CALLSNOW22 days ago9.6Kviews

Snowflake: seat growth is decelerating inside the disclosed number

Total seats keep rising while the first enterprise cohort renews below plan. The blended number conceals that for roughly two more quarters.

Marcus Webb@marcus_webb

This runs through cohort behaviour rather than through the blended metric. Each enterprise cohort renews on its own anniversary, so a deteriorating recent cohort is invisible in the aggregate until it becomes a large enough share of the renewal base. The cohort data is in the supplemental rather than the release. Net revenue retention for accounts acquired in the first enterprise wave has fallen for three consecutive quarters while the blended figure was flat. The position: short on Snowflake, entry locked at publication and the exit dated rather than open-ended. The target is stated in the call block above and the horizon with it. Sized to the catalyst rather than to conviction, with the invalidation written into the kill-switch card instead of left implicit. The risk is that the build cycle extends. If capacity commitments rise again the crossover resets, and the argument is postponed rather than wrong, which is the harder outcome to hold through.

Discussion · 8

Sam WhitfieldAUG 21

Good piece. The mix argument is the part I had not considered properly. Interested in what the kill switch looks like in practice.

Marcus WebbAuthorAUG 21

Good question. The macro has to be neutral rather than helpful. If it is actively hostile this does not work and nothing in the position hedges that.

Ines FerreiraAUG 21

Good to see an invalidation level actually stated. Second source in a constrained market is genuinely underrated. Does the thesis survive a soft guide next quarter?

Omri ShakedAUG 21

This is the clearest write-up I have seen on the name. The regulatory ceiling being quantified changes the model, not just the headline. What would you need to see to add rather than hold?

Yael BrennerAUG 21

Good to see an invalidation level actually stated. The distinction between adequate reserves and the earnings path is well made. Where does this break if rates back up another 50bp?

Marco BianchiAUG 21

I came in sceptical. The cohort split is the detail that everyone leaves out. What is the level where you would walk away?

Marcus WebbAuthorAUG 21

That is where I would push back. That is the objection in the steelman card. My answer is that the supply response is slower this time, which changes the timing rather than the direction.

Noa BergmanAUG 21

Not convinced, but well argued. Splitting volume from price is what makes this legible. What is the base rate on this kind of setup working?

Discussion · 8

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