Snowflake's main specialization is data storage in the cloud. The platform combines data from a large number of sources, so it is considered almost universal. The main advantage of the site is flexibility and adaptability. If the volume of information grows, then the system begins to narrow, and vice versa. This allows consumers to adjust their own expenses to the variability of external factors, significantly saving on this. The total capitalization of the company is 78.5 billion dollars.
The main field of activity of the company is concentrated in the States, in addition, the company offers an extensive list of services to other countries, including France, Germany, the Netherlands, Australia and others.
The basis of the company's earnings is the implementation of access to the site, it is this segment that brings the company up to 95% of revenue. Additionally, approximately 5% – consulting services.
The concern is slowly but surely expanding its own customer base, and at the end of last year the number of active users approached 5501 enterprises, which is almost half as much as for the same period in 2020. According to statistics, about 148 consumers spent $1 million or more on the company's services. Moreover, the growth trend of such consumers remains stable, and only for the period of 2021 it has grown by 128%. Today, the concern serves almost 50% of those who are on the first steps in the Fortune 500 list.
After the additional issue of shares in 2020, the company's revenue grows by exactly 100% every next quarter. However, past successes cannot always be considered an indicator of future ones. However, the Snowflake business still has a number of undeniable advantages.
All the advantages of Snowflake and business prospects
Today, a huge number of media companies have discovered access to the Snowflake database. Here they have the opportunity to view hundreds of sources without forming their own ultra-efficient data pipelines. If you become a Snowflake customer, you get the opportunity to use the option of exchanging data with other consumers of enterprise services, and this is especially attractive.
It is the above advantage that can be considered fundamental for the company. The more customers come to the platform, the greater the range of customer interests the platform covers, and the more attention users pay to it.
The longer you are an active user of the system, the more valuable the information that is offered to you. Those who really need the listed data have long appreciated the uniqueness of the service, and are not going to leave it.
By 2030, the company has a plan to reach an income of $10 billion, and watching the market grow, we do not see anything surprising in this. To achieve this goal, the issuer only needs to show financial growth of 40% annually.
Snowflake management is confident that it will be easy to achieve 30% of annual revenue over the coming years. The same applies to the free margin of 15%.
About the competition
Perhaps one of the most important risks of an enterprise is the loss of competitive ability, and these forecasts may well come true.
Amazon and Google services are still on the approaches to the peaks of Snowflake. The most real competitor today is Databricks. The latter represents information services for large databases and has already scheduled the time of the IPO. Another serious rival is the GreenLake platform from Hewlett Packard Enterprise.
As of Q3 2021, the number of active users of the enterprise increased by 51%, or 5416 units. In addition, those customers who were already among the regular ones began to spend 73% more money on the concern's services. As a result of the growth of client investments and the arrival of new consumers, the company noticed an increase in the sales rate by 110% per year. The group's revenue in 2021 approached $1 billion, and the generated free cash flow was $4.4 million.
According to the company's calculations, the targeted market amounted to $90 billion. This is a global number in comparison with the total revenue of the issuer for the last year. With a fairly impressive demand, the company is able to get the lion's share of this market. By the way, the company's regular customers include such business giants as BlackRock, Adobe and Instacart. According to the management of other large concerns, many of them are already considering connecting to the platform.
Snowflake released the report for the 4th quarter of 2021 on March 2. It is noteworthy that almost immediately the assets of the enterprise fell in price by 30%. Investors were not thrilled with the slowly growing financial indicators of the issuer, which fell significantly compared to the same period in 2019.
The total loss of the company reached $0.43, the revenue figure reached $383.8 million. Expectations for the last item were $372.6 million. Revenue increased by 101% in the last reporting period, and in the past this figure was equal to 110%. Snowflake reported a loss of $132 million, which is almost $199 million lower in the same quarter of the completed year.
Adjusted part approx. in the amount of 70%, it has become less than the expected 7-9%, even if it has increased by almost 62% over the past couple of years. Today, sellers are putting pressure on the price of the asset, so you should refrain from buying for now.
Against the background of a decrease in financial activity and the effectiveness of the entire technical segment, the assets of Salesforce have fallen in price. However, if we do not take into account the current negative trends in this regard, then in the long-term prospects of the enterprise are quite encouraging. There is an explanation for this.
The company supplies cloud services that help corporations to establish interaction with consumers, increasing the size of their own sales. CRM has a lot of visualization systems, functions in the segment of services, marketing in the field of data analysis. If you are a businessman and need to collect and store data about where and how your consumer makes purchases, then you just need to become a partner of the enterprise.
