Snowflake Reports Financial Results for the Second Quarter of Fiscal 2023
•Product revenue of $466.3 million in the second quarter, representing 83% year-over-year growth
•Remaining performance obligations of $2.7 billion, representing 78% year-over-year growth
•6,808 total customers
•Net revenue retention rate of 171%
•246 customers with trailing 12-month product revenue greater than $1 million
No-Headquarters/BOZEMAN, Mont. - August 24, 2022 - Snowflake (NYSE: SNOW), the Data Cloud company, today announced financial results for its second quarter of fiscal 2023, ended July 31, 2022.
Revenue for the quarter was $497.2 million, representing 83% year-over-year growth. Product revenue for the quarter was $466.3 million, representing 83% year-over-year growth. Remaining performance obligations were $2.7 billion, representing 78% year-over-year growth. Net revenue retention rate was 171% as of July 31, 2022. The company now has 6,808 total customers and 246 customers with trailing 12-month product revenue greater than $1 million. See the section titled “Key Business Metrics” for definitions of product revenue, remaining performance obligations, net revenue retention rate, total customers, and customers with trailing 12-month product revenue greater than $1 million.
"During Q2, product revenue grew 83% year-over-year to $466 million dollars. Our non-GAAP product gross margin exceeded 75%, and we continue to generate non-GAAP operating income and free cash flow,” said Frank Slootman, Chairman and CEO, Snowflake. "Snowflake’s next frontier of innovation is aimed at transforming how cloud applications are built, deployed, sold, and transacted. We look forward to executing against this growth opportunity."
Second Quarter Fiscal 2023 GAAP and Non-GAAP Results:
The following table summarizes our financial results for the second quarter of fiscal 2023:
Second Quarter Fiscal 2023
GAAP Results
Second Quarter Fiscal 2023
Non-GAAP Results(1)
Amount (millions)
Year/Year Growth
Product revenue
$466.3
83
%
Amount (millions)
Margin
Amount (millions)
Margin
Product gross profit
$334.7
72
%
$350.4
75
%
Operating income (loss)
($207.7)
(42
%)
$17.5
4
%
Net cash provided by operating activities
$64.4
Free cash flow
$53.8
11
%
Adjusted free cash flow
$58.6
12
%
(1) We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the section titled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP financial measures, and the table titled “GAAP to Non-GAAP Reconciliations” for a reconciliation of GAAP to non-GAAP financial measures.
Note: Fiscal year ends January 31. Numbers are rounded for presentation purposes.
Financial Outlook:
Our guidance includes GAAP and non-GAAP financial measures.
The following table summarizes our guidance for the third quarter of fiscal 2023:
Third Quarter Fiscal 2023
GAAP Guidance
Third Quarter Fiscal 2023
Non-GAAP Guidance(1)
Amount (millions)
Year/Year Growth
Product revenue
$500 - $505
60 - 62%
Margin
Operating income
2
%
Amount (millions)
Weighted-average shares used in computing net income per share attributable to common stockholders - diluted(2)
358
(1) We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the section titled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP financial measures.
(2) We may have a non-GAAP net income for the third quarter of fiscal 2023. As a result, we are presenting the weighted-average shares used in computing net income per share attributable to common stockholders - diluted in the non-GAAP column of the table above, giving effect to all dilutive securities (stock options, restricted stock units, and employee stock purchase rights under our 2020 Employee Stock Purchase Plan). These dilutive securities would be excluded from the weighted-average shares used in computing net loss per share attributable to common stockholders - diluted if we are in a non-GAAP net loss position.
The following table summarizes our guidance for the full-year fiscal 2023:
Full-Year Fiscal 2023
GAAP Guidance
Full-Year Fiscal 2023
Non-GAAP Guidance(1)
Amount (millions)
Year/Year Growth
Product revenue
$1,905 - $1,915
67 - 68%
Margin
Product gross profit
75
%
Operating income
2
%
Adjusted free cash flow
17
%
Amount (millions)
Weighted-average shares used in computing net income per share attributable to common stockholders - diluted(2)
358
(1) We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the section titled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP financial measures.
