SNOW - Earnings call transcript Q1 2023

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Operator

Good evening, and thank you for attending today's Snowflake Q1 Fiscal 2023 Conference Call. My name is Daniel, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. [Operator Instructions] I would now like to pass the conference over to our host, Jimmy Sexton. Jimmy, please proceed.

Jimmy Sexton

you call. us thank fiscal Snowflake's and earnings XXXX afternoon for on joining QX Good in Montana, Chief me of Q&A Executive Christian With session. Bozeman, our Product, Officer; and our Kleinerman, us Mike Chief who Chairman will Scarpelli, for Vice our Senior Financial join and are Officer; President Frank the Slootman,

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

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

Frank Slootman

sense Thanks, $X.X Remaining cash Jimmy, pairing Global unit adjusted yesterday's in XXXX million and And good with scale, with performance these afternoon, non-GAAP to laboring XX% make a ready. flow, public of million. year-on-year customers. with back economics and economics. made or data to growth Snowflake, systems perform everybody. to and the data the have the and record The XX% cloud platforms a billion. year-on-year coupled processes enough improving the operational $XXX Data and ingest produce with transported consumable grew obligations quarter manner. free to reports that we of quarter, added efficiency. Product to and be to the Historically, to like revenue long-running news dashboards have timely the report closed in grew data. out of analytics enterprises infrastructure, of time data XX volumes We high wasn't broke performance struggled $XXX There and day transformed ever-larger that systems in cloud-native transactional and tremendous operational money

announced their terms of put data tooling to ensures needed. analytics the to XX/X We relationships courses our strategic learning data several beginning, cost The therefore, data has product focus historically. met is and Prior in the engineering, and, mission. of complexity, possible. data do for Data evolving service possible. the The also data refer them Snowflake replicated describe used can in needs of bringing enable support to Data end. science the innovation it been is workloads, machine optimize science, was That mobilization warehousing bring needs to the the data to includes of years holds to of that a is of advances, core what incredible in due for promise the copied, been that More to data data are Snowpark was While Cloud so these This work. as To come Java, to Snowflake development. and the data predict and action. scratching and wherever operational traditional they and data Snowflake lake, has customers application Data surface data governance these enterprise Snowflake programmability options cloud, data the have of to development because wide now Python. discover workload data the lot be an cloud, to only capabilities full-scale data investing of the rivers on of Data time as We Goals stays data. moving and transferred causing legacy types. are to science govern can our and variety work is warehousing, generally, data access well can and led data Data more to to language sometimes recently enable more Cloud a workloads undesirable risks. the of end and data workload much behind that every as reports run Scala in single happened than enable workload what the the milestones. stop authority type enablement idea have

With data is progress Marketplace tools images in available. now from Streamlit build to We're and simplified plans. of acquisition storing with them. and Examples Snowflake integration extract using Support their include unstructured PDF Data data for medical data apps on sharing Our governance. to favorite we generally making documents developers closed. enabling and are access Streamlit, great our securely

win We is easily users. programming sets preview data Snowflake This of a Snowflake public from Marketplace then by also now publish variety to data Snowpark. preview. Data the become in unstructured companies allows that public purchase available other entered monetization a for for of

to and cloud. outcomes life the sciences and healthcare improved the deliver patient sciences introduction data in Our helps healthcare our will time clinical research cloud June four industry-specific our of the product announced Use retail more and The summit most customers In innovations accelerate then. we cases of you Snowflake. significant forward cloud life conference discussing and quarter, feature look data applications data to announcements We market. are often in with years. and

years. industry. One the optimize and will for manufacturers of sector. new retail retail retailers, time to new across businesses consumer cloud the empowers Snowflake collaborate across improve Albertsons estimates goods market data are that our customers data seamlessly pharmaceutical the a as by packaged vendors access and using XX.XX three for Customers drug and operations Snowflake to to such In their leveraging

to local will We Storage data FlashBlade. object joint with data on be clouds. Storage, with partner keeping data Pure With recently customers Snowflake able their customers it stored to enablement. the Pure be cloud storage use cases Pure on-premise on through seamlessly also Dell, with to or partnerships enable new joint while data copying work able Del public locally will We Dell With and announced use Storage. stored Technologies new

up XX% types edge, grew more least enable In and at we number grows. of our opportunity from has providers. stable a ago. cases, more Data data QX, As quarter-over-quarter, listings base edges year-on-year. grew stable XX% one use data year than sharing the Snowflake's with listings customer XXX of workload Marketplace from the over X,XXX for XXX% now growing XX%

Today, by are Snowflake and over growth. application partners, XXX Our Powered XX% development program. Snowflake our Data there Snowflake fuels Marketplace representing rich quarter-over-quarter ecosystem Powered by

efficiency has fortified greatly economics, and years, achieved and the Over flow. company in debt. growth, investments billion cash unit $X while balance high plus past zero three have improving cash with equivalents a sheet The and cash, we operating

accordingly. grow and scale, ability to generate continue at the have to cash We invest

and not productive investments defined to We will and growth investment so. process must and differentiation. is focused impact. and Sales we system investments is expectations on development lead continue and all and returns Research terms marketing with innovation efficiency. to invest in only business G&A cost lead Snowflake a of at must company, 'growth and do to

cash strategic free With focus turn the with Our continued I on now will coupled flow growth informs improving generation. of our all to over investments, Mike. that, call

