Snowflake has minimum purchase commitments of $1.2 billion for cloud infrastructure over the next five years, according to the company's IPO filing.
The cloud data warehouse provider outlined how it runs on Amazon Web Services, Google Cloud Platform and Microsoft Azure even as it competes with those vendors on many fronts.
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Snowflake is likely to spend more on cloud infrastructure but can secure discounts with minimum commitments. The company also disclosed that it amended its cloud infrastructure agreements in July. The new purchases include the following:
- $115 million to be spent between August 2020 and July 2021;
- $185 million between August 2020 and July 2022;
- $250 million between August 2022 and July 2023;
- $300 million between August 2023 and July 2024;
- And $350 million between August 2024 and July 2025.
If Snowflake fails to hit those minimum purchase commitments it has to pay the difference.
Those cloud purchases and rates are critical to Snowflake's bottom line. Snowflake has seen strong growth but lost $171.3 million for the six months ended July 31 and $348.5 million for the fiscal year ended January 31, 2020.
For the six months ended July 31, Snowflake reported revenue of $242 million, up 133% from a year ago. Snowflake had 3,117 customers as of July 31.