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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from   to
Commission File Number: 001-39504
snow-20221031_g1.jpg
SNOWFLAKE INC.
(Exact name of registrant as specified in its charter)
Delaware
46-0636374
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
Suite 3A, 106 East Babcock Street
Bozeman, MT 59715
(Address of principal executive offices and zip code)1
(844) 766-9355
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.0001 par valueSNOWThe New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmall reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      ☐ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of November 18, 2022, there were 321.6 million shares of the registrant’s Class A common stock, par value of $0.0001 per share, outstanding.
1 We are a Delaware corporation with a globally distributed workforce and no corporate headquarters. Under the Securities and Exchange Commission's rules, we are required to designate a “principal executive office.” For purposes of this report, we have designated our office in Bozeman, Montana as our principal executive office, as that is where our Chief Executive Officer and Chief Financial Officer are based.


TABLE OF CONTENTS
Page

3

SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act), about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial condition, business strategy, and plans and objectives of management for future operations, are forward-looking statements. In some cases, forward-looking statements may be identified by words such as “anticipate,” “believe,” “continue,” “could,” “design,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “project,” “should,” “will,” “would,” or the negative of these terms or other similar expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

our expectations regarding our revenue, expenses, and other operating results, including statements relating to the portion of our remaining performance obligations that we expect to recognize as revenue in future periods;
our ability to acquire new customers and successfully retain existing customers;
our ability to increase consumption on our platform;
our ability to continue to innovate and make new features generally available to customers;
our ability to achieve or sustain our profitability;
future investments in our business, our anticipated capital expenditures, and our estimates regarding our capital requirements;
the costs and success of our sales and marketing efforts, and our ability to promote our brand;
our growth strategies for, and market acceptance of, our platform and the Data Cloud, as well as our ability to execute such strategies;
our ability to successfully integrate and realize the benefits of strategic acquisitions;
our reliance on key personnel and our ability to identify, recruit, and retain skilled personnel;
our ability to effectively manage our growth, including any international expansion;
our ability to protect our intellectual property rights and any costs associated therewith;
our expectations regarding general market conditions and the effects of those conditions, including on customer and partner activity;
our ability to compete effectively with existing competitors and new market entrants;
the growth rates of the markets in which we compete; and
the effects of the COVID-19 pandemic or other public health crises and their related public health measures on our business, the business of our customers and partners, and the economy.
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, including risks described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Other sections of this Quarterly Report on Form 10-Q may include additional factors that could harm our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors 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 to differ from those contained in, or implied by, any forward-looking statements.

4

You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report or to conform these statements to actual results or to changes in our expectations. You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this report with the understanding that our actual future results, levels of activity, performance, and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

Investors and others should note that we may announce material business and financial information to our investors using our investor relations website (investors.snowflake.com), our filings with the Securities and Exchange Commission (SEC), webcasts, press releases, and conference calls. We use these mediums, including our website, to communicate with investors and the general public about our company, our products, and other issues. It is possible that the information that we make available on our website may be deemed to be material information. We therefore encourage investors and others interested in our company to review the information that we make available on our website.


5

SELECTED RISKS AFFECTING OUR BUSINESS
Investing in our common stock involves numerous risks, including those set forth below. This summary does not contain all of the information that may be important to you, and you should read this summary together with the more detailed discussion of risks and uncertainties set forth in the section titled “Risk Factors” included elsewhere in this Quarterly Report on Form 10-Q. Below are summaries of some of these risks, any one of which could materially adversely affect our business, results of operations, and financial condition. In that event, the market price of our common stock could decline, and you could lose part or all of your investment. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. You should not interpret our disclosure of any of the following risks to imply that such risks have not already materialized.

