Earnings call transcript Q1 2024

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Operator

Good afternoon. Thank you for attending today's Snowflake Q1 Fiscal Year '24 Earnings Conference Call. My name is Cole, and I'll 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].

pass over to Jimmy our like Sexton. now the to conference host, I'd go Please ahead.

Jimmy Sexton

thank joining you QX and afternoon, Good for earnings fiscal us call. XXXX Snowflake's on

Chief Frank With Officer; Financial Q&A will Kleinerman, President our Montana join in Vice Christian Mike are Senior Product, me Chairman our Bozeman, and and session. of Executive our Chief us Officer; Scarpelli, the Slootman, who for

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

to During statements growth, today's cause could results, performance business, statements, program statements call, we differ risks to long-term actual will them subject results. future financial stock our make of and from related forward-looking including overall uncertainties, strategy, future features, These and expected which to and materially repurchase products the prospects. our are

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

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

also will posted A be website. the on replay call of today's

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

Frank Slootman

Jimmy. Thanks, announcement. everybody earnings today's to Welcome listening

grew in $XXX totaling XXXX Snowflake's QX fiscal XX% million. product revenue year

Our net flow at adjusted came XX% $XXX revenue million, obligations billion, remaining in Non-GAAP $X.X and year-on-year. year-over-year. reached free performance up XX% rate was retention XXX%, cash up

We environment operating patterns are, consumption we this across in however, unsettled the board. in an demand and reflected see

uncertainties. term, this for with enterprises preoccupied enthusiasm environments. with in Snowflake eventually While like is customers optimize own This cost but their high, We cycles work course. run near continue response well to are their to proactively their may

long-term Our opportunity conviction in the remains unchanged.

been Generative become the progressively we trained data. and imagination AI have Generative and Models of as models will That's at has productivity, society interesting is and entire powered by the been obsolescence how and enterprises this industries to believe customizing trained interaction bring with large. chat-style and with It data. its alike. more their disruption, will primarily with technology AI captured Internet own as from well relevant. data public of benefit tasks

public of model data, to and data, unstructured, and structured becomes role focus both advancing language trend manages in proprietary lead this large vast proliferation universe textual AI's and and a data Snowflake on growing rapid models will the of specializations. As and cloud's pronounced. types

in others will shallow specialized will be be functions, in impactful capable their specific with realm. models Some deep, broadly and

other audio, is become available. of extensibility video seen adoption ideally to AI will we For modalities. Snowflake the our rapid interesting via limited equally language models for not making as on Snowpark, textual platform be reaching they a new focused also data, and years, of suited with and far

all steadily applications intelligence. and workloads, new forms demolish to limits mission Snowflake to of users, The any is and data,

evolve and continue You see therefore, feature add, sets. us our and will, to expand functions

to data purpose. world's the any all Snowflake for use limitations of way find and not is to in its goal encounter terms and Our

and our vast that machine capability, universe continuous Snowflake with we already manages, of that interest no still Data data capabilities workloads performance escalating increased the data and it's pull. enable science AI has in are uses learning, surprise is given are while gravitational From evolving. these And perspective, its efficiency improvements.

chose and Data these U.S. science, than less machine with workloads, Snowflake can growing A running. large cases models move Snowflake, constraints With engineering XX% they for approach, they every are long customers feature learning which one a QX, model financial to AI prior sampling uses on use their Snowflake In up of training. leveraged Snowflake. ingest data, predictive workloads replacing to and X,XXX year-over-year. more Facing Snowflake memory left day. institution for fully solution, all

broad of spectrum enables programmers. a types, learning for not just user Snowflake machine

have powerful machine learning extensions preview, users anomaly master data to SQL For as ML-powered time introduced, science. the analysts, proficient need leverage extensions we insights, in and SQL series top detection, underlying can such forecasting. the now without

platform for our is Snowpark engineers, and scientists programmability. data For

plugin, of a MLFlow is in is and a here machine learning. framework the both manage machine PyTorch and an loader and lifecycle Preview. data operations PyTorch helps popular New learning, for Private MLFlow

can for an contracts invoices legal AI, Applica, last science something documents documents These business now of such understanding acquisition a Preview. environment. Private today's challenging start early turn analytics, structured or year's support had in and referenceable into of now challenge, Applica's solves that data is in language real properties. in Snowflake language as through quite unstructured data. are model models Users

offers for GPT Over assistance and of ML. create experiences Lab framework one AI across apps is be pre-trained been that for the shared users. scientists have Streamlit and to AI GPT LLM-powered applications Streamlit already built. can X,XXX example. data Lab choice is

from Engaging value extract their will to will a powered believe with and build through We popular search and our users with to data is to language This conversational application allow search-enabled data. users next-generation becoming technology increase Neeva, natural by our acquire experiences. non-technical developers rich, in announced Neeva Snowflake language advancements AI. We intent opportunity models. enable to

from engaged the Snowpark first workloads. nearly for More at more XXX basis, quarter-over-quarter. to time. broadly, Snowflake industries customers of the XX% XX% up Snowpark using end Snowpark XX% Approximately now least a enable customers last are consumption of quarter. up and continues than is all with at weekly In on QX,

