SNOW - Earnings call transcript Q1 2022

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Operator

Good day, and thank you for standing by, and welcome to the Q1 FY '22 Snowflake Earnings Conference Call. [Operator Instructions]. I would now like to hand the conference over to your speaker for today, Mr. Jimmy Sexton, Head of Investor Relations. Thank you. ahead. go please Sir,

Jimmy Sexton

thank Earnings joining Call. and QX on Fiscal XXXX you afternoon, us for Snowflake's Good

Financial Joining and and Chief Chief are Executive me Frank Officer; Mike Slootman, Scarpelli, our Chairman Officer. our

review our today's fiscal and XXXX. and our discuss we quarter During for second year financial XXXX the call, guidance full for first results quarter will fiscal

the filings, market and We and future could the the statements XX, or concerning in XX-Q ended our undue and overall available reliance close any most the and features, Non-GAAP non-GAAP expected performance not XXXX, and presented will on the our to and release accordance comparisons. today's undertake we our evaluate and call, as to a with and operational statements to decision-making result will GAAP forward-looking are update that for statements forward-looking and These after of press that distributed these will out point would XX-K means I on Frank. quarter earlier press on and measures During see prospects. with measures as financial turn to results. like We investor our to to, is uncertainties, website. earnings and financial recently investors.snowflake.com. in duty Form of be measures, please products XXXX, measures our future make materially reconciliations financial year report addition SEC. our Form internally a to business, a are like today A today's in non-GAAP ended GAAP. also also posted related long-term risks of both financial Information strategy, new To today's earnings information, refer forward-looking release actual over we for, XX, we call risks now our obligation caution financial We'd future to in place from events growth call use April cause or statements, purposes With at fiscal including no presentation, to that, replay are to period-to-period differ expectations. you statements substitute SEC results, as which for including calculated of not for call, those to posted non-GAAP subject them will these which financial the the January filed today changes file in distributed the results.

Frank Slootman

with year-on-year Good in million strength Thanks, the performance Jimmy. results XXX% reported to $X.X $XXX strength Snowflake board. growth across sales in in XXX% QX product to revenues, obligations afternoon, indicating strong reflecting billion, Remaining everybody. We grew year-on-year consumption.

rate XXX%, the flow maintaining we of net free While a quarter. revenue $XX adjusted in also cash of million retention generated

in EMEA our revenue, all of than geographical quarter. Asia expanding more are product over in with more Both We million end theaters. we customers three the Pacific previous XX APJ scope XXX% and have major $X increase the quarters. and than breakout bookings year-over-year. in an XXX At grew from XXX% had QX, grew EMEA

During QX, Boots Equifax including enterprise we Walgreens Datadog, had wins, and key Alliance.

Our function growth several factors. a trajectory is of

unlimited from landscape. workloads to than the scale computing the moving changing to paid model First, the capacity are less advantage public to by with modernization on-premise Customers take drink. is clouds and of cloud utility at the

economy software governance. gains in performance, architecture, data achieve cloud-native and Snowflake's through customers Secondly, remarkable

The transformation. Data pandemic to drives enabled new now some economy secular data these a technology. lift trends drives world digital operations informs the transform Third, Data which directly. enterprise. seeking by infrastructure beating where And to Snowflake the seen from long-term are is to becoming but economy. customers core dislocation, are heart our of data has digital the modern is in one the a people data from

to from only demand, has the Cloud. growth are our Part at scale pent-up transition budgets. imagination strategy Data of been our now Aside one's by the limited and possibilities

relationships Our providers others packaged many quality thousands many can of indefinitely. Cloud how changed external is the At the Snowflake has financial packaged Snowflake. them and original analyzed digital that service ambitious. compared product We've the is patient and the organizations. these of like Snowflake queries Data out at companies the that. the goods point time. relationships media Marketplace. organizations of against data public sources. consumer value is and active industry and relationships technology; pulsing our continuously year-on-year. data data call across core has are are on through This key grew with place for than The and ZoomInfo retail through legacy data to Data is Data using this are has end business. our data Today, to refreshed possible. specific networking concurrently periodic infrastructure XX% to processes through rapidly being focus consumer with hub of Cloud and data, tried-and-true no focus of these Cloud Health insights exactly all base entertainment; through XX% improve Many a more more relationships Data targeting and organization continue Customer industries, on and near-real different data organized quarter-on-quarter. of batch to advertising, that using insights build data Snowflake ago. It XX% number Data is what are many view core future are effective underway. period Snowflake same in Retailers of active than customer number in of unlock care that time year are data sector. any well data because more vertical the partners. Data from sciences; warehouses more we had and they edges what they gain for force-fed and run. and intensify sharing with accounts Snowflake and And them to is Data lights their business their in strategy do perceptions advertising of seek in revenue was around between There parties. edges. Cloud data Albertsons the This so accelerating expanding We into a frequently are the on, their the That's to acted light are quarter, people's dynamic economy, and now large been is sum the enrich run track effectively. processed how are speed. We anymore cost our are data faster limits analytical verticals. and They companies, with at and deploy six more share a is to more like Foursquare industries but vertical processes and warehouse marketing, Data our and reasons and health media Marketplace life for alliances, will focus X of cloud Historically, basis. analytical grew are an Cloud care care. of goods; that seek all going with edges workloads providers strong, billion sales, Snowflake's But on our day, XXX% services; will a data the the

