10-Q 1 snow-20220430.htm 10-Q snow-20220430
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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 April 30, 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-20220430_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 May 13, 2022, there were 318.1 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

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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;
the effects of the ongoing 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;
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; and
the growth rates of the markets in which we compete.
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.
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.
The ongoing COVID-19 pandemic could have an adverse impact on our business, operations, and the markets and communities in which we, our partners, and customers operate.
General market conditions, volatility, or disruptions could have an adverse impact on our or our customers’ or partners’ businesses, which could negatively impact our financial condition or 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)
April 30, 2022January 31, 2022
Assets
Current assets:
Cash and cash equivalents$1,063,401 $1,085,729 
Short-term investments2,751,679 2,766,364 
Accounts receivable, net277,559 545,629 
Deferred commissions, current53,943 51,398 
Prepaid expenses and other current assets195,151 149,523 
Total current assets4,341,733 4,598,643 
Long-term investments1,212,378 1,256,207 
Property and equipment, net118,611 105,079 
Operating lease right-of-use assets188,946 190,356 
Goodwill502,614 8,449 
Intangible assets, net181,851 37,141 
Deferred commissions, non-current124,340 124,517 
Other assets352,226 329,306 
Total assets$7,022,699 $6,649,698 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$18,442 $13,441 
Accrued expenses and other current liabilities185,281 200,664 
Operating lease liabilities, current27,298 25,101 
Deferred revenue, current1,132,697 1,157,887 
Total current liabilities1,363,718 1,397,093 
Operating lease liabilities, non-current179,251 181,196 
Deferred revenue, non-current10,434 11,180 
Other liabilities11,302 11,184 
Total liabilities1,564,705 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 April 30, 2022 and January 31, 2022
  
Common stock; $0.0001 par value per share; 2,500,000 Class A shares authorized, 317,814 and 312,377 shares issued and outstanding as of April 30, 2022 and January 31, 2022, respectively; 185,461 Class B shares authorized, zero shares issued and outstanding as of each April 30, 2022 and January 31, 2022
32 31 
Additional paid-in capital7,589,712 6,984,669 
Accumulated other comprehensive loss(46,587)(16,286)
Accumulated deficit(2,085,163)(1,919,369)
Total stockholders’ equity5,457,994 5,049,045 
Total liabilities and stockholders’ equity$7,022,699 $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 April 30,
20222021
Revenue$422,371 $228,914 
Cost of revenue147,930 97,346 
Gross profit274,441 131,568 
Operating expenses:
Sales and marketing243,912 166,804 
Research and development150,798 109,796 
General and administrative68,497 60,563 
Total operating expenses463,207 337,163 
Operating loss(188,766)(205,595)
Interest income4,759 2,612 
Other expense, net(8,481)(488)
Loss before income taxes(192,488)(203,471)
Benefit from income taxes(26,694)(251)
Net loss$(165,794)$(203,220)
Net loss per share attributable to Class A and Class B common stockholders—basic and diluted(1)
$(0.53)$(0.70)
Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders—basic and diluted(1)
314,361 291,386 
________________
(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 April 30,
20222021
Net loss$(165,794)$(203,220)
Other comprehensive loss:
Foreign currency translation adjustments(1,976)352 
Net change in unrealized losses on available-for-sale debt securities(28,325)(425)
Total other comprehensive loss(30,301)(73)
Comprehensive loss$(196,095)$(203,293)

