Ben’s Portfolio update end of September 2025
Returns and portfolio holdings:
Portfolio Notes 2022 -15.6%* *Jul-Dec, since I started posting my portfolio. (For portfolio returns before I started posting on Saul’s, see one of my earlier recaps.) 2023 77.8% 2024 31.7% 2025 YTD Month Jan 9.1% 9.1% Feb 5.0% -3.7% Mar -10.4% -14.7% Apr -2.4% 8.8% May 19.6% 22.6% Jun 32.7% 11.0% Jul 33.5% 0.6% Aug 29.9% -2.7% Sep 34.2% 3.3%
These are my current positions:
Sep 2025 Aug 2025 First buy* Cloudflare 22.2% 22.6% 11/2/2020 Nvidia 21.9% 21.4% 5/13/2020 Snowflake 13.2% 14.3% 2/8/2021 Crowdstrike 11.1% 10.2% 5/13/2020 Datadog 9.6% 9.0% 5/13/2020 Axon 9.0% 9.6% 4/2/2024 Zscaler 4.5% 4.0% 3/4/2021 Samsara 4.2% 4.3% 1/8/2024 Monday 3.3% 3.5% 9/13/2021 TradeDesk 1.0% 1.2% 5/13/2020
*held through today
Company comments
Snowflake:
Snowflake reported a fantastic Fiscal Q2 2026 on 8/27/25. At a TTM revenue base of over $3.5b, the company managed to re-accelerate product revenue growth to 31.5% YoY, up from 26.2% in Q1. With that, Snowflake had it’s strongest sequential growth of 9.4% since Q3 almost 3 years ago and posted a new record in sequentially added revenue of $94M, up from the previous record of $71M last Q3 and $57M in 3Q24. In general, this quarter was a quarter of records in terms of “sequential adds” over a broad range of metrics, like product revenue, customers and data sharing, but I am getting ahead of myself. Their new Q3 guide shows continued strength which I now interpret as $1178M (8.0% QoQ, 30.9% YoY), implying a 4.5% beat. On top of that, they also raised their FY guide by 1.6% to almost $4.4b and if they can beat that by 2.5% (FY guides given in 2Q25 and 2Q24 were beaten by 3.2% and 2.6%, respectively), they would close FY26 with 30% YoY growth. Do secondary growth metrics support this trend? Let’s have a look.
Remaining performance obligations were $6.93b, growing 32.5% YoY, in line with my expectation and cRPO was $3.466b accelerating YoY growth to 32.5%, up from 31.4% and growing faster than product revenue, a good sign for continued revenue growth strength.
NRR increased to 125%, up from 124% and the first in 15 quarters where this metric increased, signaling a strong base level at this world-class retention rate.
Snowflake also did great on the “land”-side, with overall customers growing 18.9% YoY and adding 533 new customers in the quarter - that is a new all-time record in adds, if we exclude the seasonally strong Q4s. More importantly, they added a new all-time record $1M+ customers of 50 sequential adds this Q2, up from 28 last Q and 25 last Q2. So large customer growth re-accelerated to 29.8% YoY, up from 26.1% last Q and 26.3% last Q2. And, somewhat to my surprise, they even added 15 new G2000 customers this Q, up from 2 last Q and 7 last Q2 - very strong.
On the data sharing side, Snowflake added an all-time record of 302 data marketplace listings and 40% of their customers now have at least one stable edge (up from 39% in Q1 and 34% last Q2). At the same time over 50% of customers now use Snowflake AI features on a weekly basis.
Finally, both operating and income margins expanded meaningfully. OM is now 11.1%, up from 8.8% in Q1 and 5.0% last Q2 and NM is now 11.3%, up from 8.4% in Q1 and 7.3% last Q2. FCF margin was only 5.9%, after already being weaker than usually at 19.8% in Q1. This was not a surprise though as management has pointed out the temporary change in seasonality during the Q1 call:
“As discussed on our last earnings call, we had several large customers purchase as they consumed in Q4. This booking behavior impacts the seasonality of our free cash flow. We expect this year to be more second half weighted.”
and reiterated this during their Q2 call:
“As discussed on our prior calls, we expect free cash flow to be weighted to the second half of the year. This expectation is supported by contracted billings, a large renewal base and large deal volume in the pipeline. (…) For FY 2026 [.] we now expect (…) non-GAAP adjusted free cash flow margin of 25%”.
For comparison, in FY25 they had a FCF margin of 26%.
Overview of how Snowflake performed versus my prior expectations:
- Product revenue expectation: $1069M (7.2% QoQ, 28.9% YoY), implying a 3% beat; $72M net new product revenue.
