SNOW Q4 2020 Summary

As a company, there is no arguing that Snowflake is absolutely killing the game. They have the best revenue growth and dollar based net expansion rate I have ever seen at their size. Their consumption based business model is far superior than the SAAS business model, so long as customers are willing to pay up. So far, they are. This is because, as Frank states in the call, using SNOW enables customers to “spend half the money and do 10 times the work”. The same reason why CRWD or NET or SHOP has been successful applies to SNOW here - put simply they save their customers lots of money.

The only concern with SNOW, and it is a big concern, is its stretched valuation. Does price to sales ratio matter? This stock is the ultimate test of that question! Stay tuned to find out.

Also, of the quarterly reports I’ve read, this one was particularly informative.

Frank Slootman, CEO:
We finished our fiscal year with strong consumption across our customer base with 116% growth year-on-year to $178 million in fourth quarter product revenue. Remaining performance obligations of $1.3 billion grew 213% year-on-year, reflecting strengthened sales across the Board.

The Snowflake Data Cloud enables breakthrough data strategies. Capacity limitations are a thing of the past. There are virtually no constraints anymore on the number of workloads that can execute at the same time against the same data.

The performance of individual workloads has increased by orders of magnitude while latency has been reduced at similar proportions. The only constraints left are budgets and our customer’s imagination and we believe those boundaries are shifting quickly as well.

The Snowflake Data Cloud also breaks new ground in terms of data access, which is increasingly critical for data science, artificial intelligence and machine learning workloads. The days of mostly in silo analytics are numbered. The promise of data science is to discover and mobilize data relationships that can be glimpsed across a broad diversion – diversity of data sources and data types.

The physical boundaries between data sets dictated by technology legacies have no meaning or significance in data science. Science sees the world’s data as a single universe that is easily seamlessly and frictionless traversed as if it was one giant database. That is the essence of the Snowflake Data Cloud, world class workload execution coupled with practically unfettered data access across clouds, cloud regions and geographies.

BlackRock, the world’s largest asset manager has adopted the Snowflake Data Cloud to help make the best investment decisions for their clients. Now Aladdin clients can combine Aladdin portfolio data with non-Aladdin data to analyze faster and create custom applications and dashboards.
ExponentialDave: Winning BlackRock could be a huge win for them long term. The other financial behemoths will join sooner or later, and the use cases for finance appear to be very strong.

Active data showing our relationships in the Snowflake Data Cloud are growing by leaps and bounds increasing 51% quarter-on-quarter.
ExponentialDave: Data grows exponentially.

We are seeing rapid adoption of the Snowflake marketplaces as well, with consumption attributable to data from marketplace providers up 48% quarter-over-quarter and new listings growing 10x year- on-year to a total of 380 as of the end of the fiscal year.

Newly added to the marketplace in Q4 are data providers such as Zoominfo, Western Union and Foursquare. A continued push to campaign the large enterprises in the world is proving to be successful. We added 19 Fortune 500 customers in Q4, including MasterCard, Genuine Parts, Northern Trust. Our customers choose to partner with Snowflake because of the data cloud.

A Fortune 100 technology company has deployed Snowflake across numerous lines of business since migrating their on-premise data warehouse platform to Snowflake, because Snowflake their marketing department tells to more informed decision-making process with 20 times faster support for their customers.

While our selling motions to address some of the world’s smallest, as well as largest data states in the world, we will have continued emphasis on landing and expanding in the largest enterprises institutions, not just in the Americas, but also in EMEA and Asia-Pacific. To that end, we have announced new leadership in the latter region to accelerate and scale this Snowflake campaign there.

We have long sold almost exclusively on architectural distinction, which has served us well and we will continue to do so in situations that warranted. But our large enterprise focus has informed an evolution to go-to-market motion that is industry specific and outcome oriented.

We view this as a maturation of Snowflake in a large enterprise. We also now have so much critical mass in our target verticals coupled with industry specific data marketplaces that this strategy will further differentiate Snowflake. We are super excited about the New Year. We have the technology, the talent and the organization to fully pursue our opportunity.
ExponentialDave: We have the technology!


Our Q4 product revenues were $178 million representing 116% year-over-year growth and remaining performance obligations were $1.3 billion.

