Press release

Snowflake Reports Financial Results for the Second Quarter of Fiscal 2022

0
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Snowflake (NYSE: SNOW), the Data Cloud company, today announced financial results for its second quarter of fiscal 2022, ended July 31, 2021.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210825005718/en/

Snowflake FY22 Q2 Earnings Infographic (Graphic: Snowflake)

Snowflake FY22 Q2 Earnings Infographic (Graphic: Snowflake)

Revenue for the quarter was $272.2 million, representing 104% year-over-year growth. Product revenue for the quarter was $254.6 million, representing 103% year-over-year growth. Remaining performance obligations were $1.5 billion, representing 122% year-over-year growth. Net revenue retention rate was 169% as of July 31, 2021. The company now has 4,990 total customers and 116 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.

“Snowflake saw continued momentum in Q2 with triple-digit growth in product revenue, reflecting strength in customer consumption,” said Snowflake Chairman and CEO Frank Slootman. “While increasing net revenue retention rate to 169%, we also boosted gross margin and operating margin efficiency while our adjusted free cash flow was positive for the third quarter in a row.”

Second Quarter Fiscal 2022 GAAP and Non-GAAP Results:

The following table summarizes our financial results for the second quarter of fiscal 2022:

 

Second Quarter Fiscal 2022

GAAP Results

Second Quarter Fiscal 2022

Non-GAAP Results(1)

 

Amount

(millions)

Year/Year

Growth

 

 

Product revenue

$254.6

103%

 

 

 

 

 

 

 

 

Amount

(millions)

Margin

Amount

(millions)

Margin

Product gross profit

$173.6

68%

$187.4

74%

Operating loss

($200.1)

(74%)

($21.9)

(8%)

Net cash used in operating activities

($6.1)

 

 

 

Free cash flow

 

 

($12.0)

(4%)

Adjusted free cash flow

 

 

$2.8

1%

 

 

 

 

 

(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 2022:

 

Third Quarter Fiscal 2022

GAAP Guidance

 

Third Quarter Fiscal 2022

Non-GAAP Guidance(1)

 

Amount

(millions)

Year/Year

Growth

 

 

 

Product revenue

$280 – $285

89 – 92%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Margin

Operating loss

 

 

 

 

(7%)

 

 

 

 

 

 

 

Amount

(millions)

 

 

 

 

Weighted-average shares used in computing diluted net loss per share attributable to common stockholders – basic and diluted

303

 

 

 

 

 

 

 

 

 

 

(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.

The following table summarizes our guidance for the full-year fiscal 2022:

 

Full-Year Fiscal 2022

GAAP Guidance

 

Full-Year Fiscal 2022

Non-GAAP Guidance(1)

 

Amount

(millions)

Year/Year

Growth

 

 

 

Product revenue

$1,060 – $1,070

91 – 93%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Margin

Product gross profit

 

 

 

 

73%

Operating loss

 

 

 

 

(9%)

Adjusted free cash flow

 

 

 

 

7%

 

 

 

 

 

 

 

Amount

(millions)

 

 

 

 

Weighted-average shares used in computing diluted net loss per share attributable to common stockholders – basic and diluted

300

 

 

 

 

 

(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.

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 expense-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 press 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 2 p.m. Pacific Time on August 25, 2021. Investors and participants can register for the call in advance by visiting http://www.directeventreg.com/registration/event/8086935. After registering, a confirmation will be sent via email, including dial-in details and unique conference call access codes required for call entry.

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 and Operating income (loss). Our non-GAAP product gross profit and operating income (loss) measures exclude the effect of stock-based compensation expense-related charges, including employer payroll tax-related items on employee stock transactions, amortization of acquired intangibles, and expenses associated with acquisitions and strategic investments. 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 and Adjusted 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. Adjusted free cash flow is defined as free cash flow plus (minus) net cash paid (received) on payroll tax-related items on employee stock transactions. Prior to the fiscal quarter ended April 30, 2021, adjusted free cash flow was defined as free cash flow plus cash paid on only employer payroll tax-related items on employee stock transactions. Starting with the fiscal quarter ended April 30, 2021, adjusted free cash flow is defined to also exclude the effects of employee payroll tax-related items on employee stock transactions, which 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 employee payroll tax-related items will enhance stockholders’ ability to evaluate our free cash flow performance, including on a quarter-over-quarter basis. The impact of excluding employee payroll tax-related items on employee stock transactions from our definition of adjusted free cash flow was not significant for any prior periods. As a result, we have not restated adjusted free cash flow measures for any periods prior to the quarter ended April 30, 2021. Free cash flow margin and adjusted free cash flow margin are calculated as free cash flow or 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

  • 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 both deferred revenue and 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. 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, 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.
  • 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. 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. 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.