We have experienced rapid revenue growth, which may not be indicative of our future performance, and we have a limited operating history, both of which make it difficult to forecast our future results of operations.
We may not have visibility into our future financial position and results of operations.
We have a history of operating losses and may not achieve or sustain profitability in the future.
General market conditions, volatility, or disruptions, including higher inflation, higher interest rates, and fluctuations or volatility in capital markets or foreign currency exchange rates, could have an adverse impact on our or our customers’ or partners’ businesses, which could negatively impact our financial condition or results of operations.
The markets in which we operate are highly competitive, and if we do not compete effectively, our business, financial condition, and results of operations could be harmed.
If we fail to innovate in response to changing customer needs, new technologies, or other market requirements, our business, financial condition, and results of operations could be harmed.
If we or our third-party service providers experience an actual or perceived security breach or unauthorized parties otherwise obtain access to our customers’ data, our data, or our platform, our platform may be perceived as not being secure, our reputation may be harmed, demand for our platform may be reduced, and we may incur significant liabilities.
We could suffer disruptions, outages, defects, and other performance and quality problems with our platform or with the public cloud and internet infrastructure on which it relies.
We expect fluctuations in our financial results, making it difficult to project future results, and if we fail to meet the expectations of securities analysts or investors with respect to our results of operations, our stock price could decline.
Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our products and platform.
Sales efforts to large customers involve risks that may not be present or that are present to a lesser extent with respect to sales to smaller organizations.
Unfavorable conditions in our industry or the global economy, or reductions in cloud spending, could limit our ability to grow our business and negatively affect our results of operations.

6

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

SNOWFLAKE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
October 31, 2022January 31, 2022
Assets
Current assets:
Cash and cash equivalents$819,003 $1,085,729 
Short-term investments3,123,879 2,766,364 
Accounts receivable, net394,063 545,629 
Deferred commissions, current61,738 51,398 
Prepaid expenses and other current assets160,221 149,523 
Total current assets4,558,904 4,598,643 
Long-term investments943,081 1,256,207 
Property and equipment, net145,974 105,079 
Operating lease right-of-use assets234,678 190,356 
Goodwill649,092 8,449 
Intangible assets, net196,165 37,141 
Deferred commissions, non-current133,939 124,517 
Other assets293,855 329,306 
Total assets$7,155,688 $6,649,698 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$24,757 $13,441 
Accrued expenses and other current liabilities225,321 200,664 
Operating lease liabilities, current29,263 25,101 
Deferred revenue, current1,199,701 1,157,887 
Total current liabilities1,479,042 1,397,093 
Operating lease liabilities, non-current225,013 181,196 
Deferred revenue, non-current7,333 11,180 
Other liabilities21,029 11,184 
Total liabilities1,732,417 1,600,653 
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock; $0.0001 par value per share; 200,000 shares authorized, zero shares issued and outstanding as of October 31, 2022 and January 31, 2022
  
Common stock; $0.0001 par value per share; 2,500,000 Class A shares authorized, 321,497 and 312,377 shares issued and outstanding as of October 31, 2022 and January 31, 2022, respectively; 185,461 Class B shares authorized, zero shares issued and outstanding as of each October 31, 2022 and January 31, 2022
32 31 
Additional paid-in capital7,988,829 6,984,669 
Accumulated other comprehensive loss(69,179)(16,286)
Accumulated deficit(2,508,905)(1,919,369)
Total Snowflake Inc. stockholders’ equity5,410,777 5,049,045 
Noncontrolling interest12,494  
Total stockholders’ equity5,423,271 5,049,045 
Total liabilities and stockholders’ equity$7,155,688 $6,649,698 

See accompanying notes to condensed consolidated financial statements.
7

SNOWFLAKE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended October 31,Nine Months Ended October 31,
2022202120222021
Revenue$557,028 $334,441 $1,476,647 $835,553 
Cost of revenue190,721 120,786 511,883 324,253 
Gross profit366,307 213,655 964,764 511,300 
Operating expenses:
Sales and marketing284,477 190,971 803,034 540,678 
Research and development211,387 115,900 545,933 343,783 
General and administrative76,462 64,055 218,314 189,846 
Total operating expenses572,326 370,926 1,567,281 1,074,307 
Operating loss(206,019)(157,271)(602,517)(563,007)
Interest income21,857 1,985 38,308 6,787 
Other income (expense), net(13,271)1,609 (44,672)9,867 
Loss before income taxes(197,433)(153,677)(608,881)(546,353)
Provision for (benefit from) income taxes4,009 1,179 (18,839)1,442 
Net loss(201,442)(154,856)(590,042)(547,795)
Less: net loss attributable to noncontrolling interest(506) (506) 
Net loss attributable to Snowflake Inc.$(200,936)$(154,856)$(589,536)$(547,795)
Net loss per share attributable to Snowflake Inc. Class A and Class B common stockholders—basic and diluted(1)
$(0.63)$(0.51)$(1.86)$(1.84)
Weighted-average shares used in computing net loss per share attributable to Snowflake Inc. Class A and Class B common stockholders—basic and diluted(1)
320,135 303,007 317,653 297,436 
________________
(1)On March 1, 2021, all shares of the Company’s then-outstanding Class B common stock were automatically converted into the same number of shares of Class A common stock, pursuant to the terms of the Company’s amended and restated certificate of incorporation. No additional shares of Class B common stock will be issued following such conversion. See Note 10 for further details.