environment to of large enterprise themselves. as as in a expect visible we Snowflake As become line the business a IT result, and

in geographical a focus. maintains markets aperture company the world, the rapidly is While around coming industry backbone the into

the which partners which on was are $XXX the Snowflake, stepping from Snowflake standing strategy. mark Business, also of Our to our key element alliance. up a start ever fastest an million a is crossed for Deloitte ramp

vertical Snowflake annual Heinz, with likes JetBlue, Instacart, platform on More investors XX-plus BlackRock, In to our news invite June attend, now use to of looking I We Morgan the balance to optimization, host cases. Summit Data attendees are Adobe, latest One, a enhancements, Goldman we Capital was a turn the through industry that, and XX. and the year. expected, Stanley Mike. the the and forward year, hear Kraft than the of much will understanding and get to the over start call data XX,XXX QX will We great fiscal better With customer closing, X including Sachs, are governance strategy sessions NBCUniversal. of Cloud

Michael Scarpelli

in great at year. start We with execution the of fiscal saw Frank. momentum of QX you, Thank another quarter our continued

growth. revenues Our representing $XXX product were million, year-over-year XXX% QX

Our and we billion. outperformance, drove obligations Media meaningful $X.X saw were services financial remaining and from health the performance customers telecom, care our technology growth and customers.

accounted base QX, for XX added revenues. including our customers logos. customer approximately These Our Growth to Of RPO, X% net customers X-figure particular new X in of continues technology strong RPO with strength be next we billion to multimillion-dollar recognized in relationships XX% in results more in as the and reflect existing results. expect only in the telecom the new We $X.X months. revenue XXX propel sectors. our

organizations the provide are we enterprises We for globally as penetrating the these opportunity largest expansion. account hyper-focused largest on believe

enterprise is fiscal that replace new We than to up previously sales first-generation This on-premise net we what solutions, we and will solution. In number and the fuels XX-month XXX% cases, revenue million our we QX, replace creates are customers, retention product from confident XXX% rate, retention address stay use impossible. remain customers Snowflake of our our increased revenue $X many were trailing for already net with above X last expand largest greater revenue within workloads. efforts. XX cases that and cloud maturing we and When XXX, than benefiting from we quarter. typically our more the In year.

continue invest us. believe We in runway is to ahead significant of opportunity and our there international

EMEA our innings take abroad. seeing early As believe we Frank tremendous are mentioned, We as addressing the APAC shape. sales in geographies growth largest organization enterprises we the are of and within

First record net employees. We new hiring onboarded us. quarter quarter XXX was a for

highest engineering talent sales and We product, continue target enterprise and prioritizing the employees, groups. acquisition performing to

enterprise non-GAAP cloud a all across XXX margin XX%, was outperformance. points benefiting revenue regions margin agreements, Turning gross to year. from from improvements. to margins. service Operating XX%, product up success basis and last negative customer Favorable On our our steady margin gross growing contribute basis, was scales

operating Our adjusted margin bookings impacted strong free outperformance. by cash QX from XX%, and margin flow positively collections was

cash option employer employee payroll cash transactions. reminder, excludes flow employee adjusted on the of tax-related received a As impact or free stock net on items both paid and

quarter, million those saw items. a from This we $XX impact

long-term continue weakest. QX we QX While to focus were strongest margin fiscal cash seasonality. 'XX, quarters, flow on cash QX and In we while flow and profitability, experience our was do expansion free our free

future Ventures in strong seasonality evaluate experience We to with with leverages We short-term and the in billion position announced the long-term investments. and periods. this cash ThoughtSpot cash, equivalents expect in and maintained $X.X strategic cash in quarter. opportunities approximately to position DataIQ investments our Snowflake

companies with capital provide Cloud. more We the to engage to continue Data high-growth with

