SNOW · Forward model · Bear case
The Bear case, 20 quarters out
Each segment is projected from its own operating driver, rolled up into consolidated cash flow, and discounted back to a fair value per share. The assumptions below are editable — change them and every number on this page moves with them.
Snowflake reports a single operating segment, so this model uses the only revenue disaggregation it publishes every quarter: product revenue and professional services and other revenue. The two lines foot to reported total revenue to the dollar in all nine quarters shown, including the basis quarter, where $1,334,329 thousand plus $56,622 thousand is the reported $1,390,951 thousand. Nothing is split by product - there is no Cortex, Snowflake Intelligence or Cortex Code revenue line anywhere in the filings - and nothing is split by compute, storage or data transfer, because none of those is disclosed. Quarter labels are Snowflake fiscal quarters: 2027 Q1 is the three months ended 30 April 2026. Two boundaries matter. First, the margin ladder is non-GAAP and therefore excludes stock-based compensation, which ran at $433.7 million, or 31.2% of revenue, in the basis quarter; on GAAP the company's operating margin was -23.4% and it lost $0.86 a share. To carry some of that cost, the fair value is struck on the 375.0 million non-GAAP diluted share count rather than the 346.6 million shares outstanding. Second, corporate operating expense is allocated to the two verticals pro rata to their revenue rather than held as overhead, because Snowflake allocates no operating expense by line: at the basis quarter that puts the platform line at a 15.26% fully-loaded margin (75.1% non-GAAP product gross margin less the 59.84% non-GAAP operating expense ratio) and the services line at -68.04%, which recombine to the disclosed 11.9% consolidated non-GAAP operating margin. That allocation is an accounting convenience of this model, not a Snowflake disclosure. Free cash flow here is EBITDA less capital expenditure less tax at 25%, so it is not Snowflake's adjusted free cash flow: the guided 23.0% adjusted margin adds back stock-based compensation and the working-capital inflow from growing deferred revenue, and this model's projected margin runs about nine points below it, which is why the rule-of-forty score shown here is near 38 where the company's own guided score is 54. Both verticals were tested for seasonality against a centred four-quarter moving average and both came back inside the noise, so neither carries a seasonal factor.
Growth reverts to the guided trajectory rather than the printed one and the cash margin keeps slipping. Snowflake's own raised full-year guide implies second-half product growth of about 29.5% against the 34% just delivered, and the second quarter is guided at 30%. Remaining performance obligations fell from $9.77 billion at 31 January 2026 to $9.21 billion at 30 April 2026. The full-year adjusted free cash flow margin guide of 23.0% is two points below the 25% actually delivered in fiscal 2026, and non-GAAP product gross margin is guided to 75.0% against 76% delivered - the AI margin drag the CFO described. Revenue per customer stops compounding and the exit multiple compresses toward the low teens of forward sales.
Latest: $2.57B (2032Q1E)
| Period | Value |
|---|---|
| 2025Q1 | $829M |
| 2025Q2 | $869M |
| 2025Q3 | $942M |
| 2025Q4 | $987M |
| 2026Q1 | $1.04B |
| 2026Q2 | $1.14B |
| 2026Q3 | $1.21B |
| 2026Q4 | $1.28B |
| 2027Q1 | $1.39B |
| 2027Q2E | $1.46B |
| 2027Q3E | $1.53B |
| 2027Q4E | $1.60B |
| 2028Q1E | $1.66B |
| 2028Q2E | $1.73B |
| 2028Q3E | $1.79B |
| 2028Q4E | $1.85B |
| 2029Q1E | $1.91B |
| 2029Q2E | $1.97B |
| 2029Q3E | $2.03B |
| 2029Q4E | $2.09B |
| 2030Q1E | $2.15B |
| 2030Q2E | $2.20B |
| 2030Q3E | $2.26B |
| 2030Q4E | $2.31B |
| 2031Q1E | $2.37B |
| 2031Q2E | $2.42B |
| 2031Q3E | $2.47B |
| 2031Q4E | $2.52B |
| 2032Q1E | $2.57B |
What drives each segment
Platform consumption (product revenue)
Subscribers × ARPUSnowflake bills consumption of compute, storage and data transfer, not seats, so product revenue is the disclosed customer count multiplied by a derived product revenue per customer. Expansion inside the installed base is the dominant half: net revenue retention was 126% in the basis quarter and 779 customers now spend more than $1 million on a trailing twelve-month basis, up 29% year over year, so the spend is concentrated in a widening large-account tier rather than spread thinly. Product revenue is 96% of total revenue.
