SNOW - Snowflake: An AI Goldmine Preparing For Accumulation
2024-05-24 13:41:34 ET
Summary
- For Q1 FY2025, Snowflake reported a mixed set of numbers, with a sizable beat on revenue intertwined with a glaring earnings miss.
- Driven by strength in its core business, Snowflake beat top-line expectations by 5.5%, and management raised full-year revenue guidance.
- However, Snowflake is experiencing some margin deterioration due to increased investments in AI and changes to its compensation model for sales reps.
- In reaction to this report, Snowflake stock has dropped back into the $150s.
Brief Review Of Snowflake's Q1 FY25 Earnings
In my previous report on Snowflake ( SNOW ), I labeled management's FY2025 guidance as a welcome gift for their new CEO:
Snowflake: An AI Goldmine, Preparing For Accumulation
Despite the guided deceleration in SNOW's business for 2024, I continue to see a path to $10B ARR by 2029-30. The new CEO - Sridhar Ramaswamy - comes with an incredible CV, and the guide for 2024 may well be an easy beat-and-raise setup for Ramaswamy (sort of a welcome gift from Frank Slootman, who's still going to be the Chairman of the Board).