Snowflake is a popular data platform company. Their enterprise data platform has become hugely popular with large organisations, globally. If you work for an organisation of over 1000 people, chances are your company is considering it as a data warehouse solution. They have great management and have been a darling of retail investors over the past few years. But it has been facing a series of net losses. Here, we explore the company’s earnings history and when we can expect to see Snowflake make money.

What is Snowflake?

Snowflake easily takes the top position for one of the most popular and well-known cloud computing-based data warehousing companies. Launched in 2014, it remains to this day as one of the most commonly used data clouds. It is built on top of the Amazon Web Services, Microsoft Azure, and Google Cloud infrastructure.

It sets itself apart from other cloud-computing data warehouses with its unique architecture and data sharing capabilities. Moreover, it provides companies with a hardware or additional software-free interface. Its architecture allows storage and computations to scale independently off each other. This means organizations can purchase and use each separately. Thus, making it easier for organizations to share data in real-time.

Earnings Over the Recent Past

Snowflake recorded one of the largest IPOs for a software company in the year 2021. The company generated a market cap of over $73.64 billion. Still, the company generated a revenue of only $334.4 million as opposed to the predicted $305.6 million.

The shares of Snowflake however increased by 13% after the organization released its third-quarter earnings for 2021. It can be noted that Snowflake saw a growth in revenue of 110% year-over-year in this third fiscal quarter.

As of October 31^st 2021, Snowflake stated that they had 5,416 customers as opposed to the 4,990 customers they had at July 31^st. According to company officials, 148 customers amounted to more than $1 million each in revenue. More importantly these corporate customers tend to stay long and they pay yearly. Snowflake’s gross margin’s are around 80% (huge compared to peers) so these large clients leave them with a solid base.

When can we Expect to See Snowflake Make Money?

Unfortunately as of 2021, Snowflake generated a net loss of $154.9 million with a loss of 51 cents per share. The company further reported a total gross margin of 61% as of July 2021.

However, the future looks bright for Snowflake with analysts predicting guidance of more than $1.06 billion. Snowflake themselves called for $1.126 billion to $1.131 billion for the 2022 fiscal year. This summed up a year-on-year growth between 103% and 104%.

Thus, with its growing popularity and reducing net losses, Snowflake is moving towards a highly profitable future by 2023-24.