In Q4 we saw the number of customers with greater than $1 million in trailing 12 months product revenue increased to 77, up from 65 last quarter, with 12 customers are now consuming over $5 million on a trailing 12 month basis.
ExponentialDave So 12 new $1mm customers from 65 last quarter is 18.4% more in a single quarter! And as we will learn later in the call, these “new” customers likely took 6 or more months to get consumption started with snowflake, so I would bet they have some sort of backlog of high profile customers who are still in the data migration phase who will soon be in the full blown consumption phase.

Not in the transcript, but I will also include customer counts of the last 4 quarters: 4139, 3554, 3117, 2720. So customer count went up 16%, which is a bit better than the last few quarters, when customer counts went up 14%, 14.5%, and 13.7%. Ok back to the transcript…

Turning to margins, on a non-GAAP basis, our product gross margin was 70%, up 400 basis points from last year.

Our operating margin was negative 24%, benefiting from revenue outperformance and continued T&E savings.
Our adjusted free cash flow margin was 9%, positively impacted by strong collections with Q4 being our largest booking quarter, cash inflows relating to our employee stock purchase program and operating margin outperformance.

We are very proud of our strong free cash flow. On a year-over-year basis, we cut our annual cash burn by 64% or $128 million or more than doubling the business.
ExponentialDave : Business is scaling very nicely!

We have ended the year in a strong cash position, with approximately $5.1 billion in cash, cash equivalents, and short-term and long-term investments. This enables us to explore a number of strategic initiatives, including Snowflake Ventures, which has made several investments in the quarter, including DataRobot, Hunters, NOMA and Lacework.

For the first quarter of fiscal 2022, we expect product revenues between $195 million and $200 million, representing year-over-year growth between 92% and 96%.
Turning to margins, we expect on a non-GAAP negative 23% operating margin and we expect $289 million weighted average shares outstanding. For the full year of fiscal 2022, we expect product revenues between $1 billion and $1.02 billion, representing year-over-year growth between 81% and 84%.
Turning to profitability, we expect on a non-GAAP basis 71% product gross margins, negative 19% operating margins and breakeven adjusted free cash flow and we expect $295 million weighted average shares outstanding

Analyst Q & A

Raimo Lenschow

Okay. Perfect. Hey. Thank you. Again, Mike, on the gross margins, I mean, we have seen the progress this year and you gave us guidance. Just talk a little bit about the drivers for the gross margin improvement we are going to expect in the coming year and what it is – like is it more the contracts with the cloud providers or what’s driving it going forward and what led to do for you to reach the long-term goals? Thank you.

Mike Scarpelli

Yeah. I would say, the contracts with the cloud provider started kicking in Q3 and we had the full benefit in Q4. I don’t anticipate renegotiating our cloud contracts next year. We may be in a situation at the end of the year, but I am not expecting that.

It’s really driven by getting more scale within our existing deployments. We have a number of deployments where we are not at scale and we see those ramping right now. As an example, like, Japan. Japan has been running at a negative gross margin, because we just don’t have very many customers but we are starting to ramp there that that will turn around and that’s just one example. We are in 20 deployments around the world and think of a deployment as a data center out places.

But also as we move higher up into larger enterprises they tend to buy our higher addition, our business critical. Yes, those big customers require more discounting, but the margin – the contribution margin from those higher SKUs more than offset that discounting to drive gross margin, which gives us the confidence that we will get to those mid-70s, it’s not going to happen next year, but we see that continued gradual improvement.

Derrick Wood

Great. Thanks. And Mike maybe one for you, nice uptick in new customers in the quarter and then you called out to what’s helping drive that acceleration. Is it better productivity or more capacity or is it something you are starting to see on this viral networking effect from your data sharing? Is that something that can move the needle and starting to help lift the customer generation?

Mike Scarpelli

Well, I would say, there was definitely an increase in average productivity per rep in terms of the number of cap one deals that they brought in on average in terms of the data sharing. I don’t have any specific data on that but that is clearly a discussion point with every customer and one of the reasons why they choose to go with Snowflake. It helps the decision to go with Snowflake. That’s also the fact that we are ramping. We have been adding so many reps and we have been ramping those people.
ExponentialDave Mike’s answer is maybe underwhelming, but I really liked the question. Data sharing will cause a viral networking effect, bringing on more and more customers over time.

