Snowflake (SNOW) 1 Mar 232023 Q4 Earnings call transcript

Company Profile

Participants

Jimmy Sexton	Head, Investor Relations
Frank Slootman	Chairman and Chief Executive Officer
Mike Scarpelli	Chief Financial Officer
Christian Kleinerman	Senior Vice President, Products
Mark Murphy	JPMorgan
Kirk Materne	Evercore ISI
Brent Thill	Jefferies
Sean McMahon	Barclays
Gregg Moskowitz	Mizuho
Derrick Wood	Cowen
Allan Verkhovski	Wolfe Research
Sterling Auty	SVB
Kamil Mielczarek	William Blair
Fred Lee	Credit Suisse
Brad Reback	Stifel
Brent Bracelin	Piper Sandler
Tyler Radke	Citi
Victor Chiu	Raymond James
Will Power	Baird
Fred Havemeyer	Macquarie
Michael Turrin	Wells Fargo
Mike Cikos	Needham & Company

Call transcript

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Operator

Hello, and welcome to the Q4 FY '23 Snowflake Earnings Conference. My name is Elliot, and I will be coordinating your call today. [Operator Instructions]

I would now like to hand over to Jimmy Sexton, Head of Investor Relations. The floor is yours. ahead. go Please

Jimmy Sexton

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

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

we statements stock products our call, our and expected today's business, will to of growth, long-term repurchase During make program forward-looking including performance strategy, features, related and statements, future overall results, financial prospects. the future

to to filed most and cause today market Information XX-K for risks could in our available results. actual after SEC subject differ our and from those press filings, which them recently risks concerning is close Form Form our earnings XX-Q in uncertainties, statements the These obligation distributed statements year materially release are of that information, statements with caution update future we We or SEC. place will to in fiscal duty ended forward-looking result expectations. XXXX, not the no or reliance undertake our any you on changes January and as undue forward-looking a file the to XX, events new including

presented are financial earnings to To use to purposes be at calculated reconciliations non-GAAP on investors.snowflake.com. replay also in substitute financial financial these means today's release not we decision-making in presentation, earlier the of are in A a see today our website. distributed measures, which report will investor will a of evaluate these and internally and please our call, on financial results. accordance out call with and posted today's posted comparisons. non-GAAP also to the measures GAAP. like to We refer press that for addition Non-GAAP as as point We'd both GAAP for measures and non-GAAP period-to-period operational measures financial

to Frank. With like that, I now would the call over to turn

Frank Slootman

everybody year-on-year and for call. Thanks QX product revenue $X.X Good grew the billion. revenue afternoon, net QX XXX%. Jimmy. on retention the year totaling was XX%, fiscal grew XX%

our 'XX. continue performance revenue track product obligations for grew be Remaining on in $X.X billion. fiscal billion XX% goal $XX We totaling to

and We saw less in of with substantial sufficiently a cautious certain segments base. business and visibility near term. SMB renaissance so a was the a customers measure and QX lack enabling The customer of on short-term metrics. international the This longer growth much high at reflecting pronounced larger, efficiency bookings stance on contractual in in focused our contract poster versus consumption We expansions. commercial preferring term the end progress made among more customer our of

margin XX%. cash X%. for Non-GAAP flow operating reached free adjusted the margin the Non-GAAP quarter was quarter for

them at, X% at listings a from full fiscal year-over-year. stable now average, customers, non-GAAP have data $X marketplace For measured of total free on million. year as X,XXX. Among consumption XX% XX% $XXX one of ago. least now the grew cash grew margin by million But our adjusted networking up stable edges XX% six and flow 'XX, so-called edge, customers totaling was over our XX% XX%, Snowflake edges. year growth stable quarter-over-quarter

on of focused Snowpark Spark Python engineering learning. machine data and the for tried now Snowpark QX, and customers Snowpark faster migration status. superior of benefits XX% Snowpark. During adoption is typically simplicity. Spark are have on reached of on for governance the with workloads added availability Early initially and traction general cheaper promising. jobs is operational and

financial cost. work transaction loads $X from organization the results. is The Spark day. after The far into million XX% so migrating faster This Snowpark services and Xx Fortune XXX fast take activity of at X rent billion ramping is Snowpark. every indicate to workloads POC customer and records migrating comparative customer results Snowflake Spark benchmark Snowflake from to superior

with We developer development of for audience. standards focused a applications. business models we Streamlit Streamlit use entered community, applications is popular the private of Snowflake. Python replatforming framework Streamlit preview the a call is especially the machine of This machine what application and those enables and on Streamlit learning inside general Snowflake. learning by

Snowpark, our platforms. proprietary SnowConvert's In net migration SnowConvert acquisition. intent Spark legacy also this workloads QX, SnowConvert. migration we Mobileye Snowflake helps nature of to and from tools the enable to announced to capabilities conversion accelerate migrate strategic acquire

balance the We strong can flow and in growing hand cash on sheet. control. are the operating a vast focus and we market, business' generating maintaining free We a and outcomes

are to be support continue products. enterprise. and that the roles positions will directly build core that the concentrated of our Resources support prioritizing We the sell, on mission