Now guidance let's outlook. our and turn to

product XXXX, second $XXX revenues and growth between year-over-year representing of million, XX%. between the $XXX fiscal For we and quarter XX% expect million

Turning to margins.

outstanding. shares We margin, and average negative operating expect expect, XX% on million a XXX non-GAAP basis, we weighted

introduced full revenues a XXXX, improvement product the XX%. we and within year-over-year introduce growth an billion, the longer compression that negative estimated we that $X.XXX cost customers benefits fiscal We storage for and regularly more believe year we product XX% drive this $X.XX For impact compute representing performance our includes lower expect between to will $XX just the billion customers. run and between from and This Snowflake, our platform term. million enhancements

profitability. to Turning

negative a expect, We XX% average and adjusted free expect outstanding. weighted margin, margin shares XX% operating and we on basis, flow, cash XXX non-GAAP million breakeven product gross

in increase assumes COVID, to the an during assumes the year. will work net respect we to that back the that than travel employees continue more remotely still outlook we add to With for year. new Our future expenses half will forecast of X,XXX foreseeable with the our fiscal

in While Summit. office, do Day host for we will first return Snowflake time that not on And with to virtual have a line anticipate our conjunction an Investor specific we XX lastly, we the June eventual goal.

You line register investors.snowflake.com. can that, up event can for the questions. for open operator, the you With at now

Operator

[Operator Instructions].

Your Brent line Bracelin Piper from with question Sandler. comes the first of

Brent Bracelin

for you QX product and follow-up Frank. very Consumption increase in growth Mike, maybe here quarter. was revenue another million start with and strong, I'll quick $XX in triple-digit product a

trends outperformance didn't seasonality surprising? at As in that surprises Any up. drove consumption Was individual you just look clearly consumption as that other any looked the trends, of show at you QX kind QX? customer

Michael Scarpelli

customer our Remember, consumption. based It's a not on is actual recognition. revenue ratable

running that So customer going a to is did same have projects. did amount quarter -- if amount just one that mentioned, they're not in they're mean to because we quarter some some on. as specific certain And outperformance a have next same projects consume doesn't customers. certain part of consumes I tied working we they're And those

the we so revenue going And of with our happy where we be are for year. guidance outperformance QX. in very the think reflects the And balance to we're

Brent Bracelin

just up Frank, here. then, you Got And it. for following

data also the see wildfire, starting to like even be to so the of that are opportunity, think clearly much of source creation you on If projects kind sharing sharing. data catching about it new open seems you're to tied so

the As data customers? contributing still sharing $X do do think warehousing a to about these tied and new data of you to opportunity the think customers, net still you replacement spend data come? million-plus of $X is you big kind now million-plus bulk XX Or drivers think is share to around the

Frank Slootman

Well, walk before both. need Customers to they Brett, the answer really is run.

data It focus So lot a and they're is be And to you're essential. right, in will has enrich it's to it the where really want us reach sciences But enable to a evangelize this so data data, very their very, create resonating going of in is idea. that to But sharing time around very they fully exactly time. as mean I terms keen you workload everybody whole in really be, initial to on order very, data some on. transitions absolutely order said, aggressively to of where view taken really potential. is marketplace. over context in

lot those very contexts, going specific our to in vertical a specific are that have circumstances unique very vertical of on industries. to markets the We

we've Investor talk bunch not in we're Data well about We're how we're we going our operational. a you really Day you have our at area. point stuff hope that for Snowflake want show Cloud very to we And Marketplace and And excited. positioned because see completely also the it. it's So where and Data really far see it, we'll of to our to only developed come

Brent Bracelin

another Looking for forward quarter here. great to Thanks, Frank, Mike, it.

Operator

Your comes Weiss Stanley. of line next Keith the question from with Morgan

Keith Weiss

more and Have XX% the Is you edges you're these stickiness? edges think and quarter-on-quarter. going customers that of should I impact about should you're edges? more amount we about kind construct this data percentage very is to the edges that directly to this How consumption to XX% nice going XX% the And the solution. stop data Excellent. customer from about seen their quarter. to more wanted using Frank, going that the continue consumption? you're within on the we adding, of the have, on financial a partners, all of is going warehouse? of Or discussion the growth like as up the granted something Snowflake edges in think impact of never Once getting the

