Data warehouse-as-a-service Snowflake (NYSE:SNOW) beat analysts' expectations in Q4 FY2024, with revenue up 31.5% year on year to $774.7 million. It made a non-GAAP profit of $0.35 per share, improving from its profit of $0.13 per share in the same quarter last year.
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Snowflake (SNOW) Q4 FY2024 Highlights:
- Revenue: $774.7 million vs analyst estimates of $759.6 million (2% beat)
- EPS (non-GAAP): $0.35 vs analyst estimates of $0.18 ($0.17 beat)
- Product Revenue Guidance for Q1 2025 is $747.5 million at the midpoint (vs analysts' estimates of $770.1 million)
- Free Cash Flow of $324.5 million, up from $102.3 million in the previous quarter
- Net Revenue Retention Rate: 131%, down from 135% in the previous quarter
- Gross Margin (GAAP): 68.8%, up from 65.1% in the same quarter last year
- Market Capitalization: $77.07 billion
Founded in 2013 by three French engineers who spent decades working for Oracle (NYSE:ORCL), Snowflake (NYSE:SNOW) provides a data warehouse-as-a-service in the cloud that allows companies to store large amounts of data and analyze it in real time.
Data StorageData is the lifeblood of the internet and software in general, and the amount of data created is accelerating. As a result, the importance of storing the data in scalable and efficient formats continues to rise, especially as its diversity and associated use cases expand from analyzing simple, structured datasets to high-scale processing of unstructured data such as images, audio, and video.
Sales Growth As you can see below, Snowflake's revenue growth has been exceptional over the last two years, growing from $383.8 million in Q4 FY2022 to $774.7 million this quarter.
Unsurprisingly, this was another great quarter for Snowflake with revenue up 31.5% year on year. However, its growth did slow down compared to last quarter as the company's revenue increased by just $40.53 million in Q4 compared to $60.16 million in Q3 2024. While we'd like to see revenue increase by a greater amount each quarter, a one-off fluctuation is usually not concerning.
Product revenue guidance for Q1 2025 came in at $747.5 million at the midpoint, missing analyst estimates.
Large Customers Growth This quarter, Snowflake reported 461 enterprise customers paying more than $1m annually, an increase of 25 from the previous quarter. That's a bit fewer contract wins than last quarter and quite a bit below what we've typically observed over the past four quarters, suggesting that its sales momentum with large customers is slowing.
Key Takeaways from Snowflake's Q4 Results Snowflake delivered strong free cash flow, while still growing revenue at 30%+, which is certainly an impressive feat. On the other hand, its net revenue retention declined again and product guidance for Q1 missed analysts' estimates. Overall, this quarter's results seemed mixed. The market was likely expecting more, and the stock is down 22.2% after reporting, trading at $178.9 per share.