With the call that, Mike. to I'll turn over

Mike Scarpelli

expect of revenue QX as you, year-over-year XX% in representing grew next approximately XX year. the be to performance obligations $X.X Thank as months. compared a the year-over-year, Of Frank. and product remaining $XXX our we same XX% quarter in were last to This $X.X billion million, recognized revenues XX% XX% growth billion. estimate represents the RPO, totaling increase

QX includes $X tenured million Our trailing net driven new product revenue customers retention in XX-month with by durable reflects rate The longest outperformance XX among of customers. revenue largest was XXX% our customers. in growth and

services the and contribution media from see financial to continue and We entertainment verticals. greatest the

adjusted and target. historical cash QX free growth XX%. generated million in weeks diverged the versus efficiency. margin flow cash the free fiscal norms. conversion focus final our quarter non-GAAP our year $XXX on Full from non-GAAP adjusted bookings underperformed in to was outperforming pipeline continue two flow expectations, XXXX We QX of We

underperformance largest the drove XX% territories declined relative year-on-year. bookings multiyear and to plan International

bookings to not customers' smaller Customers sign patterns. date. their the with right this contractual them end While to does consumption outcome, have we to behavior contract not deals bridge are okay dictate their

are business on committed focused times. their more Snowflake to managing are We that uncertain are our and confident better customers during increasingly

progress profitability. QX quarter represented another on of continued

service to continue year-over-year favorable growth data large providers accounts in Our non-GAAP cloud improvements. more in centers cloud XX% contribute product margins with scale gross public in will our gross margin was customers' our pricing

operating Non-GAAP bad savings expense. on benefiting revenue from debt lower outperformance was T&E margin X%, and and

impacted XX%, received expected strong in February. cash positively large Our margin in were non-GAAP We payments by adjusted free that January customer was collections. flow some

We debt. ended with in cash investments a the short-term billion and no position with and $X.X long-term cash cash, strong in quarter equivalents

noted more As commitments billion. the went $X.X today, previous press release over that spend our in doubling out expanded next AWS earlier years with our to partnership have five we the than

at As committing the part joint the more go-to-market agreement, new AWS pricing. aimed is -- growth in of favorable to as of innovation. part is new This driving partnership support efforts, AWS

to turn our guidance. let's Now

of deployments. We driving remain commercial migration AWS of committed As towards our active greater profitability. completed today, to GravitonX we all have the in

We are and flow margins. free revenue growing on focused while operating expanding cash

slower change lower-than-expected us expected from The cohorts in has logo led bookings outlook. ramp new behavior, reevaluate customer and our youngest our FY to existing purchasing 'XX

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

to Turning margins.

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

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

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

next Board us program in has stock the flow our would dilution manage a two announce expected This of and our that allows authorized our to also conviction over to reflects free repurchase up to this I years. to business of over $X Directors use like program the cash period. billion

guidance count the share stock Our repurchase. does not from impact the include

sales. favorable We as the Snowflake for During new continue net current we'll hiring fiscal market hiring engineering employees. XXXX, and we view added to prioritize approximately product, X,XXX and in

add expect growing than product opportunity. against fiscal more We to We on fiscal achieve remain forward target. to look XXXX. $XX billion our our employees We to track in X,XXX executing XXXX, revenue

we our in XX Summit, conjunction Investor June annual conference. lastly, in host And will our Vegas users' Las with on Snowflake Day

e-mail interested you're in attending, If please ir@snowflake.com.

can you up now open With questions. that, the for line operator,

Operator

today from Our Instructions] Murphy JPMorgan. Mark question from [Operator comes first

Your line open. is

Mark Ronald

Mike, change there any if there? and I including saw patterns the but I'm holiday Is you have periods, Day a then you curious generally, into quick week. MLK follow-up. anything insights the -- including And President's during weekend any noteworthy consumption have that

Mike Scarpelli

There was around holidays. really noteworthy nothing the

guidance, our were clearly, Day holidays. where As President's will is we slow, we results. to be. a it of I were And we February are expecting It's And say going was factoring above actual but we into our our off QX kind very said, to start. X% guidance, in the good

Mark Ronald

Okay.

for topic think Snowflake Can these follow-up, because a could language the there would As Frank, up probably I to you of ask all on large I generative and Unistore, opportunity logs. the handle chat you you the with frame wanted AI models.

models. media data You improve training can models sets. kind Snowpipe's of some those to very think that these pull on I could large help social of feeds and be in would

around could activity or developing think be customer any time? in see You vector you tailwinds any that that

Frank Slootman

of returns. the in where these Obviously, very, hone Well, optimizations, on are the early things we're clear is things it's in all like of mean term, can that else, completion over in terms sort cycle. evaluating everybody I make difference. we code still called short a that technologies it very business

the business to that people not these of One up with model come interesting challenges of new that's a with technologies take without going solid off. but questions, a lot

other do large a So be pragmatic data in conjunction Snowflake language very we of take anticipate a model big We that many driver many, view. very will very, data sources. with

to data will our lot of drive that action think around So platform. we this activity the a gravity

