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Wow, Sales + Marketing pretty much 1.5x their revenue ($265M), swinging them from +50% operating margins to -150-200% net margins. They are really trying to c

Wow, Sales + Marketing pretty much 1.5x their revenue ($265M), swinging them from +50% operating margins to -150-200% net margins. They are really trying to cram this product down people's throats, huh?

stefan_ 6y ago
It's absurd. How can you trust any of their "growth" numbers? For all we know, they are paying people $10 to give them $8 in revenue.
- TheMagicHorsey 6y ago
  I was thinking the same thing. It seems so absurd that I fear I probably do not know how to read these financial statements correctly.
- noahmbarr 6y ago
  Or is it $8/year for several years? The question is what is Snowflake’s net-churn rate.
actualanswer 6y ago
How is this different from any enterprise sales growth company? Not a surprise
saas_sam 6y ago
You pay a lot to acquire customers up front but as long as your churn is net negative (ie., customers end up spending more year over year) you end up coming out way ahead. Sales reps only get paid on a contract one time, based on the value of that initial subscription revenue. $0 commission when it renews next year, and the year after, and the year after... (Small caveat that someone probably gets commission on follow-on expansion revenue, but not that initial subscription amount.)
- jsperson 6y ago
  Based on the quality of support I think they will have high retention. We’re currently a relatively small customer and the support has been excellent. I submitted a bug and it was fixed on our production account in less than two months. This included a step through on our dev account. It would have taken me two months just to convince Oracle and Microsoft that they had a bug. I had a couple of other minor issues and got very good response.
mr_toad 6y ago
All these breathless reviews can’t come cheap.
FridgeSeal 6y ago
It feels very much like early MongoDB days, where they are attempting to capture mind/market share by aggressively marketing as opposed to competing on product quality and features.

stefan_ 6y ago

It's absurd. How can you trust any of their "growth" numbers? For all we know, they are paying people $10 to give them $8 in revenue.

TheMagicHorsey 6y ago
I was thinking the same thing. It seems so absurd that I fear I probably do not know how to read these financial statements correctly.
noahmbarr 6y ago
Or is it $8/year for several years? The question is what is Snowflake’s net-churn rate.

actualanswer 6y ago

How is this different from any enterprise sales growth company? Not a surprise

saas_sam 6y ago

You pay a lot to acquire customers up front but as long as your churn is net negative (ie., customers end up spending more year over year) you end up coming out way ahead. Sales reps only get paid on a contract one time, based on the value of that initial subscription revenue. $0 commission when it renews next year, and the year after, and the year after... (Small caveat that someone probably gets commission on follow-on expansion revenue, but not that initial subscription amount.)

jsperson 6y ago
Based on the quality of support I think they will have high retention. We’re currently a relatively small customer and the support has been excellent. I submitted a bug and it was fixed on our production account in less than two months. This included a step through on our dev account. It would have taken me two months just to convince Oracle and Microsoft that they had a bug. I had a couple of other minor issues and got very good response.

mr_toad 6y ago

All these breathless reviews can’t come cheap.

FridgeSeal 6y ago

It feels very much like early MongoDB days, where they are attempting to capture mind/market share by aggressively marketing as opposed to competing on product quality and features.