See accompanying notes to condensed consolidated financial statements.
9

SNOWFLAKE INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)
Three Months Ended April 30, 2022
Class A Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
BALANCE—January 31, 2022
312,377 $31 $6,984,669 $(16,286)$(1,919,369)$5,049,045 
Issuance of common stock upon exercise of stock options2,448 1 15,129 — — 15,130 
Issuance of common stock under employee stock purchase plan184 — 26,094 — — 26,094 
Issuance of common stock in connection with a business combination1,840 — 438,916 — — 438,916 
Issuance of common stock in connection with a business combination subject to future vesting409 — — — — — 
Vesting of early exercised stock options— — 61 — — 61 
Vesting of restricted stock units848 — — — — — 
Shares withheld related to net share settlement of equity awards(292)— (54,145)— — (54,145)
Stock-based compensation— — 178,988 — — 178,988 
Other comprehensive loss— — — (30,301)— (30,301)
Net loss— — — — (165,794)(165,794)
BALANCE—April 30, 2022
317,814 $32 $7,589,712 $(46,587)$(2,085,163)$5,457,994 
Three Months Ended April 30, 2021
Class A and Class B
Common Stock(1)
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
BALANCE—January 31, 2021
287,918 $28 $6,175,425 $439 $(1,239,421)$4,936,471 
Issuance of common stock upon exercise of stock options7,082 2 41,215 — — 41,217 
Issuance of common stock under employee stock purchase plan259 — 26,398 — — 26,398 
Vesting of early exercised stock options— — 215 — — 215 
Vesting of restricted stock units531 — — — — — 
Stock-based compensation— — 157,313 — — 157,313 
Other comprehensive loss— — — (73)— (73)
Net loss— — — — (203,220)(203,220)
BALANCE—April 30, 2021
295,790 $30 $6,400,566 $366 $(1,442,641)$4,958,321 
________________
(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.
10

SNOWFLAKE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended April 30,
20222021
Cash flows from operating activities:
Net loss$(165,794)$(203,220)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization9,941 4,684 
Non-cash operating lease costs10,091 8,509 
Amortization of deferred commissions13,201 8,316 
Stock-based compensation, net of amounts capitalized172,493 151,014 
Net amortization of premiums on investments8,198 13,019 
Net unrealized losses on strategic investments in marketable equity securities8,859  
Deferred income tax(26,664) 
Other1,761 1,214 
Changes in operating assets and liabilities, net of effects of a business combination:
Accounts receivable266,656 127,179 
Deferred commissions(16,718)(14,749)
Prepaid expenses and other assets(57,535)(54,357)
Accounts payable4,158 (1,245)
Accrued expenses and other liabilities(14,217)(6,567)
Operating lease liabilities(8,376)(7,833)
Deferred revenue(21,441)(4,110)
Net cash provided by operating activities184,613 21,854 
Cash flows from investing activities:
Purchases of property and equipment(7,413)(6,430)
Capitalized internal-use software development costs(4,804)(2,480)
Cash paid for a business combination, net of cash and cash equivalents acquired(177,925) 
Purchases of intangible assets (10,460)
Purchases of investments(897,291)(1,145,670)
Sales of investments10,974 384,383 
Maturities and redemptions of investments886,667 516,588 
Net cash used in investing activities(189,792)(264,069)
Cash flows from financing activities:
Proceeds from exercise of stock options15,276 41,402 
Proceeds from issuance of common stock under employee stock purchase plan26,094 26,398 
Taxes paid related to net share settlement of equity awards(53,216) 
Net cash provided by (used in) financing activities(11,846)67,800 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(5,098)19 
Net decrease in cash, cash equivalents, and restricted cash(22,123)(174,396)
Cash, cash equivalents, and restricted cash—beginning of period1,102,534 835,193 
Cash, cash equivalents, and restricted cash—end of period$1,080,411 $660,797 
11

Three Months Ended April 30,
20222021
Supplemental disclosures of non-cash investing and financing activities
Property and equipment included in accounts payable and accrued expenses$4,782 $3,469 
Stock-based compensation included in capitalized software development costs$6,291 $6,210 
Issuance of common stock in connection with a business combination$438,916 $ 
Purchases of intangible assets included in accrued expenses and other liabilities$ $5,039 
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents$1,063,401 $644,674 
Restricted cash—included in other assets and prepaid expenses and other current assets17,010 16,123 
Total cash, cash equivalents, and restricted cash$1,080,411 $660,797 

See accompanying notes to condensed consolidated financial statements.
12

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 April 30, 2022 and the results of operations for the three months ended April 30, 2022 and 2021, and cash flows for the three months ended April 30, 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 months ended April 30, 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. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

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.

13

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):
April 30, 2022January 31, 2022
United States$285,705 $272,895 
Other21,852 22,540 
Total$307,557 $295,435 

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. In addition, the Company assessed the impact of COVID-19 on the estimates and assumptions and determined there was no material impact.
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 three months ended April 30, 2022.