Operator

turn now to Kirk Materne We ISI. Evercore from

Your open. is line

Kirk Materne

of quarter. a the just something in sales is needs the in about U.S.? terms quarter. over of that on that about over actually there you the the Is region? organization talk international Mike, continue versus really a maturation just your to Congrats of are specific sort good underperformance, can consuming there region people how just Or this

Mike Scarpelli

more working that under our little too. Japan, to as tend But consume, own in I We've part also say think do always execution too, that. contracts which would cautious being in can which I we're their business customers seen their buying they they Customers do well, particular. it's just on. is in as as a and well,

we our as customers, their amount in but do consumption place themselves say, full of had still to deals a rather than their right on and but a think number it. contract North grow now. function consumed will big of contract larger business, like who continues customers a just their in bridge I stuff that's of well uncertainty see in did still had America, I yes, So, some just And

Kirk Materne

And you focused how that on on verticals could your edges shared around strong other bigger guys? just the seen just I ramp? the financial one how there, kind your on services have guys one think you curious do telecom thoughts for some fast your of Frank, you've for any been really you cloud ramp that the could thoughts of quick in that of point some Just that and that announced, was Frank. to Obviously, customers? you

Frank Slootman

a on very is important service our some experience, that Telco I of running the across cross-selling massive amounts very, customer -- our managing large us. largest for largest very really They're are segment of customers in mean, segment. bases. customer focused data

This that is it, other. and telco-specific data practices, it's cloud telcos, focused data of each interact our that then sets, we have data bringing assets people in applications ecosystem with to bring and fifth on announced, really industry really that

opportunity the Snowflake. like benefit have have to We the of network data a

high be -- mean, tend for the of mean, telcos modern of us. secondary to very we're a cornerstone obviously, every So in on especially consumers markets, economy, are I I lot biggest and the telcos

Operator

from Jefferies. comes question next Our from Thill Brent

open. Your line is

Brent Thill

you ultimately, a relates just big perspective? from and baked what give Just kind you your can us kind the as been to overall of Mike, in, little of guide, what's the change perhaps more color it

Mike Scarpelli

at ramping gets slows just early business, the change Snowflake And these naturally in still a as also deployed on bigger customers been they think still that ramping And slower large I customers. are lower the cohorts Snowflake pace growth is those big our are tend really rate. of more some organizations -- did. a we've move than as is they're to The but efficiently just the focused base that for I They're Snowflake but we're GXKs, consuming. and adopters younger at of just slowly, being what their still down the too, These consuming. consumption think into large seeing really coming are be

Brent Thill

seeing a consistent the just you're productivity slow? where perspective, productivity Mike, not And from is seen Or is historically? anything rep there what reps you've to changing there

Mike Scarpelli

productive think over there's to deploy issue we of large well a get reps say down rep don't slowing hiring for can are where and And in enterprise productivity North we the we the other would is The have well. doing international definitely our see enterprises of those the for doing we where some us. American but we're be continues where strong I productivity, areas months. some productivity we resources going next markets, us. to is XX

Operator

from Keith Stanley. We now turn Morgan Weiss to

open. line Your is

Unidentified Analyst

for Deaton is This Keith.

of XXX% what sequentially, an different You still between love cores retention put number, would maybe you're how million is the which over way Any you net of slowing out I sort that between changed expansion of and and also seeing the parse of this in customers? your terms the then optimization XX up impressive customers plus could last but quarter, customer X that momentum to sort understand but days. rest

Mike Scarpelli

control. lot of a public, there that reacceleration bit and customers the XXXX, a reminder, and retention, of had was a maybe in XXX% I revenue our First all, was business exact as spending net think when XXXX, went the of we of there's little just where out a

are people I bigger using very which But methodical detailed is not any Snowflake implementations. Customers focus growth in any deployment almost a Snowflake. rate customers plans are efficiently. company slowing that today, customers' they're think every way costs of consumption more on material spend decrease going as are we're that down their their Snowflake, through in having Now within much seeing

that we pace, I three continue of a those albeit last those out of costs. But in the of more grow out dropped of of customers year that's those had and our top most have general, at few pointed but stabilized. us, to lower a think still we XX, Yes, have with at controlling a of nature our guys beginning

Unidentified Analyst

there a And big you sort that verticals you. year comes now? verticals? fiscal be your reiterates sort accelerating explain you're seeing for might expansion guide? are it what I clearly, effort. can slowed that different Any it. I when then and the stabilizing And way of think about in focus verticalization. AWS Okay. mean partnership different quickly Great. Are how any you're that of that's that your 'XX on Got sort Any to thinking just of

Mike Scarpelli

I going on. I've financial vertical. say, biggest as the Well, in definitely mentioned services and my remarks, have sharing I we our where would is data said before, That's most

Next for and is entertainment. media and a technology, segment huge us. That's

well, I ones, of to some seen controls we've large year. a grow. companies, in going some the a the of Clearly, you're been newer seeing venture And may companies those growing do lot highlighted companies a XXXX we last see very Mac in which Global definitely in have had slowdown technology think those slowdown that cost to of as quickly. We're but continue definitely

