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Call sheet · Q2'25

Snowflake (SNOW)

Q2'25 earnings call · held 2024-08-21 · compared with the Q1'25 call · management-credibility review
9/12
Disclosure score
2 medium, 4 low flags
Financial quality
Bottom line
The sleeper story is AI products ramping 233% in three months to 2,500+ weekly active accounts - that's not in anyone's models and management expects material revenue contribution next year despite giving zero guidance. The obvious headline is stable 30% growth, but the real constraint is customer commitment levels with two top-10 accounts going month-to-month and RPO-revenue gaps at historic highs. Mike's most revealing quote: 'We really haven't seen any storage leave Snowflake yet, but that was always forecast to happen in the second half' - translation, the Iceberg storage headwind everyone fears is still coming. My view changes if they quantify AI revenue contribution in Q3 or if storage revenue suddenly drops below 10% of total revenue.

The 30-second version

  • SLEEPER STORY: AI products are ramping faster than expected despite zero revenue guidance contribution
  • 30% growth looks stable but it's getting harder - optimization headwinds persist despite claims of 'stable environment'
  • Iceberg is the revenue time bomb nobody's pricing in - storage still 11% of revenue despite 400 customer deployments

What changed this quarter

MetricQ1'25Q2'25Change
Product Revenue$790M (+34% YoY)$829M (+30% YoY)400bps deceleration
Remaining Performance Obligations$5.0B (+46% YoY)$5.2B (+48% YoY)200bps acceleration
Non-GAAP Product Gross Margin76.9%76%90bps compression
Non-GAAP Operating Margin4%5%100bps improvement
Free Cash Flow Margin44%8%3600bps decline (seasonal)
AI Weekly Active Accounts750+2,500+233% growth in 3 months
Iceberg Customer Count300+ (public preview)400+ (GA)33% growth
Data Sharing Adoption24% of customersNearly 1/3 of customersContinued expansion
Storage Mix11%11%Flat despite Iceberg fears
Share Repurchases$516M$400M22% lower deployment

Accountability tracked

8 new promises made4 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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This is a free preview. The full write-up and promise ledger are published to subscribers on Substack.
Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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