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, 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, 2021 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, 2021.

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 212 of the 2021 Fortune 500 as of July 31, 2021, use Snowflake Data Cloud to power their businesses. Learn more at snowflake.com.

Source: Snowflake Inc.

 

Snowflake Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

 

 

 

Three Months Ended July 31,

 

Six Months Ended July 31,

 

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

Revenue

 

$

272,198

 

 

$

133,145

 

 

$

501,112

 

 

$

241,960

 

Cost of revenue

 

106,121

 

 

50,446

 

 

203,467

 

 

93,003

 

Gross profit

 

166,077

 

 

82,699

 

 

297,645

 

 

148,957

 

Operating expenses:

 

 

 

 

 

 

 

 

Sales and marketing

 

182,903

 

 

92,663

 

 

349,707

 

 

190,540

 

Research and development

 

118,087

 

 

36,533

 

 

227,883

 

 

69,811

 

General and administrative

 

65,228

 

 

31,186

 

 

125,791

 

 

62,692

 

Total operating expenses

 

366,218

 

 

160,382

 

 

703,381

 

 

323,043

 

Operating loss

 

(200,141

)

 

(77,683

)

 

(405,736

)

 

(174,086

)

Interest income

 

2,190

 

 

1,689

 

 

4,802

 

 

4,137

 

Other income (expense), net

 

8,746

 

 

(1,109

)

 

8,258

 

 

(1,042

)

Loss before income taxes

 

(189,205

)

 

(77,103

)

 

(392,676

)

 

(170,991

)

Provision for income taxes

 

514

 

 

531

 

 

263

 

 

287

 

Net loss

 

$

(189,719

)

 

$

(77,634

)

 

$

(392,939

)

 

$

(171,278

)

Net loss per share attributable to common stockholders – basic and diluted

 

$

(0.64

)

 

$

(1.31

)

 

$

(1.33

)

 

$

(3.01

)

Weighted-average shares used in computing net loss per share attributable to common stockholders – basic and diluted

 

297,717,099

 

59,260,645

 

 

294,603,943

 

 

56,809,625

 

 

Snowflake Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

July 31, 2021

 

January 31, 2021

 

 

 

 

 

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

698,548

 

$

820,177

Short-term investments

 

3,436,941

 

3,087,887

Accounts receivable, net

 

237,457

 

294,017

Deferred commissions, current

 

39,265

 

32,371

Prepaid expenses and other current assets

 

95,891

 

66,200

Total current assets

 

4,508,102

 

4,300,652

Long-term investments

 

956,011

 

1,165,275

Property and equipment, net

 

83,643

 

68,968

Operating lease right-of-use assets

 

174,974

 

186,818

Goodwill

 

8,449

 

8,449

Intangible assets, net

 

28,089

 

16,091

Deferred commissions, non-current

 

96,174

 

86,164

Other assets

 

176,974

 

89,322

Total assets

 

$

6,032,416

 

$

5,921,739

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

9,475

 

$

5,647

Accrued expenses and other current liabilities

 

143,864

 

125,315

Operating lease liabilities, current

 

20,641

 

19,650

Deferred revenue, current

 

701,758

 

638,652

Total current liabilities

 

875,738

 

789,264

Operating lease liabilities, non-current

 

174,256

 

184,887

Deferred revenue, non-current

 

7,100

 

4,194

Other liabilities

 

10,357

 

6,923

Stockholders’ equity

 

4,964,965

 

4,936,471

Total liabilities and stockholders’ equity

 

$

6,032,416

 

$

5,921,739

 

Snowflake Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Three Months Ended July 31,

 

Six Months Ended July 31,

 

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(189,719

)

 

$

(77,634

)

 

$

(392,939

)

 

$

(171,278

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

5,384

 

 

2,240

 

 

10,068

 

 

3,762

 

Non-cash operating lease costs

 

8,531

 

 

8,212

 

 

17,040

 

 

16,337

 

Amortization of deferred commissions

 

8,841

 

 

6,840

 

 

17,157

 

 

14,066

 

Stock-based compensation, net of amounts capitalized

 

163,991

 

 

18,204

 

 

315,005

 

 

38,649

 

Net amortization of premiums on investments

 

12,332

 

 

279

 

 

25,351

 

 

226

 

Unrealized gains on strategic investments in privately-held equity securities

 

(8,060

)

 

 

 

(8,060

)

 

 

Other

 

1,568

 

 

4,224

 

 

2,782

 

 

4,049

 

Changes in operating assets and liabilities, net of effect of business combinations:

 

 

 

 

 

 

 

 

Accounts receivable

 

(71,283

)

 

(55,572

)

 

55,896

 

 

27,129

 

Deferred commissions

 

(19,182

)

 

(8,722

)

 

(33,931

)

 