In 2020, the company was included in the Dow Jones index, taking the place of Exxon Mobil. In mid-autumn of the same year, it acquired the Canadian company Mobify, operating in the field of e-commerce for retailers in the States and states of Europe, Japan, etc. As a result, all of the above has increased the efficiency of Salesforce, increasing the conversion of services, and increasing their profitability. In the same period, the company covered $1.3 billion in debt for the Vlocity mobile software generator.
What does Salesforce mean in the world?
There are concerns that are city–forming, there are - regional or national scale. In contrast to them, Salesforce operates everywhere. According to forecasts, by 2026, 9.3 million jobs have been created at this enterprise alone, and its innovations will bring in $1.6 trillion in revenue.
If we take into account the opinion of experts, then the business that plans to interact with Salesforce is able to produce $6.19 per unit of a similar currency earned by the company itself. If the CRM makes a profit, its customers earn more, consumers lose too.
In 2021, Salesforce completed the process of joining Slack Technologies, the owner of the Slack manager. The consequences of this purchase were impressive successes in the development of innovation sectors for remote access.
According to the latest IDS report, for the first half of 2021, the company's share took 24% of the total CRM market. If we take into comparison, the share of the company's rivals in the aggregate has reached 20%.
In addition to the technological advantage, the company rises due to effective management, skillfully conducting its business, expanding the range of offers and services through fresh purchases. The most important acquisitions in this regard were MuleSoft, Tableau and Slack Technologies.
Discussing the economic perspective, Salesforce is doing just fine today. For the 3rd quarter of 2022, its revenue amounted to $5.82 billion, and this is 27% higher than the same parameter in 2021.
The profit on the asset in Q4 2021 reached $0.84, against the previously forecast $0.74. Revenue increased by 26% and amounted to $7.33 billion, while the forecast was at the position of $7.24 billion.
The company's new forecast for 2023 is about $32 billion, with a maximum of $32.1 billion. According to most major world experts, this figure may well amount to $31.78 billion.
The company's management plans to increase sales by 2 times by 2026, and reach the planned position of $50 billion. If compared with the same parameter for 2021, it was at the level of $21.3 billion. If the growth continues, then Salesforce will quite reach the $trillion figure only over the next decade and a half.
We have already said that today is not the best time for technology and CRM, but in the future everything will change a lot, and the company is perfect for long-term investments.
Today, the company is at the starting point, if we compare the targeted market and the cumulative prospects of the company itself. Over the past year, its revenue has almost reached $25 million, and according to analysts' estimates, the size of the address market in the near future will be about $248 billion. To be more precise, this indicator is growing slightly slower than the speed of light. By the way, only last summer it was at a position of $204 billion, and has already grown by 22%. It turns out that at the moment the company's sales are only 14% of the possible ones.
In addition, taking into account the interests of large concerns that are increasingly being introduced into the field of cloud services, using them for different needs, as well as the cloud market, Salesforce's revenues will grow exponentially. Any serious drop in asset prices is a great opportunity to purchase promising securities at a very favorable cost. Now you are just observing this situation.
Sellers are putting pressure on the stock today. So by the end of February, the paper was worth $185, from which it jumped away, and headed for a position of $200. This movement is not going to stop, so analysts predict an increase in the cost to $315.
Last week's reports
Last week, Target retail outlets released their own 4 kv report, and reported for 2021. Thus, in the aggregate period, the profit on the issuer's asset amounted to $3.19, with experts' expectations of $2.86. The company's revenue reached the position of $31 billion, whereas it was previously forecast at $31.39 billion. Net profit increased by 12% to $1.54 billion.
Revenue for 2021 reached 106 billion dollars. According to the company's management, this parameter has increased by 35%. The net profit indicator for the past year reached $8.9 billion, and this is 36% more than in the previous year. The company expects further growth.
After the release of such an impressive report in financial terms, the company's asset from the position of $185 quickly reached the point of $230. If the price goes up further, we can expect 260 dollars.
Broadcom has also released its report, only for the 1st quarter of fiscal year 2022. Net profit in this period reached $2.47 billion or $5.59 per asset. In the same period last year, the company showed $1.38 billion and $3.05, respectively. Adjusted profit on paper reached $8.39, whereas last year it was $6.61.
From $6.66 billion over the past year, the company's revenue increased to $7.71 billion. According to forecasts, this figure should reach $7.43 billion in Q2 2022.
According to the issuer, during the 1st quarter of 2022, $2.7 billion was spent on the repurchase of shares. The next buyout is scheduled for $10 billion. Quarterly dividend payments increased by 14%.
After the release of the positive report, investor sentiment in the market remained. We are waiting for the level of $620 per asset, and we buy, then the goal is $680, and in the future - $710.