EPS of $-0.51 increased by 20.3% from previous year
Gross margin of 68.8%
Net income of -169.35M
""Q4 was an exceptionally strong bookings quarter. We reported $5.2 billion of remaining performance obligations, representing accelerated year-on-year growth of 41%." - Mike Scarpelli, CFO" - Mike Scarpelli
Snowflake Inc (SNOW) reported robust fourth-quarter results for fiscal 2024, culminating in a revenue of $774.7 million, reflecting a year-over-year growth of 31.53%. Critical metrics indicated sustained performance despite macroeconomic headwinds, with management emphasizing a strategic focus on AI and data cloud innovations. The transition of leadership to Sridhar Ramaswamy as CEO is expected to drive technological and operational advancements promptly.
Management’s outlook suggests continued revenue growth with guidance for fiscal 2025 forecasting product revenue between $3.25 billion, a 22% growth year-over-year. The company’s strategic investments in AI and cloud technologies demonstrate a proactive approach to capitalize on growth opportunities, despite certain anticipated headwinds regarding customer consumption patterns and product efficiency gains.
Key Performance Indicators
Revenue
774.70M
QoQ: 5.52% | YoY:31.53%
Gross Profit
532.90M
68.79% margin
QoQ: 5.48% | YoY:39.01%
Operating Income
-275.51M
QoQ: -5.71% | YoY:-14.91%
Net Income
-169.35M
QoQ: 20.96% | YoY:18.38%
EPS
-0.51
QoQ: 21.54% | YoY:20.31%
Revenue Trend
Margin Analysis
Key Insights
Q4 2024 Revenue: $774.7 million, QoQ growth of 5.52%, YoY growth of 31.53%.
FY 2024 Product Revenue: Increased by 38% to $2.67 billion.
Gross Profit: $532.9 million (Gross Margin: 68.79%).
Operating Income: -$275.5 million (Operating Margin: -35.6%). Management highlighted the challenges of maintaining profitability amidst strategic investments in R&D and hiring constraints.
Net Cash Provided by Operating Activities: $344.58 million.
Financial Highlights
1. Revenue Performance:
- Q4 2024 Revenue: $774.7 million, QoQ growth of 5.52%, YoY growth of 31.53%.
- FY 2024 Product Revenue: Increased by 38% to $2.67 billion.
2. Profitability:
- Gross Profit: $532.9 million (Gross Margin: 68.79%).
- Operating Income: -$275.5 million (Operating Margin: -35.6%). Management highlighted the challenges of maintaining profitability amidst strategic investments in R&D and hiring constraints.
3. Cash Flow:
- Net Cash Provided by Operating Activities: $344.58 million.
- Free Cash Flow: $324.48 million, with significant cash balance at $1.78 billion at quarter-end.
4. Balance Sheet:
- Total Assets: $8.22 billion, with $3.84 billion in cash and short-term investments.
- Total Liabilities: $3.03 billion, indicating a healthy liquidity position with a current ratio of 1.81, showcasing short-term financial health.
5. Management Commentary:
- Growth strategies focus on AI, with CEO Sridhar Ramaswamy emphasizing the availability of generative AI solutions.
- COO Mike Scarpelli elaborated, "Q4 was an exceptionally strong bookings quarter. We reported $5.2 billion of remaining performance obligations, representing accelerated year-on-year growth of 41%.”
Management remains cautiously optimistic yet conservative with growth forecasts for FY 2025, aligning expectations with current operational trends instead of historical highs.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
774.70M
31.53%
5.52%
Gross Profit
532.90M
39.01%
5.48%
Operating Income
-275.51M
-14.91%
-5.71%
Net Income
-169.35M
18.38%
20.96%
EPS
-0.51
20.31%
21.54%
Key Financial Ratios
currentRatio
1.81
grossProfitMargin
68.8%
operatingProfitMargin
-35.6%
netProfitMargin
-21.9%
returnOnAssets
-2.06%
returnOnEquity
-3.27%
debtEquityRatio
0.06
operatingCashFlowPerShare
$1.04
freeCashFlowPerShare
$0.98
priceToBookRatio
12.5
priceEarningsRatio
-95.62
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key Themes from Management Commentary:
1. AI and Innovation: Management stated, "There’s no AI strategy without a data strategy," showcasing their commitment to integrating AI capabilities into their cloud platform.
2. Customer Adoption: Notable growth of multi-year commitments, with a largest deal of five years for $250 million.
3. Financial Discipline: Increased scrutiny on hiring and spending, preserving margins amidst heavy investment in R&D and Go-to-market strategies.
4. Change Management: The transition to new leadership is framed positively as a source of renewed growth vision.
"Q4 was an exceptionally strong bookings quarter. We reported $5.2 billion of remaining performance obligations, representing accelerated year-on-year growth of 41%." - Mike Scarpelli, CFO
— Mike Scarpelli
"Generative AI is at the forefront of my customer conversations. This drives renewed emphasis on data strategy in preparation of these new technologies." - Sridhar Ramaswamy, CEO
— Sridhar Ramaswamy
Forward Guidance
Management provided revenue guidance for Q1 FY 2025 at $745 million to $750 million, projecting a growth of 26% to 27%. For the full fiscal year, product revenue is expected to reach approximately $3.25 billion. Management anticipates challenges from tiered pricing and customer adoption of new product features like Iceberg Tables, inducing conservativism in forecasting.
The emphasis on AI development reflects an alignment with key market trends, while investments in product development signify a commitment to capturing higher market share. Key factors to watch include customer consumption patterns as new product features roll out and the competitive response from leading cloud service providers.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
SNOW Focus
68.79%
-35.60%
-3.27%
-95.62%
AI
59.60%
-95.10%
-8.35%
-9.47%
SHOP
49.50%
9.54%
7.25%
38.11%
WDAY
75.90%
3.47%
14.70%
16.11%
INTU
75.40%
-4.74%
-0.11%
-2,265.73%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Despite challenges, Snowflake is poised for long-term growth driven by innovative product rollouts and integration of AI tech. Investors should monitor quarterly performance closely, especially in light of new leadership and product initiatives. Key metrics to observe include revenue growth rates, cash flow variations, and customer retention statistics amidst potential market shifts.
Key Investment Factors
Growth Potential
Strong growth forecast driven by increasing demand for cloud data solutions and AI capabilities. Potential revenue upside from newly launched products like Snowpark and Document AI expected to drive customer engagement and acquisition.
Profitability Risk
Potential risks include slower than anticipated consumption rates from existing products, competitive pressures from other cloud providers, and economic fluctuations that may impact customer spending. Concerning trends around transitioning customer data to Iceberg format could further compress margins temporarily.
Financial Position
Snowflake maintains a robust balance sheet with significant cash reserves and a manageable debt load. The overall current ratio indicates a strong ability to meet short-term obligations while pursuing aggressive growth strategies.
SWOT Analysis
Strengths
Strong revenue growth trajectory
Leading position in cloud data solutions known for ease of integration and innovative AI capabilities