by time Snowflake ServiceNow in the and is The can needing ServiceNow public Snowflake. developers cloud interest, their Native inside use application of holds development. or data. core IT With apps, preview. native Preview, Connector first their to to third-party because customers perimeter manually to a built insight so-called developers without governance deployment focus access [offload] Private is of make APIs ServiceNow integrate on security run The is to Connector data it the wealth They and on services. app Today, Snowflake Customers are which data convincing of significant, expose waste for apps, can security (ph) Snowflake. native concerns and data. tools. data common

on During essential which Supply the the siloing problem. unique supply have as one the quarter, Manufacturing management a are somewhat remaining chain all few of chain Data Supply managing we to focuses data that platform change realms supply itself. prevents chain software visibility problem also management data enterprise Cloud, struggled launched it. and the is in the

enterprises Cloud, also being and from Manufacturing continues to being operational large data cloud With for an institution. hub evolve the a to Snowflake

expect creating make therefore, participant supply comprised a Snowflake. supply different management, software We data the to companies the We, supply provider Supply chain also in from major fully significant Blue the strategic clouds. announced first the entities. numerous this in alliance They commitment re-platform Blue retail will change as and Blue of largest chain Yonder, both chain that a typically platform Yonder. the are is network Snowflake. end-to-end effects Yonder this the onto one manufacturing chain of key to management with discipline, on highly are network is

look to announcements significant seeing you will feature Our we in Summit forward there. and conference June more product

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

Mike Scarpelli

Thank you, Frank.

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

reflects -- rate with includes of environment. me, new month in customers excuse challenging revenue XXX% million performance a trailing Our revenue QX five strong net XX product revenue. retention $X in

focus adjusted our QX of We outperforming cash to efficiency. continue We flow, and target. of free growth non-GAAP million generated $XXX on

performance and consumption We strong QX, month. with Easter globally our our from after slowed was The geographic consumption line exception through driven consumption healthcare we April, APJ varied in outperformed SMB Starting of a from customers segments. strength benefited month From standpoint, manufacturing and the quarter today. customers. to March. in our In the February holidays in saw by and the Financial in services expectations.

costs, Snowflake today. own and It to as slowdown of in identify our headwinds largest single consumption face Easter challenging have the businesses. cause customers scrutinized is of A few they their a between

storage policies have cost. For re-evaluated delete performance more has and less price data. shown to stale long-term lowers a efforts retention example, and some to their with that and these reduces valuable recently We've expect bill customers worked few large organizations trends these on continue. compute History data their This benefits consumption.

results. remain saw we Productivity pressures, globally because is with multi-year are macro and the to we But be This sign challenging hesitant where environment standpoint, still a outlook always current of bookings our American reflects quarter North booking competitive the our not due customers satisfied is large that. segment. want with QX not to headwinds updated a we From our but not this. deals. it is exception and enterprise magnifies to large

in invest yield areas only returns. that will We

existing reason, onboard new sales that resources before capacity. growth we drive will we For prioritize to

on profitability. quarter QX of continued represented another progress

operating with Our public in in marketing non-GAAP pricing revenue contribute and centers, Non-GAAP providers, outperformance savings our was gross product cloud on improvements. product and year-over-year data margin sales More customer X%, spend. service gross growth scale continued and will to accounts margin was from favorable cloud large XX%. margin benefiting improvements, our

impacted of and free of linearity flow collections positively May by was Our XX%, non-GAAP early strong some receivables. adjusted cash margin collections

equivalent to repurchase cash at X.X strong billion position date cash continue We cash with have our $X of cash, of million and $XXX million a used in and short-term price average long-term to to approximately approximately an investments. We $XXX.

using opportunistically shares flow. repurchase free our to cash continue will We

are Neeva. As acquiring Frank mentioned, we

We full excited to welcome outlook. to the impact XX our in Snowflake, are Neeva and from reflected approximately is employees

discuss been observing. guidance, Before trends to would we've recent like turning the I to

by the we underperformance older driven mentioned, this slower-than-expected have revenue since quarter, I customers. As Contrary Easter. is seen of to last majority growth

Although year behavior] visibility to flowing [customer reverse, we full (ph). are predictability of we due these through to lack patterns to expect our this of and the

consistent in we're a As a change we costs result, in consumption. see until reining

investing resources, to in and Snowpark as such We and quickly our Streamlit still selling customers, team with PS leveraging personas enterprise. more and and concentration these on customers successfully, focused are in new sign on solutions partner ensuring newer the continuing to growth are our efficient migrated the win

the laid to better years. can data network lead profile We fiscal effects XXXX We ultimately believe revenue have that still cloud are of confident the product out margin over out billion than a we $XX with few year. we past this last will laid in we achieve

Now, let's turn to guidance.

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

X% a And XXX expect, outstanding. average we on million margins, non-GAAP to Turning expect basis, weighted diluted operating shares margin. we

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

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

hiring will to engineering. and We product in continue prioritize

fiscal add our We in M&A. hiring plan approximately and have expect to the X,XXX inclusive employees slowed year, we XXXX, for of

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

email If you are please interested IR@snowflake.com. in attending,

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

Operator

Thank you.