Mike Scarpelli

and billion. Of XX% recognized QX Frank. performance you, billion as product grew months, in $X.X year-over-year, XX% expect year-over-year XX next RPO, the Thank revenue be approximately were $X.X revenues year-over-year we in obligations totaling million, the representing representing XX% growth. to XX% $XXX growth, remaining

XX top customers customers the XXX% Our includes trailing net on XX XX, $XX grew our among have reflects now million customer’s to and quarter, $XX growth customers. of QX, the and of million largest We million-plus durable Similar basis. a our $X customers. revenue than product last $X faster XX In retention year-over-year new overall crossed company. threshold XX-month revenue customers million five

health in continue continued vertical to the from enterprise. more revenue life Product services this strategy our growth grew in grew the drive revenue year-over-year. a vertical growth in and financial and customers Driving year-over-year, We under pursue product care to upmarket. move vertical than from customers the sciences just XXX% XXX% is

the some bookings in expansion QX about Global We the As in and scale. the focused Global year. in the Forbes In institutions. deals. represents larger on we like significant deals quarter excited XX at the to XX% growth spend revenue figure revenue We're booked added the eight discussing in customers' the year. up to internationally, our XXXX XXXX platform. and from same focus adoption same enterprise four, our quarter last of I up This last dynamics quarter also new are from quarter. and the we customers, of product large expand other two we would time quarter, leads

extremely Today, Specific with customers experience shifting a businesses, certain expected organizations on to companies. to Last anticipated complete consume operating businesses Customers their we amid flexibility notably consumption Our consumer much to their less growing -- own their have challenging allows are much were circumstances, customers Snowflake than run unique business Their higher face businesses. rely fast. aligns saw use. we economic business needs. model some they environment. than year, facing on believe Snowflake customers consumption we current how more cloud most

long for variability are is demand they detract as the Customer’s believe not their This our still Consumption plans long-term their supported us headwinds from with from quarter-to-quarter. Although remains for contractual commitments their consumption longer-term opportunity. data macroeconomic they adopting by growing, are by as be impacted organization. patterns fluctuate these the and unchanged. making may Snowflake will across impacted. overall cloud are we does customers This

bookings. Turning to

$XXX approximately on is record XXXX. by for a year our which you're tough achieved This we earnings mentioned to a million I in We the fiscal The last decline our outperformance quarter. call, booking in outperformed to comparison, we led why seeing QX XXXX, saw fiscal quarter-over-quarter target As internal our sequential led in increase QX. bookings spend internal in in still in QX and us QX. plan RPO

our leading and consumption is capacity. purchase revenue the as reminder, indicator a As follow of customers our growth. more Bookings RPO

Now turning to on basis. margins non-GAAP a

enterprise Scale Our was to XX%. our cloud and margin contribute customer success gross product steady margin public in gross data improvement. centers

Our benefiting linearity. from was operating margin X%, hiring

at Snowflake earlier. never all put to yield. strong position. joined, like mentioned with the We would long-term Our short billion based by strong cash very cash adjusted Frank a is We cash, and cost' in evaluate and record cash position, strong ended on $X impacted 'growth investments company. in been. we not it investments. us And XX%, has This margin QX a what in I has quarter flow collections positively a was free equivalents since bookings. from approximately reiterate

We will committed showing and continue to grow leverage year-on-year. to are

turn let's Now guidance. to our

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

margins. to Turning

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

The forward. a reminder, in As conference associated incurred moving will in will summit QX our we expenses be hosting in-person be every June. largely

XX%. expect product growth revenues $X.XXX $X.X year year-over-year we billion, and the representing between XXXX, XX% For billion full and between fiscal

average expect full margin XX% operating the margin, basis, shares on margin, gross we outstanding. for XXXX, profitability year million XXX X% XX.X% product expect and fiscal to free cash Turning a weighted we non-GAAP diluted flow adjusted and

headcount adding our support initiatives. QX are a record quarter. growth We to hiring was

on net than year, we plan new the more full employees. adding For X,XXX still

ever Our long-term has it been. than opportunity stronger is today

our business. Our of market and data their the out front clear expanding. workloads And with is plays customers, Data and of role playing types strategy that it more is of is the our success conversations a us, enabling in key opportunity Cloud in in

and our year like the over With would have year of growth the continue expansion to of the at our our we In fiscal are to execute advance Investor Day, seen we update that scale. we confident targets. I last opportunity, XXXX will

product year-over-year. XXXX, year reiterating of we revenue fiscal billion, For target for $XX are our growing XX%

are free in cash and XX Summit. Day a on more Las basis We conjunction forward targets margin adjusted with product our and increasing We June sharing expect gross non-GAAP XX% Snowflake information look in at now operating on to XX% margin, approximately flow Vegas our XX% Investor margin margin.

