Quarterly Outlook
Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
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CrowdStrike and Snowflake: why guidance beats history
Ruben Dalfovo
Investment Strategist
Key takeaways
- Two strong prints, opposite reactions: Crowdstrike fell on soft revenue outlook; Snowflake jumped on a raised guide
- Use history as a baseline to judge guidance credibility and execution, not as a forecast
- Focus on the key metrics that drive sensitivity to future outlook and price tomorrow’s cash flows, not yesterday’s beat
Why guidance beats history
Earnings tell you what just happened. Guidance tells you what management thinks will happen next. Markets move on guidance, not last quarter, because a stock is priced on expected future cash flows and the odds they will materialize. History is the baseline. It answers, “Is the engine working and is execution credible?”. Guidance is the steering wheel. It updates the path and speed. When guidance shifts even a little versus consensus, the whole trajectory of expected cash flows changes, and the market must reprice.
Three levers drive that repricing:
Magnitude vs consensus: A +1% raise or −1% trim to next-quarter revenue can imply a much larger multi-quarter knock-on once you compound it.
Quality of growth: The same revenue can be worth more if it comes from sticky cohorts, higher-margin modules, or durable consumption patterns.
Credibility: Repeatedly meeting or beating guidance lowers the discount investors apply to management’s forecasts; misses raise it.
That is why two “beats” can diverge. CrowdStrike delivered strong ARR and cash conversion, but a slightly softer near-term revenue outlook plus remediation credits pulled the forward curve down. Snowflake raised product-revenue guidance and showed healthy cohorts and remaining performance obligations, so the curve bent up. The market did not reward yesterday’s prints; it recalibrated tomorrow’s path.
Business models: ARR vs consumption
Both companies sell into the AI wave. CrowdStrike sells subscriptions measured by annual recurring revenue (ARR). Net new ARR of USD 221 million set a quarterly record and ending ARR rose 20% year over year to USD 4.66 billion—evidence the platform continues to land and expand. The model converts growth into cash today: second quarter free cash flow was USD 284 million (24% of revenue), with operating income at USD 255 million. Cash helps the floor, but top-line confidence sets the ceiling.
Snowflake sells consumption. Customers pay for what they use—compute, storage, and services—so revenue tracks query volumes and AI workloads, not seats. In the second quarter, product revenue grew 32% year over year to USD 1.09 billion, net revenue retention held at 125%, and remaining performance obligations rose 33% to USD 6.9 billion—forward demand signals for usage at scale. Operating margin reached 11% and free-cash-flow margin 6%, marking the second consecutive quarter of adjusted operating profits and positive cash flows.
Print vs. expectations: why guidance drove the tape
CrowdStrike guided next quarterly revenue to USD 1.21–1.22 billion, a touch below consensus near USD 1.23 billion. Shares fell roughly 4% after hours as investors repriced near-term growth. In addition, after the global outage, CrowdStrike is compensating customers with bill credits and cash. Management expects about USD 51 million of cash payments in Q3 and a USD 10–15 million quarterly revenue drag from retention incentives. These are remediation costs, not regulatory fines, and they weigh on near-term results while aiming to keep customers.
The message is simple: even with strong ARR and cash conversion, a softer revenue outlook weighs more than a clean backward-looking beat.
Snowflake lifted full year product-revenue guidance to about USD 4.395 billion and guided third quarter product revenue to USD 1.125–1.130 billion, slightly above expectations. Shares jumped about 13% after hours. The path to scale is visible and the market prices the cadence of consumption growth and AI workload ramp, not last quarter’s print.
Both stories share the same risk: forward numbers hinge on usage and deal timing. That makes quarter-to-quarter surprises hard to model—cohort behavior, large-customer decisions, AI workload ramp, and any service issues can move guidance quickly.
Investor playbook
- Track forward guides vs consensus each quarter.
- For CrowdStrike, watch net new ARR, modules per customer, and next quarter revenue realization vs the guided range, and remediation costs fading.
- For Snowflake, watch consumption trends by cohort, next quarter product revenue, and how guidance for fiscal year 2026 moves over time.
- Monitor cash conversion and adjust for share-based pay to see if growth turns into real profits.
Conclusion
Two strong quarters. Two different futures priced. CrowdStrike’s record ARR and solid cash generation met a softer near-term revenue guide, so stock paid for near-term doubt. Snowflake’s clean beat plus slightly higher guidance did the opposite. For long-term investors, the signal is clear: credibility and cadence of forward metrics drive returns more than backward-looking strength. The key driver is guidance quality; the key risk is consumption or renewal volatility that dents that guidance. Price the path, not the past—the market rewards evidence today and compounding over time.
This material is marketing content and should not be regarded as investment advice. Trading financial instruments carries risks and historic performance is not a guarantee of future results.
The instrument(s) referenced in this content may be issued by a partner, from whom Saxo receives promotional fees, payment or retrocessions. While Saxo may receive compensation from these partnerships, all content is created with the aim of providing clients with valuable information and options..
The instrument(s) referenced in this content may be issued by a partner, from whom Saxo receives promotional fees, payment or retrocessions. While Saxo may receive compensation from these partnerships, all content is created with the aim of providing clients with valuable information and options..
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