Patrick Colville

Hey. Thank you so much for taking the question and congrats on an extremely impressive set of numbers. I just want to touch on the capacity environment. I mean the earlier question from Raimo was around competition with the cloud native vendors. But one of the legacy, call it, on-prem vendors put up some pretty impressive cloud numbers a month ago. How dynamics with the incumbents shaping out and yeah maybe a comment on that please?

Frank Slootman

What I will say is that, we are seeing the public cloud vendors having significant struggles in terms of migrating successfully off of these legacy platforms, which of course, brings relative strength to these – to some of these legacy providers.

I think that Snowflake is really the only platform that is successfully and consistently and now at scale moving these workloads to the cloud. But to some degree your legacy providers are hanging in there longer, because if you are not going to Snowflake you are going to have a struggle on your hands. So that’s sort of my commentary on that topic.

Brad Zelnick

Excellent. And I echo the congrats as well. Well done guys. I have got one for Frank and maybe one for Mike. Frank, can you share more about BlackRock partnership with a lagging cloud on the Snowflake Data Cloud. Specifically can you talk about the economics of these types of relationships and the success criteria that you use for gauging the progress? And maybe as well, how many partnerships like this are out there to go after?

Frank Slootman

No. There’s a lot of partnerships out there to go after. I think that that announcement by itself triggered a whole rash of conversations both from the financial industry, as well as other industries. This whole conversation around customers building their own data cloud is really the center of their universe, the way they interact with their partners, their customers, their stakeholders is a huge idea and people are seeing the opportunity and the potential, and obviously, for BlackRock because they are the world’s largest asset manager with where they were leased $21 trillion, $22 trillion of assets under management.

They realized that they needed to modernize and transform to be able to continue to be in a very dominant position and it was – from an economic standpoint it’s really no different than what we are doing, in other words this is not a different line of business for us. The same product, same business practices and so on.

But obviously these relationships are highly strategic to us. They come – they become cornerstones to the Snowflake Data Cloud in the data universe, because there’s this is – this induces network effect all over the place from people that need to have access to this data or provide access.

Mike Scarpelli

To say it in a simpler way, Brad, that all of those Aladdin customers that want data through Aladdin, if they want to get their data the most efficient way are going to have to be Snowflake customers.

Brad Zelnick

Excellent. That makes perfect sense. And Mike, maybe just to follow up with you, it’s great to see net retention continues to be really strong. I think that’s in class of anything else we look at. But as we think about the cohort of customers that you have added in the last 12 months, how are they tracking relative to prior years? And maybe just ask differently, like, how do we think about the size of your lands today and how that might be changing and informs your view or our view on how we might think about that net retention rate going forward?

Mike Scarpelli

Yeah. So I do expect net retention rate this year to remain very high. It should be north of 160 throughout the year is what we are – what we see right now. In terms of average deal size landing, that is not changing that much.

What’s happening and because I want to stress, it takes customers especially if you are doing a legacy migration. It can take customers six months plus before we start to recognize any consumption revenue from those customers because they are doing the data migration.

And what we find is so they consume very little in the first six months and then remaining six months they consume their entire contract they have. Then when we do a renewal that’s when most customers are doing the multiyear renewals once they have proven the use case on Snowflake.

And so I haven’t seen much difference other than we are, as you know, when Frank came in here, he really started focusing more on enterprise customers. We are landing more Fortune 500 customers. We talked about we landed 19 in the quarter. But those 19 we landed, just to reiterate, we recognized virtually no revenue on those customers. That’s all in the RPO that will be in the next 12 months.
ExponentialDave: Great question and answer here. Firstly, the balls to say we expect net retention to stay north of 160 throughout the year. How many of our other companies would dare provide guidance on net retention, let alone to have it be that high??

Second, we learn about Snow’s onboarding process. Data migration can take 6 months! I wonder how long it takes if you just pick a cloud vendor and skip Snowflake. I just googled this exact question and it seems to be a normal amount of time for a cloud migration.