Frank Slootman

it's going make time a to Well, the designate sticky. in it terms for answer us things is something incredibly both, consumption. edge, durable obviously, to an to as But has have of minimal of amount

a stable metric But we for, durable or a be for a much for trial, edge period very time. to also lot a call, dimension we that's transient. edges an follow relationships They because there's They -- a project, mods other we'd exist really a world. it these exist whatever is. of So maybe data look we and what that words, not that's in have our where we consider edges. durable In don't stable it and consumption to they are track that of otherwise, or

over consumption. exist periods drive of they They consistent So time.

the So to your question, absolutely yes. both answer is

Keith Weiss

XX And Mike. I follow-up it. to Got this eye-popping a $X getting could one if that's for customers million-plus in sneak level real that quarter, The number.

side year? could of that's the faster? have getting the is in the expectation think too expect than an year. of number remainder three see of high going Anything basis? And is the quarters motion that I kind other on that all a more of particular a for to that of did in on first last equation, the Or go-forward we you to

Michael Scarpelli

number, to many to I to to $X there to going customer going going All we -- was number starts it's quarter, very a $X I this rate. before number people a had X closer it Well, and to what contract of want a to consume is actually to it's I at I months of months But on -- times, we going when think takes growth. as continue cusp say be their X customers. will strong a of a remind we into -- the there's customer, I'm million customers is, land not guide million, to and see think X

on impact balance say starting a years over I focusing only, But that is customers. And lot the really those see off. so think, the of XX% is of to of of will actually larger about X.X and that the pay this we're is then what enterprise last that customers, XXX customers I majors, are

about XX% XXX. Fortune So XXX. Only Fortune think are about

The end others said, just small And them, on even I lot of cusp. that are big be consumers of across-the-board there's can my companies that as And point customers. Snowflake. a is are there

that expect continue. we to So

Operator

comes with question Derrick Cowen. next Wood from the line Your of

James Wood

Congrats you're know there. Great. about I'd Frank, love regions? changes. what's headcount some in and to on feeding quarter. I a breakout international guys causing had you growth hear great leadership the sure more I'm

versus much else own how kind factors like growing anything you'd or out? So market awareness call is acceptance or cloud your of other efforts

Frank Slootman

just ourselves exactly just said. it's operationalize these what I mean to we you properly No, needed geographies. in

it's As by know, you market market.

have leadership have in correct to place. the We

a mean and changes great that you furiously. that a fast like made of impact come in is going with. leadership When of lot to very these have have We regions pleased I the Snowflake, product we're

think personally my a Europe, is to of the own bunch opportunity in time invest So because going I'm given tremendous. I background,

we latest Pacific we're to online changes excited that coming and We're the that well. made happy expect as we actually continue. in So very regions Asia contributing we see and with these

be where expectations going as there's high markets well. to to up have and We of we're open very ANZ other Japan, starting obviously,

James Wood

which one add The in outlier you a speak across And forward. seasonality great. like this was Mike. number, maybe Anything for the I board. or of what one kind QX. look thoughts going to maybe That's net around of could to expect XXX, Fortune kind numbers looked mean great slower the

Michael Scarpelli

Well, Obviously, strong in contributed revenue. it was that's you to And are additions. cycles, a long going these customer. just lumpiness large accounts QX That sales would mean are quarter. one doesn't see very, and expect, very the landing to a as

year. landed end close As is XXX, we commission people to natural I that QX. given a end said, yet of of revenue Fortune commission seen reps I the enough. no stress and year accelerators, today. in those for the most them QX everything And in can't We've that from do everything of virtually

Fortune upon customer fully I close the ready all that we'll And So when begin the is to journey. based to continue it's expect year. of the XXX balance

Operator

Your the Goldman Rangan next question comes from Kash Sachs. of line with

Kasthuri Rangan

quarter. the never-ending Two on warehousing. of Congratulations is questions. replacement talked about One you data

you seem just database I I Mike, that to could core opportunity, the forecast that the is Is in If just And doesn't data -- comments want that for your upcoming fascinated seem expand that, you're to revenue longer-tailed you, market. for very is seem to because forecast consumption the suggest again this the business. why to longer-term, know a it's think you small on a I'm think flow-through subsegment that increases -- But least big your at quarter because of not assuming do for we of that it one warehousing revenue? a the look growth of guidance, Is like beat. conservative?