Operator

Our from next from question Raimo Lenschow comes Barclays.

open. Your line is

Sean McMahon

This for is Sean McMahon on Raimo.

spend that growth of some lag? help with can magnitude is year's attach billion about You've recently if Is I consumption to between that. there discussed onto we revenue was services For future we any that -- the Snowflake to how on example, of a think about GSI update the the attach of the top those QX. wondering then as correlation XX framework could the GSIs an of think have done spend should expectations? about was inform year-to-date can think around And rates? we service get services? in next $X.X Or and there those around sort we

Mike Scarpelli

top Yes. booked was over spend I'll just billion XX say in GSIs, that they've the is -- year my alliances is last data $X.X the in team upon reporting. based the deals

at specific In anecdotally would that spend customers. terms and I concrete I really be any Snowflake and of looking their trying between have data to don't guessing get revenue, relationship

of that. So the bigger guide Year is I'm with generally what revenue a towards it X. not going times But number to it's in associated than

Sean McMahon

you and getting margin between considering new bookings revenue commissions? there versus accounts it. when operating some free affect guys S&M quick you the then mentioned leverage net expansion on forward? wondering How going increasing cash may larger that follow-up. are and should well. the relationship about role Got lower a that I and think the flow we was And into as margin duration, played And greater if was duration of Particularly billings

Mike Scarpelli

customer, capacity are right one be month and First model, for for the look it could just of it be and people one year, that. may they be for at and buying could varies three or really even do all, I billings to have our because by in months, that capacity don't

operating terms operating your given number, more the of adjusted will a we relationship free flow, it's and for flow cash free But X% part cash our definitely year. I much a year lower and this expand operating margin margin rapid well, model expect and the just XX% In June. full will as free between the margin expands, in flow to as Day update We margin at pace Investor longer-term operating clearly of to our expand. cash non-GAAP guided

Operator

Moskowitz from to Mizuho. Gregg now turn We

line open. is Your

Gregg Moskowitz

net weaker materially QX today that fiscal were the said But the mentioned enterprise cohort And call, fiscal back bookings 'XX ramp to well. some customers youngest pretty held that ramp to has thinking slower-than-expected significant you you generally expecting spoken that in impacted your you new also you had up Mike, Okay. about from and guide. the the 'XX. also

can wondering, looking three from there line this maybe a it at that potential ramping us ones bottoms-up about terms them you the perspective, fiscal in with thinking later, and customers I'm of particular you're was sight how of these share 'XX. months in So,

in that's at if that terms wondering Just of viewpoint. all changed

Mike Scarpelli

pipeline definitely happen pulled typically are That in quarter, different into QX, not get But I in XX say, and historically, in. XX% of customers and bookings understated where will this literally Week are deals we still been our what of those Well, is converted because that's quarter. that's ramping. our what did XXX% weighted deals

the to than them consumed a and deal, bought had get We next quarter two. customers enough just literally, rather capacity a multiyear number rather they than everything big who also to through of or customers, do big

within again, a have But run do expired. that six my of I on don't something. once customers. two deals just left they still could haven't buy they basis could their them. do they months do know to They have the just quarterly capacity because out next do capacity a big capacity any they biggest on or of I contracts sufficient have will

revenue make conserving cohort And the companies an ramping focus a a and the what why on a of but they do that customers as on see I in ramping, number that's pace they they the newer I of leading think on from our sure than definitely we bookings why are expense think focus standpoint. that's at function much is can going But I more So don't too to and as indicator. still have. that money historically cost controls slower are I as much within said,

Gregg Moskowitz

Very helpful. for then Snowpark for for Mike and just on Frank, And Python.

So we've small of that heard but call like of there's lot a sounds a a kicking activity. of place, customers tires, taking that are couple tests really the lot and of of ramping, that lot a did you robust it are customers out POC are

how Just bit plays insight how little course thinking be you're over to helpful fiscal 'XX of of in about a the get terms adoption. in terms this more out of

Frank Slootman

we data unleashed have that, Snowflake analytics, that for court Spark into orbit, basic example, sort is of our Snowpark out Well, Snowflake, because putting for purposes a the machine is in consumption, posture Snowflake either ours. really definitely of taking press runs any job learning data full or

will chats, we towards the will of it, we new that compete and sort Spark hard will any we attitude That's we for take challenge existing and ones.

that happening taking so is action speak. for are the to hemisphere, we activity our So in ownership really

data, over customers map. which doing So it they're the touching our from are can We what clearly Snowflake. see all because own is very

up that So activity. have ourselves picked clearly as to a seem lot the to mobilized you organization we target really an of on and

These anticipating. see can in the rolling amount huge and a on verify a it's customers want of to POC of there outcomes lot we and we're going activity whether of that feel I really some is It's there. stuff, out ways,

those And the our about so and is results on super opportunity results have based sales encouraging the we're far, force seeing. been good pretty that

sort. will, time frame a of since excited our if after we the quite company Hadoop about that out So scope as workloads of is and the expansion, biggest XXXX really went first we're in -- things when really came you it. we This