(14,266

)

Prepaid expenses and other assets

 

(15,731

)

 

7,494

 

 

(70,088

)

 

(1,452

)

Accounts payable

 

4,967

 

 

14

 

 

3,722

 

 

(2,843

)

Accrued expenses and other liabilities

 

30,287

 

 

16,148

 

 

23,720

 

 

10,993

 

Operating lease liabilities

 

(8,159

)

 

(9,817

)

 

(15,992

)

 

(17,404

)

Deferred revenue

 

70,122

 

 

49,405

 

 

66,012

 

 

46,755

 

Net cash provided by (used in) operating activities

 

(6,111

)

 

(38,685

)

 

15,743

 

 

(45,277

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

(3,497

)

 

(4,715

)

 

(9,927

)

 

(6,748

)

Capitalized internal-use software development costs

 

(2,344

)

 

(981

)

 

(4,824

)

 

(3,170

)

Cash paid for business combinations, net of cash acquired

 

 

 

(6,035

)

 

 

 

(6,035

)

Purchases of intangible assets

 

(722

)

 

(184

)

 

(11,182

)

 

(6,184

)

Purchases of investments

 

(842,963

)

 

(358,811

)

 

(1,988,633

)

 

(612,635

)

Sales of investments

 

7,929

 

 

3,510

 

 

392,312

 

 

3,510

 

Maturities and redemptions of investments

 

877,635

 

 

97,817

 

 

1,394,223

 

 

189,859

 

Net cash provided by (used in) investing activities

 

36,038

 

 

(269,399

)

 

(228,031

)

 

(441,403

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs

 

 

 

 

 

 

 

478,573

 

Proceeds from early exercised stock options

 

 

 

 

 

 

 

159

 

Proceeds from exercise of stock options

 

24,463

 

 

9,864

 

 

65,865

 

 

20,736

 

Proceeds from issuance of common stock under the employee stock purchase plan

 

 

 

 

 

26,398

 

 

 

Proceeds from repayments of a nonrecourse promissory note

 

 

 

2,090

 

 

 

 

2,090

 

Repurchases of early exercised stock options

 

 

 

 

 

 

 

(30

)

Payments of deferred offering costs

 

 

 

(2,231

)

 

 

 

(2,336

)

Payment of deferred purchase consideration for a business combination

 

 

 

(600

)

 

 

 

(600

)

Net cash provided by financing activities

 

24,463

 

 

9,123

 

 

92,263

 

 

498,592

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

196

 

 

 

 

215

 

 

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

54,586

 

 

(298,961

)

 

(119,810

)

 

11,912

 

Cash, cash equivalents, and restricted cash at beginning of period

 

660,797

 

 

452,849

 

 

835,193

 

 

141,976

 

Cash, cash equivalents, and restricted cash at end of period

 

$

715,383

 

 

$

153,888

 

 

$

715,383

 

 

$

153,888

 

Snowflake Inc.

GAAP to Non-GAAP Reconciliations

(in thousands, except percentages)

(unaudited)

 

 

Three Months Ended July 31, 2021

 

GAAP amounts

 

GAAP amounts

as a % of

revenue

 

Stock-based

compensation

expense-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 expense-related charges included approximately $12.1 million of employer payroll tax-related expenses on employee stock transactions.

 

 

Three Months Ended July 31, 2020

 

GAAP amounts

 

GAAP amounts

as a % of

revenue

 

Stock-based

compensation

expense-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

$

125,216

 

 

94

%

 

 

 

 

 

 

 

 

 

 

Professional services and other revenue

7,929

 

 

6

%

 

 

 

 

 

 

 

 

 

 

Revenue

133,145

 

 

100

%

 

 

 

 

 

 

 

 

 

 

Year over Year % Growth

121

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product revenue

42,716

 

 

32

%

 

$

(613

)

 

$

(281

)

 

$

 

 

$

41,822

 

 

31

%

Cost of professional services and other revenue

7,730

 

 

6

%

 

(580

)

 

 

 

 

 

7,150

 

 

6

%

Total cost of revenue

50,446

 

 

38

%

 

(1,193

)

 

(281

)

 

 

 

48,972

 

 

37

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

Product gross profit

82,500

 

 

 

 

613

 

 

281

 

 

 

 

83,394

 

 

 

Professional services and other gross profit

199

 

 

 

 

580

 

 

 

 

 

 

779

 

 

 

Total gross profit

82,699

 

 

62

%

 

1,193

 

 

281

 

 

 

 

84,173

 

 

63

%

Product gross margin

66

%

 

 

 

1

%

 

%

 

%

 

67

%

 

 

Professional services and other gross margin

3

%

 

 

 

7

%

 

%

 

%

 

10

%

 

 

Total gross margin

62

%

 

 