Patrick Walravens

Oh! Great. Thank you and congratulations. Frank or Mike, can you double click on the migration. So why is it so hard to migrate legacy data warehouse? What are the steps you have to take that are so time consuming and then what is it about Snowflake platform to make it so much better suited do it than the cloud providers?

Frank Slootman

So that’s a great question. So, first of all, database migrations have been hard since time immemorial. They have never been easy. They have been lengthy. They have been expensive. They have been risky. And our customers are quite leery of them as well.

One of the reasons is that, while we can analyze the data with the structures, we analyze the code, we can automatically convert a lot of it and usually there is no straightforward mapping of some of the data between these databases.

Now for example, you take some of the legacy flavors out there, they have proprietary artifacts that just simply do not have a counterpart in Snowflake, because Snowflake is a completely standard NNC quote environment.

So that means that we have to reengineer, we have to reach the structure, we have to optimize workloads, things of that sort. The integrity of the data is absolutely everything. When you do a data migration what makes customers fearful is. They want to make sure that when the systems land on the other side they are getting exactly the same results that they were getting before. So the integrity is 100% maintained and there is not a matter of this throw on a big switch and hoping for the best.

So that’s a little bit of color and texture why these things are viewed as a sort of high friction. Now we are good at it, because we are experts at this. This is what we do. And we have a ton of experience doing it and that accumulated experience, as well as a lot of the tooling that we have to support these efforts, it’s resulting in a very good results, a very predictable results, time wise, cost wise and outcome, so that’s why.

Brent Thill

And one of the other things that the customers keep talking through Frank just as it relates to some of the partnerships whether it’s with Tableau or Salesforce or ThoughtSpot, some of the other interfaces that’s making your data more consumable by the mass market and we have heard some incredible stories of customers moving faster with you because of those partnerships. Can you just bring us up to speed on what you hear anything from customers and what some of the deployments look like that you are hearing kind of common feedback on? Thanks.

Frank Slootman

Well, we have relationships literally with every single business intelligence BI, vendor Tableau is definitely the largest one. But we also have – we are going gangbusters with Power BI which is the Microsoft product also and we are going to – we expect to see a lot of growth in that area as well.

So, we are – those relationships are really, really solid. We have a product of our own called Snowsight, which is really not meant to be so much competitive with the likes of Power BI and many of the others. That’s really our homegrown if you will and better products really data analysts as opposed to for end user distribution.

But listen there’s no doubt that Snowflake makes these product absolutely sing. It’s just a sheer scale of execution, the performance, the provisioning.So no without Snowflake it’s just very difficult for these products to really have the snappy dynamic performance that users are looking for. So combination of this technology Snowflake with the entire family of the BA products out there, very, very important to deliver a good sort of end result to the customer.

Kash Rangan

Hey, guys. Thank you very much. Congratulations on a superb quarter. Two questions, Frank one for you, as you talked about how the decisions are increasingly being made by the C level, not just the CIO, but CEO level. Can you talk about how they are looking at Snowflake in relation to their digital transformation initiatives meet? Generally here customer experience, employee experience is fairly digital. Could you help us connect the dots what are your CEOs, customer CEOs thinking in regards to Snowflake and how Snowflake specifically drives the digital transformation. Maybe I will just at that? Thanks.

Frank Slootman

Yeah. So the angle they are taking is one of digital transformation. IT organizations are typically focused on what we call modernization. They are taking existing workloads. They want to move them from the on-premise environment to the cloud, but essentially take advantage of the utility model and all of that, but fundamentally running the same workloads on the platform like Snowflake.

Digital transformation plays a big role. What that means here is that, they are looking to drive signals out of their data. They are trying to define data relationships through data models that they can take advantage of. And once I can describe the data relationship I can predict it and I can even make prescriptions out of that as well.

You can think of things like really improving the efficiency and yield on marketing and sales outreach, improving service experiences, and obviously, very, very, very high scale and very, very high precision and very, very high economy on these type of processes compared to what they historically have done.

The data cloud is central to these conversations. One of the things that we drive very hard is that, in the future data operations are going to be very much dominated by data really moving in an orbit, where – in other words data is flowing between partners and all kinds of stakeholders and people are able to not just analyze data in silos, but very effortlessly address data really across really a very broad orbit that includes their own data.

