SNOW thoughts

Investment Analysis Clubs Saul’s Investing Discussions
1

Snowflake’s Q2’21 Investor Presentation
https://s26.q4cdn.com/463892824/files/doc_financials/2022/q2…

Slides 22-24
Non-GAAP operating loss is shrinking fast. Snowflake continues to invest heavily in S&M and R&D. GAAP Operating Loss is high due to stock-based compensation. It’s important to keep an eye on SBC and make sure it isn’t getting out of hand, but if you remove it from operating expenses, Snowflake is becoming more and more efficient which will lead to profitability soon. Adjusted Free Cash Flow has been positive for 3 quarters now.

Non-GAAP Operating Margin for the last 5 quarters (Q2’21 first): -8%, -16%, -24%, -30%, -44%

They’re re-iterating that customer adds in current quarter take 9-12 months to begin generating meaningful revenue. Customer adds this quarter were +458 sequentially and Customers adds with TTM >1M were +12 sequentially.

Slide 14
Fortune 500 customers grew by +18 sequentially.

-HugoStocklitz

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2

The concerning piece as I see it offhand is RPO growth.
Last quarter RPO growth was relatively slow, but it appears based on two years of data that last quarter is seasonally slow. That is not the case in this quarter.

Here’s what RPO growth looks like on a sequential basis:


        Q1     Q2     Q3     Q4
2021   7.4%   **6.8%**
2020   9.9%   42.7%  38.9%  43.6%
2019   7.8%   60.1%  23.5%  56.0% 
2018                        54.6%

So last quarter’s growth was explained by seasonality.  But Q2 of this year is an outlier.  This would be the big question I have at this point.

Let me know if I’m missing something.  

A.J.
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3

What is RPO? I couldn’t find it defined in the KnowledgeBase and while Wikipedia has numerous options, none fit this context.

4

What is RPO? I couldn’t find it defined in the KnowledgeBase and while Wikipedia has numerous options, none fit this context.

https://www.fool.com/investing/2018/06/26/a-new-metric-provi…

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