Snowflake reports Wednesday.
What should we be looking for?
First, as with any $SNOW report, when the report is first released, REMEMBER the big number they tout is NOT overall revenue. It is a SUBSET of revenue (Product Revenue). This is very confusing for many many MANY investors (including myself when I first started following their reports) as I see it misinterpreted EVERYWHERE immediately after the release. This often leads to a big drop right away until people realize it is in fact NOT overall revenue. Ok, on to what to expect…
We have NEVER seen a company like this. I see a lot of people saying they’re overvalued, I ask what they SHOULD be valued at, but nobody has answered… Its easy to say “OVERVALUED”, especially in THIS market
Rev 102% YoY, 15% QoQ
FCF Margin 27% (9% a year ago)
REMEMBER, they told us to expect slower revenue as processing improvements will TEMPORARIALLY limit revenue. THIS IS GOOD. It will drive more workloads; with the Teradata workloads being the icing on the cake. 3-6 month lead time in additional workloads.
Expect this quarter to have a FULL quarter of lower than usual revenue but to expect the impact to be lower over the next few quarters. Based on their past guidance & beats, my model indicates YoY growth between 86% & 99% with 93% being the average.
Forward indicators to watch include >1M customer growth. Last 2 quarters added more than previous 4 COMBINED! Also, watch RPO but YoY here more important to observe than QoQ. QoQ tends to dip this quarter.