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

Revenue consists of the following (in thousands):

Three Months Ended April 30,
20222021
Product revenue$394,434 $213,830 
Professional services and other revenue27,937 15,084 
Total$422,371 $228,914 

14

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 April 30,
20222021
Americas:
United States$335,925 $186,185 
Other Americas(1)
9,126 5,020 
EMEA(1)(2)
58,018 30,174 
Asia-Pacific and Japan(1)
19,302 7,535 
Total$422,371 $228,914 
________________
(1)No individual country in these areas represented more than 10% of the Company’s revenue for all periods presented.
(2)Europe, the Middle East and Africa

Accounts Receivable, Net

As of April 30, 2022 and January 31, 2022, allowance for credit losses of $0.9 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 April 30, 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 months ended April 30, 2022 and 2021.

Deferred Revenue

Revenue recognized for the three months ended April 30, 2022 from amounts included in deferred revenue as of January 31, 2022 was $339.1 million. Revenue recognized for the three months ended April 30, 2021 from amounts included in deferred revenue as of January 31, 2021 was $187.0 million.

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 USD each period based on the applicable period-end exchange rates.

As of April 30, 2022, the Company’s RPO was $2.6 billion, of which the Company expects approximately 53% to be recognized as revenue in the twelve months ending April 30, 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.

15

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):

April 30, 2022
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Cash equivalents:
Money market funds$744,931 $ $ $744,931 
Commercial paper98,852 1 (14)98,839 
Corporate notes and bonds13,545  (2)13,543 
Total cash equivalents857,328 1 (16)857,313 
Investments:
Corporate notes and bonds2,481,897 23 (31,188)2,450,732 
Commercial paper776,878  (3,255)773,623 
U.S. government and agency securities597,500 125 (8,990)588,635 
Certificates of deposit151,467 42 (442)151,067 
Total investments4,007,742 190 (43,875)3,964,057 
Total cash equivalents and investments$4,865,070 $191 $(43,891)$4,821,370 

January 31, 2022
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Cash equivalents:
Money market funds$722,492 $ $ $722,492 
Commercial paper77,795 1 (2)77,794 
U.S. government securities36,997  (2)36,995 
Corporate notes and bonds7,950  (1)7,949 
Total cash equivalents845,234 1 (5)845,230 
Investments:
Corporate notes and bonds2,610,010 91 (12,062)2,598,039 
Commercial paper884,376 81 (821)883,636 
U.S. government and agency securities439,449 28 (2,558)436,919 
Certificates of deposit104,108 4 (135)103,977 
Total investments4,037,943 204 (15,576)4,022,571 
Total cash equivalents and investments$4,883,177 $205 $(15,581)$4,867,801 

The Company included $14.3 million and $14.1 million of interest receivable in prepaid expenses and other current assets on the condensed consolidated balance sheets as of April 30, 2022 and January 31, 2022, respectively. The Company did not recognize an allowance for credit losses against interest receivable as of April 30, 2022 and January 31, 2022 because such potential losses were not material.
16


As of April 30, 2022, the contractual maturities of the Company’s available-for-sale marketable debt securities did not exceed 36 months. The estimated fair values of available-for-sale marketable debt securities, by remaining contractual maturity, are as follows (in thousands):

April 30, 2022
Estimated
Fair Value
Due within 1 year$2,864,061 
Due in 1 year to 3 years1,212,378 
Total$4,076,439 

The following tables show the fair values of, and the gross unrealized losses on, the Company’s available-for-sale marketable debt securities, classified by the length of time that the securities have been in a continuous unrealized loss position and aggregated by investment type, on the condensed consolidated balance sheets (in thousands):

April 30, 2022
Less than 12 Months12 Months or GreaterTotal
Fair ValueGross
Unrealized
Losses
Fair ValueGross
Unrealized
Losses
Fair ValueGross
Unrealized
Losses
Cash equivalents:
Commercial paper$91,794 $(14)$ $ $91,794 $(14)
Corporate notes and bonds13,343 (2)  13,343 (2)
Total cash equivalents105,137 (16)  105,137 (16)
Investments:
Corporate notes and bonds2,366,492 (30,842)25,832 (346)2,392,324 (31,188)
Commercial paper773,377 (3,255)  773,377 (3,255)
U.S. government and agency securities452,886 (8,688)13,698 (302)466,584 (8,990)
Certificates of deposit108,223 (442)  108,223 (442)
Total investments3,700,978 (43,227)39,530 (648)3,740,508 (43,875)
Total cash equivalents and investments$3,806,115 $(43,243)$39,530 $(648)$3,845,645 $(43,891)