Mike Scarpelli

I apologize all for the coughing.

Operator

from Murphy is Morgan. J.P. Instructions] [Operator question Mark first with Our

is line open. now Your

Mark Murphy

a of think then look consumption Then normalize Thank the would more do and have you perk you up other sequential begin any Frank, activity? quarters, very optimizations much. connection within optimization few or if separate growth same pattern sense that you at words, follow-up. quick Azure the do I to Snowflake's hyperscaler phenomena? a to around you kind time, of cost do this In the rates cadence a AWS as

Frank Slootman

we think we of a experienced, are percentage because Well, our deployments, We proxy. as overall is know from they Yes. talking well. they good them large just to that that Amazon such experienced that what

we're there's a effect ripple definitely the stack. So, because in

is we that. smaller. So, speaking, see Microsoft yes, is the answer, generally will

as So, experience AWS of predictive they're be. not our would as

Mark Murphy

bit horizon to revenue are quick follow-up, safe you there baked developments to the ask the on might But guidance adoption next also It curious, sorry a builder that about quarters? in Mike, as assume you're of warehouse case. several like that the the Graviton any Then I'm questions. is I got Okay. product? that a we could headwinds But other think you sounds cold. in from thinking and completely a you've into through have analogous I'm that's it be

Mike Scarpelli

performance. all better And AWS regularly types performance migrated in optimizations our in cloud which X% of hence we is. bulk do our the really three and that's there's year customers software, generally, our And Yes. optimizations cheaper X, headwind hardware, improve revenue the that customers. revenue to associated We've those combined, every better and where vendors want of I there's two we and optimizations. there's by fully so of to forecast, the There's those. a Graviton remind with with Then, the to our for our that's you,

largest one their a customer retention them customers, and optimization And petabytes the from went data. is saw of to of one Like, three to the years, really change that and five a petabytes in massive really our policies. it's wanting just storage with we third few

policies storage But which archive seeing one, I wanting I run spoke their because so, we seeing data. your on customers you're they older that. more some wanting we confirm top quicker, say within hyperscalers, do more that, And to And customers, they're the to to lose of that revenue. data. are retention won't now of less of And amounts queries querying change

Mark Murphy

That's Mike. thank very Yes, you, helpful.

Operator

Our is next from Goldman with Sachs. Rangan question Kash

Your line open. is now

Kash Rangan

question. much taking Hi. for Thank you so my

that's If you "normal plateau are respect going likely Thank to degree you optimization, you the and when are that you could what to if consumption customers can? to to much. you when with that consumption," just back are can, to likely they telling your through come offer so

Frank Slootman

more call already way, it level another efficiently that optimization, which a of there's driving sort layer just on, I of bit but that. just savings would top more color Kash, Yes, we're rationalization. say, running -- look, what put to would is do there's we little how a on of and there's run I

that last sort business. we've of is is oversight there One the the of expression quarters things a we of in of over that is the normally is selling use is enterprise not scrutiny they're this couple this that in not a that the level frequent seen there. CFO occurrence. is that's an happen And that And

see this only episodes. happening fairly You in severe

you're but beginning In the like, like, live it's "Hey, going your contracts, to contracts," it's then we within smaller do means. "Hey, short-term

and make playing can into that's figure money you're to you it really you're dynamics of where work. you're there. amount the Here's to seen And we've going to to going out spend going cut out So fit our that box."

of Now are over? in settling course, unsettled, I run my going they in when in question, because, remarks, eventually is this end, things terms all settle. their said your in. we're things These do will to the but be prepared

strong sort have still real "Okay, of when things it in into visibility be that there. then we is settle are we don't adjusting, and resume going to think of, But think patterns will different?" We as people I new and are now, unsettled all of I from and right terms

Kash Rangan

much. so you Thank

Operator

Keith Our Weiss next Morgan from question Stanley. with is

open. line now is Your

Keith Weiss

down that the couple into basis a Excellent. year? forecast be for in moving on our not little one's if guidance Thank you And investors We've but question. forward for gentlemen Mike, the of most have down last new come and might over forecast I'm and to couple be seen this a you. your of the from investors, it's it's getting to cut unfair, of the types further optimization both give acting. taking times changed and quarters. anything's for the And and are that that the that. can environment about one taking of kind methodology of we're past of this we customers a going running go-forward pieces how How is macro the there's kind a fiscal lot in confidence it

Mike Scarpelli

was a consumption daily we no trends or growth we week-over-week was methodology what Well, the in in literally through This, no four and at on And in forecast four the unique. is se earnings our there the would I way per weeks -- where say literally prior change literally April past, looking there yesterday. forecast weeks basis, material. to really not saw we is

it that storage And of by customers, model, consumption on big ability the we have upon it was when a to lot customers But happens, it some only dial some confidence they well these a think of get driven And retention I guide us. do in business. have we the that's data can in to available optimizations back and these as can policies. their they too based increase when more

