In case you missed it, Jim Cramer had the Snowflake CEO on his show after earnings.
https://www.cnbc.com/2022/03/02/snowflake-ceo-projecting-rev…
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I think this speaks volumes:
Snowflake books its revenue using a “consumption model,” Slootman said, rather than a typical subscription model that’s common across software industry. It may take time for investors to understand how that impacts its results and ability to forecast multiple quarters down the road, Slootman said.
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Which is even more relevant when you consider that Slootman forecasted revenue to grow to $10B by 2030 (iirc) and many naysayer analysts take that as gospel for why they feel it’s overvalued.
Pretty clear to me that Slootman is essentially saying these are worst case scenarios. He looks supremely confident to me, remembering that since he has no cash needs anytime soon, there’s really nothing to be gained by doing anything other than sandbagging.
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Seems incredibly conservative - basically, they have best in class NRR, and RPO bookings growing at 99%, but because they have a lot of new customers (44% growth) with not a long usage history, they are “guiding conservatively” until they get a better idea of how their new customers will use the product… Seems like never ending sandbagging if you keep adding customers all the time!
JDR
It’s the algorithms selling the guidance; only reason SNOW is down AH. Slootman basically just said that they’re assuming the worst for customers with whom they don’t have a history.
“Consumption model isn’t SaaS and the future hasn’t happened yet.”
He specifically mentioned original FY22 guidance (80%) vs. actual (106%) in speaking to their conservativeness. Imagine if they did a similar beat to the 67% guidance just given? The dude isn’t Josh Bixby. He’s gonna crush that guidance like there’s no tomorrow.
So, he’s already telegraphing beats and raises. Slootman seems to hate the guidance shenanigans even more than Saul does.
We’re watching a monster of a company scaling before our very eyes. $1.2B in bookings in one quarter, and somebody thinks they’ll do just $1.9B in revs for a whole year!? Slootman is probably laughing at the sandbag sandwich guidance they just fed the algos because he knows they’re going to absolutely annihilate it.
Eric
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