If interested e-mail you ir@snowflake.com. now the you for questions. are please attending, open operator, With in up that, can line

Operator

[Operator Certainly. proceed. from Karl Instructions] comes Please question Keirstead UBS. First of

Karl Keirstead

guide bit -- in the that much. you the Thank what you're back you gets from the for exposed cloud macro, so given direct through essentially I'll in you. April $X.X be assuming and customers think that might that year quarter that worse? you. one Are stepping product called what quarter. Mike, little embedding some the that XQ consumer-facing reaffirming companies, you little Mike. might you to revenue you out an assumptions bit be I and this When you, color saw billion, Thanks April interesting full Mike, continues, maybe guidance mentioned XQ? of are that a in Maybe pinched to you a

Mike Scarpelli

the the two Well, to honest, But a that forecast, just strong. on weeks going but the that What we saw we're growth of in headwinds week-over-week say large has of decline, did will is taken But customer. in to little specifically, where others March going of May I our more bit or in last April, be our we've into everything very have by their are we weakness we're full been some a we macro revenue partially be hearing, given year. total cautious see offsetting that. some customers

Karl Keirstead

Thanks, Okay. That makes prudent. sense me Mike. to

Operator

you. Thank

Please comes from Alex question Wolfe Research. Next Zukin proceed. of

Alex Zukin

for question. Thanks the taking guys. Hey,

consumption kind a give specifically, guidance. of back started you some about took those Cloud what So on kind even for maybe numbers you just see trends to of companies, of Karl's interval around those question, And companies, step to impacted Data consumption patterns back? you even that of the piggyback talk Mike, can actually the you Again, the up step confidence within of conviction trending the kind how in May. mentioned around

Mike Scarpelli

been as we grow literally at the forecast. production on that conviction growing, and with not our we are the look because revenue that gives our Well, an going to some revenue customers, confidence. going that be I the strong working week-over-week That in two I to our and three customers the very of us And new all that said, at still know lowering year. growth even basis, saw ones just the been customers I last weeks the are gives pace them larger me are has individual daily into on the we've that's basis on these. based of how And a for all last

Alex Zukin

-- it. possible? impact, just terms quantifying maybe that in is And Got of that is or there sizing any

Mike Scarpelli

I'm possible, what told is you. I but to going It tell you

Alex Zukin

Mike. Thanks, Okay.

Operator

from you. Stanley. Morgan The Thank Keith question next Weiss Please comes proceed. with

Keith Weiss

the also for Excellent. consequences talked Two into incenting terms a guys lowering the Thank you, price performance taking of to intended last question. big the quarter, to revenues, you workloads guys. but a and platform. lot we on guys pushing both for about boost One, customers your come that are in you questions more

doing context doing consumption that then more piggyback or plan, existing down? what So you question slowing workloads consumption deployed typically and far? the below had patterns before, number one workloads on any with, less it what those terms the to initiative? from the consequences is, has initiative were is of When the intended cutting that you're Karl's -- is when that of does Can two, Like, behaviors give And they to you come seen from so that which people new pace customers actually looking question. get see so in impacts more? is us have

Mike Scarpelli

Yeah.

-- you're X, been the has we're incremental seeing very quarter, the new and asking other said see specifically, let customers between already scheduling to we from as So with that. question, I'll that. regards first asked, usually Snowflake. when planned customers, Graviton performance as everything in to the driving quarter, you when last is workloads it's went out for of warehouse feedback the roll But the and improvements we question a going we about out in answer strong, revenue last too, benefit rollout lag your on On the Christian

Christian Kleinerman

just Yeah, is there from -- see businesses. activity and are lower when the two with One the consumption. correlation drivers natural data to you

business some which pipelines aggregating. if translates are expecting activity, we're how data, their into much in less and So slowdown damage a

see more other of optimization aspect The a usage of little is focus you the do of Snowflake. bit on

as not it more removal So attention optimization of of they're just paying characterize what I a workloads. would It's bit and doing to resources. little

Mike Scarpelli

say a are customers forecast customers come and have their what And seen fast these rapid of Yeah. as your taken these you And growth out. you that necessarily would lot we've in where much. that pay cost on when have these attention we've -- customers the I Many down, business, our have publicly business. grown so of don't is

from help You into those and who ones them. of by those are too. are prudent hear way, costs. well, And talking the lowering optimize as cutting them the being customers our CNBC we're about And them some forecast on to consumption going

Alex Zukin

guys. Got it. That’s you super helpful. Thank

Operator

next proceed. question JPMorgan. Mark comes The Please from you. of Thank Murphy

Mark Murphy

you very much. Thank Yes.

from also same for Snap with investments And to retailers. slower flow cash get the So breakeven? cash it's that missed. Netflix, venture probably kind their some that of to it Peloton, consumption burning, slowing and softness have of are question We're commented you maybe trying Facebook, public to the on that then companies, Is had software cloud. companies associating enterprise from types ones backed assume consumer reasonable

Just numbers. wondering in I'm missed Target, own the if just three we that biggest the there's have And there? wake recalibration of have Walmart, Amazon, their retailers any