Keith Weiss

it. Got you. Thank

Operator

Keith. you, Thank

with Our Wolfe Zukin Research. next question Alex from is

open. line now is Your

Alex Zukin

for Thanks guys. the question. Hey,

So, the -- still look one. with it the purse a less to course versus changed If maybe with? growth one Kind of strings months? how the people doing the more technical meaning balance then tight of of look? six or to are versus rationalization, how do we optimization of balance has that if at from we financial does nine much one, and last over the How headwinds

a just does get it with maybe important? for it unlock from Neeva? do what is then AI? relative generative Why to And you your What customer technical perspective, base

Mike Scarpelli

that queries of getting Graviton So, versus of queries run running amount right the they the the -- what of It's are jobs you're our year actually optimizations, this it's of of the on, are from outpacing X of now customers -- just faster. the actually some also year-over-year reduce the full grew year. revenue. last storage queries the The is in both number quarter if running quarter, in because impact you the more doing number efficiently. XX% of And terms

just -- customers. revenue much out is becoming actually is so and more actually efficient the our So of growth number we're for jobs outpacing

Christian, Neeva, go who the to can... on we'll is And here

Christian Kleinerman

Yes.

has the we all over The several an you extend search is us happen case we communicated for application broad capabilities, applications the the years that is experiences, notion so bring into is to only not here. generative to a And advent but close on hi, with the can It So, evolved conversational AI computation mission platform. enabled to and data. search to core of use Snowflake is a experiences. of of last vision its Christian

the important us the conversational ones are the And within as around Snowflake customers' help technology, power leverage a security search with that on the privacy they but the are of or folks the Snowflake Neeva for innovation and data. this platform with security safety but so to the perimeter new and data all going accelerate most can the efforts that from and of experiences,

Alex Zukin

Understood.

Operator

Our next question is from Raimo with Lenschow Barclays.

line Your is open. now

Raimo Lenschow

momentum -- at you you. The have there is Last Thank things -- ones, like talked slower it to it, from ones. there? -- two the slightly you Mike, I like other Yes. newer more that quarter quarter, think we the like we change of you kind had expansion if kind like, established better the the there? optimization compared seen factors and ones. pace from or soon. expanding more work this like last we quick are the Or more hope the the now at one feel quarter, question. about Is newer older the in lower cohort Have about any older of

Mike Scarpelli

older, good No, larger faster. The The ones obviously, dollars. growing are the question. newer are

that's AWS, materially are So, net company to where revenue impact. they is And that. do new optimizations within a interesting we're because relatively growth the those that it's for above when retention customers to and has bigger overall

us the off Cloud So, for well. really starting to Azure is take as

Raimo Lenschow

do But years, their was terms you a storage then you in you et approach, voice, Or is of Thank and it, policy data, thing? with kind cetera. And of like here? I different now help reason people more coming a your in stuff certain changes if think as that's mean, that's of you're why -- stored one, the you. for number a think that maybe for about kind the and kind seeing like, to you that, have there of we're think retention Frank. people Frank, Okay. Do kind of happening just what permanent move temporary a of out, do

Frank Slootman

we'll are it's Look, you in permanent. I "Okay, operating need to of the the said, know in look the starting are. okay? implement there do actually might So, data business the is, CFOs the think prevailing the at, cut guidance I at But is then of very we The like moment processes fruit this?" direct Sometimes teams cost you don't "Here's where just actually low-hanging because terms we concern to given the how be," not sentiment running the well, cost. back. general what, is be as that

costs In it XXXX, was -- the was mentality was all let and and rip. at it there growth XXXX

I we're right side predictability We're that situation. other Now in mean have on complete where that we the will the point the the certainty, we and so inverse on. strong at now. know to last. reconvert of of cost And will some think just We don't on spectrum here.

Raimo Lenschow

Thank sense. you. Makes Okay.

Operator

Our Brad from question Zelnick is next with Deutsche Bank.

line Your open. now is

Brad Zelnick

volumes, so it's Thanks consumption workloads that a transaction predict for question. just we Mike, of back obviously, come of the optimization much in I tied to model, macro. and is number a lot Great. difficult know to to wanted topic. I the know the new to

optimized just optimized sense there to if of compare optimized maybe three your of talked about have to you as You get downside different were most the can most is, Is any customer a that everyone what your total way customer customer? you optimization. the portfolio the types

Mike Scarpelli

would That customer I so don't have Each that do. hard be data. to is different.

Brad Zelnick

question [Multiple I ahead. Speakers] ask right a Can Please go you

Sorry.

Christian Kleinerman

in Frank add Mike needs. of that thinks in described to changing about was category their instances, going it's that certain alluding was to, the I the optimizations business some these what third how No, and

do, it's decision. for of can to policy, business when that type we us estimate only our so difficult that to the a So, made decision re-evaluate storage impact there's customers

Brad Zelnick

It's question Since relative any the answer how commentary looks May you trends know every forecast week, Thank have I to. you, Mike, April? helpful. Christian. on do to the a you

Mike Scarpelli

where periods couple the of $X.X it strong, in it's was there I That's reflected okay. -- the but billion that's in you, for reflected a gave it's But in that of kind guide it's the May it year. I not were would that we say guide be, want but to where the now.

