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Every once in a while, a tech company comes on the scene and stirs a massive debate about its future in the market.

As a cub reporter, back in 1990, I covered that conversation over Cisco Systems. Companies had PCs for all their workers, but did they really need to connect them in networks? Turns out, yes. The next decade, Google came along promising its revenue would rise as fast as Internet growth. Indeed. And Facebook’s challenge when it went public in 2012 was whether it would be wiped out by smartphones. Ha ha.

That’s not to say that every giant reaches its projected height. Whether it’s Groupon or AT&T Wireless or the dreaded eToys, sometimes the hype isn’t justified.

Today, the company in the crosshairs is Snowflake, the inventor of the cloud database. I’ve raved about Snowflake before, which also impressed—and drew investment dollars—from Warren Buffett and Marc Benioff alongside its IPO. The company has a compelling Silicon Valley origin story, and revolutionizing the use of databases seems like pretty heady stuff. But Snowflake also has much competition from Amazon, Google, and others. And its stock market value is nearing $100 billion while it’s still losing a lot of money every quarter.

This week was Snowflake’s first quarterly report since going public. Customers, who pay by the second to analyze their data stored with Snowflake, pushed sales up 119% to $160 million. For a company still in growth mode, that generated a net loss of $1.01 per share. Both numbers were a little better than the average analyst forecast, but as we saw with Zoom and Peloton and other tech stocks, that wasn’t enough to impress the first wave of rapid traders, human and algorithmic. Snowflake’s shares initially traded down 6%.

Then investors (and reporters) delved into the details. New customers who sign up with Snowflake buy credits, almost like Amazon gift cards, that they can spend later when they actually start to use the service. Snowflake reports those credits not as revenue but in a separate category called “remaining performance obligations.” And those RPOs jumped 240% to almost $1 billion. Well-compensated CEO Frank Slootman also revealed to analysts that Snowflake had recently gotten better terms from Amazon and Microsoft for the massive amounts of cloud computing services it buys from them.

“We get really big discounts,” Slootman told me in a Zoom call from his home office on Thursday. “It’s a function of contract scale. It’s not because we’re so good-looking or anything else,” he joked. Instead of being hurt by its relationships with the big cloud providers, as some feared before the IPO, Snowflake is prospering.

On Thursday morning, the stock rallied and hit an all-time high, closing at $339.89, a 16% gain and almost triple its IPO price of $120 on September 16.

Why the run-up? In addition to its RPOs, Snowflake is expanding into new areas for analysis such as unstructured data. Those are the vast collections of images or PDF files or other items that companies have accumulated without much organization or metadata. “Our world is getting overrun with unstructured data in terms of video and audio and PDFs,” Slootman says. “It’s not easy. We have to reinvent things…but this is what we fight to do, we love it.”

Shareholders are hoping they keep on fighting, that’s for sure.

Aaron Pressman
@ampressman
aaron.pressman@fortune.com

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On the latest episode of Brainstorm podcast, we discuss how Elon Musk is transforming one industry after another—and why he’s Fortune’s Businessperson of the Year. Brainstorm’s Brian O’Keefe and Michal Lev-Ram speak with Fortune‘s Andrew Nusca about what drives Musk. They also chat with GM’s Ken Morris, VP of Electric and Autonomous Vehicles. While Musk’s Tesla may have lit the fire under the electric vehicle market, the scale of GM means it could put many more drivers into environmentally-friendly cars. Listen to the episode here





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