Mike Scarpelli

Well, the mind where that's to there is you you name you the I'm use, customers on And CFOs them too. a And what were focus find top is of consumption well, can beauty customers, what of only the costs. our definitely going expense for but ones mentioned. not they cut to as out that's of none and a many like model

that our we there's about going customers that Snowflake, customers and into plans be looking so don't But Snowflake Yes, and going of that forecast of macro off continued likewise, these Snowflake. usage overperform. to customer’s I sure that are the at some and taking underperform. out, I And feel just laid going none consideration and literally environment aggregate. good to in more changing the see have And to be to do moving long-term, customers are there's many most with of I'm

Mark Murphy

you. Thank

Operator

Thank you.

from of comes question proceed. Mizuho. Next Gregg Moskowitz Please

Gregg Moskowitz

net be on The guys. appears it's lower afternoon quantity. Good And slowing over more basis. was count quality customer a Mike, seven-figure just you. a about then you your new down It pipeline? on new But Thank what right. year-over-year somewhat. generally color -- All know XX you to and about little give look are just your you at talked more customers. new for net can us your expectations when I

Mike Scarpelli

customers said, -- equal. to all the in and $X add. we're target that on be I world. Well, million the land want plus for largest the customers those the don't It's are we're enterprises I looking not focused We my can really disclose commentary, we as said in customers. to But what you

on. aggregate we're not and the all individual those it's of it's It's -- the quality customers, focused that's So what about number.

Gregg Moskowitz

Thank right. you. All

Operator

Please Goldman The you. next Rangan comes Kash Thank of from question Sachs. proceed.

Kash Rangan

the the much, quarter? shift, and upfront full very this the and much. optimizer the headwind you curious effect did Thank Frank of Mike. about credit get warehouse Just full in Did you you that… effect AMB so Thank

Mike Scarpelli

No.

Kash Rangan

Okay, …or it. any out? more is there left okay. play to Got

Mike Scarpelli

full No, of warehouse have and the time. out already impact over was done we The GravitonX was period that. rolled that a service a of scheduling

Kash Rangan

Got it.

expect and we headwind maximum a should quarter headwind? which of weighting then So, the that

Mike Scarpelli

year. of end the It's by the

Kash Rangan

Was in got Okay, saw activity weeks aggregate -- customers that first more or of -- through you couple the said same of Also, a in decline the the consumption, of you it. that Mike, was resumed go that cohort effect? it -- did back that was an you the May. of it said

Mike Scarpelli

More aggregate of an effect.

Kash Rangan

environment to are element it. more the have is? Got you how contracts subscription predictable rethinking finally, And you given more and structure that macroeconomic

Mike Scarpelli

No.

Kash Rangan

would the And be that why case? not

Mike Scarpelli

value are Well, model, the to consumption it, doing you in cost the you model. the by a consumption the is to the when way a are. more only the And more use our problem is costs cover extract

Frank Slootman

contracts. have People

Mike Scarpelli

it's much And friendly. also customer more

Kash Rangan

Thank it. got it. you much. it, Appreciate so Got

Operator

Thank you.

Evercore. Materne comes proceed. Please question of Kirk Next from

Kirk Materne

sort discretionary. we the economic Hi. much. the if been wondering you both and go Thanks a about you've of you importance just nature lack very a of talk some I Snowflake through cycles bit just, it cycle little Frank, before. of data obviously, economic could and discretionary the through was or being as of, potential

I the that thinking different I’d of And a technology. people very on consumer it's have are customers you take discretionary. think are your imagine using in how model also means terms

wondering just confidence longer term fiscal XXXX some guys was I the for gives why what us So perspective you doing of your are importance that guide? you and customers could on the Thanks. in you give if

Frank Slootman

are business how in we've grafted operational by processes. of two years core why these into a of the a this talked thing also meaning heavily mean, as a reality And not processes. type heavily because workloads little become nuanced Yes. this workloads it, reasons I way on the or and grafted about calls, bit same requires is some all well. saw difficult looking But at the is into way, the for topic thing. more that, that, so of all the to workloads it to question, -- that I Snowflake, It's it online move our of it's very one noise fair the it's one of last is

on a like of sort may you They're are That, there to things the And in not massive that, for they're are to So side, the our repository some and interesting data of more lake essentially going what business. by some anywhere. that doing thing not put have you today? files. far but the that's these optional. discretionary, trying on just feel data scientists Snowflake, have do do going They're workloads like where are stuff lake of with not that's like, do of fishing way, out the serious That focus intentions that. that what sort When is have highly I people mean, falls not to data. decide data of they I

So the in But business It's something really world, is not platforms I that's sort a elephant we're can that dealing much are better. our as shut that of just of off that our but with, embedded not running get more while things it part discretionary until can processes. there of where you are core that data uses are said, for of avoid sort so that you into processes.

Kirk Materne

you. Thank

Operator

Thank Raimo you. comes Lenschow The Please question from next of proceed. Barclays.

Raimo Lenschow

Thank you. And quick question.

