Allegations
The filed complaint alleges that Snowflake Inc. made materially false and/or misleading statements and/or failed to disclose that: (a) Snowflake had systematically oversold capacity to customers which created a misleading appearance of the demand for Snowflake’s products and services; (b) Snowflake had provided significant discounts to its customers prior to the Initial Public Offering (IPO) that temporarily boosted sales but would not be sustainable after the IPO and/or necessitate platform efficiency adjustments that negatively impacted client consumption and Snowflake’s revenue and profit margins; (c) as a result of (a)-(b) above, Snowflake’s customers were poised to roll over a material amount of unused credits (and thereby cannibalize future sales) at the end of their contracts’ terms or to refuse to renew their contracts at prior consumption levels or at all; (d) as a result (a)-(c) above, Snowflake’s product revenue and remaining performance obligations had been artificially inflated leading up to and during the class period; and (e) as a result of (a)-(d) above, defendants lacked a reasonable basis for their positive statements about Snowflake’s business, financials, and growth trajectory.