But then external data sources data from partners, social media, IoT, structured unstructured. That’s really where people are looking for significant advantage from where they historically have been.

Kash Rangan

Yeah. Got it. Frank and also your biggest customers, what are the problem areas they pushing you into that could open up the opportunities and that’s it from me. Thank you so much.

Frank Slootman

Well, the opportunities that are central to the conversations with our bigger customers are data cloud oriented. That means establishing data networking relationships, not just internally, but especially externally.

Historically, we have shared data through APIs and through file transfer processes copying and replicating. It’s been an enormous struggle. The opportunity with Snowflake is to make this zero latency, zero friction, completely seamless. So it is an enormous game changer to what people are used to and also that goes, of course, then.

Brad Reback

Great. Thanks very much. Frank, early in the call you talked about the limit – the limitlessness nature of the product set and that it’s only limited by the customer’s imagination. How do you help those clients manage budgeting issues, given the usage that they rack up on the system very quickly?

Frank Slootman

Yeah. That’s good question and certainly a topic that we discuss often. The big change in paradigm is that historically in on-premise data centers, people have to manage capacity. And now they don’t manage capacity anymore, but they need to manage consumption. And that’s a new thing for – not for everybody but for most people – and people that are in the public cloud. I have gotten used to the notion of consumption obviously because it applies equally to the infrastructure clouds.

Now we do a lot, we have full blown chargeback capability, so that the consumers are – of compute are and of our service and really accountable for what they do and don’t do. We have hard limits, we have soft limits, we have notifications, we have dashboards. So there’s a lot of ways to do this.

But at the same time a very scares, people are really so motivated and inspired by the capabilities that they have. Sometimes they get a little bit out of control in terms of the amount of processing that they were planning to do and it’s a very, very blunt situation. I mean we have been bottled up literally for generations and now there’s a situation where there is no upper limit to how much you can do and that’s intoxicating quite honestly.


Your next question comes from the line of Brent Bracelin with Piper Sandler. Your line is open.

Brent Bracelin

Good afternoon and thanks for taking the question. One quick for you, Mike, and then a follow-up for Frank. The dollar value of new contract signings exceeded – in Q4 exceeded all of last year. And so my question is, there is some seasonality that drove that. Is this just improving sales productivity? Walk me through the drivers there of the RPO momentum on Q4 and then one quick follow up.

Mike Scarpelli

So, number of things. A, obviously you are always going to get seasonality because that’s a bookings number and obviously sales people in Q4 are going to try to maximize their acceleration there into. But it’s also a function of the number of reps that we have now are ramped up.

And it’s also a function of the fact that we are getting into larger customers as well too and it’s not just the larger new customers, it’s the existing large customers with big renewals, because we are growing within those customers in the multiyear component of those customers.

As I mentioned earlier, most initial what we call cap one customers are tend to be one year contracts and if the renewal and the follow on that tends to be the multiyear once they have proven they use cases.

That’s not always the case. That’s just what we have been seeing historically. I do expect as we become a larger company, we will see more and more of those capacity when customers sign up for multiyear deals day one as well.

Brent Bracelin

Got it. Helpful color there. And then, Frank, we have heard internal use case for data sharing inside of a corporation has the potential to become believe the killer app here. You have some great stats on data marketplace which is really around sharing data externally. But do you have any color for us around internal use cases for data sharing. Are you seeing any sort of material changes and customer interests for internal data sharing use cases?

Mike Scarpelli

Yeah. The interesting thing is most of the data sharing is actually externally, not internally. And one of the reasons is, if I look at some of our larger customers, they maintain a single copy of all their data and they allow their operating functions and departments and business units to execute clusters against the single copy of the data. So they are sharing data effectively because they having a single copy of the data, right?

So they don’t have to take advantage of our data exchanges and data sharing because they are literally sitting on the same copy of the data and that’s probably will be the reason why we should have two modes of sharing.

One is really tightly coupled where everybody sits on the same data and the other one is the more loosely coupled one, which is through our data sharing architecture and customers can actually mix and match.