(2) We may have a non-GAAP net income for full-year fiscal 2023. As a result, we are presenting the weighted-average shares used in computing net income per share attributable to common stockholders - diluted in the non-GAAP column of the table above, giving effect to all dilutive securities (stock options, restricted stock units, and employee stock purchase rights under our 2020 Employee Stock Purchase Plan). These dilutive securities would be excluded from the weighted-average shares used in computing net loss per share attributable to common stockholders - diluted if we are in a non-GAAP net loss position.
A reconciliation of non-GAAP guidance measures to corresponding GAAP guidance measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, expenses that may be incurred in the future. Stock-based compensation-related charges, including employer payroll tax-related items on employee stock transactions, are impacted by the timing of employee stock transactions, the future fair market value of our common stock, and our future hiring and retention needs, all of which are difficult to predict and subject to constant change. We have provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for our historical non-GAAP financial results included in this release. Our fiscal year ends January 31, and numbers are rounded for presentation purposes.
Conference Call Details
We will host a conference call today, beginning at 3 p.m. Mountain Time on August 24, 2022. Investors and participants may attend the call by dialing (844) 200-6205 (Passcode: 880899), or if outside the United States, by dialing +1 (833) 950-0062 (Passcode: 880899).
The call will also be webcast live on the Snowflake Investor Relations website.
An audio replay of the conference call and webcast will be available two hours after its completion and will be accessible for 30 days on the Snowflake Investor Relations website.
Investor Presentation Details
An investor presentation providing additional information and analysis can be found at https://investors.snowflake.com.
Statement Regarding Use of Non‑GAAP Financial Measures
We report the following non-GAAP financial measures, which have not been prepared in accordance with generally accepted accounting principles in the United States (GAAP), in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
▪Product gross profit, Operating income (loss), and Net income (loss). Our non-GAAP product gross profit, operating income (loss), and net income (loss) measures exclude the effect of stock-based compensation-related charges, including employer payroll tax-related items on employee stock transactions, amortization of acquired intangibles, expenses associated with acquisitions and strategic investments, and the related income tax effect of these adjustments as well as the non-recurring income tax expense or benefit associated with acquisitions. We believe the presentation of operating results that exclude these non-cash or non-recurring items provides useful supplemental information to investors and facilitates the analysis of our operating results and comparison of operating results across reporting periods.
▪Free cash flow. Free cash flow is defined as net cash provided by (used in) operating activities reduced by purchases of property and equipment and capitalized internal-use software development costs. Cash outflows for employee payroll tax items related to the net share settlement of equity awards are included in cash flow for financing activities and, as a result, do not have an effect on the calculation of free cash flow. Free cash flow margin is calculated as free cash flow as a percentage of revenue. We believe these measures provide useful supplemental information to investors because they are indicators of the strength and performance of our core business operations.
▪Adjusted free cash flow. Adjusted free cash flow is defined as free cash flow plus (minus) net cash paid (received) on employer and employee payroll tax-related items on employee stock transactions. Employee payroll tax-related items on employee stock transactions are generally pass-through transactions that are expected to have a net zero impact on free cash flow over time, but that may impact free cash flow in any given fiscal quarter due to differences between the time that we receive funds from our employees and the time we remit those funds to applicable tax authorities. We believe that excluding the effects of these payroll tax-related items will enhance stockholders' ability to evaluate our free cash flow performance, including on a quarter-over-quarter basis. Adjusted free cash flow margin is calculated as adjusted free cash flow as a percentage of revenue. We believe these measures provide useful supplemental information to investors because they are indicators of the strength and performance of our core business operations.
We use these non-GAAP financial measures internally for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. Our presentation of non-GAAP financial measures may not be comparable to similar measures used by other companies. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand our business. Please see the tables included at the end of this release for the reconciliation of GAAP to non-GAAP results.
Key Business Metrics
We monitor our key business metrics, including (i) free cash flow starting with the fiscal quarter ended January 31, 2022, and (ii) the other metrics set forth below to help us evaluate our business and growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts, and assess operational efficiencies. See the section titled “Statement Regarding Use of Non-GAAP Financial Measures” for the definition of free cash flow. The calculation of our key business metrics may differ from other similarly titled metrics used by other companies, securities analysts, or investors.