Brad Zelnick

questions, you for guys. Cool. the so Thank taking much

Operator

Our is from next Keirstead with question UBS. Karl

Your open. line is now

Karl Keirstead

Okay. embedding Thanks. environment is essentially you of in second spirit it assumptions just line your if the I build reflecting saw Brad's of half May you and what Are April, questioning, could Mike, on the you're guidance? straight lining and a little you taking conservative gets it, or that weaker? fins That's little approach or one. assumes of maybe are more bit a of bit question haircutting number that sort a the vertical it

Question comments Mike number suited Frank. be some you elaborate entirely it is Could of that? might be execution. two, maybe wanted sales his best like this sales productivity macro, that is where for to pressure Frank, Because the not may sounds mentioned not but Snowflake in on that be.

love And, bit. interpreted taking the I'd I to correctly? to turn that it you're hear around? If So, Thank a you. steps maybe little

Mike Scarpelli

Karl. sorry, So,

lower expecting We from seeing it pace on been will a are that it's will what much there compound, that and we've four inside of prior, expecting it's more be average than straight not last the but year. today expecting I'm at the is end line there. we're in we a week-over-week was our growth where at the are what weeks customers with

Frank Slootman

Yes.

think is optimal. applied do And any There side, we're you a On a I harder. push that we not resources, resources think a way the have we comes the on that's macro sales but point converting much very productivity where thing. the in can't

sales an just is execution I is, aspect? always There day-to-day mean, there management. that's So, right?

successful resource amounts of we've of I the I like this thought I've In definitely and performance. is of all comes more But tremendous to a under where, need felt have prioritized driving work, feel more I it. point resource. have done could applied kind hindsight, very, become a in the years I very This the where we thought I more. that situation always always there we of But been applied doing on like okay, selective, sort at

than any thing. is sort So, the push definitely just harder sentiment a think mean, certain a can't I you that point. a us of up out it's to macro I there

Karl Keirstead

both. you Thank Okay.

Operator

Our next from question Walravens with JMP. is Patrick

Your line is open. now

Patrick Walravens

Difficulty] [Technical

Mike Scarpelli

We can't hear you, Pat.

Patrick Walravens

Yonder as iX Blue right, Manugistics. remember I and If JDA, is and

about would great. anything be so why So, that's interesting

Frank Slootman

supply management, fascination Look, it's been supply platformed in incredibly incredibly It's spreadsheet has I inefficient that because is, management is really different. first volume of chain all, have high long-term it's each an chain chain platformed and reason of it opportunity. operation. never with couldn't software, email And the a supply an terms be

So is variable. secondly, a solution for to standard hard have is But data it's something very that the so problem.

you can't entities make all supply to the stand If problem. that establish you visibility across chain, chance solving up of no that

So, find will supply the will entities the Snowflake And chance of it fighting have all have solving interesting to that, else. is a for look, I Snowflake the visibility reason the way that so everybody chain we real in right? become it. accounts, Because that's everybody

suited for on of high of course, Snowflake Secondly, the ideally volume. intensive taking processes that run-in very very, kinds those supply chain management are extremely is workloads. computationally and in they run And

supply of running network services be So, network but I we're will I that all operating in. think that's industries in segment financial And management most really segment think the today, of we're most the is that by Because far, there. time. that chain of history there's are is. These right be retail very fullness in the problems overtaken manufacturing unsolved absolutely penetration no That's much it and almost in computing. will the how by serious in

So, fantastic the to address. historical technology opportunity for

Patrick Walravens

Okay. you. Thank

Operator

question Kirk ISI. next Materne from is with Our

is now line open. Your

Kirk Materne

are get the any sorted of conversations explosion I they you discovery still data might of sort think executives -- customers the of AI get starting the with Meaning, conceptually, front? your Yes, know six tying the sort to questions Frank, sort AI that, data that? are Or out opportunities thanks is that your need months, to buyers are or in with to most with over in and AI the on the yet? people take to do that phase percolate but around of very of because of much. advantage last the

of can Mike, guys. sort just I then, margins if curious op the impacts kind was of but Thanks, mentioned kind margin of are was I talk flattish you full guidance savings, you've year-over-year. if the And impact. Neeva just had any curious, for at just that all? year

Frank Slootman

It's of can that's and then customers of and space, data between stuff, in the Snowflake, happening. also the on make you some take progress. connection to AI already that And ability that advantage they're kind and rig things already language interface all and together today models interesting Frank. make available large the the available and language natural Obviously, the services are the

is these power to data. do thing really that -- have models. highly-optimized what highly-curated, we Snowflake And the But you then at is need to

don't terms its things these You things. cannot these indiscriminately understand lineage, definition, loose -- all of that its in of let its kinds data just on that quality, people is and and

think, place. in are I in great And I So, said data a a prepared pull. remarks, has gravitational really the we

these is to will towards possible. to maximum the attract we workloads. for type our And enable So, extent the that tremendous demand of strategy

Mike Scarpelli

regards all And that's actually, well, of very then They're baked their in engineers into They all Kirk, people. expensive have guidance. based to with -- senior are they're number the engineers, U.S. these people, fully Neeva, a and of very the

Operator

Thill is question with next from Our Jefferies. Brent

now open. line Your is

Brent Thill

long one we desktop? in where you do -- you can person start mass we internally, where everyone's this Everyone simple power When to seeing this front have deployed Snow it's of I concept you to for and to chat do data in it like having Snowflake go ultimately, I start mean takes to the that, the of market, a think have but to see how Frank, UI that's you the Thanks. that GPT bring that think user?