See accompanying notes to condensed consolidated financial statements.
8

SNOWFLAKE INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
(unaudited)
Three Months Ended October 31,Nine Months Ended October 31,
2022202120222021
Net loss$(201,442)$(154,856)$(590,042)$(547,795)
Other comprehensive loss:
Foreign currency translation adjustments(1,108)(361)(4,158)(63)
Net change in unrealized gains (losses) on available-for-sale debt securities(20,214)(4,266)(48,735)(3,862)
Total other comprehensive loss(21,322)(4,627)(52,893)(3,925)
Comprehensive loss attributable to Snowflake Inc.$(222,764)$(159,483)$(642,935)$(551,720)

See accompanying notes to condensed consolidated financial statements.
9

SNOWFLAKE INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)
Three Months Ended October 31, 2022
Class A Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive Loss
Accumulated
Deficit
Total Snowflake Inc. Stockholders’ EquityNoncontrolling InterestTotal
Stockholders’
Equity
SharesAmount
BALANCE—July 31, 2022
319,897 $32 $7,782,117 $(47,857)$(2,307,969)$5,426,323 $$5,426,323 
Issuance of common stock upon exercise of stock options984 — 7,366 — — 7,366 — 7,366 
Issuance of common stock under employee stock purchase plan102 — 14,837 — — 14,837 — 14,837 
Issuance of common stock in connection with a business combination2 — — — — — — — 
Vesting of early exercised stock options— — 61 — — 61 — 61 
Vesting of restricted stock units786 — — — — — — — 
Shares withheld related to net share settlement of equity awards(274)— (52,507)— — (52,507)— (52,507)
Stock-based compensation— — 236,955 — — 236,955 — 236,955 
Capital contributions from noncontrolling interest holders— — — — — — 13,000 13,000 
Other comprehensive loss— — — (21,322)— (21,322)— (21,322)
Net loss— — — — (200,936)(200,936)(506)(201,442)
BALANCE—October 31, 2022
321,497 $32 $7,988,829 $(69,179)$(2,508,905)$5,410,777 $12,494 $5,423,271 

Three Months Ended October 31, 2021
Class A Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total Snowflake Inc. Stockholders’ EquityNoncontrolling InterestTotal
Stockholders’
Equity
SharesAmount
BALANCE—July 31, 2021
300,585 $30 $6,596,154 $1,141 $(1,632,360)$4,964,965 $$4,964,965 
Issuance of common stock upon exercise of stock options4,222 — 24,708 — — 24,708 24,708 
Issuance of common stock under employee stock purchase plan111 — 25,829 — — 25,829 25,829 
Vesting of early exercised stock options— — 191 — — 191 191 
Vesting of restricted stock units981 — — — — — — 
Stock-based compensation— — 150,472 — — 150,472 150,472 
Other comprehensive loss— — — (4,627)— (4,627)(4,627)
Net loss— — — — (154,856)(154,856)(154,856)
BALANCE—October 31, 2021
305,899 $30 $6,797,354 $(3,486)$(1,787,216)$5,006,682 $ $5,006,682 


