Reaching $3.1 Billion in ARR, Snowflake is now seen as a significant tech leader in the industry. Despite previously unparalleled growth and metrics, it is now experiencing a slower growth rate at 32% with its ARR at $3.1 Billion. Legendary CEO Frank Slootman has transitioned to the role of Chairman, marking a generational shift for the company.
Despite the noticeable growth slowdown, Snowflake’s milestones are still remarkable. With a 32% growth rate, it is adding over $1 billion in new ARR annually. However, the growth and Net Revenue Retention (NRR) are showing signs of normalization at scale for the first time.
5 Interesting Learnings:
#1. NRR Remains World Class at 131%, But Down From the Previous Peak of 170%
While 131% NRR is still impressive, it has decreased from the exceptional 160%-170% it maintained previously. This decline in NRR has also impacted the revenue growth, shifting it from exceptional to very good levels.
#2. Insanely Efficient Now. 29% Free Cash Flow Margins.
Snowflake has significantly improved its efficiency with a noticeable increase in free cash flow margins from 12% to 29%. This achievement is attributed to the reduction in Sales & Marketing expenses, particularly in commissions.
#3. Adding Headcount, Just More Slowly Than Revenue Growth
Snowflake has exemplified a strategy adopted by many Cloud and SaaS companies by increasing headcount by 19% while revenue grew by 32%. This suggests that the company is managing its human resource expenses efficiently by aligning them with revenue growth.
#4. $1M+ Customers Growing the Fastest, at +39% a Year
Like many Cloud and SaaS companies, Snowflake is experiencing faster growth from its largest customers. The company now serves 461 $1M+ customers and 691 Global 2000 customers, indicating a strong presence in the enterprise market.
#5. NPS of 67. Pretty solid!
With an NPS of 67, Snowflake has achieved a commendable score in customer satisfaction. This reflects positively on the company’s reputation and customer-centric approach.
Snowflake continues to demonstrate strong growth and impressive metrics, positioning itself as a prominent player in the tech industry. Despite facing challenges, it remains a remarkable platform, now with a touch of humanity in its journey towards becoming an iconic tech company.