Frank Slootman

harder I And place. I And relatively technologies. limits people I mean will that, they're when it doing over and like is much is for thing, it. finding things start think prefer me much, start in might of simplistic over it. asks I -- want where like it we're available dashboards running to kind of don't it the asking you the direct top the example, example, to more half simplistic, very Snowflake, of, be these already not say that data which second be the harder, I questions. you just that's for the Salesforce -- on like it that's a gets But much internally going common things in all something Well, questions, these let because characterization. when But questions. also that using

the months think of of side this really hard in And for of even captivating figure workforce people. out, productive technology to we're weeks take asking fun-and-games that software that the content take will of weeks analytical do in this a I technology. be sort But matter is the or and generation fascinating of and with this, way. that state people still some that questions development So to to seconds

of The now. So, we're cycle. of work starts the the at sort top really real hype

Brent Thill

a on it then, you're There's new XXX mentioned on openings Mike, lot website. effectively bringing like you sound And your still of not job capacity. -- doesn't

people you're what Or bringing How onboarding So, I still you're trend? until the saying is are guess see are you you freezing on? capacity? that thinking rep this in quota-carrying interim about you

Mike Scarpelli

backfills right organization, sales we're region management look from underperforming doing now, will And new only net to one hires. the and people. reallocate another In but that's heads we no and upgrading we at performance region, could

Sorry.

Brent Thill

feel you better. hope I Great.

Mike Scarpelli

Yes.

Sorry.

Operator

Moskowitz with Gregg from next question Mizuho. is Our

Your line open. is now

Gregg Moskowitz

the questions. All right. taking for Thank you

customers the retention a refresh updating? mentioned about on are prevalent change seeing the back with data as the You data optimization of pull form more Are frequency you rate? which What the recently. in

Christian Kleinerman

Christian No. here.

We we patterns. economics in fairly cost have are not the or more the there. see are If model, less anything, updating of our versus reasonably frequently similar, similar because don't seen people if changes changes and

Gregg Moskowitz

right. follow-up Thanks, for a Frank. And guess, just Neeva, I or That's then Christian. for you on either helpful. All

think avenue provide fairly do Thanks. to a you customers this truly I'm new can the then, So, horizontal value to I in add much secondly, land how of the base? be just installed that enterprise this of potential can think think terms of And if forward? an you technology appeal. as wondering going help

Frank Slootman

under I'll with Frank. search and first. go it. complete view as really evolution chat of influence is relationship We AI, with we interact the data and how This of our

I think became how our remember, relationship just with search first changed most when data. that's available, of us dramatically

it powerful, that when a empowering. generate can't it, answer the search point it also that in But has questions zero It's search we the it I'm to have it matches can't are search. can code leave personally And make to posted the technology has incredibly with find the to own been, the actually I strength, junky. it stateful. context. search alone. I it not now find problem incredibly

the about other the it. the Snowflake to So, mean, going I natural But through interfaces, this how what mobilizing thing important morphing that at language do interface. is incredibly the I single all world's beginning, chats through is interfaces. you, is are would this from of and natural said lot manifested intelligence sort not is of we're this I language basically just caution to be a the mean and not going the is language. we to about we're search data, about what a into talking natural

Gregg Moskowitz

Okay. Thank you.

Operator

Gregg. you, Thank

Our next from Brad with question Reback Stifel. is

open. now is line Your

Brad Reback

Great. best Thanks hate you're probably very to this much. pose to you, it. Mike, the answer I to but

any week-to-week metrics base, looking to usage you give installed other NRR confidence patterns at data the operational on Beyond there when you're bottom? that are the in will

Mike Scarpelli

not at spending generation, every at. I'm only on I'm days three sales these weighted what -- their accounts. quarters. reps look going look We're thing -- pipeline that's within in out pipeline. lot We're call, looking on the I'd on with Monday. a I to looking typically the obviously, is at of sit time four I

And anything confidence. biggest that gives so looking the new are of also thing at to them, future. out. It's patterns come most products that the consumption but today -- us hard And of for is but forecast the may somewhat indicator important

in what And them. with Preview. towards meaningful. We the Applica right now. it have some we're will daily big going talked is in be announcements Streamlit, seeing about that Private of really consumption we're think, -- are credit Streamlit we We GA But pleased one Snowpark