Mike If think you've the on call, out guys and -- other play this about before. a as Frank, the seen said of couple you

for to it of situation, investments et If in bit you do seem segments, think about to you to maybe vertical your can you. kind stable and you have about different kind other do levers in done or consumer-facing? readiness cetera. you've like, terms do can And there of Is your certain there of you hence, prioritize anything do different there sure think, share more little industries what have -- at more or of the adoption how to in can I'm -- have you exposure you the sales more the a spending example, Is much Analyst that these Thank Day? if talk you segments, that? anything analysis,

Mike Scarpelli

But investing -- also do sure focused But costs a investments. and not all we're years, the efficiently going heavily in is no I business, on we that the going We're growth go-to-market make continue we're very with in model. to at the to Yes. envious amazing on and on show to but won't What there's do in invest I'm question, sitting say, it us. the quite still of in our that, in has heavily our been your never to two-and-a-half time free position be and Raimo, our mentioned, we're to great it as seeing There would And $X efficient leverage continue opportunistic, opportunity over done the very cash billion very will continue we've because in going There forward. three And we're function. in quarters to not but next flow. last be to where for We're this last, XX, to I however long will or this we this ourselves for waste today, we're going R&D, regards set but two And years. Snowflake. quarters doing in uncertainty continuing for to business. the up and long we going invest on we're term, in we're quite scale. is the macro or next XX we're front

Raimo Lenschow

over from focus clouds financials terms I revenue you're that vertical next… the Mike, the out or more focus might you is be of more on now, came of, like because And in building Yes. like for example, like safer still as side, the more can

Mike Scarpelli

we drive the the they all want Snowflake which missing, where clients when has business, our more continue to be that's you to services add But is these in troubled what's financial biggest. access is going on clouds. And better We're retail, been we're about but And resources. our in understand will one And those to going we're opportunities, that data. focused health be times, talk very and seeing more always data on we want to see biggest consumption. it definitely, people -- retail they want are. their all -- to may Well, care. more of to strong one going in The

Raimo Lenschow

Good.

Okay. Perfect. you. Thank

Operator

Thank you.

Brad proceed. question Please Bank. Zelnick comes of Next from Deutsche

Brad Zelnick

Great. much guys. Thank you so

changes and way you to think asking the aside about macro we scale, But discipline amazing is you're shouldn't the So instead lost. when to and want be XXth comes believe any the maybe rates that I what's an it put would for anything delivering And I competitors sec, the you you to across perhaps maybe there it's seeing? if and on I impact and at obstacle of mean evidence are to But Thank -- guys having, us I up your And adoption? just growth you're dream know have very customers any ROI-focused. of other you. trying pricing about seeing reason the to if pricing going that don't stratifying for money, their those even dynamics, alternatives pricing, appreciate had you strong think a win along certainly, help competitive helpful. consumption things save maybe have it's same is to to dimensions that be believe can or that

Frank Slootman

Yes. Frank, Brad. is This

Our question. is not amazing things. very your to certainly to do which very business. commoditized, trying commoditize another But characterizing trying is way people also that are are customers in of the There's our business world difficult of sort things,

what charge physics paying terms And for many what for. to is they're and incredibly of economics, in there is hide we credit This So It's places competitive. optimized. incredibly already right? aren't

it's productive still for things very, pursue really impact, developing the people the that's is basis. to right on now. So that at not it's where very One insights

to sell sell subsidizing have good best-of-breed, that. you're impact. want that we don't will that But at are felt we and maintain business we they to not we feel pricing value, So customers we've all. make We else's sell really continue And we sure right, pressure that yes, we discipline, do that somebody good discipline.

they that with missions the improve life. that's Snowflake with that core And that's lives save We to have a conversations of going mean and really credit, customers' mission, to compute those hammer out is are amazing of things. the whining business with really people cent when just conversations not having trying about sort non-sensical customers for we're our of coming cheaper. the -- to customers' are dynamic than for rather a Those quality I a out customers. use That's outcome whether not us that's be fraction of or the to pay at there. like when hospital a we're more certainly are verticalized adopting the owning right? playing institutions because the really want I'm And just

Mike Scarpelli

aware over single significant of a single a where pricing -- customer, going not lost opportunity customer I'm one. we after it not a we're

Christian Kleinerman

that we economics performance for customers, one and deliver, And add we and enhancements also factor, of that platform. ratio customers front, of I'll platform see price the improve that the more the but from decisions only also look value. not and the at insights thing performance the the

Frank Slootman

we I mean, Yes. can many examples. use

do think We That's do do. have is life to with to this very right? helps customers. on that. whole thing, hunt commoditization in them, is their how So, trying this, life-saving Snowflake a that lot to a of mind. what accelerate just pharma That's market their what time That's of they're we well. what's pharmaceuticals. I mission won't preoccupying And dog

Brad Zelnick

the appreciate Thank you color. guys. Really

Operator

Please from Mielczarek William comes question Blair. of next Kamil The you. Thank proceed.

