Summary
Snowflake delivered rapid revenue growth in the first quarter of fiscal 2022, which ended April 30, 2021. Total revenue reached $228.9 million, up 110.4% from $108.8 million in the prior-year quarter. Gross profit was $131.6 million, up 98.6% from $66.3 million. Gross margin fell to 57.5% from 60.9% in the prior-year quarter. The company reported an operating loss of $205.6 million, wider than the $96.4 million operating loss in the prior-year quarter. Operating margin was -89.8%, compared with -88.6%. Net loss was $203.2 million, or negative $0.70 per diluted share, wider than the $93.6 million net loss a year earlier. Non-GAAP operating loss was much smaller at $35.8 million, and non-GAAP product gross profit was $154.5 million with a 72% margin. The difference between GAAP and non-GAAP results is largely tied to stock-based compensation and related charges.
The company said customer consumption drove the top line, and the MD&A noted that approximately 96% of revenue came from existing customers under capacity arrangements. Cash generation improved. Operating cash flow was $21.9 million, up from negative $6.6 million in the prior-year quarter. That increase was mainly due to $167.7 million more in cash collected from customers, according to the MD&A. Capital expenditures were $6.4 million, up from $2.0 million. Free cash flow, a non-GAAP measure, was $12.9 million, while adjusted free cash flow was $23.4 million. Deferred revenue, current, was $635.1 million. Remaining performance obligations stood at $1.4 billion. Management said about 54% of RPO is expected to be recognized as revenue in the twelve months ending April 30, 2022, and the weighted-average remaining life of contracts was 1.9 years. Those figures suggest a healthy pipeline but also highlight that revenue timing depends on customer consumption.
Customer metrics remained strong. Snowflake had 4,532 total customers as of April 30, 2021, up from 4,139 as of January 31, 2021. The net revenue retention rate was 168% as of April 30, 2021. Customers with trailing 12-month product revenue greater than $1 million rose to 104, up from 48 as of April 30, 2020. The company also reported that 187 of the 2020 Fortune 500 used its platform as of April 30, 2021, and those customers contributed about 26% of revenue for the quarter. Guidance for the second quarter of fiscal 2022 calls for product revenue growth of 88% to 92% and a non-GAAP operating loss margin of 19%. For the full fiscal year 2022, management guided product revenue growth of 84% to 87%, a non-GAAP product gross margin of 72%, a non-GAAP operating loss margin of 17%, and an adjusted free cash flow margin of 0%. The outlook points to continued high growth, but it also signals that losses will persist as the company invests in sales, marketing, research and development, and infrastructure.
Risks are significant. Snowflake's consumption-based model means revenue depends on how much customers use the platform, and the MD&A warns that slower consumption could cause revenue fluctuations. Net revenue retention is expected to decline over time as longer-tenured customers become a larger portion of the base. The company faces competition, reliance on third-party cloud infrastructure, and COVID-19-related challenges, including longer sales cycles for some prospective customers. Product gross margin could be pressured by shifts in customer consumption mix, discounting, and investments in operations. The MD&A also noted that new software releases or hardware improvements could make the platform more efficient, enabling customers to consume fewer resources and potentially reducing revenue. Stock-based compensation is a major expense, and the company had $1.5 billion of unrecognized compensation cost as of April 30, 2021, to be recognized over a weighted-average period of 3.2 years. Management has said it will continue to invest heavily in growth rather than optimize for near-term profitability or cash flow.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2022 | Q4 FY2021 | QoQ | Q1 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $228.9M | $190.5M | +20.2% | — | — |
| Gross profit | $131.6M | $107.6M | +22.3% | — | — |
| Gross margin | 57.5% | 56.5% | +1.0 pp | — | — |
| Research & development | $109.8M | $94.0M | +16.8% | — | — |
| Sales & marketing | $166.8M | $154.1M | +8.3% | — | — |
| General & administrative | $60.6M | $59.9M | +1.1% | — | — |
| Total operating expenses | $337.2M | $308.0M | +9.5% | — | — |
| Operating income (loss) | -$205.6M | -$200.4M | -2.6% | — | — |
| Operating margin | -89.8% | -105.2% | +15.4 pp | — | — |
| Net income (loss) | -$203.2M | -$198.9M | -2.2% | — | — |
| Net margin | -88.8% | -104.5% | +15.7 pp | — | — |
Risks
Snowflake recognizes revenue on consumption rather than ratably over subscription terms, so customers control timing and may consume more slowly than expected. MD&A states net revenue retention was 168% as of April 30, 2021 and revenue depends on variable platform usage, making forecasting difficult.
A substantial majority of business runs on AWS, and AWS, Azure, and GCP are also primary competitors. They could bundle competing products, provide unfavorable pricing, or use control of their clouds to disadvantage Snowflake, a risk highlighted as total gross margin declined 3.4 percentage points to 57.5% in FY2022 Q1.
Snowflake faces large public cloud providers and legacy vendors with greater resources, and competition may pressure consumption growth or prices. MD&A notes it expects to continue investing in sales and marketing to acquire large enterprise customers.
Despite revenue up 110.4% to $228.9M in FY2022 Q1, net loss widened to $203.2M from $93.6M in FY2021 Q1, and operating loss widened to $205.6M. MD&A states Snowflake will continue to invest heavily rather than optimize for profitability or cash flow in the near future.
Stock-based compensation and future equity issuances could dilute stockholders. MD&A notes total unrecognized compensation cost related to unvested awards remained significant and will be recognized over a weighted-average period of 3.2 years.
MD&A shows professional services and other gross margin was negative, and the risk factors state that failure to manage growth of implementation services or improve their profit margin could harm operating results.
As of April 30, 2021, 187 Fortune 500 customers contributed a meaningful share of revenue, and 104 customers had trailing 12-month product revenue over $1 million. Sales to large enterprises have longer sales cycles and less predictability.
Growth increasingly depends on data providers, data consumers, and data application developers, and a small but increasing portion of revenue comes from global system integrators, managed service providers, and resellers. Insufficient qualified partners could slow implementations and expansion.
COVID-19 has lengthened sales cycles for some prospective customers and delayed professional services and trainings, though MD&A says FY2022 Q1 results were not adversely impacted. Renewed downturns could reduce customer spending or delay collections.
Sales to federal, state, and local governments and heavily regulated industries face competitive procurement, certification, audit, and termination risks. Noncompliance could lead to penalties or debarment from future government business.
Customer accounts outside the United States generated 19% of revenue for the three months ended April 30, 2021. Expansion requires new partners, localization, and compliance with diverse regulations, taxes, and labor laws.
Success depends on CEO Frank Slootman, CFO Michael P. Scarpelli, and key research and development and sales employees. Remote work and equity volatility may impair retention and hiring.
Snowflake historically receives a higher volume of orders in its fourth fiscal quarter, which impacts RPO and may become more pronounced as it targets large enterprise customers.
SaaS KPIs
All quarters →Net Revenue Retention Rate
Total Customers
Remaining Performance Obligations
Non-GAAP Operating Margin
Adjusted Free Cash Flow Margin
Free Cash Flow Margin
Adjusted Free Cash Flow
Product Revenue
Customers with Trailing 12-Month Product Revenue Greater than $1 Million
Free Cash Flow
Non-GAAP Product Gross Margin
Summary, forecast, risks and KPIs are extracted from Snowflake Inc.'s SEC filings for Q1 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.