Latest: $2.50B (2032Q1E)
| Period | Value |
|---|---|
| 2025Q1 | $790M |
| 2025Q2 | $829M |
| 2025Q3 | $900M |
| 2025Q4 | $943M |
| 2026Q1 | $997M |
| 2026Q2 | $1.09B |
| 2026Q3 | $1.16B |
| 2026Q4 | $1.23B |
| 2027Q1 | $1.33B |
| 2027Q2E | $1.40B |
| 2027Q3E | $1.47B |
| 2027Q4E | $1.54B |
| 2028Q1E | $1.60B |
| 2028Q2E | $1.67B |
| 2028Q3E | $1.73B |
| 2028Q4E | $1.79B |
| 2029Q1E | $1.85B |
| 2029Q2E | $1.91B |
| 2029Q3E | $1.97B |
| 2029Q4E | $2.02B |
| 2030Q1E | $2.08B |
| 2030Q2E | $2.13B |
| 2030Q3E | $2.19B |
| 2030Q4E | $2.24B |
| 2031Q1E | $2.29B |
| 2031Q2E | $2.34B |
| 2031Q3E | $2.40B |
| 2031Q4E | $2.45B |
| 2032Q1E | $2.50B |
Assumptions & reasoning
- Product revenue per customer is derived, not disclosed. Snowflake publishes the total customer count and the product revenue every quarter; the ratio is arithmetic. It was $95,912 per customer per quarter in the basis quarter, up 11.4% year over year, and the driver carries it as $31,970.67 a month because the engine bills ARPU monthly.
- The engine damps net adds by the headroom left against the ceiling, so the 1,157 net-add capacity in the slider is the disclosed 616 net adds grossed up by the 53.6% of the 30,000-customer pool still unfilled. The published net-adds trace prints 616 in the first projected quarter, which is what Snowflake reported.
- Total customer counts are restated for acquisitions, consolidations and spin-offs. The FY2026 10-K states 13,328 total customers at 31 January 2026; the FY2027 Q1 10-Q restates that same date to 13,296, and the 616 net adds disclosed in the release are computed against the restated figure. The history above uses each count as first reported.
- The AI products - Cortex, Snowflake Intelligence and Cortex Code - sit inside product revenue with no separate disclosure. The CFO said Cortex Code 'had the largest driver to the increase in our forecast' but gave no dollar figure, so this model creates no AI revenue line.
- Tested for seasonality by ratio to a centred four-quarter moving average: the fiscal-quarter factors come out 0.982, 1.007, 1.004 and 0.993, a 2.5-point signal, while the same method on the longer thirteen-quarter total-revenue series gives a 1.5-point signal against a 1.1 to 2.3 point window-to-window spread within each quarter. The spread swamps the signal, so this line is modelled as aseasonal.
- Observe closed on 2 February 2026 for $595.8 million, inside the basis quarter, and Snowflake discloses no revenue contribution from it. Part of the customer and revenue step-up is therefore inorganic and cannot be sized from disclosure.
Professional services and other
Growth pathImplementation, training and education attached to platform deployments. It is sold to seed consumption rather than for profit: it carried a 37.1% GAAP gross loss and an 8.2% non-GAAP gross loss in the basis quarter and has never been gross-profitable in the nine disclosed quarters. At 4% of revenue it is immaterial to value but it is the second half of the only revenue split Snowflake publishes, so it is carried explicitly rather than folded into the platform line.