17

January 31, 2022
Less than 12 Months12 Months or GreaterTotal
Fair ValueGross
Unrealized
Losses
Fair ValueGross
Unrealized
Losses
Fair ValueGross
Unrealized
Losses
Cash equivalents:
Commercial paper$55,819 $(2)$ $ $55,819 $(2)
U.S. government securities36,995 (2)  36,995 (2)
Corporate notes and bonds7,629 (1)  7,629 (1)
Total cash equivalents100,443 (5)  100,443 (5)
Investments:
Corporate notes and bonds2,378,956 (12,044)8,935 (18)2,387,891 (12,062)
Commercial paper653,827 (821)  653,827 (821)
U.S. government and agency securities334,980 (2,558)  334,980 (2,558)
Certificates of deposit49,118 (135)  49,118 (135)
Total investments3,416,881 (15,558)8,935 (18)3,425,816 (15,576)
Total cash equivalents and investments$3,517,324 $(15,563)$8,935 $(18)$3,526,259 $(15,581)

For available-for-sale marketable debt securities with unrealized loss positions, the Company does not intend to sell these securities and it is more likely than not that the Company will hold these securities until maturity or a recovery of the cost basis. The decline in fair value of these securities due to credit related factors was not material as of April 30, 2022 and January 31, 2022.

See Note 5 for information regarding the Company’s strategic investments.

5. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

18

The following table presents the fair value hierarchy for the Company’s assets measured at fair value on a recurring basis as of April 30, 2022 (in thousands):

Level 1
Level 2
Total
Cash equivalents:
Money market funds$744,931 $ $744,931 
Commercial paper 98,839 98,839 
Corporate notes and bonds 13,543 13,543 
Short-term investments:
Corporate notes and bonds 1,621,164 1,621,164 
Commercial paper 773,623 773,623 
U.S. government and agency securities 206,221 206,221 
Certificates of deposit 150,671 150,671 
Long-term investments:
Corporate notes and bonds 829,568 829,568 
U.S. government and agency securities 382,414 382,414 
Certificates of deposit 396 396 
Total
$744,931 $4,076,439 $4,821,370 

The following table presents the fair value hierarchy for the Company’s assets measured at fair value on a recurring basis as of January 31, 2022 (in thousands):

Level 1
Level 2
Total
Cash equivalents:
Money market funds$722,492 $ $722,492 
Commercial paper 77,794 77,794 
U.S. government securities 36,995 36,995 
Corporate notes and bonds 7,949 7,949 
Short-term investments:
Corporate notes and bonds 1,662,436 1,662,436 
Commercial paper 883,636 883,636 
U.S. government and agency securities 116,712 116,712 
Certificates of deposit 103,580 103,580 
Long-term investments:
Corporate notes and bonds 935,603 935,603 
U.S. government and agency securities 320,207 320,207 
Certificates of deposit 397 397 
Total
$722,492 $4,145,309 $4,867,801 

The Company determines the fair value of its security holdings based on pricing from the Company’s service providers and market prices from industry-standard independent data providers. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs), such as yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures.

19

Strategic Investments

The tables above do not include the Company’s strategic investments in non-marketable equity securities, which are recorded at fair value on a non-recurring basis using the Measurement Alternative, or the Company's strategic investments in marketable equity securities and non-marketable debt securities, which are recorded at fair value on a recurring basis.

The non-marketable equity and debt securities that the Company holds are valued using significant unobservable inputs or data in an inactive market. As a result, the Company classifies these assets as Level 3 within the fair value hierarchy. The estimation of fair value for the Company’s non-marketable equity securities requires the use of an observable transaction price and other unobservable inputs, including the volatility, rights, and obligations of the securities the Company holds. The marketable equity securities that the Company holds are valued using the quoted market price and are classified as Level 1 within the fair value hierarchy.

The following table presents the fair value hierarchy for the Company’s strategic investments measured at fair value as of April 30, 2022 (in thousands):

Level 1Level 3Total
Equity securities: