Read on Twitter
$SNOW: Pioneering the Data Cloud
Snowflake Inc. (NYSE: SNOW) helps companies consolidate data in order to drive meaningful business insights, build data-driven applications, and share data.
Its growth rates and metrics would even impress $ZM shareholders
A thread
Snowflake Inc. (NYSE: SNOW) helps companies consolidate data in order to drive meaningful business insights, build data-driven applications, and share data.
Its growth rates and metrics would even impress $ZM shareholders
A thread
1/ The Basics
Cloud-native architecture, 3 independently scalable layers:
- Storage
- Compute
- Cloud Services
Key: SNOW separates compute and storage functionality
Built on 3 major public clouds across 22 interconnected deployments to create a single Cloud Data Platform
Cloud-native architecture, 3 independently scalable layers:
- Storage
- Compute
- Cloud Services
Key: SNOW separates compute and storage functionality
Built on 3 major public clouds across 22 interconnected deployments to create a single Cloud Data Platform
2/ Market Opportunity
TAM: $137B
-Cloud Data Platform: $81B
-Analytics/Platform/BI: $56B
Tailwinds:
-Accelerating Cloud Adoption (IDC): 30% of data currently stored in public cloud -> 49% by 2025
-Data Proliferation (IDC): 33 ZB of data in 2018 to 175 ZB by 2025 (27% CAGR)
TAM: $137B
-Cloud Data Platform: $81B
-Analytics/Platform/BI: $56B
Tailwinds:
-Accelerating Cloud Adoption (IDC): 30% of data currently stored in public cloud -> 49% by 2025
-Data Proliferation (IDC): 33 ZB of data in 2018 to 175 ZB by 2025 (27% CAGR)
3/ The Data Warehousing Problem
Legacy database architectures: scalability & capacity constraints; not designed for cloud-based workloads.
Resulted in data silos, governance issues, limited business insights.
Can’t support large data volumes or data sharing & expensive
Legacy database architectures: scalability & capacity constraints; not designed for cloud-based workloads.
Resulted in data silos, governance issues, limited business insights.
Can’t support large data volumes or data sharing & expensive
4/ SNOW’s Solution
Leverage elasticity & performance of public cloud; enable customers to unify and query data
Frictionless, governed data access: securely share data in/outside of org
Benefits from powerful network effects (more customers > more data > better data cloud)
Leverage elasticity & performance of public cloud; enable customers to unify and query data
Frictionless, governed data access: securely share data in/outside of org
Benefits from powerful network effects (more customers > more data > better data cloud)
5/ Business Model: DWaaS
Usage-based pricing (i.e. $DDOG, $FSLY, $TWLO) -> High DBNR
Separate pricing for storage, compute, and data transfer
Single integrated offering, can’t be purchased separately
Majority of revenue from capacity arrangements https://twitter.com/SeifelCapital/status/1295843009381175296?s=20
Usage-based pricing (i.e. $DDOG, $FSLY, $TWLO) -> High DBNR
Separate pricing for storage, compute, and data transfer
Single integrated offering, can’t be purchased separately
Majority of revenue from capacity arrangements https://twitter.com/SeifelCapital/status/1295843009381175296?s=20
6/ GTM
Self-Service with Demo & Trial: Land customers
Upsell Existing Customers: Increase migration of workloads (158% NRR)
Shift Towards Higher ACV Customers: $160K ACV significantly above SaaS avg.
- Better CAC Payback
Customers (): 154% increase in +$1MM customers
Self-Service with Demo & Trial: Land customers
Upsell Existing Customers: Increase migration of workloads (158% NRR)
Shift Towards Higher ACV Customers: $160K ACV significantly above SaaS avg.
- Better CAC Payback
Customers (
): 154% increase in +$1MM customers
7/ Customer Profile
- Total Customers: 3,117 vs. 1,547 (+101% YoY)
- 7 of F10; 146 of F500 (4% & 26% of Revenue)
- Customers > $1MM Revenue: 56 vs. 22 (+155%); 46% of Revenue; Focused on this cohort
- 94% of Revenue from existing customers under capacity arrangements
- Total Customers: 3,117 vs. 1,547 (+101% YoY)
- 7 of F10; 146 of F500 (4% & 26% of Revenue)
- Customers > $1MM Revenue: 56 vs. 22 (+155%); 46% of Revenue; Focused on this cohort
- 94% of Revenue from existing customers under capacity arrangements
8/ Key Business Metrics
Q2 Revenue: $133MM vs. $60MM (+121% YoY)
- TTM: $403MM vs. $169MM (+137.7% YoY)
RPO: $688.2MM vs. $221.1MM (+211% YoY)
Net Revenue Retention: 158% (223% Q2 2019)
*Usage-based pricing
Gross Margins: 56%
Rule of 40: 93%
Payback Period: 22 Months
Q2 Revenue: $133MM vs. $60MM (+121% YoY)
- TTM: $403MM vs. $169MM (+137.7% YoY)
RPO: $688.2MM vs. $221.1MM (+211% YoY)
Net Revenue Retention: 158% (223% Q2 2019)
*Usage-based pricing
Gross Margins: 56%
Rule of 40: 93%
Payback Period: 22 Months
9/ Competition
- Major Cloud Providers: $AMZN $MSFT $GOOGL
[Note: $SNOW only offers its services on ^, majority on AWS]
-> Difference: $SNOW is cloud agnostic, customers avoid vendor lock-in
- Legacy database vendors / big data offerings: $ORCL, Netezza ($IBM), Vertica
![9/ Competition- Major Cloud Providers: $AMZN $MSFT $GOOGL[Note: $SNOW only offers its services on ^, majority on AWS]-> Difference: $SNOW is cloud agnostic, customers avoid vendor lock-in- Legacy database vendors / big data offerings: $ORCL, Netezza ($IBM), Vertica](https://pbs.twimg.com/media/Eg3K0n7UwAEEJFC.jpg "9/ Competition- Major Cloud Providers: $AMZN $MSFT $GOOGL[Note: $SNOW only offers its services on ^, majority on AWS]-> Difference: $SNOW is cloud agnostic, customers avoid vendor lock-in- Legacy database vendors / big data offerings: $ORCL, Netezza ($IBM), Vertica")
- Major Cloud Providers: $AMZN $MSFT $GOOGL
[Note: $SNOW only offers its services on ^, majority on AWS]
-> Difference: $SNOW is cloud agnostic, customers avoid vendor lock-in
- Legacy database vendors / big data offerings: $ORCL, Netezza ($IBM), Vertica
10/ Management
Current CEO: Frank Slootman
- Former CEO of $NOW: Oversaw Revenue growth from $100MM to $1.4B in six years (55% CAGR)
Founders: Thierry Cruanes (CTO) and Benoit Dageville (President of Products)
Sutter Hill Ventures was first investor; Mike Speiser was 1st CEO
Current CEO: Frank Slootman
- Former CEO of $NOW: Oversaw Revenue growth from $100MM to $1.4B in six years (55% CAGR)
Founders: Thierry Cruanes (CTO) and Benoit Dageville (President of Products)
Sutter Hill Ventures was first investor; Mike Speiser was 1st CEO
11/ Conclusion
$SNOW will be the subject of my newsletter next week: http://seifelcapital.substack.com
The company’s growth and operating metrics are off the charts
I'm a big fan of the business model and market tailwinds
I will be a shareholder after it forms an IPO base
$SNOW will be the subject of my newsletter next week: http://seifelcapital.substack.com
The company’s growth and operating metrics are off the charts
I'm a big fan of the business model and market tailwinds
I will be a shareholder after it forms an IPO base
H/T to my friends at @publiccomps
Specifically @jonbma for his excellent breakdown of the $SNOW S-1 from which I used the competitor and ARR images.
His thread is here: https://twitter.com/jonbma/status/1299078997637292032?s=20
Public Comps provides detailed and thorough company analysis - check them out!
Specifically @jonbma for his excellent breakdown of the $SNOW S-1 from which I used the competitor and ARR images.
His thread is here: https://twitter.com/jonbma/status/1299078997637292032?s=20
Public Comps provides detailed and thorough company analysis - check them out!
