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Important Notice Regarding Alleged Product Efficiency and Consumption Misrepresentations
NEW YORK, April 23, 2026 /PRNewswire/ -- SueWallSt notifies investors in Snowflake Inc. (NYSE: SNOW) that a class action lawsuit has been filed on behalf of shareholders who purchased securities between June 27, 2023 and February 28, 2024. Find out if you qualify to recover losses. You may also contact Joseph E. Levi, Esq. at jlevi@SueWallSt.com or (888) SueWallSt.
SNOW shares fell $41.72 per share, an 18.14% single-day decline, after the Company disclosed material revenue headwinds it had allegedly concealed for months. The lead plaintiff deadline is April 27, 2026.
How a Consumption-Based Revenue Model Created Concealed Vulnerability
Unlike traditional software companies that sell annual licenses, Snowflake generates revenue only when customers actively consume computing credits. This model ties the Company's top line directly to usage volume. According to the lawsuit, this made Snowflake uniquely vulnerable to three converging forces that management allegedly failed to disclose: product efficiency gains that let customers do more with fewer credits, open-source Iceberg Table formats that shifted storage outside the Snowflake platform, and a new tiered pricing structure that discounted storage costs for the Company's largest accounts.
Key Consumption Revenue Allegations for Shareholders
The complaint contends that during the Class Period, management made repeated positive statements about consumption trends while allegedly knowing that:
- Product efficiency improvements were reducing credit consumption per workload, creating a 6.2% to 6.3% drag on revenue growth
- Large customers had already communicated their plans to adopt Iceberg Tables, which would remove storage and associated compute revenue from Snowflake's platform
- Tiered storage pricing, rolled out beginning in Q3 of fiscal 2024, was compressing storage revenue from the Company's biggest accounts
- Storage represented approximately 10% to 11% of total revenue, making any migration to open formats a material headwind
- The combined effect of these forces made the Company's public $10 billion 2029 product revenue target unsupportable
- Jobs running on the platform grew 62% year-over-year while revenue grew only 33%, a widening gap the lawsuit alleges reflected the consumption erosion already underway
The Consumption Model Paradox
The lawsuit alleges a fundamental tension at the center of this case: Snowflake's own product improvements were cannibalizing its revenue. The action claims that as the Company made its platform faster and more efficient, customers needed fewer credits to accomplish the same work. This dynamic was compounded by Iceberg Tables, which the complaint asserts gave large enterprise customers a path to store data outside Snowflake entirely, eliminating both storage fees and the compute costs associated with importing that data.
"This case presents important questions about consumption-based revenue disclosure obligations in the cloud software sector. When a company's own product developments create material headwinds to its revenue model, investors are entitled to timely and transparent disclosure of those dynamics." -- Joseph E. Levi, Esq.
Submit your information to join this case or call Joseph E. Levi, Esq. at (212) 363-7500.
ABOUT LEVI & KORSINSKY, LLP -- Over the past 20 years, Levi & Korsinsky has secured hundreds of millions of dollars for aggrieved shareholders. The firm has extensive expertise in complex securities litigation and a team of over 70 employees. For seven consecutive years, Levi & Korsinsky has ranked in ISS Securities Class Action Services' Top 50 Report. Applications to serve as lead plaintiff must be filed by April 27, 2026.
CONTACT:
SueWallSt
Joseph E. Levi, Esq.
33 Whitehall Street, 27th Floor
New York, NY 10004
Tel: (888) SueWallSt
Fax: (212) 363-7171
View original content to download multimedia:https://www.prnewswire.com/news-releases/suewallst-snow-consumption-headwinds-allegedly-hid-revenue-risks-302751170.html
SOURCE SueWallSt.com
Disclosure Under Scrutiny: Were Snowflake's Risk Warnings Adequate?
NEW YORK, April 22, 2026 /PRNewswire/ -- Levi & Korsinsky, LLP examines the adequacy of Snowflake Inc.'s (NYSE: SNOW) risk disclosures during the period June 27, 2023 through February 28, 2024. A securities class action has been filed in the U.S. District Court for the Northern District of California on behalf of investors who purchased SNOW stock during that period and lost money. Find out if you are eligible to recover losses from inadequate disclosures or contact Joseph E. Levi, Esq. at jlevi@levikorsinsky.com or (212) 363-7500.
Snowflake shares fell $41.72 per share (18.14%) after the Company disclosed material consumption headwinds it had allegedly known about for months. The lead plaintiff deadline is April 27, 2026.
What the Company Disclosed to Investors
Throughout the Class Period, Snowflake's public statements painted an optimistic picture of consumption trends and product developments. On its Investor Day in June 2023, the Company reaffirmed confidence in reaching $10 billion in product revenue by 2029. In quarterly earnings calls in August and November 2023, the Company described consumption as "good" and "strong from a broad base of customers," the complaint recounts. Product initiatives such as Iceberg Tables were framed exclusively as growth opportunities that would open new workload categories.
What the Complaint Alleges Was Missing
The action contends that these public statements omitted specific, known adverse facts:
- Product efficiency gains were already reducing the amount customers paid per workload, with a projected 6.2% to 6.3% revenue headwind for the following fiscal year
- Tiered storage pricing, which Snowflake began rolling out in Q3 of fiscal 2024, was reducing storage revenue from the Company's largest customers
- Many large customers had directly communicated their plans to adopt Iceberg Tables, which would shift storage out of Snowflake and eliminate both storage and compute revenue
- The arm chip rollout in Microsoft Azure was expected to further reduce consumption per customer
- Internally, Snowflake monitored consumption and revenue on a daily basis, giving executives real-time visibility into these trends
The complaint challenges the adequacy of Snowflake's disclosures because while generic risk factors may have referenced competition or changing customer preferences, they allegedly did not alert investors to specific, quantifiable headwinds that executives were already tracking and that large customers had already confirmed.
Why Generic Warnings May Not Protect
Under the federal securities laws, boilerplate risk factor language cannot substitute for disclosing specific, known problems that are already affecting operations. When a company's SVP of Product confirms that "for many of our large customers, we have been in touch on their plans for adoption on Iceberg," and its CFO acknowledges monitoring consumption daily, the complaint contends that investors were entitled to more than general cautionary language about potential future risks.
"Generic risk factor language cannot substitute for disclosing specific, known problems that are already affecting a company's operations. When executives have daily visibility into consumption trends and direct communications from customers about adoption of competing formats, investors deserve to know," stated Joseph E. Levi, Esq.
Speak with an attorney about whether Snowflake's disclosures were adequate or call (212) 363-7500.
LEAD PLAINTIFF DEADLINE: April 27, 2026
Levi & Korsinsky, LLP, Top 50 securities litigation firm (ISS, seven consecutive years). Over 70 professionals. Hundreds of millions recovered for investors.
CONTACT:
Levi & Korsinsky, LLP
Joseph E. Levi, Esq.
Ed Korsinsky, Esq.
33 Whitehall Street, 27th Floor
New York, NY 10004
Tel: (212) 363-7500
Fax: (212) 363-7171
View original content to download multimedia:https://www.prnewswire.com/news-releases/snows-generic-risk-warnings-allegedly-failed-to-disclose-known-headwinds--levi--korsinsky-llp-302749868.html
SOURCE Levi & Korsinsky, LLP