Operator

turn Derrick from now to Wood Cowen. We

Your open. is line

Derrick Wood

simplify a you how acquired been those any Frank, key projects? in you can for driver growth Is legacy given that you kinds migrations for new And talk causing from guys guys. that SnowConvert, about the projects? customers macro or accelerate urgency may for help of on-premise migration change have migration

Frank Slootman

SnowConverts, just getting model. we it. and also we're for we've years I familiar control years. migrating now to to on that not with happy it's about We're faster, why with Well, consumption it matters customers, technology mean that is working actually which super because technology really been over them And have our that full it's

just it and dynamic growth slowdown on because migrations. a about to of seeing time. In was continuing I the extensions. Mike's as is of more really that fast about reticent are customers really mean, posture. so Not contract They they as do who the was the comments all a as hard all all far the could past, have enabling

a Now, And we're far they're they're at the skis. where sort are coming and a their of in furious. looking the over migrations they keep going opposite But too get steps not growth they're time. and on fast are to foreseeing few dynamic enabling

Derrick Wood

the tech -- did for Mike, exposure can seeing sense impact there? And given material happening tech of sector, activity. to you pressure. kind give Great. is headcount to around how having the have start-up Any revenue allude in any you much consumption assumptions that a you the us your cuts all

Mike Scarpelli

RIF, Yes. companies spend. can generally reducing a looking other you areas your Well, you're reduce about the and count, at when you're definitely at not all, first looking just business make you're are When I their costs. doing on comment looking of head also save of costs to

that risks. I think in customers, can announced So see you definitely some one publicly

others XX Snowflake. their has customers. -- that consumption a gone another but RIF in there's one can't announced Yet Their names, of top one We've in up the seen I slowdown real in some revenue. actually name our

and customer's companies or costs through So and between a will other are consumption ways there's things. and correlation headcount definitely cut for say, no RIFs in Snowflake. either direct CFOs to But looking I

Operator

to Alex from We Zukin Research. Wolfe turn now

is line open. Your

Allan Verkhovski

on Zukin. Verkhovski This for is Allan Alex

one one for quick Just me.

last 'XX, should the XX% growth guide that your ramp product the has after recent times your fiscal platform? view adopters in seeing through year? your think how about the seasonality with quarter perhaps slower to now relative For we more of And how changed

Mike Scarpelli

Well, in they're They're think of to taking the more conserve. as -- not of of longer is I euphorically see the ones. said, could terms I really growing like platform slower. a be we it adopters macro of they want that that the recent ramping definitely the earlier And do them factor some

It could be that they're people who as the of depending on the customer, they been that Snowflake they're bigger being Snowflake roll market. population have more a using efficient in out how in there's

capital. And been factor tend always also venture-backed aren't of a disciplined on spending. it's be lot companies signing new up necessarily that unlimited we're have that mature more these that of to these that their a start-ups have the customers They

So it really does vary.

for the to just of year. terms see not XX% We in what I'm and quarters quarterly after to you seasonality, done. guided finished QX other because QX as you guided going to guided you we the XX% growth give is can we for guidance always give quarter, QX In the we've guided. XX% we'll we the

Operator

Sterling to turning SVB. Now Auty from

open. Your line is

Sterling Auty

on you the that first? customers. new hold? are cases customers But what Mike, the growth I'm they if the use them putting a of maybe newer what cases the use number couple for also initially? And are in wondering with slower so, ramping you see reducing of And gave things are reasons

Mike Scarpelli

in use on-prem, them. depends. most data use the one Migrations to really are The cases. cases warehouse, on-prem an cases? expand. common What are is reduction It lot and no continue it's a There but of a use big

those and like seen use slowdown Some are relatively of data the cases. haven't remain changed. we're average think, The sizes in still cloud I I some hasn't Redshift that. really warehouses, them, though, -- things still deal any first-generation of replacing same,

Operator

William We Mielczarek now from turn to Blair. Kamil

line open. is Your

Kamil Mielczarek

macro reaccelerate margins target this Can how assuming flow And growth? free to do revenue? you about that revenue long-term later margin reached a think and balance improves XX%. cash the shorter-term year think flow provide you bringing how in more color about decision fiscal Your cash you little down of margin environment your 'XX, to around

Mike Scarpelli

Free is margin to cash our not directly related flow growth.

and see adding on on grow increase And growth heads there, when think unless in increase in and in productivity expense we'll based at we're will revenue looking side that and our Our more organization. seeing the the faster what productivity, today. business productivity, we the the appropriate not is we we at add we're sales pace more see

I most added X,XXX over still generating people add As year again. this cash in and year, while margin we where are cutting, flow good last said, having companies free people will X,XXX year operating next net, very and we improvement

Kamil Mielczarek

early, expect piece realize And it's product detail you Unistore That's a the you're helpful. quick follow-up. for evolve I to still with but platform of can and you the seeing next the provide traction some around the how that years? few

Christian Kleinerman

of feedback. feedback customers early it's but adoption. early quite for on. in and private for have encouragement, tens is us ring We rollout validating positive to preview This Yes. say, a We're very Christian. meaningful It any is, with still selling as us you received

Operator

from Fred Credit to We now Lee turn Suisse.

