Snow Management, Confident

What I did:
I sold ~28% of my 19% position in Cloudflare @$117 to add 50% more to my 12% position in Snowflake.

Why I did it:
When I saw a 30%+ drop in share price just as I was reading the headline numbers, my first inclination was to follow through on my plan prior to earnings - the plan I’d made if the numbers confirmed Snowflakes Narritive as I understood it. But, The Revenue number was a little low so I wrote into my Investing Jounal, “Wait for the Call to make sure management still sounds as confident”. Those 55 minutes were longer than I wanted. So, I sold the amount of Cloudflare in AH trading with the requisite Limit in place.

The call was stellar as usual. Only 5 minutes in and I left the Call to add the shares of Snowflake from the sale of Cloudflare. Snowflake is a monster of a company, unlike any other. Snowflake adding $1.2B in contract value in this quarter was what got me to add as much as I did. The following characterizes well the tone of the call and much of how I measure managements confidence in their ability to carry their plans forward.

Mike Scarplei casually mentioning this early in the call,
You saw that we closed over $1.2 billion in contract value in the quarter, growing our RPO to $2.6 billion. That was well above what we were planning internally. The other thing I want to call out, too, is we co-sold with the cloud vendors, $1.2 billion in contract value for the year as well.

About 20 minutes later this question was asked, sounding incredulous…

Brad Reback
And one other thing I hope I’m not trying to transposing as well. I think you also said that there was $1.2 billion co-sold with the hyperscalers for the year. I think last quarter, you talked about $500 million, which would obviously imply you added $700 million – that seems like a really big number.
In immediate response,
Mike Scarpelli
Yes. It was very – and we sold in totaled for the quarter over $1.2 billion just for the quarter and roughly $700 million was co-sold with the hyperscalers.

After hearing the above, I re-read my initial notes after reading this quarters press release, Disappointed on the product revenue, looks like QoQ was only 15%. Non-Saas revenue is lumpy so listen to the Call for tone. With a FY guide of 66% growth, with beat and raise this could become 90% , that’s if the flood gates aren’t opening yet (this last bit was in reference to what CEO, Slootman, said in a call a few quarters ago when he was explaining his expectations for revenue growth in the future.

Is $1.2B in contract value QoQ an amount that justifies us saying, ‘perhaps the floodgates have begun to open’?

Irregardless, I believe +$1.2B added to their bank account just this quarter does make announcing the Guide difficult to say with a straight face😉.


Great point!
I think, of everything in the call, what I was most taken aback was the fact that they co-sold 1.2 Billion last year with… their biggest competition !!!
(Amazon Redshift, Azure Synapse and Google Big Query biggest cloud competitors, besides Databricks, which may or may not be direct competition)

The RPO number alone could have been taking as a signal that the flood gates are opening…


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