10

SNOWFLAKE INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)
(in thousands)
(unaudited)
Nine Months Ended October 31, 2022
Class A Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive Loss
Accumulated
Deficit
Total Snowflake Inc. Stockholders’ EquityNoncontrolling InterestTotal
Stockholders’
Equity
SharesAmount
BALANCE—January 31, 2022
312,377 $31 $6,984,669 $(16,286)$(1,919,369)$5,049,045 $ $5,049,045 
Issuance of common stock upon exercise of stock options4,926 1 30,932 — — 30,933 — 30,933 
Issuance of common stock under employee stock purchase plan286 — 40,931 — — 40,931 — 40,931 
Issuance of common stock in connection with a business combination1,916 — 438,916 — — 438,916 — 438,916 
Issuance of common stock in connection with a business combination subject to future vesting409 — — — — — — — 
Vesting of early exercised stock options— — 183 — — 183 — 183 
Vesting of restricted stock units2,409 — — — — — — — 
Shares withheld related to net share settlement of equity awards(826)— (138,641)— — (138,641)— (138,641)
Stock-based compensation— — 631,839 — — 631,839 — 631,839 
Capital contributions from noncontrolling interest holders— — — — — — 13,000 13,000 
Other comprehensive loss— — — (52,893)— (52,893)— (52,893)
Net loss— — — — (589,536)(589,536)(506)(590,042)
BALANCE—October 31, 2022
321,497 $32 $7,988,829 $(69,179)$(2,508,905)$5,410,777 $12,494 $5,423,271 

Nine Months Ended October 31, 2021
Class A and Class B
Common Stock(1)
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total Snowflake Inc. Stockholders’ EquityNoncontrolling InterestTotal
Stockholders’
Equity
SharesAmount
BALANCE—January 31, 2021
287,918 $28 $6,175,425 $439 $(1,239,421)$4,936,471 $ $4,936,471 
Issuance of common stock upon exercise of stock options15,279 2 90,374 — — 90,376 — 90,376 
Issuance of common stock under employee stock purchase plan370 — 52,227 — — 52,227 — 52,227 
Vesting of early exercised stock options— — 614 — — 614 — 614 
Vesting of restricted stock units2,332 — — — — — — — 
Stock-based compensation— — 478,714 — — 478,714 — 478,714 
Other comprehensive loss— — — (3,925)— (3,925)— (3,925)
Net loss— — — — (547,795)(547,795)— (547,795)
BALANCE—October 31, 2021
305,899 $30 $6,797,354 $(3,486)$(1,787,216)$5,006,682 $ $5,006,682 
________________
(1)On March 1, 2021, all shares of the Company’s then-outstanding Class B common stock were automatically converted into the same number of shares of Class A common stock, pursuant to the terms of the Company’s amended and restated certificate of incorporation. No additional shares of Class B common stock will be issued following such conversion. See Note 10 for further details.
See accompanying notes to condensed consolidated financial statements.
11

SNOWFLAKE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended October 31,
20222021
Cash flows from operating activities:
Net loss$(590,042)$(547,795)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization43,809 15,586 
Non-cash operating lease costs33,579 25,895 
Amortization of deferred commissions41,525 26,824 
Stock-based compensation, net of amounts capitalized610,837 459,392 
Net amortization of premiums on investments
12,331 36,938 
Net unrealized losses (gains) on strategic investments in equity securities45,096 (8,515)
Deferred income tax(25,277) 
Other678 2,535 
Changes in operating assets and liabilities, net of effects of business combinations:
Accounts receivable150,723 39,142 
Deferred commissions(63,627)(52,892)
Prepaid expenses and other assets13,169 (112,798)
Accounts payable10,304 4,591 
Accrued expenses and other liabilities27,727 43,106 
Operating lease liabilities(29,176)(24,758)
Deferred revenue46,667 124,030 
Net cash provided by operating activities328,323 31,281 
Cash flows from investing activities:
Purchases of property and equipment(19,766)(12,209)
Capitalized internal-use software development costs(17,319)(8,612)
Cash paid for business combinations, net of cash and cash equivalents acquired(352,555) 
Purchases of intangible assets(700)(11,182)
Purchases of investments(2,796,167)(3,042,396)
Sales of investments58,813 407,003 
Maturities and redemptions of investments2,594,593 2,610,429 
Net cash used in investing activities(533,101)(56,967)
Cash flows from financing activities:
Proceeds from exercise of stock options31,095 90,444 
Proceeds from issuance of common stock under employee stock purchase plan40,931 52,227 
Taxes paid related to net share settlement of equity awards(135,766) 
Capital contributions from noncontrolling interest holders13,000  
Payments of deferred purchase consideration for a business combination(1,800) 
Net cash provided by (used in) financing activities(52,540)142,671 
12