Kamil Mielczarek

Hi, thanks my for taking question.

in Your the net two year-over-year, almost grew XX% over fastest sales headcount years, and doubled. and rate marketing new adds

needed time show new financial to to headcount platform, and ramp for model? customers the Given that when the some the from And noise expect we time from needed up reps macro-related why to when right in growth in customers, the load new time is should growth? this to the accelerated now accelerate factoring onto data the

Mike Scarpelli

nature it of in rep, on you're the continue ramp planning but And have anywhere nine of kickoff. to to show impact in once. before, people a the as to we in Well, months six-month front the a it's next our $XX us. very in of comp we people enterprise were reflected And long-term the corporate also of our it's the sales quarter along. And we somewhat to shown function And is what end year. impact our on do on opportunity because year will invest we're said, now an we this doing have continue QX to heavy on beginning year, our or biggest be by because more has you're getting the can hiring at hiring that in to whether at efficiently we've or tends a And of billion groups of go-to-market towards I more of as from new team all we've going And marketing, SDRs that and bookings majors, we we're the in leverage. XXXX. an for revenue to year, said is on but always big target the sales on typically, year and try onboard of to fiscal the the it onboard depending

Kamil Mielczarek

Thank to follow-up. helpful. if remarks, could great you. made I progress mentioned That's you you've just Frank, prepared quickly developers. your the And all in enable application

You acquired Streamlit.

You're adding Python.

the launched should for and of app out make maybe Thank And app we of watch by dependable there features Snowflake? specific around are that Snowflake. the you. a Powered quarters? could flywheel that milestones You integration Have in more you for any pace seen recent rollout changes key development development in

Frank Slootman

Snowflake Well, on -- the called prepared side. going XX% of by in quarter-on-quarter. later conference year remarks application about partners in have an software the is the to a Powered for separate number amount I is the There growth was specifically we developers. in a have conference this just like development that enormous of We're now application This November. energy Build in mentioned the

end a enormous Snowflake for So, strategy entire things is of and time business because with supposed that want Snowflake do any programmers we on the day somewhere work they is cannot of And Snowflake that whole fall to are do out to model, of the where our else way alignment an lift data they then customers it then is our will out our enable spectrum do don't copy and focus workloads. and good because to. things then

economic bring, come an to where to well, this a a the extremely going from workloads these allow maximum And just we you're you're we engineer usability obviously, standpoint, from investment data. whole or to is execute allow game our see do is programmer, data whether from standpoint, to a So the we whether everything what the we're standpoint, work and more you're more that's that full succeed is from that that this is everything along focus So with alignment everything about. – broadly all all announcing, of performance lines, us doing, okay? model The what these everything we're seen the a we in Snowflake, that consuming you've business core that's drives it to strategy.

Mike Scarpelli

increase that And XX% the we're And developers once that's And is of number we will already about amazing that the Streamlit Snowflake. Streamlit. a into that using add, think what's extremely today. in Snowflake in quarter, that acquisition announced reintegrated Yeah. for development too, Streamlit last the will app excited seen be we've we meaningful about

Kamil Mielczarek

Take Thanks care. great. again. That's

Operator

Kidron Thank Please you. The Ittai question comes of proceed. Oppenheimer. next from

Ittai Kidron

Thanks. Frank, I had a question for you regarding your prepared remarks.

It's you big now. You out? customers trying the performance the have color the universe How on this how give the preview GA? timing of out unstructured be this talked about it on can Any opportunity. And impact in of can is think do you when more will data your gate?

Frank Slootman

I'm flip Christian, this going if mind. to one just to over you don't

Christian Kleinerman

capabilities the governance generally both you'll core benefits announcing The summit a already. sharing, data in at throughout Yeah. us of What actually user of available. additional couple how all unstructured value from available to additional the extract weeks data conference in see is – for and our years, replication capability Snowflake and that's types. of and around use on But

Operator

Thank you.

Next of question Piper proceed. comes from Brent Please Sandler. Bracelin

Brent Bracelin

where pandemic. guess, the cycle slowdown. recent you. was most a That the consumption pretty meaningful side, the back at we on I Thank Mike, I business look saw

to business? customers quarters businesses their to actually the recover travel, think were in reacceleration. they you use a impacted, two back in for at what just use time because go pandemic beyond business reaccelerated. later cases back a most slowdown some Your slowdown the past to slow look of that did I as in the guess trying impacted, well, were hospitality as about quarters to new if start and and you relative just Just in they and did then their two sequentially then saw

maybe saw to seeing a wondering you're then now. you what Just Thanks. kind what bit of little and comparing

Mike Scarpelli

outperforming haven't. say some specific slowdown growth looked reset $XX that are unique customers came see in a customers, largest our With of -- is in really typically and and saw our forecast to the some we caused really at that there. have saw that their We us data from at today, you're – top our few number is below I reset customers of that what that it is I full it. highest what businesses these their that as we we will And in have of million, we've don't is we we are that quarter. I are which seeing for that on have internal, our is those those to looking every a what forecast, April, particular. year, XX industries, that what still but I – the

Frank Slootman

that where in do places, here. so the a started new people of down. wrong cases Sending demand they to where wasn't. Frank a that what were of the in of as understand some that understand weaknesses lot I and you a form and of them. focus for there from were, was to things trigger that thing to were only just to that I demand pandemic renewed the it travel The Yes. recall try would -- happening said, add it's in to upside chains hospitality response was was, to sort sort. in really fog, couldn't demand compensate And to started Supply led acceleration products use sectoral

going a focus. have analytical again what to are stronger this going when went of because as happen to to sort, sort you resort much there. And of now dislocations that's that's So on well people