Frank Slootman

warehouses in hanging on-premise legacy business, systems. on has innings reasons they're by Snowflake the actually transitioning We've actually Yes. public seen think that's it that see early been these in on cloud Kash, been. one not it's some actually, of you Frank. done company the successfully been successful really to of the companies. Yes, their We license. number replacing only that these Teradata's And data we're super legacy

it's it there think indefinitely. most coming. opportunity intents still all That's is purposes, of is, that for I So and why and still

sources. will to our not So our a actually time. But our much it business materially period contribute that of those continue long coming expectation to business for very of is from is

Michael Scarpelli

going also the your full more, about the question, guidance, full beat, had headwind to plus the On the on we flow to did Kash, year. $X but beat the through million we year

be. revenue to literally better that compression we As based the economics that, And storage away going to ultimately expecting because million customers. rolled I a $XX which take customer, about more compression put with our cause of our going early we introduced mentioned, it's much from to good it's -- longer it will term, the higher technology our the is to drive it's being data new we than of more thing feedback Snowflake, upon And storage were drive Switch more in is going for customers company just consumption. our of that much so out. for to

Kasthuri Rangan

could is cloud-based you you have if them it That Frank, barriers own this Why cloud against I And that that very they data bay? warehouse hyperscalers own keep advantages been guys doesn't their warehouse? the The I of data follow offerings. are compete have Snowflake sometimes partners able know yours. structural their has quickly. -- up Wonderful. the just to market. get cloud-based way have of in in the that hyperscalers Any and at

Frank Slootman

deeply Well, cloud is are. didn't database very, and scale different I to that But on what They technology looking a period with reinvent of the of forward absolutely very computing, the of sheet team really different were time. paper. in and a clean any they makes of architecturally things this for completely on that which obviously like Snowflake purposes very started founding were the legacy carry is all for And on-premise. they reasons long from not our call, over can steeped go that one about

So incredibly different, it was very, innovative. very

always We're straddling cloud. we when architecture. good code up on-premise adapt As it's is actual only from environments. very mean on and The a catch that thing hard have our only architecture, important. the to at private but in to you're not They've cloud lot the carried, environment. and not look, evolve the public sitting companies. say, say result, that. look tried that forward a not of it's public you They cloud I And a we're public

Snowflake And architecture, lose of. lot. never going its the is only a something You're It get you rooted really core should to behind. this further sight what whole of in is strength Architecture matters matters.

Operator

from of comes Kirk ISI. next with the Evercore question Materne Your line

Stewart Materne

I could was your we just the that to guess, data of vertical understand out just seems you of you And those Frank, need be I if There's of those beyond verticals sort of you clients kind that. sort game, I in of building landing curious the where along some knowledge, on each verticals. wondering couple was X to the each a about of are of ahead to think It going is out ones work real expand a important some little versus lines, to those those bit market are the key of that you thinking the maybe really on opportunity, comments verticals. start intricacies maybe on. maybe build each on in sharing sort and me, beachhead still having salespeople do when of

Frank Slootman

Yes. definitely come broad-ranging in Summit showcase customers because That's we see a a again, us of and we're verticals. kind at And question. these of lot to going

very of may in surprise because what to to way in important they're likes to hear it. and And they much how are is like very media, a and sophisticated, people, can a really for lot a Amazon, our largest for and actually that content them doing their and is of NBCUniversal they're are a surprise very, actually this businesses in terms But of streaming enabler and businesses. digital-to-consumer of the business in in in doing because some directly It's that Snowflake advertising. advertising obviously, Disney them. they vertical, of render Facebook not from and key companies develop dominance You and Google, How Hulu of actually advanced. for reasons. many Comcast very this the And is

at that of example challenges extremely there. this a over just And active is on are the strategic so of that because going that's with business point Snowflake one

large companies, vertical surprise might that software is is be to largest much institutions. care, Second because Retail, in is reasons That -- actually not not digital in they packaged very, for because a life health similar transformation consumer part financial is us be of be of sciences so the very for tend goods for big financial may huge. that large obviously, most world.

Of of is of stack. course, sector the our at see you'll out component there, there a top of business big as their Summit a companies many, thing our a becoming over software companies Snowflake, because very on core lot well. event, side, Public part software advertising and are many re-platforming large very Snowflake of that a

their So lot world. a made of crossed really we historically over have about enabling value-added just exclusively there's cloud. their on We parts we We're distinction. customers' higher longer makes excited company we us moving been than a on the really as business, we And progress really our much outcomes. partner it on-premise in a architectural that the and no were when from challenges, focused to workloads into shifting have sell lifting

Stewart Materne

Yes. And just That's really one. quick helpful. Mike, if could I squeeze in really a

your we of think summer? from consider Over into say trends, Is seen is over there terms little sort there of in season, in bookings a down the should front? heading on third full bit seasonality guidance just about any quarter. the that in anything we've year years, obviously, come we're terms and the to of the way model consumption your summer Given consumption

Michael Scarpelli

it's in because into obviously, still no on there's there seasonality as too. of a factored not is you -- that, our the First all, on but lot workloads see of run weekends, office, many weekends, more employees but

X. drops it's like So not it to

some. do seen But vacation drop consumption. in see haven't really see not of a So off December as holidays, clearly, profound big people We it's that. you taking terms around that you in

Stewart Materne

Congrats.

