Data warehouse startup Snowflake has filed for a much-anticipated initial public offering, revealing robust sales and gross profit growth but steep losses.
Snowflake’s software allows businesses to store and manage data in the cloud rather than on legacy databases, making it easier for customers to quickly access and analyze critical information across the enterprise.
“Our platform solves the decades-old problem of data silos and data governance,” Snowflake said in its IPO prospectus. “Leveraging the elasticity and performance of the public cloud, our platform enables customers to unify and query data to support a wide variety of use cases.”
According to the prospectus, the company has more than 3,100 customers, including Capital One, Sony, Office Depot, Adobe, and Dropbox, and the addressable market opportunity for its platform is about $81 billion.
Snowflake is “one of the world’s most valuable former startups that is still private,” TechCrunch said, noting that it was valued at around $12.5 billion when it raised $479 million earlier this year.
In the first disclosure of its financials, the company said revenue jumped 173.7% to $264.7 million for the fiscal year ended Jan. 31 while gross profit more than tripled to $148.2 million. Net loss for the year nearly doubled to $348.54 million but for the six months ended July 31, it fell 3.4% to $171.3 million.
“Even though there are losses, Snowflake’s 100%-plus growth rate will attract investor interest,” Kathleen Smith, principal at IPO research firm Renaissance Capital, told Reuters.
She added that the IPO market is healthy and Snowflake’s peers MongoDB, Okta, and Splunk have produced strong returns for investors this year.
Snowflake’s software runs on infrastructure provided by Amazon Web Services, Microsoft Azure, and Google Cloud Platform.
“Our costs and gross margins are significantly influenced by the prices we are able to negotiate with these public cloud providers, which in certain cases are also our competitors,” the prospectus says.
Snowflake has been run by tech industry veteran Frank Slootman since May 2019, when the former chairman and CEO of ServiceNow replaced former Microsoft executive Bob Muglia.