Nine Months Ended October 31,
20222021
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(9,390)21 
Net increase (decrease) in cash, cash equivalents, and restricted cash(266,708)117,006 
Cash, cash equivalents, and restricted cash—beginning of period1,102,534 835,193 
Cash, cash equivalents, and restricted cash—end of period$835,826 $952,199 
Supplemental disclosures of non-cash investing and financing activities:
Property and equipment included in accounts payable and accrued expenses$5,841 $3,115 
Stock-based compensation included in capitalized software development costs$20,295 $18,923 
Issuance of common stock in connection with a business combination$438,916 $ 
Purchases of intangible assets included in accrued expenses and other liabilities$ $4,544 
Unpaid taxes related to net share settlement of equity awards included in accrued expenses and other current liabilities$2,874 $ 
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents$819,003 $935,217 
Restricted cash—included in other assets and prepaid expenses and other current assets16,823 16,982 
Total cash, cash equivalents, and restricted cash$835,826 $952,199 

See accompanying notes to condensed consolidated financial statements.
13

SNOWFLAKE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1. Organization and Description of Business

Snowflake Inc. (Snowflake or the Company) provides a cloud-based data platform, which enables customers to consolidate data to drive meaningful business insights, build data-driven applications, and share data. The Company provides its platform through a customer-centric, consumption-based business model, only charging customers for the resources they use. Through its platform, the Company delivers the Data Cloud, a network where Snowflake customers, partners, data providers, and data consumers can break down data silos and derive value from rapidly growing data sets in secure, governed, and compliant ways. Snowflake was incorporated in the state of Delaware on July 23, 2012.

2. Basis of Presentation and Summary of Significant Accounting Policies

Fiscal Year

The Company’s fiscal year ends on January 31. For example, references to fiscal 2023 refer to the fiscal year ended January 31, 2023.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and applicable rules and regulations of the U.S. Securities and Exchange Commission (SEC) regarding interim financial reporting. Accordingly, they do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with GAAP. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2022, which was filed with the SEC on March 30, 2022.

In management’s opinion, these unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of October 31, 2022 and the results of operations for the three and nine months ended October 31, 2022 and 2021, and cash flows for the nine months ended October 31, 2022 and 2021. The condensed balance sheet as of January 31, 2022 was derived from the audited financial statements but does not include all disclosures required by GAAP. The results of operations for the three and nine months ended October 31, 2022 are not necessarily indicative of the results to be expected for the full year or any other future interim or annual period.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Snowflake Inc., its wholly-owned subsidiaries, and a majority-owned subsidiary in which the Company has a controlling financial interest. All intercompany transactions and balances have been eliminated in consolidation. The Company records noncontrolling interest in its condensed consolidated financial statements to recognize the minority ownership interest in its majority-owned subsidiary. Profits and losses of the majority-owned subsidiary are attributed to controlling and noncontrolling interests using the hypothetical liquidation at book value method.

Segment Information

The Company has a single operating and reportable segment. The Company’s chief operating decision maker is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. For information regarding the Company’s revenue by geographic area, see Note 3.

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The following table presents the Company’s long-lived assets, comprising property and equipment, net and operating lease right-of-use assets, by geographic area (in thousands):
October 31, 2022January 31, 2022
United States$322,199 $272,895 
Other(1)
58,453 22,540 
Total$380,652 $295,435 
________________
(1)No individual country outside of the United States accounted for more than 10% of the Company’s long-lived assets as of October 31, 2022 and January 31, 2022.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Such estimates include, but are not limited to, stand-alone selling prices (SSP) for each distinct performance obligation, internal-use software development costs, the expected period of benefit for deferred commissions, the fair value of intangible assets acquired in business combinations, the useful lives of long-lived assets, the carrying value of operating lease right-of-use assets, stock-based compensation, accounting for income taxes, and the fair value of investments in marketable and non-marketable securities.

The Company bases its estimates on historical experience and also on assumptions that management considers reasonable. These estimates are assessed on a regular basis; however, actual results could differ from these estimates.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are discussed in “Note 2 – Basis of Presentation and Summary of Significant Accounting Policies” of the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2022, which was filed with the SEC on March 30, 2022. There have been no significant changes to these policies during the nine months ended October 31, 2022, except for the addition of the derivative financial instruments accounting policy with respect to the Company’s foreign currency forward contracts entered into during the nine months ended October 31, 2022.