Operator

Karl UBS. the Keirstead line of Next from comes with question

Karl Keirstead

follow-up. noticeable on a then for two quick I've Mike, change Snowflake any revenue And Maybe got Azure? in Mike. AWS mix the Okay. between on versus Snowflake

Michael Scarpelli

that get is still AWS a bookings, will as still new still, our we new Azure But from say is percent. I as biggest our But to from large continues increase biggest. bookings. into enterprise, AWS

Karl Keirstead

storage Or change whether Frank And of terms in the Okay. as as growth. then, and change? pricing savings just types wondering compression this and sense. just team real little pass on bit to follow-up, Makes willingness onetime was of Maybe the now revenues. I'm customers more the in change to pricing you, delta greater a the of a these opposed to future cost interesting strategy. Mike, symbolic drive a high-level that's just strategy any on a have change to

Michael Scarpelli

transparent. lot in I this learned I'll be Well, a process.

So has compression And There's this on we But improvements every is customers. we once that And we to something to a have real philosophy our storage. thought. there's knew well. for impact always performance only from big been the customers. historically would live focus than of the technology other examples pass new that years. And about company got has actually it on was two bigger done as

For do chip always increase and working directly that performance we impact, have that. instance, done customers. improve dramatically next year And our to to to expect the we're goes an have performance see our and improve that a of product that of benefit continue We more new that performance. on the or that's you'll of will technology

Operator

question Our line the Moskowitz from next of with Gregg comes Mizuho.

Gregg Moskowitz

data I had follow-up Congratulations. secure on sharing. a

shared that ramps, kinds your but of a will being naturally, as sets the going all of so the to all data So intricate in consumption too complexity ways. lot is rise by

that level you do governance have of concerns platform security wondering, the as maintaining and I'm about any so unfolds? And a on high

Frank Slootman

that is not It's In model because Frank. really, we is for as the security we're other do sharing our architecture. security. exact to The deploy for answer same data words, deploying external completely no, integral we internal

is not a hack. X implemented. said well product It I exactly incredibly doing matters. beautifully does. what is it that It's It's architecture bolt-on. as a just not And this So designed, earlier, is

no to would So your the answer question. be

Gregg Moskowitz

Mike. And helpful. a quick then That's follow-up Great. for

say 'XX? looks that mentioned Asia you bookings this over XXX%. Can Does reflect EMEA So you like growth what acceleration? fiscal over Pac grew the in XXX%,

Michael Scarpelli

had a their very we deal What plan. actually strong both plus exceeded and Japan a as company. very EMEA did EMEA is customer a I They saw million with quarters. multimillion -- was in it dollar will we $X big APAC nice We pharmaceutical landed well. say in And

So APAC. say, in board, very the across strong EMEA would and performance I

Operator

Our of question the comes from from Raimo next Lenschow line Barclays.

Raimo Lenschow

help just job one of involved. think have partner into the actually that I of replacement You then one A with but quick you the Frank, around as you lot well. Mike. question. there? there? happy you a you're a pointed of off do of already, out one as to follow-up obviously, is kind you cycle, the does me from kind Deloitte work channel Congrats big actually Teradata mentioned I are properly, it look you as quite the capacity what getting kind assume for of How with extra And big and one,

Frank Slootman

we're Well, places highlighted. happy I in

our Our here absolutely $XXX on. demand business, trajectory over lead standing million to they went enormous. partner, ago just a these they're an shows Deloitte, start a a of which ripping that is bit relationship who It migrations for little year is with is that from

to staff, the have on. lot other engagement provision. scrambling of Capgemini We to Infosys, it's all a names all Accenture they're But obviously, certify, big and so from whether out there, or to

this. Our the logical that's do. far, the this actually, by And best all professional is obviously a fact because services at organization consequence of we is

so we for these do everybody, is sure using and customers abilities are them our help business. into that's the cheap, they're to and we're that got migrations we've easy And marketplace. so for friction terrific really really job it's absolutely make leverage there's steep not on. easy, not So risk the involved not in ramp own because our to the an the because And

