing the company's financial performance for the third quarter of fiscal 2024. The data cloud company reported a significant 34% year-over-year growth in product revenue, which amounted to $698.5 million. This growth is a testament to the company's robust business model and its ability to attract and retain customers, even in a challenging macroeconomic environment.
Financial Performance Overview
Snowflake Inc (SNOW, Financial) demonstrated strong financial health with a net revenue retention rate of 135%, indicating high customer satisfaction and increased spending from existing clients. The company's customer base also expanded, with 436 customers now generating more than $1 million in trailing 12-month product revenue, reflecting a 52% increase from the previous year. Additionally, Snowflake now serves 647 Forbes Global 2000 customers, marking a 10% year-over-year growth.
The company's remaining performance obligations (RPO) stood at $3.7 billion, a 23% increase compared to the same period last year, suggesting a healthy pipeline of future revenue. Furthermore, net cash provided by operating activities was $120.9 million, a significant 53% increase year-over-year.
Income Statement and Cash Flow Highlights
According to the income statement, Snowflake Inc (SNOW, Financial) achieved a product gross profit of $518.5 million with a margin of 74%, and a non-GAAP product gross profit of $547.1 million with a 78% margin. However, the company reported an operating loss of $260.6 million, which translates to a -35% margin. On a non-GAAP basis, operating income was $71.9 million, or a 10% margin.
The cash flow statement further underscores the company's efficiency, with free cash flow reported at $102.3 million, a 14% margin, and adjusted free cash flow at $110.8 million, a 15% margin. These figures highlight Snowflake's ability to generate cash while continuing to invest in growth.
Forward Guidance and Investor Sentiment
Looking ahead, Snowflake Inc (SNOW, Financial) provided guidance for the fourth quarter of fiscal 2024, projecting product revenue to be between $716 million and $721 million, representing a 29-30% year-over-year growth. The company also anticipates a non-GAAP operating margin of 4%. For the full fiscal year 2024, Snowflake expects a product revenue growth of 37%, with a non-GAAP product gross profit margin of 77% and an adjusted free cash flow margin of 27%.
Chairman and CEO Frank Slootman commented on the results, stating,
During Q3, product revenue grew 34% year-over-year to reach $698 million and non-GAAP adjusted free cash flow was $111 million, representing 70% year-over-year growth. These results reflect strong execution in a broadly stabilizing macro environment."
The company's financial outlook and management's commentary reflect confidence in Snowflake's strategic direction and its ability to navigate economic uncertainties while delivering value to its customers and shareholders.
Conclusion
Snowflake Inc (SNOW, Financial) continues to demonstrate its resilience and growth potential in the data cloud sector. The company's strong Q3 fiscal 2024 performance, coupled with a robust financial outlook, positions it well for continued success. Investors and stakeholders can anticipate Snowflake's sustained momentum as it leverages its innovative platform and expands its customer base.
For detailed financial tables and further information, readers are encouraged to view the full earnings release on Snowflake's investor relations website.
Explore the complete 8-K earnings release (here) from Snowflake Inc for further details.