Latest: $77M (2032Q1E)
| Period | Value |
|---|---|
| 2025Q1 | $39M |
| 2025Q2 | $40M |
| 2025Q3 | $42M |
| 2025Q4 | $43M |
| 2026Q1 | $45M |
| 2026Q2 | $54M |
| 2026Q3 | $55M |
| 2026Q4 | $57M |
| 2027Q1 | $57M |
| 2027Q2E | $58M |
| 2027Q3E | $59M |
| 2027Q4E | $60M |
| 2028Q1E | $61M |
| 2028Q2E | $62M |
| 2028Q3E | $63M |
| 2028Q4E | $64M |
| 2029Q1E | $65M |
| 2029Q2E | $66M |
| 2029Q3E | $67M |
| 2029Q4E | $68M |
| 2030Q1E | $69M |
| 2030Q2E | $70M |
| 2030Q3E | $71M |
| 2030Q4E | $72M |
| 2031Q1E | $73M |
| 2031Q2E | $74M |
| 2031Q3E | $75M |
| 2031Q4E | $76M |
| 2032Q1E | $77M |
Assumptions & reasoning
- Snowflake discloses no headcount, utilisation, billable-hours, day-rate or backlog measure for this line, so a base growth rate is the only honest driver. Any unit or capacity build would be invented.
- The FY2026 Q2 step from $45.3 million to $54.5 million is a level shift that has held for four quarters, not a season; the base is roughly $55 to $57 million a quarter growing with deployments.
- Ratio to a centred four-quarter moving average puts the apparent fiscal-quarter factors at 0.946, 1.065, 1.003 and 0.979, an 11.9-point spread - but every quarter index has a single usable window, and the whole shape is that one level shift sitting in the FY2026 Q1 and Q2 slots. A level change cannot be separated from a season on one observation, so this line is modelled as aseasonal.
Where each case comes from
Bear case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Bear column is what happens if they are taken at face value.
The guide that came with the beat
- May 27, 2026 Full year fiscal 2027 product revenue of $5,840 million, representing 31% year-over-year growth, with non-GAAP adjusted free cash flow margin of 23%.
- May 27, 2026 Remaining performance obligations of $9.21 billion, representing 38% year-over-year growth.
- Feb 25, 2026 Non-GAAP adjusted free cash flow margin of 25% for fiscal 2026, with non-GAAP product gross margin of 76%.
Bull case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Bull column is what happens if they are taken at face value.
The quarter that accelerated
- May 27, 2026 Product revenue of $1.33 billion in the first quarter, representing 34% year-over-year growth.
- May 27, 2026 Net revenue retention rate of 126%, and 779 customers with trailing 12-month product revenue greater than $1 million.
- May 27, 2026 We now have 64 customers spending more than $10 million on a trailing 12-month basis.
Control plane case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Control plane column is what happens if they are taken at face value.
The control-plane claim
- May 27, 2026 With Cortex Code and Snowflake Intelligence, we are extending from the trusted foundation for enterprise data and context to become the control plane for the Agentic Enterprise.
- May 27, 2026 Accounts using Snowflake Intelligence more than doubled quarter-over-quarter, and CoCo is already in use with more than 7,100 accounts.
- May 27, 2026 Under the amended agreement, we have committed to a cumulative minimum spend of $6.0 billion over a five-year contract term ending March 31, 2031.
From cash flow to fair value
| Present value of free cash flow, 20 quarters | $3.38B |
| Terminal-year revenue | $9.98B |
| Terminal-year EBITDA | $1.97B |
| Exit multiple, on revenue | 6.0x |
| Terminal value | $59.91B |
| Discounted at 11.5% a year, terminal value becomes | $34.76B |
| Enterprise value | $38.14B |
| Net cash | $2.09B |
| Equity value | $40.23B |
| Shares | 0.38B |
| Fair value per share | $107.25 |
| Against the current price of $329.11 | -67% |
10.5% on a business that is loss-making at GAAP, carries $2.09 billion of net cash and $2.3 billion of zero-coupon converts, and whose revenue is consumption-billed and therefore discretionary - a premium over a large-cap SaaS cost of equity. 9.0x terminal revenue is roughly half the 17.6x forward EV/sales the shares carry at the 26 August 2026 close of $315.37, and it is the compression a line fading from 31% growth toward the terminal rate has to take; on the assumed 28% terminal margin it is the same as 28x EBITDA. No peer multiple was independently verified beyond Datadog at 19.67x trailing EV/sales, so the exit multiple is anchored on Snowflake's own fade rather than on an asserted comp set. It is by a wide margin the most sensitive input in this model.