So it's enablement challenge I hard sort them good large they of system effective welcome is leaning grown have. day-to-day businesses it the as are, actually become but are really that in very we all view as we work integrators as But for the the that that do. to

Raimo Lenschow

Yes.

et storage does like but high. Mike, like then, be really the gross the really, might sense. And margins? is Okay. This that Makes question, stupid XX% cetera, compression, a impact

and compression, is like year more So you upside et kind with cetera. next is totally quickly it there to do wondering is get there unrelated? more everyone Or how of manage so now

Michael Scarpelli

going Well, But does Storage overall what about mid-XXs. roll did April, business-critical move has our mid-XXs. this really talk discounting That storage larger of component around impact been we I a revenue, in take a you to It's enterprise, IPO, might the could last that vendors efficient. the mix say we'll margin to cloud get in we've the more you and becomes thought gross more of Day, do into we of smaller into coming it that date will margin. organization say will at out for it feel if say And our renegotiation our of remember, the the because on with the Investor that and time. higher coupled compute say selling fact is we some see I And our to is margin. biggest And contracts sales quarter. we improvement attract with enterprises, did we're and software very the that which is more margin get to our in improves contribution an of as later. the discipline would margins. value improve that drives and we'll is and we the real some the the good tuned way I stay seen more our

Operator

Brent Our with question next Jefferies. of the comes Thill from line

Brent Thill

quota-carrying this Mike, just reps on year.

you can out get giving the you growth us trying keep a of you're not just trajectory If last are to the productivity of year sense more of a going number, give or added. added reps same to you you

around side Just be the would any on helpful. color quota-carrying

Michael Scarpelli

the disclose don't last what level the we'll we're our going reps. we net add employees we we say about expect year. I will year year, add do that full into organization for same Well, And is about sales did X,XXX quota-carrying as this and to

Brent Thill

So same number reps? absolute of

Michael Scarpelli

Correct.

Operator

from Canaccord Our Hynes next question Genuity. comes the of line with DJ

David Hynes

to Frank, I Snowflake about ask Ventures. want

portfolio. ThoughtSpot, out the in DataRobot's DataIQ. know You I called

AI are and analytics targets. ML, obviously, So logical

driving the Snowflake? where to are seeing in volumes to like curious interesting Just stuff as it you happening ecosystem pertains else

Frank Slootman

as Areas in governance, I to large probably to security Obviously, say huge Yes. operations compliance. of like really governance it When governance. institutions. relates such aspect well becoming is see a data as

fully growing the that but literally in issue, been large on it's it's it a big data year our by is to Super, our customers company ability actually mean about there's of can very CryptoNumerics, investments, So you're the company allow like that's our the have ecosystem-oriented that's posture. relationship that but maintain we last to we We we a the make of What one important and an themselves into use. customers we what of mean a I is organizing the closer ecosystem to is get flavor, build much really areas are of good customer we're There's and platform. I to basis to whole integrations, have upside that And a with do. the sort. lot kind ecosystem super things more feel cataloging. better that what in name that a our data and really PI mean governed. rather very we to want the flowing going we experiences. just investments, they of platform, not feels seamless our that experience platform these and on customers. safe actually I and whole like now than acquired terms around to of platform, much in data sure anonymize investing our like customers on importance And quarter-on-quarter.

yes. at We a we're stuff continually, So of new that we number the done, happy look for we've looking opportunities. see and investments with we're and lot,

David Hynes

you. in the good portfolio Yes. Yes. follow-up ones Obviously, a some to Mike, already.

-- trajectory kind that expand that? demands about ask to think mid-XXs fair it in kind should more if mean I what's are on the we data, unstructured way about it Or So is compression get I doing think the heavy with how Raimo margins of guys as right like think asked you about trajectories gross I I technology. to storage of about think was of pertains think going to it into, gross there, target? we the storage to margins the interim? as dip that could there to

Michael Scarpelli

can but IPO, you get in asking us the margins I questions. be were at get in I it's don't did And to getting I costs get we're I a our a product public hard the when mid-XXs. our there and one a day, to. see pretty given But is are high people We limit component into beyond XXs. happening to gross into say path don't clouds XXs. see all, the the dip where can this. the going the through able to see may, associated there, to storage with

David Hynes

Makes sense. Nice numbers, guys.

Operator

comes question the next Reback of from Brad Our with line Stifel.

Brad Reback

Can FedRAMP. us investments you be And give think federal update about I talked do 'XX? you Mike, quarter, in could maybe you fiscal the last you contributor in where think an vertical a stand?