Your line is open.

Fred Lee

thinking about versus philosophy, behind doubling clear into the buyback this the down share long products? the engine pouring billion Company's the You've both business very managing been term what's on operating gas and R&D $X considering and more for the

Mike Scarpelli

Yes, Fred, it's Mike.

M&A in on acquisition We strategic a have deals. We've balance had $X.X billion the cash of since $X public. went We've and number our we time sheet. made billion

so but feel the time in we people as headcount, add in enough get only as can our at M&As we growth an to well small business fuel them have than more productive a and So, invest tuck-in through the both many you capital organization. in engineering

it's have, years. we given faster next And we a great And hire candidates we need it's are we're billion generate engineering close to manage the to this two not I'm we growth so if and more through that. find choose. have leaders the billion dilution it'd do opportunity growth think we people. Yes, company. well claim we to too, all And at as they continue growth hearing efficient expect we'll to if not be And our great the over to And $X company, $X.X that. costs going but we still

Operator

We Stifel. now from to Brad turn Reback

is line open. Your

Brad Reback

X,XXX years, Mike, year. last each over X,XXX three new added to the customers you've

So sort per Or continue of we to as per we in customer? look expect into 'XX, revenue will growth in should customer? a skew that more similar towards revenue it

Mike Scarpelli

of all, of on don't total I the focus number First customers. really

said quality to that customers. or large tend be customers. like significant can focus enterprise ability I've times, to on As to they I'd small the on focus many have be We

focus those And on what don't so Whether or is really X,XXX right going number know customers clearly, customers X,XXX, are. add the to I grow. X,XXX, more going next I'm to of we year.

you but the our new per stayed of at revenue added million-plus we will number a see customers have there. growing. in Yes, And also customer million, X.X customers flat X

now were Global XXXX They X.X more in are added Global trailing months. Our million million we still last XX XXXX. at quarter, X.X yet up to

GXK out going do grow I over going numbers. and over think those revenue million continue think and time, of So plus I you're to growth per the see XXXX customer is to more to Global

Operator

Our next Piper Brent from question comes from Sandler. Bracelin

is open. line Your

Brent Bracelin

work and cases you customers that lot those Python. do Frank, business. driving workload you to do workloads new of actually Or use a think for think year from this acceleration half? have the second could actually is use XX% of move the these you in think experimentation out customers it perspective? a and testing Snowpark Do some tried of lever When potential from a cases take a driver in these

Frank Slootman

growing early from consumption that. is to think we're we half be going small Snowpark, what is of velocity seeing second where But point, coming the that in at some base. in see think already in impact it's we days. very from terms a material it from We're the Yes, we're what a still will of

still persist before our material. it velocity becomes are yes, we that to revenue seeing scale, So need high on

Mike Scarpelli

have is guidance way, I Another materially. Brent, this think be year for much for we material what but not it's longer term still us give our It do will could early. but upside, too Snowpark, more

Brent Bracelin

through for thinking the business And at free $X.X model, usage want margins here. call impacting rethinking at at, today margins and go you of helpful. Very billion are profitability be on I then, a could scale, they larger billion XXX% drag I what the back scale. guiding to $XX flow recession business potentially guess Are margin cash XX% just it, a you much the to but comment Mike, this scale. growth

Mike Scarpelli

there's Day what going to last for have Investor said give an when Day. June Well, clearly, upside just that we but model we update wait or Investor to on to you're

Operator

to We from Radke turn now Citi. Tyler

line open. is Your

Tyler Radke

comments given about year Yes, slowdown the driving slowdown, the back at that you was that was are consumption incorporating how first the that that on of And saw? full the you of Mike, XXX% I weighted slowdown to the below versus outlook this assumptions actual close for booking lower adjusted rate guess, converted going the quarter as that of you quarter, just your the secondly, think lower you much bookings pipeline? end

Mike Scarpelli

the the through. was bookings that them of new not to into Yes, second capacity to were that have year there year some this in revenue. land of customers an get a do Most really have half deferred impact that enough just customers did buying on duration ones we does that deals

on revenue are XXXX that large big possible. Global some And the possible early do biggest thing are to everything get to way customers these the as are were soon of Snowflake customers longer guide we our that Unlike as methodical adopters newer are some seeing the ramp. everything very as do on take in really that the is they things. the of But

Operator

to James. Raymond Leopold from turning now Simon We're

Victor Chiu

for Chiu Victor is This in Simon.

this shift this how going it behavior is previous think forward? a implementations, of rates approaching structural the quo are a more consumption about do cohorts, accelerates consumption Regarding around you and we anticipate of kind the and returns status is kind new their the Or should how normalized as of that cohorts to in new environment?