Derivative Financial Instruments

During the nine months ended October 31, 2022, the Company began using derivative financial instruments to manage its exposure to certain foreign currency exchange risks associated with certain intercompany balances denominated in currencies other than the U.S. dollar. These derivative financial instruments consist of deliverable foreign currency forward contracts entered into with high-quality financial institutions that have investment-grade ratings with maturities of one month or less and are not designated as hedging instruments. As such, all changes in the fair value of these derivative instruments are recorded in other income (expense), net on the condensed consolidated statements of operations, and are intended to offset the foreign currency transaction gains or losses associated with the underlying intercompany balances. The resulting derivative assets and liabilities are measured at fair value using Level 2 inputs and presented as prepaid expenses and other current assets and accrued expenses and other current liabilities, as applicable, on the condensed consolidated balance sheets. Cash flows at settlement of such foreign currency forward contracts are classified as operating activities in the condensed consolidated statement of cash flows.

As of October 31, 2022, all of the Company’s derivative assets and liabilities were settled, and the related realized gains (losses) were not material for the three and nine months ended October 31, 2022.

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3. Revenue, Accounts Receivable, Deferred Revenue, and Remaining Performance Obligations

Disaggregation of Revenue

Revenue consists of the following (in thousands):

Three Months Ended October 31,Nine Months Ended October 31,
2022202120222021
Product revenue$522,752 $312,458 $1,383,454 $780,911 
Professional services and other revenue34,276 21,983 93,193 54,642 
Total$557,028 $334,441 $1,476,647 $835,553 

Revenue by geographic area, based on the location of the Company’s customers (or end-customers under reseller arrangements), was as follows (in thousands):

Three Months Ended October 31,Nine Months Ended October 31,
2022202120222021
Americas:
United States$441,432 $265,605 $1,171,641 $669,172 
Other Americas(1)
11,637 7,703 31,316 18,860 
EMEA(1)(2)
79,326 47,671 207,010 117,149 
Asia-Pacific and Japan(1)
24,633 13,462 66,680 30,372 
Total$557,028 $334,441 $1,476,647 $835,553 
________________
(1)No individual country in these areas represented more than 10% of the Company’s revenue for all periods presented.
(2)Includes Europe, the Middle East, and Africa.

Accounts Receivable, Net

As of October 31, 2022 and January 31, 2022, allowance for credit losses of $2.2 million and $1.3 million, was included in the Company’s accounts receivable, net balance, respectively.

Significant Customers

For purposes of assessing the concentration of credit risk and significant customers, a group of customers under common control or customers that are affiliates of each other are regarded as a single customer. As of October 31, 2022 and January 31, 2022, there were no customers that represented 10% or more of the Company’s accounts receivable, net balance. Additionally, there were no customers that represented 10% or more of the Company’s revenue for each of the three and nine months ended October 31, 2022 and 2021.

Deferred Revenue

Revenue recognized for the three months ended October 31, 2022 from amounts included in deferred revenue as of July 31, 2022 was $427.4 million. Revenue recognized for the three months ended October 31, 2021 from amounts included in deferred revenue as of July 31, 2021 was $255.0 million.

Revenue recognized for the nine months ended October 31, 2022 from amounts included in deferred revenue as of January 31, 2022 was $841.8 million. Revenue recognized for the nine months ended October 31, 2021 from amounts included in deferred revenue as of January 31, 2021 was $464.0 million.

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Remaining Performance Obligations

Remaining performance obligations (RPO) represent the amount of contracted future revenue that has not yet been recognized, including (i) deferred revenue and (ii) non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods. The Company’s RPO excludes performance obligations from on-demand arrangements as there are no minimum purchase commitments associated with these arrangements, and certain time and materials contracts that are billed in arrears. Portions of RPO that are not yet invoiced and are denominated in foreign currencies are revalued into U.S. dollars each period based on the applicable period-end exchange rates.

As of October 31, 2022, the Company’s RPO was $3.0 billion, of which the Company expects approximately 55% to be recognized as revenue in the twelve months ending October 31, 2023 based on historical customer consumption patterns. However, the amount and timing of revenue recognition are generally dependent upon customers’ future consumption, which is inherently variable at customers’ discretion and can extend beyond the original contract term in cases where customers are permitted to roll over unused capacity to future periods, generally on the purchase of additional capacity at renewal.

4. Cash Equivalents and Investments

The following is a summary of the Company’s cash equivalents, short-term investments, and long-term investments on the condensed consolidated balance sheets (in thousands):