•Product Revenue. Product revenue is a key metric for us because we recognize revenue based on platform consumption, which is inherently variable at our customers’ discretion, and not based on the amount and duration of contract terms. Product revenue is primarily derived from the consumption of compute, storage, and data transfer resources, which are consumed by customers on our platform as a single, integrated offering. Customers have the flexibility to consume more than their contracted capacity during the contract term and may have the ability to roll over unused capacity to future periods, generally upon the purchase of additional capacity at renewal. Our consumption-based business model distinguishes us from subscription-based software companies that generally recognize revenue ratably over the contract term and may not permit rollover. Because customers have flexibility in the timing of their consumption, which can exceed their contracted capacity or extend beyond the original contract term in many cases, the amount of product revenue recognized in a given period is an important indicator of customer satisfaction and the value derived from our platform. Product revenue excludes our professional services and other revenue.
•Remaining Performance Obligations. Remaining performance obligations (RPO) represent the amount of contracted future revenue that has not yet been recognized, including (i) deferred revenue and (ii) non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods. RPO excludes performance obligations from on-demand arrangements and certain time and materials contracts that are billed in arrears. Portions of RPO that are not yet invoiced and are denominated in foreign currencies are revalued into U.S. dollars each period based on the applicable period-end exchange rates. RPO is not necessarily indicative of future product revenue growth because it does not account for the timing of customers’ consumption or their consumption of more than their contracted capacity. Moreover, RPO is influenced by a number of factors, including the timing of renewals, the timing of purchases of additional capacity, average contract terms, seasonality, changes in foreign currency exchange rates, and the extent to which customers are permitted to roll over unused capacity to future periods, generally upon the purchase of additional capacity at renewal.
•Total Customers. We count the total number of customers at the end of each period. For purposes of determining our customer count, we treat each customer account, including accounts for end-customers under a reseller arrangement, that has at least one corresponding capacity contract as a unique customer, and a single organization with multiple divisions, segments, or subsidiaries may be counted as multiple customers. For purposes of determining our customer count, we do not include customers that consume our platform only under on-demand arrangements. Our customer count is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity, and we present our total customer count for historical periods reflecting these adjustments.
•Net Revenue Retention Rate. To calculate net revenue retention rate, we first specify a measurement period consisting of the trailing two years from our current period end. Next, we define as our measurement cohort the population of customers under capacity contracts that used our platform at any point in the first month of the first year of the measurement period. Starting with the fiscal quarter ended October 31, 2021, the cohorts used to calculate net revenue retention rate include end-customers under a reseller arrangement. We then calculate our net revenue retention rate as the quotient obtained by dividing our product revenue from this cohort in the second year of the measurement period by our product revenue from this cohort in the first year of the measurement period. Any customer in the cohort that did not use our platform in the second year remains in the calculation and contributes zero product revenue in the second year. Our net revenue retention rate is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity, and we present our net revenue retention rate for historical periods reflecting these adjustments. Since we will continue to attribute the historical product revenue to the consolidated contract, consolidation of capacity contracts within a customer’s organization typically will not impact our net revenue retention rate unless one of those customers was not a customer at any point in the first month of the first year of the measurement period.
•Customers with Trailing 12-Month Product Revenue Greater than $1 Million. To calculate the number of customers with trailing 12-month product revenue greater than $1 million, we count the number of customers under capacity arrangements that contributed more than $1 million in product revenue in the trailing 12 months. Our customer count is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity, and we present our customer count for historical periods reflecting these adjustments.
Use of Forward‑Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding our performance, including but not limited to statements in the section titled “Financial Outlook.” The forward-looking statements contained in this release and the accompanying oral presentation are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause actual results or outcomes to be materially different from any future results or outcomes expressed or implied by the forward-looking statements. These risks, uncertainties, assumptions, and other factors include, but are not limited to, those related to our business and financial performance, the effects of COVID-19 or other public health crises on our business, results of operations, and financial condition, general market and business conditions, downturns, or uncertainty, the effects of the recent and developing armed conflict in Ukraine on our business, results of operations, and financial condition, our ability to attract and retain customers, our ability to develop new products and services and enhance existing products and services, our ability to respond rapidly to emerging technology trends, our ability to execute on our business strategy, including our strategy related to the Data Cloud, our ability to increase and predict customer consumption of our platform, our ability to compete effectively, and our ability to manage growth.