Mike Scarpelli

well, we're as zero I a can up model too. I of that beginning consumption they is Snowflake. costs. the But and say tight in as they their literally choose to think In have the we very environment, quickly it a watching day, Snowflake Well, are revenue macro what quickly as people would turn ramp off, can customers use just

out we're customers, doing things. as seeing how they're more roll to before, more methodical make efficiently, sure I a they be And said use so Snowflake Snowflake in

big they're And net retention. They're there's our But see the growing you revenue change. they just that not still really still rate were, no in are Customers consuming. growing. at

Victor Chiu

priorities? quick where R&D new follow-up. versus where R&D adding you understand And opportunities Can entering for little your sense more Maybe see help just That's your Okay. to around helpful. new are markets? understand help features Just between get us around preferences us one trying a a your you efforts.

Mike Scarpelli

I'll let Christian talk that. about

Christian Kleinerman

Yes.

We and is the past. progress across the discussed innovating continue investing continued analytics. on three in vectors broad One that we

sharing cleanest. Second one is collaboration, around data where

seen of and who's are is to come broader enablement, that's extremely fit the closer data, to computation where of we've initiatives not our category the Snow but Here, many in. one

three making now continue investing progress we and So prongs.

Mike Scarpelli

terms high on or working be start will we're and to material public the to FedRAMP able market in very, the after side, have sector, have will we'll in our we side this as go of we're new expect to year And more deals. going soon public to very on and well, that us be product sector the side,

strategy China And huge we our where markets, thing new that that is move some where for with is and new of too, something in will in be in going continue we're China, opportunity. we're international who slower. not seeing then terms And like other year. I operate explore we They a opening the multinationals this the markets Japan of would to in and there invest say, more countries, just we're to bigger any global

Operator

from Our next Baird. Will question from comes Power

Your line is open.

Will Power

as wonder opportunity that comprehensive It looks lower any agreement a margin where higher the guess I despite Great. guidance could to AWS. the Azure there, than currently this I to what margins then were like? you looks in bit like nice go-to-market the provide if revenue a Mike, previously relationship, with update year, it Okay. vein, you And outlook. as just pertains really

of color other enable key on levers that. any maybe helping Just kind the

Mike Scarpelli

when I'll slowed we with some this we, our hiring down margins our like the first. Clearly, and our looking of year. at Well, started start many of costs, customers

as committed we things. operate to And that's to And in are efficiencies outperformance Company do the the continuing driving so well the way really as we margin as efficiently possible. as

longer leverage more So term do model there. in the expect

the vendors, with commit. an to In AWS terms I relationship agreement $X.X is billion AWS with the good really new already relationship in a step forward We the begin with. great a cloud say, would had improving of

mean a better two. I much into and AWS, commit have we're over years the it's billion the we next Azure, years, that still $X.X between X.X -- Now still five-year we're alignment five go-to-market contract.

We GCP go-to-market another, there be date. will start no discussing term. talking something could change pricing, get I'm with with just talking in terms. working hopeful to not to together and there's Azure longer I'm in better trying GCP I'm one

We with And AWS, we our will XXXX. end clearly to GCP a committed contract the in GCP, renewal come running we new to with fully ahead early with contract and Azure of why that's May we're we're tracking did an what of to consume or and but AWS.

Operator

turn now from to Fred We Macquarie. Havemeyer

open. Your is line

Fred Havemeyer

to methodical Mike, with you're square I well. context or segment oversight, ramping the but -- the to gave of anything made earlier anything? management description back your a you of in trying you you more about or some doing? it budget-related wanted the And around Could square rather, being go Is like an in that little internal perhaps performing newer what customer change terms Snowflake. that is comment there context it I'm understand enterprise approach quite their around something provide to on this not in to cohorts more seeing what they're also

Mike Scarpelli

XXXX, albeit did, board, a people have around that's seeing companies in methodical cost was these Well, and and I'm they're more things I a XXXX do with being see at there. more as conscious much discipline Snowflake, bit companies a you're the do you growing across spending, rips more you're who you on where or do they're didn't just out just quickly as we but result, seeing why cost we as telling they saw they how these what not pace. not think little And companies and it growing as growing,

seeing of not rollout out in spikes our are with Snowflake, these efficiently function involved really in the since people that's We're And they're also customers. actively consumption of customers. crazy a in using terms planning more also resource PS Snowflake of

do This really -- a Our migrations. better of partners just are Snowflake and us. on is how getting maturing to trained our ecosystem partner this

Operator

from Turrin Wells from comes Michael question Fargo. next Our

Your line open. is

Mike Scarpelli

start hear you. Can to that? be I can't Even with repeat in? sorry, you can -- you

Michael Turrin

how above Yes. a realize the lost you with impacts strong variability Yes. to. change but for is at holding on some But No, there's those you're long XX% XXX% levels any happy of that you NRR in still you're thinking remain even about us, mentioning, expect time. not said to the target

that to is anything Just can anything metric meaningfully add you're you dip more seeing could helpful. cause currently that or there

Mike Scarpelli

possible had acceleration last the rate. that that, that recall in come revenue cohort saying into net actually next soon. to too. numbers to And our very well, dip get and level to the year. our as over if as I'm we landed that's is but you ones harder. it anytime We're not the happen, be in becomes forecasting it today it is land going XXXX, number that years clearly, not we two going will number. bigger, an all the upon high retention to But depends that clearly, a back that still really that happen customers But And we could

the revenue through of that's retention look XXXX, a consumption You went thing net our beautiful model. up. And

budgets spend will their really on very their seeing that off we're up come still retention. but Snowflake, can it's existing not companies Snowflake open drive can they precipitous ramp longer the revenue control they but customers a very going It longer in down term, that quickly high. on as could drop when term net Just potentially more, to up, stay

Sorry hear I can't you.