→ $1090.5M (9.4% QoQ, 31.5% YoY), a 5.1% beat, resulting in record $94M net new product revenue. - Q3 new product revenue guide: $1117M (4.5% QoQ, 24% YoY) which I would interpret as $1155M (8% QoQ, 28% YoY), implying a 3.5% beat and that revenue growth will be roughly stable QoQ.
→ $1127.5M (3.4% QoQ, 25.2% YoY), which I now interpret as $1178M (8.0% QoQ, 30.9% YoY), implying a 4.5% beat. - NRR around 124%.
→ 125%. - I would like to see RPO around $6.95b and cRPO around $3.4b, expecting more headwinds due to customers switching to “day-by-day” consumption after running out of contracted consumption early instead of pulling forward the renewal cycle.
→ RPO was $6.932b (3.7% QoQ, 32.5% YoY) and cRPO was $3.466b (3.7% QoQ, 32.5% YoY) growing faster than revenue grew and has been accelerating the last 2 quarters. - I would like to see total customer growth around 4.6% QoQ (~533 adds) and $1M+ customer growth around 5% QoQ (~30 adds).
→ Total customers grew 4.6%, adding 533 new customers. $1M+ customer growth was 8.3% QoQ adding 50 customers to this cohort. - I would like to see continued stable edge customer growth strength and market place listings growth to accelerate again QoQ.
→ Stable edge customers grew 40% YoY and now make up 40% of all customers, up from 39% in Q1 and 34% last Q2. Market place listings grew 21.3% YoY, reaccelerating from 20.7% in Q1, growing 9.7% QoQ, up from 1.8% in Q1 and 9.2% last Q2. - I would like to see continued strength in profitability margins, ideally QoQ expansion, but at least YoY expansion.
→ Operating and net margins expanded both QoQ and YoY. OM was 11.1%, up from 8.8% in Q1 and 5.0% last Q2. NM was 11.3%, up from 8.4% in Q1 and 7.3% last Q2. FCFM was 5.9%, down from 19.8% in Q1 and 7.6% last Q2. “As discussed on our prior calls, we expect free cash flow to be weighted to the second half of the year. This expectation is supported by contracted billings, a large renewal base and large deal volume in the pipeline. (…) For FY 2026 [.] we now expect (…) non-GAAP adjusted free cash flow margin of 25%.” - Thoughts from previous Q: Ben’s Portfolio update end of July 2025
Zscaler:
Zscaler reported Fiscal Q4 2025 on 09/02/25. The first thing worth pointing out is that they have a new CFO and with it came quite a few big changes in their earnings reporting. For example, it seems they stopped reporting NRR, restated their customer numbers and stopped guiding for billings and instead switched to guiding for ARR.
Keeping that in mind, I thought they had a very strong quarter and my previous hypothesis of them having a monster quarter coming up in Q1 (as predicted by my billings model which I pointed out in my last earnings recap of Zscaler) seems to work out as they guided Q1 revenue to $773M, versus my expected $763M. I now interpret this new guide as a revenue growth acceleration to 25% YoY, from currently 21.3% YoY growth. Note, before we had this quarter’s billings number I had expected Q1 YoY revenue growth of 24% YoY. As they were able to outperform my Q4 billings expectation by growing billings by a stunning 53.2% (vs. my prior expectation of 48%), my updated billings model now predicts 25% YoY revenue growth for Q1, which is consistent with their new guide.
Both RPO and cRPO growth were again very strong this quarter. RPO grew 16.5% QoQ and cRPO grew 11.7% QoQ, compared to 15.5% and 8.7% in the year ago quarter. That resulted in RPO and cRPO YoY growth acceleration to 31.3% and 25.8%, respectively, which is up from Q3’s 30.2% and 22.5%. So especially the cRPO growth acceleration also points to YoY revenue growth acceleration ahead.
Customer growth in the $100k+ and $1M+ cohorts was weak though, growing 4.1% QoQ and 4.9% QoQ, respectively. This is down from 5.8% and 8.0% in the year ago quarter.
While operating and net income where good and similar to previous quarters, with margins of 22.1% and 20.4%, respectively (up from 21.5% and 19.5% in the year ago quarter), I was happy to see free cash flow margin expand to 26.7%, up from 23.0% in the year ago quarter. So being able to deliver such strong profitability margins in the face of upcoming revenue growth acceleration is really great to see.
Overview of how Zscaler performed versus my prior expectations:
- Revenue expectation: $717M (5.7% QoQ, 20.9% YoY), expectation from billings model and implying a 1.5% beat.