Further information on these and additional risks, uncertainties, and other factors that could cause actual outcomes and results to differ materially from those included in or contemplated by the forward-looking statements contained in this release are included under the caption “Risk Factors” and elsewhere in our Form 10-Q for the fiscal quarter ended April 30, 2022 and other filings and reports we make with the Securities and Exchange Commission from time to time, including our Form 10-Q that will be filed for the fiscal quarter ended July 31, 2022.
Moreover, we operate in a very competitive and rapidly changing environment, and new risks may emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results or outcomes to differ materially from those contained in any forward-looking statements we may make. Forward-looking statements speak only as of the date the statements are made and are based on information available to us at the time those statements are made and/or management's good faith belief as of that time with respect to future events. Except as required by law, we undertake no obligation, and do not intend, to update these forward-looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current financial quarter.
About Snowflake
Snowflake enables every organization to mobilize their data with Snowflake’s Data Cloud. Customers use the Data Cloud to unite siloed data, discover and securely share data, and execute diverse analytic workloads. Wherever data or users live, Snowflake delivers a single data experience that spans multiple clouds and geographies. Thousands of customers across many industries, including 510 of the 2022 Forbes Global 2000 (G2K) as of July 31, 2022, use Snowflake Data Cloud to power their businesses. Learn more at snowflake.com.
Investor Contact
Jimmy Sexton
IR@snowflake.com
Press Contact
Eszter Szikora
Press@snowflake.com
Source: Snowflake Inc.
Snowflake Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended July 31,
Six Months Ended July 31,
2022
2021
2022
2021
Revenue
$
497,248
$
272,198
$
919,619
$
501,112
Cost of revenue
173,232
106,121
321,162
203,467
Gross profit
324,016
166,077
598,457
297,645
Operating expenses:
Sales and marketing
274,645
182,903
518,557
349,707
Research and development
183,748
118,087
334,546
227,883
General and administrative
73,355
65,228
141,852
125,791
Total operating expenses
531,748
366,218
994,955
703,381
Operating loss
(207,732)
(200,141)
(396,498)
(405,736)
Interest income
11,692
2,190
16,451
4,802
Other income (expense), net
(22,920)
8,746
(31,401)
8,258
Loss before income taxes
(218,960)
(189,205)
(411,448)
(392,676)
Provision for (benefit from) income taxes
3,846
514
(22,848)
263
Net loss
$
(222,806)
$
(189,719)
$
(388,600)
$
(392,939)
Net loss per share attributable to common stockholders - basic and diluted
$
(0.70)
$
(0.64)
$
(1.23)
$
(1.33)
Weighted-average shares used in computing net loss per share attributable to common stockholders - basic and diluted
318,356
297,717
316,392
294,604
Snowflake Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
July 31, 2022
January 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
906,663
$
1,085,729
Short-term investments
3,046,477
2,766,364
Accounts receivable, net
304,964
545,629
Deferred commissions, current
57,908
51,398
Prepaid expenses and other current assets
187,685
149,523
Total current assets
4,503,697
4,598,643
Long-term investments
1,086,684
1,256,207
Property and equipment, net