Brad Reback

Thanks very great. much. That's

Operator

from Radke Tyler is Citi. with next Our question

now is line open. Your

Tyler Radke

taking announcements, so to to there. pose conference the product for including and wanted on a ask Microsoft, a the new to of break just hosting question. obviously, this you But I'll more they're front. data partnership Frank give on this ton thanks But analytics. their Build Yes, week and Mike in I

there. seeing some I think better commented traction you just on

program, partner. I X as you think a they've their Tier adding including evolved partner

with that of relationship of own about kind some quo of which you of kind the just on but and the that unifying talk products, could new this status just So, announcements, status relationship? How Microsoft's partnership? opportunity given the you're like Fabric, these in, fitting

Frank Slootman

Yes.

and platforms Azure over relationship net a support. not regard top two we as Microsoft and Just very been other It's sort Microsoft cloud in we're a the as that. of and a think and said whole compete large. one, the the and proprietary for day will about Microsoft we of a that yes, world has choice, will integrated we've benefit we that's And that bunch from that's than reasons. sort we're successful been -- with for at different that a very been that keep that innovation. viewing compete, Microsoft growing of we people clear over they're single faster from about expect platform, will I coming, -- on they've But stack. And And

As more they they get and better then better get products, choice.

right, good resolving The where get important, And is relationship or and are field out that that level. friction is we is processes when who the I that's following juvenile at the the established that. relatively have there things as sort of rules, news incredibly state, meaning are good mature, addressing think of people dysfunctional the for we not

that, continue no So, reason manner. will in that not that I believe to have

faster platforms. continue So, I grow the other to than Azure grow and think will

Tyler Radke

on what big you're Great. ramp And there? consumption are that engineering? Could this expecting on just like give Snowpark, what pleased you migrations, cases the you're us sense the revenue the of use Is give up are how with use us on Hadoop quarter. a that it seeing And Just ramp the driving sounded kind for expectations you're data cases that? a main and sense today? it

Frank Slootman

Yes.

important Snowflake. about to platform Snowpark thing Snowpark. So here's is understand programmability the the for

through the platform. was address conceived would with you SQL I was Now know the Snowflake which originally, interfaces, and mode that

of really look, processes. that. will, opened host these we Snowpark or to onto So if it our want this achieve is to you posture if whole platform up to writes reads of modalities, Basically, sort a And the platform. is, the Snowflake, own has

going So, right? those just to they're dimensions how Now, simpler, faster, in going cheaper, And Spark we if into be these fully ought the Often they're processes a to to engineering comes on are and the processes. Snowpark, and that going I all on not think they're customer chain, they Snowflake be are operationally you're running out reason will, you be workloads these Snowflake governed, listed. supply and to you missing run four is to they're if you're the think be processes. is through We going just Snowpark. data data

consumption the the On it's end, thing. same

reads if think doing machine posture writes to science, campaigning from we if is you're very we Snowflake, And learning, Snowpark data have that's doing If We're high. tremendously back AI, if a it analytics, Snowpark. you're if very, around world. The very you're the emphatic doing and you're taken doing interest hard this. to

one said a using the remarks, XXX%. going basis. it that's in we least in I think to prepared our to went As of We customers from to go XX% XX% at quarter on weekly

will Snowpark become Snowflake. of think around the prevalent extremely I use

and in, over that Now can very own there's we're we're beyond there. whole -- to home interested we that is own everything, that, wide also obviously there that and world a going at start

Tyler Radke

you. Thank

Operator

Sandler. is question next Brent from Bracelin Piper Our with

now Your open. line is

Brent Bracelin

get and Are that could drives the slowdown? curious for macro get you Or maybe underway. the think workloads the totally or current that think your what Frank, business? I'd afternoon. of would through us to there control? thinking hear be you. Just have wait efforts flag you reacceleration concerns Good of I optimization ones more current you improve? the what's cost Thanks. the products as to do we key to further watch in to to out

Frank Slootman

but absolutely -- give we're one the these people seeing anxiety. literally any hope. one. are they chomping now of that you dealing are out bit, Data day Officers, And stomped. number issue we're CTOs Watching number lack visibility, the is getting That's because is just what there, the sentiment the Chief guess, and with CNBC doesn't when the all at I

going As saying, how in and all the that's business much guess well. good I said by and CFO here's spend. to But being well, the you're I earlier,

you're know You new to going contract. get a

to going the that confines the have. live you of contract You're within

of that So the really anxiety artificially in economy. constraining because the the exists general demand

their episodes run course. These start things needs that happen. And lifting. to been will We've through before. that So really these

that's requirement. I So really think the

to CFOs or demand a be workload CFO. in of plenty terms drive And mean, right no whole now, with absolutely. to to other I vector of It's There's going out AI hard going stop, development. there, it's

Brent Bracelin

then, harder a I acquisition. that fully Neeva, up Streamlit, totally little me Very helpful on to there. Christian, And understand. for to wanted get follow Neeva.

-- as at the under stack, tech and Neeva? Is sort it some Was look there why most model their search hood? Is large expertise? engine language the it What So, team? Neeva differentiated interesting? you the of what was

Christian Kleinerman

it's a Yes, great question.