Brent Bracelin

workflow -- a about of like for new a about a sounds And is store to be business? the Streamlit. -- Snowflake. app it top tied follow-up might what you spoke as Great. consumer But Snowflake data quick of store on area. lever that idea retail to in building on app building think popular workload an the Snowflake just top this last that new how as customer the I on week talked Obviously, a space workload that of

Christian Kleinerman

Yes.

sharing, enabling data around distribution for have which marketplace has also So by is commercialization. be data the number third function of to sharing technology leveraged our we the a data parties foundation the capability general and and of been

I -- but specifics, think be the to. that about know what may don't I that's referring So you're

Brent Bracelin

Helpful. you. Thank

Operator

you. Thank

of comes Please Cowen. Next Wood Derrick from proceed. question

Derrick Wood

guys. Hey,

First question.

about that verticalized to feel I kind strategy. whether how made go-to-market for you teams tweaks you quarter? you think productivity made remind sales may productivity have more new QX impact towards or evolve you and as there us some in bookings in QX, in the what did was changes any of to you Can a

Mike Scarpelli

Productivity industry from leadership. roll with it focus moved is went of something and almost themselves year. starting out the geography new We this number large, And Hi, not the Derrick, sales to mentioned, plan as a change be. QX to we there commission reps is our change. we the where were we by bookings internal that's And we plan a year. about focus that did an were vertical I talking for needed made under But hit a to going and growth. been accounts majors, have for we

Derrick Wood

XX%. cash your the from XX% What Mike, us walk And through you Great. of can pretty changes jump. target flow biggest margin assumptions? raised to large -- long-term a That's kind free the you in

Mike Scarpelli

this I'd -- from not to good Well, cash We say, about quarter, flow a is were I customers reminder, show free every -- last and think I as issue. I as leverage overly XX%-plus And going XX% year. year. just for this the full cash year I'm continue not we're skewed, but to mentioned, recent our we just which is feel probably we did very conservative collecting year, an

Derrick Wood

Got you. Thank it.

Operator

Thank you.

Radke Tyler Please proceed. Citi. of Next question comes from

Tyler Radke

I consumption the beyond to specific just outlook, just saw terms or you customers about you and only you was did EMEA was talk some then any make of customers? macro just referenced, And going in wanted Thanks question. in slowdowns internationally, in if Could to rates the the with Thank large lower taking out terms assumptions in clarify those there of of noise your what for you it there forward those you. quarter?

Mike Scarpelli

growth continue daily in basis We customers, specific two a seen as lowered weeks, quite to we and a for still on revenue mentioned the week-over-week. we've last it and see, high for I've half

Yes, their macro. Europe, in forecasting. I in it but increasing do on we're I'm to weakness the necessarily some consumption what with and are customers going not see So line blame

part well growth We're as recently, very a would an you, North our probably our America it's Chris in as there. Mind quarter, small. we'll been too. well as over Frank strong commercial well, execution time Europe APJ Degnan think on us. very really was is North for I has say as last there. good I in strong enterprise as America. seeing it's and strong business lot of spending continue was

Tyler Radke

you. Thank Great.

Operator

Thank comes Brad you. proceed. of Stifel. The question Please next Reback from

Brad Reback

customers Thanks. the rates Thanks new the earlier to line new for you over year talked on sort coming about well usually know platform. new much. last And in sight about go-forward it Mike, of had Great. a on to good you How I a think net call, very in? hit having of their years? customer customers versus the have of historically stride. growth should we over what the modeled few takes

Mike Scarpelli

of platform, takes our are to because QX. what takes those months signing we up existing when the I are landing is to now the we The visibility, customers. impact XX% to customers biggest in customers, be QX signed time And I'm nine ramp when to to going know have saying, customers out. that start existing and current our And it up a say come QX roughly in on year, on the really driving comes migration. that's it in the Well, revenue year six we new revenue. we customers a impact starting do we're from When bigger going them

Brad Reback

Great. Thanks very much.

Operator

you. Thank

from comes Phil proceed. Winslow Suisse. of question Credit Please Next

Phil Winslow

scheduling? you been something to necessarily consumption. for. customers my any What the different? to been up on on discussed What Graviton similar workload are this go Hi. open be of you the that saying, But to of quarter, new it’s impact taking on to there of flip workloads move what just But chips Snowflake could being what enhanced question. that about wasn't that are workload Is Snowflake? what the area on click looking focus seeing impact types on of it, this, lot enhancement brought call the right negative of expect, does for I the to without you an it also Thanks Thanks. now? of talking wanted guys up side maybe going Last the they've in was terms customers a schedule, to we've double

Mike Scarpelli

we of I'll has planned. scheduling just what warehouse impact been say, service the

that the was we we -- had end and what impact quarter, the were of rolled mentioned, out before January, an and I As had on already got rolled the that impact in expecting. it out

what that. let Christian talk of terms workloads, I'll In new about

Christian Kleinerman

workloads customers We've Snowflake. intent Oftentimes, expressed them see bringing from that the and heard many time. to additional processes Yes. on the our of they have improvement, many lower those take of latency, of concurrency

cannot leverage have about. So the frequently but migrations capabilities these we new to we something happened, is that say hear the intention

Mike Scarpelli

on our been these but positive from There's customers nothing improvements. impact performance

Phil Winslow

guys. Thanks, Great.

