Non-GAAP to GAAP reconciliation (illustrative)
Non-GAAP adjusted FCF$880
Less: stock-based compensation expense($810)
Less: employer payroll taxes on SBC($35)
GAAP FCF (approximate)$35
USD millions. Refresh from the most recent 10-K filing.
How an analyst should treat this
Use GAAP FCF for valuation. Use non-GAAP only to understand management's framing of underlying margin trajectory. Disclose both in any model you publish.
Rule of 40 reading
Revenue growth ~30%, GAAP FCF margin ~1%, non-GAAP FCF margin ~27%. Rule of 40 clears 40 only under the non-GAAP reading. Strict practitioners would say Snowflake is below rule-of-40 on the audit-room metric.