Michael Turrin

Helpful.

I if more, one Just may.

Sorry the customers ramping -- mentioned slower. new you've that's -- helpful. Any

time from all perspective this product we're leads Or -- is matter come that from we perspective? it go-to-market appreciate either your to over dynamic in. of and or all? them at you letting there are a change is you're environment think the out being things can that a could But I us patient, more contemplating

Mike Scarpelli

work they of also our that too, some of can this. ramping on very, whole the want are That's strategy partners why that's also stress a are migrations help faster. we really to customers training and time I so lot very certifying quickly. enable who Yes. SnowConvert are That's spending was Mobileye. to But the behind there acquisition average, on

We a to on ramp they to everything at not were Snowflake. albeit to the they are euphoric good be at pace customers very can pace, clear, see to the doing continue continue And we past. in that ramp

Operator

Cikos & Mike from from Company. comes question next Needham Our

line Your open. is

Michael Cikos

an are to if see have a on you it's it, example, quality XXXX of have. maybe again, total to like asked I guys other cycles I If two-year because previously, customers, think one- the at focus you wanted I know, of you I parse I looking to the back a the construction some call about relationship. commented as couple strategic for had And Global about I guys -- know could customers. Mike, sales that spoken that look ads. these guidance just has added having, folks customer Snowflake

that how Is if there of how to I could, the Company's customer any let's is you net that the as segment? Can detail exposure the the that you year? as are VC-backed I Or seen know way get companies, rates XXXX? which the more an additions the follow-up, you're say far any can had about provide up those size Global earlier then to clamping thinking colleague course previously. about that retention asked expected from to trend versus or you four growth down one are exposure what And over

Mike Scarpelli

enterprises, But sales So Global cycles. ramping of we them guys to terms long is those that we but booking. time are a land in be you revenue. when take first They as and to They get as can. to asked XXXX number land large of ramp we large will the the is of lumpy questions. them, fast it's purely thing The

any change seen average when of XXXX of size land really those Global deal them. not have terms We we the in

not roughly very are of at markets we tends business. when have some focuses in been given in but you to retention guide they're capitalized. public question I'm sales a XX% the That net well, unicorns the our large terms and going that on are to chosen too. large of to These before, go the on, there there. the asked your ready to well about, inside have and disclosed there In really look future. But revenue I venture-backed those terms as be revenue It's it of for retention that some all not companies, in of of And our that, have still companies segment unicorns, net remains to. while, not this

Michael Cikos

the that expanding know landing Can saying deal no customers, I of six taken, be about months we're the if you're you're saying size run And rate. in at what change Like that impact know, but don't have I is that magnitude cohorts awesome. customers provide to you're are if delta rate, these to that ramp thinking seeing? differences, magnitude slower based typically are today? that how when there's on a you are newer That's would trending average from the you macro like this

Mike Scarpelli

not I'm Yes, that. going slower. to disclose just it's saying I'm

Operator

comes from Deutsche Brad Zelnick final question today Bank. Our from

Unidentified Analyst

those that kind call into that would differ impact looking on just the several of Graviton now kind play to those over through to next expect of improvements that year, for consumption of quickly anything on and wanted talked that you're of quarters is you've and to gone out of software terms expecting? next improvements of key long-term And the kind of into hardware And kind the were a out from kind I Dan is the of what you kind that about any completed, kind This one year. software how on we've then before? mentioned year and that the reason the relative to in did impact ask the focus migration you hardware, Brad. some going have of of

Mike Scarpelli

No.

we both don't every of hardware factor improvements constantly are on those. there of number happening. This headwind today, and see associated year before, and improvements, X% hardware improvements material any a said in I with we're revenue as working that software year, software a As

quite I There as the quarter. this get good finished a feel done in were all of I last completed deployments year. of are of today. number about as pretty them so first didn't all mentioned. And month X%, were that them The GravitonX We

to forecast full baked hard but thought this quite our didn't we really impact year, as it's so into last And have for year. the tell, it's but

Unidentified Analyst

just on kind that in And curious are I then just was particular the there in drove if last international, any of markets underperformance one international? one. the

Mike Scarpelli

from actually a a good were function booking their more cautious in consumption. I side. on much a little with being They the think They consumption. on businesses. had plan slower a of pretty people And uncertainty So EMEA more of that's were

EMEA our bit small would in other we say, piece really slower, some overall areas little go. I a of us, bookings such thought of Japan little from very are for they is as what It's have was they And well Asia perspective say and and but a that Asia methodical are would slower doing a buy would a than productivity. the I business. is but

Operator

gentlemen, We'd like now for and concluded. participation. call has thank Ladies today's you to your

lines. your You may now disconnect

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