130,082
105,079
Operating lease right-of-use assets
222,240
190,356
Goodwill
502,614
8,449
Intangible assets, net
172,254
37,141
Deferred commissions, non-current
129,222
124,517
Other assets
317,322
329,306
Total assets
$
7,064,115
$
6,649,698
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
20,286
$
13,441
Accrued expenses and other current liabilities
209,772
200,664
Operating lease liabilities, current
26,605
25,101
Deferred revenue, current
1,144,773
1,157,887
Total current liabilities
1,401,436
1,397,093
Operating lease liabilities, non-current
215,152
181,196
Deferred revenue, non-current
8,793
11,180
Other liabilities
12,411
11,184
Stockholders’ equity
5,426,323
5,049,045
Total liabilities and stockholders’ equity
$
7,064,115
$
6,649,698
Snowflake Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended July 31,
Six Months Ended July 31,
2022
2021
2022
2021
Cash flows from operating activities:
Net loss
$
(222,806)
$
(189,719)
$
(388,600)
$
(392,939)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization
16,172
5,384
26,113
10,068
Non-cash operating lease costs
11,148
8,531
21,239
17,040
Amortization of deferred commissions
13,770
8,841
26,971
17,157
Stock-based compensation, net of amounts capitalized
209,181
163,991
381,674
315,005
Net amortization of premiums on investments
4,678
12,332
12,876
25,351
Net unrealized losses (gains) on strategic investments in equity securities
23,173
(8,060)
32,032
(8,060)
Deferred income tax
—
—
(26,664)
—
Other
313
1,568
2,074
2,782
Changes in operating assets and liabilities, net of effects of a business combination:
Accounts receivable
(27,087)
(71,283)
239,569
55,896
Deferred commissions
(23,188)
(19,182)
(39,906)
(33,931)
Prepaid expenses and other assets
29,358
(15,731)
(28,177)
(70,088)
Accounts payable
2,067
4,967
6,225
3,722
Accrued expenses and other liabilities
24,672
30,287
10,455
23,720
Operating lease liabilities
(9,810)
(8,159)
(18,186)
(15,992)
Deferred revenue
12,792
70,122
(8,649)
66,012
Net cash provided by (used in) operating activities
64,433
(6,111)
249,046
15,743
Cash flows from investing activities:
Purchases of property and equipment
(3,848)
(3,497)
(11,261)
(9,927)
Capitalized internal-use software development costs
(6,736)
(2,344)
(11,540)
(4,824)
Cash paid for a business combination, net of cash and cash equivalents acquired
—
—
(177,925)
—
Purchases of intangible assets
(700)
(722)
(700)
(11,182)
Purchases of investments
(1,027,966)
(842,963)
(1,925,257)
(1,988,633)
Sales of investments
32,958
7,929
43,932
392,312
Maturities and redemptions of investments
809,845
877,635
1,696,512
1,394,223
Net cash provided by (used in) investing activities
(196,447)
36,038
(386,239)
(228,031)
Cash flows from financing activities:
Proceeds from exercise of stock options
8,520
24,463
23,796
65,865
Proceeds from issuance of common stock under employee stock purchase plan
—
—
26,094
26,398
Taxes paid related to net share settlement of equity awards
(30,893)
—
(84,109)
—
Net cash provided by (used in) financing activities
(22,373)
24,463
(34,219)
92,263
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
(2,290)
196
(7,388)
215
Net increase (decrease) in cash, cash equivalents, and restricted cash
(156,677)
54,586
(178,800)
(119,810)
Cash, cash equivalents, and restricted cash—beginning of period
1,080,411
660,797
1,102,534
835,193
Cash, cash equivalents, and restricted cash—end of period
$
923,734
$
715,383
$
923,734
$
715,383
Snowflake Inc.