LLM I of think it's the traditional technology. with technology combination search

was of to how or LLM couple then, want of looks generative that And LLM have And It Neeva appealing seen but precise very very demos more an to Well, interesting there in an a with are. of the to something combine produce was answers. reliable and then of those you AI-type results combination technology is is think I where hours, it's able team precise most and problems extremely to traditional good, that days able take in be are two on us. that did numerous setting people us it search how well. those do were of results. the course, technology a attributional That enterprise appealing. combination team. world-class And

Brent Bracelin

Thank Helpful. you.

Operator

is next from Our Derrick with TD Wood Cowen. question

Your line is now open.

Derrick Wood

focusing there. about change I I in to And any translating guys of side, to savings. Thanks. shifts or your Great. competitive lot pricing, kind renewals? on have customers win to when into talked it comes especially competitive wanted guess pricing out environment you you seen rates on ability the pricing, How to the this workload ask the about cost and platforms? different a on hold unit is

Frank Slootman

temporarily player parts to business the of economics. converging much subsidizing there's a he certain amount in or to a similar just economics. read And a sustained than is look, games there's physics sponsoring are or write. Mike different edge It another. write pricing get right? very that pricing a is, thing not And once of the one read, physics, costs about let or playing is really all on But weigh I'll very, a a coughing. Frankly, other stops We're money, room

a platforms, touch cost And run just of that And far sets, Where the know complexity computing skill where that fewer has the It's you and people, total is storage. is ownership, like, reduced that. see cost customers of is having cost what that is descendants mean, Tesla in this of huge and and generates Apple be abstracted opportunity to the descendants more we of I Hadoop, I in and that this to it's really the technology? -- huge some is the on of much and underlying marketplace, on and And being differences not advantage. [indiscernible] are our advantage. [indiscernible]. not on. there's to than a mean, what the computing we're like the and TCO have right? not So, of people that's But raw storage, complexity, the cost

Christian Kleinerman

being what his Spark which Snowpark seeing Frank but I competitive want to add and in seeing performance, what something we're by better Snowpark answer, better price relative to we're highlight Spark, platforms, only performance. is mentioned to

see So, of because to competitive and giving of wins customers the interestingly migrate we better dynamics. the wanting us economics technical enough,

Derrick Wood

I could one if in. more And Great. squeeze

envision for lot of on in think and offering terms and clusters be up of guys Just of the to a data hyperscalers inference to and be be kind on obviously place Or mined training are really you models. Do LLMs, GPU that's that? training to sitting able building you guys platform? do you doing your

Christian Kleinerman

is to remarks GPUs. We of that all multi-model at collection the Applica, doing prepared Snowflake it. being We're alluded models built -- it requires of in which

working our conference surface we'll show we're also but part, we're at we doing GPU more and So, on our [indiscernible]. how

an important wave AI component the gen above, of innovation. So of this it's all of

Derrick Wood

feel Thanks. better. Okay. Mike,

Mike Scarpelli

sorry. so I'm Thanks.

Operator

Thank you, Derrick.

Scotiabank. from [indiscernible] Our next question is with

Our is next MoffettNathanson. Sterling Auty from with question

now Your open. is line

Sterling Auty

Hi, thanks.

Mike Scarpelli

a having We're problem here.

Sterling Auty

It's to the operator. hear sorry Yes, Mike. about that, hard

Mike Scarpelli

Yes.

Sterling Auty

that out the Easter much in the of So just you've vertical. you as that post services wondering, called vertical holiday? your impact largest out Wondering patterns had financial an how consumption pointed

Mike Scarpelli

other was fine. quite very revenue doing in some It still services. guess, is It of financial our and growing of bigger I outside strong of us. It's of some customers our for financial areas the with was fast. the XX% services vertical

Sterling Auty

right. All Understood. Thank you.

Operator

Turrin Our next Fargo. question is Wells from with Michael

now is line Your open.

Mike Scarpelli

hard Operator, hearing a having we're time you.

we hear you. Now,

Okay.

Michael Turrin

I fading. you is me agree. appreciate sneaking the would No, in. operator I

growth revised guidance Just mention below the longer-term you XX%, target. in confidence but the falls billion going $XX still back suggests did

just time So, seeing growth if confidence around on could bounces what is spend drives back? we some temporary you're that hearing suggests customers which you're what from

bookings North right and else And Thank enterprise you. second just there's sure that, context if on what's is can to driving on the commentary, the have add as favorably. I you it appreciated. sounded make it's part, large America standing anything we there that's out like the area the want

Mike Scarpelli

of say I we customers. What would have a lot is

We to of that's as on fraction we data they as And just Snowflake, a deals. next have I years. confidence their have we know us pipeline have customers. and know plans the top only over well that for moved cycles, That's go these what a year that pipeline of multi-year deals to talking gives of couple lot not I'm long gives of what coming us the the on products sales There's out their now. pipeline big new the next the of

Michael Turrin

Thanks. Okay. Thanks [indiscernible] the callbacks.

Operator

last Thank you your conference be for participation. and question. time That call. will the concludes the your That

line. your disconnect now may You

Snowflake (SNOW) 24 May 232024 Q1 Earnings call transcript