 

1

%

 

%

 

%

 

63

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

92,663

 

 

70

%

 

(5,371

)

 

(1

)

 

 

 

87,291

 

 

65

%

Research and development

36,533

 

 

27

%

 

(5,166

)

 

 

 

 

 

31,367

 

 

24

%

General and administrative

31,186

 

 

23

%

 

(6,840

)

 

(305

)

 

(252

)

 

23,789

 

 

18

%

Total operating expenses

160,382

 

 

120

%

 

(17,377

)

 

(306

)

 

(252

)

 

142,447

 

 

107

%

Operating loss

$

(77,683

)

 

(58

%)

 

$

18,570

 

 

$

587

 

 

$

252

 

 

$

(58,274

)

 

(44

%)

Operating margin

(58

%)

 

 

 

14

%

 

%

 

%

 

(44

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Stock-based compensation expense-related charges included approximately $0.4 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

expense-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 expense-related charges included approximately $28.3 million of employer payroll tax-related expenses on employee stock transactions.

 

 

 

Six Months Ended July 31, 2020

 

GAAP amounts

 

GAAP amounts

as a % of

revenue

 

Stock-based

compensation

expense-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

$

227,033

 

 

94

%

 

 

 

 

 

 

 

 

 

 

Professional services and other revenue

14,927

 

 

6

%

 

 

 

 

 

 

 

 

 

 

Revenue

241,960

 

 

100

%

 

 

 

 

 

 

 

 

 

 

Year over Year % Growth

133

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product revenue

78,249

 

 

32

%

 

$

(1,228

)

 

$

(563

)

 

$

 

 

$

76,458

 

 

32

%

Cost of professional services and other revenue

14,754

 

 

6

%

 

(1,199

)

 

 

 

 

 

13,555

 

 

5

%

Total cost of revenue

93,003

 

 

38

%

 

(2,427

)

 

(563

)

 

 

 

90,013

 

 

37

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

Product gross profit

148,784

 

 

 

 

1,228

 

 

563

 

 

 

 

150,575

 

 

 

Professional services and other gross profit

173

 

 

 

 

1,199

 

 

 

 

 

 

1,372

 

 

 

Total gross profit

148,957

 

 

62

%

 

2,427

 

 

563

 

 

 

 

151,947

 

 

63

%

Product gross margin

66

%

 

 

 

%

 

%

 

%

 

66

%

 

 

Professional services and other gross margin

1

%

 

 

 

8

%

 

%

 

%

 

9

%

 

 

Total gross margin

62

%

 

 

 

1

%

 

%

 

%

 

63

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

190,540

 

 

79

%

 

(11,762

)

 

(12

)

 

 

 

178,766

 

 

74

%

Research and development

69,811

 

 

29

%

 

(11,108

)

 

 

 

 

 

58,703

 

 

24

%

General and administrative

62,692

 

 

26

%

 

(16,737

)

 

(408

)

 

(252

)

 

45,295

 

 

19

%

Total operating expenses

323,043

 

 

134

%

 

(39,607

)

 

(420

)

 

(252

)

 

282,764

 

 

117

%

Operating loss

$

(174,086

)

 

(72

%)

 

$

42,034

 

 

$

983

 

 

$

252

 

 

$

(130,817

)

 

(54

%)

Operating margin

(72

%)

 

 

 

18

%

 

%

 

%

 

(54

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Stock-based compensation expense-related charges included approximately $3.4 million of employer payroll tax-related expenses on employee stock transactions.

 

 

 

Three Months Ended July 31,

 

Six Months Ended July 31,

 

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

Revenue

 

$

272,198

 

 

$

133,145

 

 

$

501,112

 

 

$

241,960

 

 

 

 

 

 

 

 

 

 

GAAP net cash provided by (used in) operating activities

 

$

(6,111

)

 

$

(38,685

)

 

$

15,743

 

 

$

(45,277

)

Less: purchases of property and equipment

 

(3,497

)

 

(4,715

)

 

(9,927

)

 

(6,748

)

Less: capitalized internal-use software development costs

 

(2,344

)

 

(981

)

 

(4,824

)

 

(3,170

)

Non-GAAP free cash flow

 

(11,952

)

 

(44,381

)

 

992

 

 

(55,195

)

Add: net cash paid on payroll tax-related items on employee stock transactions

 

14,764

 

 

365

 

 

25,209

 

 

3,384

 

Non-GAAP adjusted free cash flow

 

$

2,812

 

 

$

(44,016

)

 

$

26,201

 

 

$

(51,811

)

Non-GAAP free cash flow margin

 

(4

%)

 

(33

%)

 

%

 

(23

%)

Non-GAAP adjusted free cash flow margin

 

1

%

 

(33

%)

 

5

%

 

(21

%)