GAAP to Non-GAAP Reconciliations
(in thousands, except percentages)
(unaudited)
Three Months Ended July 31, 2022
GAAP amounts
GAAP amounts as a % of revenue
Stock-based compensation-related charges(1)
Amortization of acquired intangibles
Expenses associated with acquisitions and strategic investments
Non-GAAP amounts
Non-GAAP amounts as a % of revenue
Revenue:
Product revenue
$
466,268
94
%
Professional services and other revenue
30,980
6
%
Revenue
497,248
100
%
Year-over-year growth
83
%
Cost of revenue:
Cost of product revenue
131,606
27
%
$
(15,122)
$
(566)
$
—
$
115,918
23
%
Cost of professional services and other revenue
41,626
8
%
(12,572)
—
—
29,054
6
%
Total cost of revenue
173,232
35
%
(27,694)
(566)
—
144,972
29
%
Gross profit (loss):
Product gross profit
334,662
15,122
566
—
350,350
Professional services and other gross profit (loss)
(10,646)
12,572
—
—
1,926
Total gross profit
324,016
65
%
27,694
566
—
352,276
71
%
Product gross margin
72
%
3
%
—
%
—
%
75
%
Professional services and other gross margin
(34
%)
40
%
—
%
—
%
6
%
Total gross margin
65
%
6
%
—
%
—
%
71
%
Operating expenses:
Sales and marketing
274,645
55
%
(62,173)
(7,555)
—
204,917
41
%
Research and development
183,748
37
%
(97,839)
(1,759)
—
84,150
17
%
General and administrative
73,355
15
%
(26,576)
(417)
(614)
45,748
9
%
Total operating expenses
531,748
107
%
(186,588)
(9,731)
(614)
334,815
67
%
Operating income (loss)
$
(207,732)
(42
%)
$
214,282
$
10,297
$
614
$
17,461
4
%
Operating margin
(42
%)
44
%
2
%
—
%
4
%
(1) Stock-based compensation-related charges included approximately $3.9 million of employer payroll tax-related expenses on employee stock transactions.
Three Months Ended July 31, 2021
GAAP amounts
GAAP amounts as a % of revenue
Stock-based compensation-related charges(1)
Amortization of acquired intangibles
Expenses associated with acquisitions and strategic investments
Non-GAAP amounts
Non-GAAP amounts as a % of revenue
Revenue:
Product revenue
$
254,623
94
%
Professional services and other revenue
17,575
6
%
Revenue
272,198
100
%
Year-over-year growth
104
%
Cost of revenue:
Cost of product revenue
81,048
30
%
$
(13,226)
$
(566)
$
—
$
67,256
25
%
Cost of professional services and other revenue
25,073
9
%
(9,877)
—
—
15,196
5
%
Total cost of revenue
106,121
39
%
(23,103)
(566)
—
82,452
30
%
Gross profit (loss):
Product gross profit
173,575
13,226
566
—
187,367
Professional services and other gross profit (loss)
(7,498)
9,877
—
—
2,379
Total gross profit
166,077
61
%
23,103
566
—
189,746
70
%
Product gross margin
68
%
6
%
—
%
—
%
74
%
Professional services and other gross margin
(43
%)
57
%
—
%
—
%
14
%
Total gross margin
61
%
9
%
—
%
—
%
70
%
Operating expenses:
Sales and marketing
182,903
68
%
(57,626)
—
—
125,277
46
%
Research and development
118,087
43
%
(65,841)
(942)
—
51,304
19
%
General and administrative
65,228
24
%
(29,839)
(401)
75
35,063
13
%
Total operating expenses
366,218
135
%
(153,306)
(1,343)
75
211,644
78
%
Operating loss
$
(200,141)
(74
%)
$
176,409
$
1,909
$
(75)
$
(21,898)
(8
%)
Operating margin
(74
%)
65
%
1
%
—
%
(8
%)
(1) Stock-based compensation-related charges included approximately $12.1 million of employer payroll tax-related expenses on employee stock transactions.
Six Months Ended July 31, 2022
GAAP amounts
GAAP amounts as a % of revenue
Stock-based compensation-related charges(1)
Amortization of acquired intangibles
Expenses associated with acquisitions and strategic investments
Non-GAAP amounts
Non-GAAP amounts as a % of revenue
Revenue:
Product revenue
$
860,702
94
%
Professional services and other revenue
58,917
6
%
Revenue
919,619
100
%
Year-over-year growth
84
%
Cost of revenue:
Cost of product revenue
243,017
27
%
$
(28,263)
$
(1,133)
$
—
$
213,621
23
%
Cost of professional services and other revenue
78,145
8
%
(24,321)
—
—
53,824
6
%
Total cost of revenue
321,162
35
%
(52,584)
(1,133)
—
267,445
29
%
Gross profit (loss):
Product gross profit
617,685
28,263
1,133
—
647,081
Professional services and other gross profit (loss)
(19,228)
24,321
—
—
5,093
Total gross profit
598,457
65
%
52,584
1,133
—
652,174
71
%
Product gross margin
72
%
3
%
—
%
—
%
75
%
Professional services and other gross margin
(33
%)
42
%
—
%
—
%
9
%
Total gross margin
65
%
6
%
—
%
—
%
71
%
Operating expenses:
Sales and marketing
518,557
57
%
(119,797)
(10,101)
—
388,659
43
%
Research and development
334,546
36
%
(173,623)
(3,525)
—
157,398
17
%
General and administrative
141,852
15
%
(51,519)
(829)
(2,523)
86,981
9
%
Total operating expenses
994,955
108
%
(344,939)
(14,455)
(2,523)
633,038
69
%
Operating income (loss)
$
(396,498)
(43
%)
$
397,523
$
15,588
$
2,523
$
19,136
2
%
Operating margin
(43
%)
43
%
2
%
—
%
2
%
(1) Stock-based compensation-related charges included approximately $14.1 million of employer payroll tax-related expenses on employee stock transactions.