Operator

you. Thank

Gray Powell comes BTIG. proceed. question Please from of Next

Gray Powell

for Okay. taking the Thanks question.

I hit lot yes, kind risk is we've if all but So, go we flow. that Snowflake everybody on recession. software, of free a there's But I think across before, know do I of understands just that this generating into of cash mean, a

You're sitting billion $X cash. in on

you would come stabilizes, just you gets seeing order see economy say in and the to world bigger let's stronger the opportunities do out Where and a So invest or look starts this everyone to slowing company said differently, in worse once growth. where downturn?

Frank Slootman

This is Frank.

a think answer this absolutely times see has but point. I Mike to at already few opportunity everywhere we tried question afternoon, this this

which on a basis, can use which very workloads have ones which and a not. daily we customers, cases, see are -- verticals, which are We trending which

we're ability for backing been impact for. how to saying the looking where to from there's most continuing reason investments have we've not if hatches they're because for I that we mean, well it's -- us to that start be off are yield. adjust yield our in So trajectory, mode, likely us. have that, the the investments and the making down battening we're a a the we're we to in growth working But no direct considering

where incredibly well. well penetrated as broad-based. is there's mean I opportunity very not we're Our verticals still

process very business – dime. something and very, But off have you Once turn there the investment For where shouldn't on some nervous you're we example, the large plan the over public of to -- federal making an long -- you the public sort At I sector, investments, sector point, especially are a with because really say a have quite stick in doing not you there, we government. federal well, where haul, parts that's we're on of are got sectors. those why right? every we on to to people a table, as it. tacking can't cash be do get not in terms change not the long the are of we we out we unit and as in again, economics of the go be in can will around to time right? economics, are corner. there do. growth doing cowering the producing terms we're We're of the little with We efficient, things would it? in crash we So operating So, drive that terms as ship what flow, going

course, circumstances doing the sort they're these that stepping part or a mode of a as in avoidance generating where natural do up mode to, yet in acts they're they to a the are not terms of massive not the you're contracts now. expenses trying of platform. in of change customers of point is type Now they're going I feel not mean, contracts that yielding, of we're to changes, and investments right? of we how make the But time the – that are behavior our to where

I in a little what of moment So, bit is we're this terms of think the getting ahead at in really time. real economy ourselves

Mike Scarpelli

And to but of out buy and there's may good I X for a there, not on technology, not they to Yes. I are, sense I'll are on interesting the good opportunities. resets where necessarily make teams the that. add some opportunities, which valuation. think next that's it I'm we're opportunities some big things think with stay some interesting be create the be do saying team valuation a at our on if the M&A there looking where front, there where areas M&A, not could reasonable -- that do to technology may some that could companies going necessarily, be private roadmap more revenue, months but

Gray Powell

helpful. of Very sense. Thanks. That makes lot

Operator

comes of from Canaccord. Please Hynes question proceed. Next DJ

DJ Hynes

one just you. Mike, guys. thanks Hey, for

Is or how of that foundational model, So, paid. you if I retention something how impact given guys you think manage through comp see sales to would more that get worry at just at you I notionally does how your opportunities know these driving thinking expansion like around expansions of about kind which rollover, lowers renewal, it? consumption all staff? your the

Mike Scarpelli

Yes.

these clear, our see have we've contract of them be And the within don't second one and historically, that consuming customers customers conference period. The just well consume period. we've when are already deal, our companies within and I a that right fast third thing their So changed amount changing just to year. the our customers down. seeing largest the to historically names those three-year still for still has still some most has customers. see we're the their that their contracted don't our contract their see because And seen they're signed that I I'm not growth I changing of slowed we $XXX now. rate of growth only for million Actually, call going who growing, on with happening, customers year give that invoiced you still in with

DJ Hynes

Sure.

important clarification. Okay. Yes, an that's Thanks.

Operator

SMBC. from Koenig Please Next comes proceed. question Steve of

Steve Koenig

you Mike. Thanks gentlemen And just the question covering be for to it's pleasure guys squeezing by I'll one way, me for in. a ask now.

takes little we remarkable. how across a either per acceleration about revenue going term? short-term you NRR trends on XXXX Thanks longer in metrics the in or what puts this? qualitatively, lumpiness Mike, the and just those was and fiscal drove So really very think talk customer And much. bit should the Can about forward,

Mike Scarpelli

into Well, years cohort that number are NRR ramping. isn't customers. real that over about why and quite customers, really but quickly, quality driven largest our grow continuing is shouldn't -- seasonally that customers by, two the this had customers focus this of are is And to the also last coming this new we've surprise a, this is the

these cohort Snowflake. a two-year are large of lot in a that customers have usage landed their ramping now we've We are of that

will to in last come and it above said mentioned net but down, long stay high down will I at And I I don't very that to a XXX% well but I think revenue past, will I come it do will see time, expect It think I gradually come quarter. don't the time. for over the this extremely rate. time. it down that do As continue increasing, over remain retention

Steve Koenig

thank it. you much. Great. Got Well, very

Operator

your conclude questions. the participation. will time That you for of Thank

You may lines. now disconnect your

Snowflake (SNOW) 25 May 222023 Q1 Earnings call transcript