Read the other way round: at $329.11 the market is paying 20.4x terminal-year revenue, holding every other assumption on this page fixed. That is the number to argue about.
The projected path
| Quarter | Platform consumption (product revenue) | Professional services and other | Revenue | YoY | EBITDA | Capex | FCF | R40 | PV of FCF |
|---|---|---|---|---|---|---|---|---|---|
| 2027 Q2E | $1.40B | $58M | $1.46B | +28% | $144M | $12M | $99M | +34 | $97M |
| 2027 Q3E | $1.47B | $59M | $1.53B | +26% | $165M | $13M | $114M | +34 | $108M |
| 2027 Q4E | $1.54B | $60M | $1.60B | +24% | $186M | $15M | $128M | +33 | $118M |
| 2028 Q1E | $1.60B | $61M | $1.66B | +20% | $207M | $16M | $143M | +28 | $128M |
| 2028 Q2E | $1.67B | $62M | $1.73B | +18% | $228M | $18M | $157M | +27 | $137M |
| 2028 Q3E | $1.73B | $63M | $1.79B | +17% | $248M | $19M | $172M | +27 | $146M |
| 2028 Q4E | $1.79B | $64M | $1.85B | +16% | $269M | $20M | $187M | +26 | $154M |
| 2029 Q1E | $1.85B | $65M | $1.91B | +15% | $290M | $22M | $201M | +26 | $162M |
| 2029 Q2E | $1.91B | $66M | $1.97B | +14% | $310M | $23M | $216M | +25 | $169M |
| 2029 Q3E | $1.97B | $67M | $2.03B | +13% | $331M | $24M | $230M | +25 | $175M |
| 2029 Q4E | $2.02B | $68M | $2.09B | +13% | $351M | $26M | $244M | +24 | $181M |
| 2030 Q1E | $2.08B | $69M | $2.15B | +12% | $371M | $27M | $258M | +24 | $186M |
| 2030 Q2E | $2.13B | $70M | $2.20B | +12% | $390M | $28M | $272M | +24 | $191M |
| 2030 Q3E | $2.19B | $71M | $2.26B | +11% | $409M | $29M | $285M | +24 | $195M |
| 2030 Q4E | $2.24B | $72M | $2.31B | +11% | $428M | $30M | $299M | +24 | $199M |
| 2031 Q1E | $2.29B | $73M | $2.37B | +10% | $447M | $31M | $312M | +23 | $202M |
| 2031 Q2E | $2.34B | $74M | $2.42B | +10% | $465M | $32M | $325M | +23 | $204M |
| 2031 Q3E | $2.40B | $75M | $2.47B | +9% | $483M | $33M | $338M | +23 | $207M |
| 2031 Q4E | $2.45B | $76M | $2.52B | +9% | $501M | $34M | $350M | +23 | $209M |
| 2032 Q1E | $2.50B | $77M | $2.57B | +9% | $519M | $35M | $363M | +23 | $210M |
Every row is projected. A year-over-year change is shown only where the quarter it compares against exists — an em dash means there is no comparable quarter, not a flat year.
Model revisions
Assumptions are marked to reality as each quarter prints. Every change is appended here, with the fair value the model produced at the time, so the model's own history stays visible.
| Date | Changed | Fair value then | Note |
|---|---|---|---|
| 2026-08-27 | all | $193.27 | First publication, built on the fiscal 2027 first-quarter print of 27 May 2026. Two verticals - product revenue and professional services, the only revenue split Snowflake discloses - with the platform line driven by the disclosed customer count and a derived product revenue per customer, tuned so the three projected quarters of fiscal 2027 reproduce the $5,840 million full-year product revenue guide. |