Michael Scarpelli

associated And a we doing out So focused we with good high on. high end doing it. FedRAMP didn't year. that, there's year, very have see obviously, within And ITAR is very we're a the a this sector. FedRAMP to there And on of opportunity, because cost wouldn't going mid pipeline is it. big public working the we we're be if be big

it's driver today, revenue. of big of As not a

So a there's there. lot of upside

Operator

from Radke question comes next with of Tyler line Our the Citi.

Tyler Radke

those of with? seeing that large-scale given with find are case greenfield migration in start Frank, on data curious, with been kind with legacy important Data changing a leading I'm a less how like at earlier the that that new really database you're of data to the focus the I you success more of call, are initial in to terms and migration? marketplace, you do Perhaps, data talked customer the and all Maybe about think sharing given given you're it's the use land you go-to-market your warehouse easier legacy has motion. perhaps Cloud, a

Frank Slootman

of warehouse. I'm that this these People we can about almost that -- after talk a people often Well, the of moved other they the time running running not move populated workloads of data. the you're frame all run are like of thing time my on cloud time concept accelerate I dashboard, When Snowflake, get platform populating -- legacy workloads orders like is weeks, they've whole faster. the data. the sudden, the already now happens that a magnitude you're words, out by and when value reports. to you finding X In

the seeing moving in architectures not to cycle, If data you working sense where to now you time and And computer that's event time. but but aggressively get data in where we're are a up, visceral XX-hour -- now get science our are of real sense, minutes. on near-real most of hours near-real time, sort it's of in the customers very people right,

weeks and for at days did you looking to for have than wait to where see it now differently before you're very So it. you data

what data That do is they net very so and showing perspective cases cloud consumption previous a quickly. It's is very of That things warehouses discovering times. new way rates static it's coupled in because revenue retention now. That different. can completely driving were it, what's enabled can the do by different, of that the is completely is they this with so changes people's And different Snowflake completely whole consideration right? have use batch-oriented thinking Now never that is that up architecture. in people with high we are public important what

Okay.

Tyler Radke

current then -- recognized RPO Mike. from in the current the next percentage of terms a in a the obviously, But model. for that that's really have follow-up confirm, seem up it's expected quarters. your quite a growth a few comments the to don't on consumption-oriented because, you be RPO like know And I I months, bit number it that in the XX wanted just last to of picked

kind number the and to wanted drove understand just that would a So QX. confirm good rate the factors growth performance number just like in that one, number; here I bookings on seem of two, what

Michael Scarpelli

XX% off about off was to to revenue that that how into it will else that, roll know say -- next see but we rolling and XX% XX revenue. months, And QX and there don't And RPO strong a we bookings XX% of it I last was that's performance. the quarter. is it over Well, what estimate

Operator

of question comes with the from Blair. Kamil Mielszarek William Our last line

Kamil Mielczarek

a start the And half update to provide year? split Can loaded? be follow-up headcount great the and execution could the expect to on half the you that year. between on the of have should we increase And year. on the X,XXX I us Congrats the targeted second front-end the date? you first maybe to this

Michael Scarpelli

the XXX we of I the half said year. first remarks, the onboarded employees in net as Well, in

of the year always to But in and to first our And in be people add the to so half, front-end month We skewed that. get marketing our to definitely, going of to a and the of sales kickoff. more continue we're try definitely X,XXX to is benefit organization first the loaded. lot add it's sales into going

Kamil Mielczarek

enterprise duration, something at been incredible pushed helpful. over Is is a years I XXX%, Can the past guess, function you how it's on you've sales being growth that's few that RPO just That's more penetration your team? level? now. past by an -- delivered the And changing? update Or provide the contract that over of for

Michael Scarpelli

to normal year Well, going contracts. first really X-year what of customers we be we and natural to more to multiyear is sales contracts year salespeople. the motion asking X-year It's the our in sign sales I force was And our sell last would now say them into sell incentivized contract. only. to getting for more it's Historically, a used

do renewals are do want do to X-year some have want are contract only reflected multiyear the done. on newer always renewal still know do Generally, we renewals fully everything to they on customers, Snowflake. a that's can new customers, they've want some X-year renewals. to because they as so And There those because But we're doing they that's that still in they're us are get what renewals customers a finding our RPO. especially where And there customers us on ones seeing with more. they're to

Kamil Mielczarek

Makes sense. congrats And again.

Operator

participation. your and for concludes conference call. this thank today's ladies you And gentlemen, We

disconnect. now You may

Snowflake (SNOW) 27 May 212022 Q1 Earnings call transcript