It depends on their culture and how much they want to have custody their own data and things of that sort, that sort of drives where they land on that, but the architecturally the tightest model out that we have is where there’s one copies of data for the entire enterprise and anybody that wants to process against that data, they fire up their own warehouses and their own clusters and they run their own workloads and that’s an extremely successful model for Snowflake and our customers.

David Hynes

Hey. Thanks guys. I think I will echo everyone else’s congrats, really impressive numbers. And just one for me, Frank, is there any way to think about a dollar spent with Teradata or when the legacy CW vendors turns into X amount of spend with Snowflake and I don’t know if you can think about it that way, but at sometimes did investors saying, hey, Teradata peaked out a little less than $3 billion in revenue and look, I realize they are not the only share donator and I realize this is not only replacement. But it’s gets at the question of like, how big can Snowflake really gets. So any thoughts to help us kind of frame that question?

Frank Slootman

Yeah. Interesting thing is that a lot of the Teradata migration we have done, customers are telling us we are spending half the money and we are doing 10 times the amount of work and that may not be what you want to hear, but obviously that’s a hell of a deal for them.

What’s really expanding the marketplace is that, historically there have been fixed capacity limits on how much work you could do and those are gone under the Snowflake platform. You can run as many workloads concurrently and you can provision those individual workloads as much as you need to.

So all of a sudden it’s like, hey, I don’t have to wait in line for 2 a.m. slot to run my little job. It’s like everything runs concurrently as much as you can possibly imagine that you want to do. Obviously, there is a financial consequence to running a ton of workloads, but there’s no operational limit on that.

Now what does is, it really starts to inspire people to do things they never entertain because there was not a possibility for them to ever do that. So we are sort of in this period where we are unleashing all this imagination, as well as all the backlog that has already existed that people are just rushing towards.

Now because data as a driver of digital transformation, it is really the signals that fuel digital processes. It’s just a very, very core component to how enterprises are evolving. So that’s – I think this market can get. We have been told by a number of our customers that we are the second largest line item in their budget behind the public cloud and that may come as a shock to some. But I am telling you that that’s not going to be out of the ordinary going forward based on what we are seeing.

ExponentialDave: Although the grammar of the question did not get transcribed so great, this was a terrific question and answer. Frank has the incentive to tell us that every dollar spent on teradata translates to a 1000 spent on Snowflake, but he actually goes the opposite direction and spins it into a crazy positive. Snowflake customers are getting more and spending less, which is causing them to in turn use the product more! They find new use cases, which fits in with the overall narrative of why companies choose Snowflake.

Mark Murphy

Thank you, Frank. At the Data Cloud Summit, Benoit had mentioned a goal to try to reduce end-to-end data latency by 10 times from where it is today, a pretty amazing goal. I was wondering if you could walk us through how long you think that might take and what types of new opportunities it could open up maybe for more complex analysis or larger AI models and so forth inside the Snowflake?

Frank Slootman

Yeah. Probably we should bring Benoit into – in here, let him answer that question, one of the areas that we are investing in where we have extraordinary talent that we have attracted the company as where our event driven architecture is.

Today our event latency is sort of seconds and minutes, right? But you want to drive that down to sub-seconds and dramatically sub-seconds. You start to open up use cases that are just very different. That are really not approachable by a platform approach today. They really require very single purpose optimizations, right? When you think about electronic trading and all these things the latency has to be approaching zero.

That obviously – that requires tremendous optimization on our part and we are working on that because we see that as a very, very critical part of the ongoing evolution of digital transformation.

We are doing a lot of stuff that is where – what our capabilities are today are totally adequate. But we are foreseeing a world where and this has been lost at where we have to become much, much faster than what we have done so far. And certainly we have that room up, we know how to do it. So again this is going to expand the marketplace in places where these technologies historically have not been.

Mark Murphy

Thank you. And that’s a good follow-up Mike, it sounds like you are moving up market in Beijing with more large enterprises pretty rapidly. Are you seeing a higher mix of Snowflake usage on Microsoft Azure or should we be pencil an AWS sticking around, I think, it’s been 85% of the usage. Do you think it would hang in there for this fiscal year?

Mike Scarpelli

I think AWS will continue to be our largest cloud for quite some time, but we are definitely seeing a lot of large enterprise customers choosing to go with Microsoft. But you – there were – as I mentioned, the revenue is lagging when we book deal. So it’s going to be second half of the year and even in 2020, our fiscal 2023, I think, you are going to see Azure kick up as a percentage, but we still think AWS will remain our number one cloud partner.

