NOTESNOWabout 2 months ago8.2Kviews

Snowflake: attach is real and it is not discounted

Upsell into the installed base carries no acquisition cost. At this attach rate the contribution margin on the increment is close to the gross margin.

Daniel Okafor@daniel_okafor

The economics turn on customer acquisition cost. Selling a new module into an existing account carries almost none, so incremental contribution margin on upsell runs far closer to gross margin than the blended figure suggests. Attach is visible in the segment detail. The new modules contributed meaningfully to the quarter with no corresponding increase in sales and marketing, which is what upsell into an installed base looks like. The position: long 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. Multiple compression across the sector is the risk that is not company-specific and not hedged here. It would overwhelm the operating argument in either direction.

Discussion · 9

Sam WhitfieldJUL 25

Thanks for showing the workings. The channel data is what makes this hard to dismiss. What would you need to see to add rather than hold?

Daniel OkaforAuthorJUL 24

Fair challenge. Invalidation is a close below the lock price on volume, and I should have written that into the card rather than leaving it implicit. (716)

Omri ShakedJUL 25

This changed my mind. The destocking signature is textbook and nobody is naming it. Would you underwrite this without the catalyst date?

Daniel OkaforAuthorJUL 23

Fair challenge. Invalidation is a close below the lock price on volume, and I should have written that into the card rather than leaving it implicit. (718)

Yael BrennerJUL 25

Good piece. The channel data is what makes this hard to dismiss. Any view on how the read-across affects the rest of the group?

Dana KatzJUL 25

Useful framing. I had not appreciated how much of this is already in consensus. Would you underwrite this without the catalyst date?

Daniel OkaforAuthorJUL 24

Fair challenge. Invalidation is a close below the lock price on volume, and I should have written that into the card rather than leaving it implicit. (720)

Yael BrennerJUL 25

Not convinced, but well argued. The point about conversion rather than demand is the right one. How much of this do you think is already in the buy side's numbers?

Ines FerreiraJUL 24

This lines up with what I saw in the filings. The cohort split is the detail that everyone leaves out. Any view on how the read-across affects the rest of the group?