Snowflake (Nasdaq: SNOW) reported Q3 earnings that topped expectations by a healthy margin, and the company issued Q4 guidance that was better than expected. In premarket trading, shares are currently up more than 13% which is wiping out Wednesday's 8% loss as growth stocks were under pressure on Wall Street on concerns over the Federal Reserve's hiking timetable.
Inside the Numbers
In Q3, Snowflake reported a loss of $0.51 per share. This was a slight improvement from the company's $0.55 per share loss in last year's Q3. In terms of revenue, the company posted $334.4 million for the quarter which topped expectations of $305.6 million in sales. This was a 110% increase from last year and a slight acceleration from the 104% growth rate in Q2.
The company issued Q4 guidance between $345 million and $350 million which would equate to a growth rate between 94% and 96%. This range was also well above consensus estimates of $316 million in revenue. For the full year, Snowflake expects between $1.126 billion and $1.131 billion in product revenue which is about a 104% growth rate and also above analysts' consensus expectations of full-year revenue between $1.06 billion and $1.07 billion.
Product revenue accounted for the bulk of revenue at $313 million, a 110% increase from last year. The company's newest source of growth is its international expansion with European revenue increasing by 174% and revenue from Asian and Pacific countries more than tripling.
The company's backlog also showed impressive growth at 94% to $1.8 billion. Currently, the company has 5,400 total customers with 148 clients accounting for more than $1 million in annual revenue. Another reason for the stock's strength is its net revenue retention rate of 173% which is a validation of the company's value proposition for customers.
Snowflake's numbers were especially impressive. Product revenue jumped 110% year over year to $312.5 million. In particular, Snowflake's international expansion efforts paid off, with greater European product revenue jumping 174% and Asia-Pacific product revenue more than tripling year over year. Remaining performance obligations grew 94% to $1.8 billion. The company boasted more than 5,400 total customers, including 148 big-ticket clients with annual revenue exceeding $1 million.