Bear: Can I ask specifically what numbers you’ll be looking for / hoping for?
Hey Bear - I’m going to take a stab at it and focus on the top line - total revenue growth only and leave taking a stab at the raise to you.
They guided for 92-97% yoy last Q and did 110% in both total and product revenue growth. They’ve guided for 90% this quarter and I’m hoping for >100% yoy again.
So to put a number on it: I’m hoping for $275m TOTAL revenue, up 107% yoy / 20% qoq, based on the two things I discuss above:
- size of historical customer adds as well as
- accelerating international growth, which is clearly much higher than the US business.
I think that would not be disappointing, even given the current valuation.
**Bear:**I think it’s likely the strong $1m+ customer trend will continue, but isn’t that kind of implicit with a 160%+ NRR? Both of these things are great, but…they’re kind of two ways to express the same driving force. In other words, it’s the increased spend, not a flood of new customers, that’s driving revenue hypergrowth.
Not completely. The reason for that is that NRR does not tell us anything about the absolute growth of the revenue, just the relative growth.
So a hypothetical small customer starting up contributing $100 revenue in y1 and ending contributing $168 in y2 has a 168% NRR, same as a $1m customer in y1 contributing $1.68m in y2. NRR is the same but revenue impact is hugely different.
Because it takes 6-9 months, and closer to 9 months before a newly landed customer contributes to revenue it is hugely important in the current quarter what size customers were acquired 6-9 months ago.
And Snowflake has not split customers acquired for us like that, except by saying in Q1 that they’ve been at it focusing on ever larger customers for a year and a half and that it’s really now starting to come together. And the Fortune 500 adds - which was very strong last year is also only half of the story as that is less than 25% of the customers spending more than $1m with them.
The CFO also said that the sales cycles for those large customers are long - 6 months? Which, if you add the months comes roughly to 6 months sales cycle plus 9 months before starting to contribute to revenue for the very large customers, so almost a year and a half. And they started targeting very large customers a year and a half ago last quarter. Which means the focus on larger customers will only have started coming through in the revenue numbers in the last quarter or so, and if you focus on larger customers, you should see customers spending a large amount with you increasing at some point faster than the overall customer growth.
And that is exactly the number which spiked last quarter - the $1m+ ttm (this is important - its not annualised - its ttm) revenue customers.
So if one was to assume that the composition of the customers acquired but not yet contributing revenue for 9 months after acquisition like the CFO cannot stress enough in the last year or two has shifted to bigger, perhaps much bigger ones, and the NRR stays the same as the CFO has also stated then revenue contribution from those customers could be much larger when they start to contribute.
So paraphrasing what you said, I would rather argue:
In other words, it’s the increased spend of a smaller number of much larger customers acquired in the last year and a half, not a flood of new smaller customers, that’s driving revenue hypergrowth.
Or at least that’s my take. If I were a betting man…
Let’s see a bit later 
-WSM