Six Months Ended July 31, 2021
GAAP amounts
GAAP amounts as a % of revenue
Stock-based compensation-related charges(1)
Amortization of acquired intangibles
Expenses associated with acquisitions and strategic investments
Non-GAAP amounts
Non-GAAP amounts as a % of revenue
Revenue:
Product revenue
$
468,453
93
%
Professional services and other revenue
32,659
7
%
Revenue
501,112
100
%
Year-over-year growth
107
%
Cost of revenue:
Cost of product revenue
153,128
31
%
$
(25,394)
$
(1,133)
$
—
$
126,601
25
%
Cost of professional services and other revenue
50,339
10
%
(22,033)
—
—
28,306
6
%
Total cost of revenue
203,467
41
%
(47,427)
(1,133)
—
154,907
31
%
Gross profit (loss):
Product gross profit
315,325
25,394
1,133
—
341,852
Professional services and other gross profit (loss)
(17,680)
22,033
—
—
4,353
Total gross profit
297,645
59
%
47,427
1,133
—
346,205
69
%
Product gross margin
67
%
6
%
—
%
—
%
73
%
Professional services and other gross margin
(54
%)
67
%
—
%
—
%
13
%
Total gross margin
59
%
10
%
—
%
—
%
69
%
Operating expenses:
Sales and marketing
349,707
70
%
(111,871)
—
—
237,836
48
%
Research and development
227,883
45
%
(126,653)
(1,797)
—
99,433
20
%
General and administrative
125,791
25
%
(57,956)
(798)
(396)
66,641
13
%
Total operating expenses
703,381
140
%
(296,480)
(2,595)
(396)
403,910
81
%
Operating loss
$
(405,736)
(81
%)
$
343,907
$
3,728
$
396
$
(57,705)
(12
%)
Operating margin
(81
%)
68
%
1
%
—
%
(12
%)
(1) Stock-based compensation-related charges included approximately $28.3 million of employer payroll tax-related expenses on employee stock transactions.
Three Months Ended July 31,
Six Months Ended July 31,
2022
2021
2022
2021
Revenue
$
497,248
$
272,198
$
919,619
$
501,112
GAAP net cash provided by (used in) operating activities
$
64,433
$
(6,111)
$
249,046
$
15,743
Less: purchases of property and equipment
(3,848)
(3,497)
(11,261)
(9,927)
Less: capitalized internal-use software development costs
(6,736)
(2,344)
(11,540)
(4,824)
Non-GAAP free cash flow
53,849
(11,952)
226,245
992
Add: net cash paid on payroll tax-related items on employee stock transactions(1)
4,796
14,764
13,841
25,209
Non-GAAP adjusted free cash flow
$
58,645
$
2,812
$
240,086
$
26,201
Non-GAAP free cash flow margin
11
%
(4
%)
25
%
—
%
Non-GAAP adjusted free cash flow margin
12
%
1
%
26
%
5
%
(1) The amounts for the three and six months ended July 31, 2022 do not include employee payroll taxes of $30.9 million and $84.1 million, respectively, related to net share settlement of employee restricted stock units, which were reflected as cash outflows for financing activities. No equity awards were net settled prior to the six months ended July 31, 2022.