ExponentialDave: It is known that you can get an idea of how Datadog’s quarter will go based on how the major cloud providers perform. I included this question because it tells us that 85% of Snowflake usage comes from AWS, so GCP and Azure are less relevant when trying to predict Snow’s quarter than AWS.

Tyler Radke

Hey. Thanks very much for taking my questions and I appreciate the stats on data sharing. I wanted to ask you about that, the strength there, I wanted to see if that’s helping you accelerate the win of new logos, if you are able to land with that use case and maybe a customer where you hadn’t been successful before?

Frank Slootman
What I will tell you, the data cloud conversation is so highly differentiated that’s even in accounts that are completely dominated by incumbents that it reopens the conversation and we have seen that over and over and over.

And so it’s – we love it, because it’s just the conversation goes from just modernizing existing workloads breaking through the cloud, doing POCs benchmarking to all of a sudden we are talking about complete innovation transformation

Tyler Radke

Just a follow up, just as you are thinking about this year, curious how your assumptions are on close rates and what you are putting into the forecast relative to last year as you think about the macro environment? Thank you.

Mike Scarpelli

I would just say we gave guidance for next year and you are going to continue to see growth next year and we feel very good about what we are seeing right now, and we are not really seeing any impact on the macro in our business at all.
ExponentialDave: No covid withdrawals that might happen in stocks like Etsy, ZM, DOCU, or Shopify here.

Andrew Nowinski

Great. Thank you for squeezing me in. So, I just want to start with a question on the $1 million or more customers, really strong growth again this quarter and I know it’s a trailing 12 months calculation. So, I’d assume some of that is coming from your existing customers versus new customers. I am just wondering if you could provide any more color or maybe around what’s driving that.

Mike Scarpelli

Well. I would say 100% of that is coming from existing old customers. Because as I said, any customer we signed up in the current last fiscal year it takes them six plus months to ramp those significant customers.

So, it’s really coming from our existing customers and we have a number of other customers that are on the cusp of that. So we think we will continue to see that growth in million dollar plus trailing 12-month revenue customers going into next year.

Andrew Nowinski

That’s great. Thanks, Mike. And then maybe just a quick follow up on your guidance. Q1 certainly looks – I mean, coming off a great Q4, Q1 looked a little bit lower than expected, but then the annual outlook was fantastic across the Board, across all metrics. So it looks like you are expecting somewhat more of a stronger back half of the year? I am just wondering if you could provide any more color on kind of assumptions for Q1 near-term versus the back half of the year?

Mike Scarpelli

Yeah. I don’t think that’s correct, Andrew. Q1 is actually a very strong guide relative to where consensus is and – we are seeing strength into Q1 in our business and I think the guidance for the full year is prudent, given this is the start of the fiscal year.


The only concern with SNOW, and it is a big concern, is its stretched valuation. Does price to sales ratio matter? This stock is the ultimate test of that question! Stay tuned to find out.

Probably SNOW is overvalued by any measure you can find. If I worried about all the value formulae out there I’m sure I’d go nuts.

I listened to and read the CC which you presented and commented upon so cogently in your last post.

My conclusions: Extraordinary growth opportunity. TAM is incalculable and the product is practically a necessity for enterprise operations particularly if one wants to compete successfully and fully grasp the nuances of ones business data.

Parenthetically I’ve supplemented my review of SNOW by diving into their free published literature including a couple of texts for dummies. These really bring home to me the character and power of Snowflake’s innovative and the value of their approach.

The outstanding quarterly results it seems to me simply reflect the basic strengths of the company.

Someone here posted that the 96% growth guidance for next quarter implies much slower growth. The CC convinces me otherwise. The number and character of newly acquired large customers the 6 month delay in seeing realized revenue, the outstanding RPO and the description of use cases all combine to give me confidence that they will continue to grow and that the valuation will be otherwise unjustifiable by reasonable measures. At some future date matters will equilibrate as they always will, but I do not believe this will occur in the next 6 months.




Is this why Snowflake is down so much today?