Snowflake (NYSE:SNOW) posted non-GAAP earnings of 15 cents per share in the first quarter of fiscal 2024, above the Consensus Estimate by 200%. In the previous quarter, the company earned 3 cents per share.

Revenues of $623.6 million exceeded expectations by 2.64% and increased 47.6% year on year.

Top-Line Specifications   

The product revenues of Snowflake accounted for 94.6% of total revenues. The figure was $590.1 million, an increase of 49.6% year over year.

Professional Services and other sales accounted for 5.4% of total income. The total was $33.5 million, a 20% increase year on year.

Snowflake saw a net revenue retention percentage of 151% for existing customers in the fiscal first quarter, down from 158% in the previous quarter and 174% in the year-ago quarter.     

The number of clients increased by 29% year on year, reaching 8,167 in the reported quarter. It now has 373 customers with more than $1 million in trailing 12-month product revenue (increased 80% year over year) and 590 Forbes Global 2000 customers (up 15% year over year).

Top-line growth in the reported quarter was aided by strong sales from customers in the healthcare, manufacturing, and financial services verticals.

Operating Specifics

Year over year, the non-GAAP gross margin increased by 130 basis points (bps) to 78.2%.

Product advancements, attractive cloud agreement pricing, better scale, and a rising enterprise customer base all contributed to the product gross margin expanding further.

R&D expenses as a percentage of revenue climbed by 330 basis points year over year to 20.7%.

General and administrative expenses were 7.7% of revenues, down 210 basis points year on year.

Sales and marketing expenses as a proportion of revenues fell 430 basis points year on year to 39.2%.

Total operating expenses as a proportion of revenues were 67.6%, down from 70.6% in the previous quarter.

Operating income was $32.6 million in the reporting quarter, up from $1.7 million the previous year.

The Balance Sheet and Cash Flow

Snowflake has $3.95 billion in cash, cash equivalents, and short-term investments as of April 30, 2023, compared to $4 billion as of January 31, 2023.

At the end of the fiscal first quarter of 2024, the remaining performance commitments were $3.41 billion, up 31% year on year.

The reported quarter’s adjusted free cash flow was $287 million, up from $215.3 million in the prior quarter.

Guidance

Snowflake anticipates product revenues in the $620-$625 million range for the second quarter of fiscal 2024. The projected year-over-year growth rate is 33-34%.

For the fiscal second quarter, the operating margin is predicted to be 2%.

Product revenues are expected to climb 34% year on year to $2.6 billion in fiscal 2024, according to the business.

The non-GAAP product gross margin is estimated to be 76%, with a 5% non-GAAP operating margin.

In fiscal 2024, the non-GAAP adjusted free cash flow margin is estimated to be 26%.

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