→ $719.2M (6.1% QoQ, 21.3% YoY), a 1.9% beat. - Q1 new revenue guide: $763M (6.4% QoQ, 21% YoY) which I would interpret as $777M (8.4% QoQ, 24% YoY) as my expectation from billings model, assuming Q4 QoQ billings growth of 48% (seasonal! And beating their FY billings guide by 0.5%). Note, even if they just meet their FY billings guide, my billings model suggests that they’ll still have a monster Q1 with at least 7.9% QoQ growth and YoY growth acceleration to at least 23%, from my expected 21% in Q4.
→ Q1 new revenue guide was $773M (7.5% QoQ, 23.1% YoY), which I now interpret as 787M (9.4% QoQ, 25.3% YoY) as my updated expectation from billings model as billings QoQ growth came in at 53.2%. This would be a very strong re-acceleration in YoY revenue growth! - I would like to see Q4 billings of around $1161M.
→ Q4 billings was $1202.3M (53.2% QoQ, 32.0% YoY), the highest Q4 QoQ billings growth they had in 7 years. - I would like to see >100k ARR customer growth around 5% QoQ (~168 net adds).
→ 4.1% QoQ (137 net adds). Note, they restated their customer numbers for the last 8 quarters. - I would like to see >1M ARR customer growth around 6.5% QoQ (~42 net adds).
→ 4.9% QoQ (31 net adds). Note, they restated their customer numbers for the last 8 quarters. - I would like to see an operating income around $162M (22.6% margin).
→ $159M (22.1% margin). - Thoughts from previous Q: Ben’s Portfolio update end of July 2025
Nvidia:
I thought Nvidia had a great quarter. Not only did they meet my revenue expectation, but exceeded my expectations for gross margins and gave an incredible guide for Q3, expecting 15.5% QoQ revenue growth, which I interpret as 18.4% QoQ and a YoY revenue growth acceleration to 57.8% (from Q2’s 55.6%).
For more detailed thoughts I recommend you read Gaucho’s writeup on Nvidia! Here: 2025-08-31 Portfolio Update - GauchoRico Stock Investing & Personal Finance
Overview of how Nvidia performed versus my prior expectations:
- Revenue expectation: $46800M (6.2% QoQ, 55.8% YoY), implying a 4% beat; they beat a year ago’s Q1 guide by 8.5%, Q2 guide by 7.3%, Q3 guide by 7.9% and Q4 guide by 4.9%. Then last Q1 guide by only 2.5%.
→ $46743M (6.1% QoQ, 55.6% YoY), a 3.9% beat. - Q3 new revenue guide: $47730M (2% QoQ, 36% YoY) which I would interpret as $49600M (6% QoQ, 41% YoY), with similar QoQ growth as in Q2.
→ $54000M (15.5% QoQ, 53.9% YoY), which I now interpret as $55350M (18.4% QoQ, 57.8% YoY). That would be a YoY acceleration at $165b TTM revenue base! - I would like to see GAAP gross margin above 70%.
→ 72.4% - I would like to see non-GAAP gross margin above 70%.
→ 72.7%.
Wrap up
What an amazing earnings season! All but one of my highest conviction companies (top-6) managed to accelerate YoY revenue growth rates with NVIDIA set to accelerate in their upcoming Q3 report (Cloudflare: 26.5% → 27.8%, Snowflake: 26.2% → 31.5%, Crowdstrike: 19.8% → 21.3%, Datadog: 24.6% → 28.1%, Axon: 31.3% → 32.8%). I am now also confident that Zscaler (7th place in the portfolio) will accelerate YoY revenue growth in their upcoming Q1 (21.3% → 25.3%). Samsara, on 8th place did not accelerate but stayed constant above 30% YoY growth and Monday in 9th place is also set to accelerate YoY revenue growth in their upcoming Q3 (26.6% → 27.3%).
I am wishing you all a great October!
Ben
Past recaps
2022: Jul 2022 | Aug 2022 | Sep 2022 | Oct 2022 | Nov 2022 | Dec 2022
2023: Jan 2023 | Feb 2023 | Mar 2023 | Apr 2023 | May 2023 | Jun 2023 | Jul 2023 | Aug 2023 | Sep 2023 | Oct 2023 | Nov 2023 | Dec 2023
2024: Jan 2024 | Feb 2024 | Mar 2024 | Apr 2024 | May 2024 | Jun 2024 | Jul 2024 | Aug 2024 | Sep 2024 | Oct 2024 | Nov 2024 | Dec 2024
2025: Jan 2025 | Feb 2025 | Mar 2025 | Apr 2025 | May 2025 | Jun 2025 | Jul 2025 | Aug 2025