Q2 2025 Snowflake Inc Earnings Call

Cole: good afternoon thank you for attending today'snowflake q two and fiscal year two and twenty five earnings call my name is cole and i'll be the moderator for today's call all lines will be muted during the presentation portionof call with an pportunity for questions and answers at the end

i'd now like to pass the over to jimmy sexon head of investor relations please go ahead

Speaker Change: good afternoon and thank you for ining us on snowfla q two fiscal two thousand andtwentyfive earnings call joining me on the call today is sheet forammy our chief executive officermike ar ly archchief financial officer and christi cineeofman our executive vice president product will participate in the q session

Speaker Change: during today's call we will view our financial results for the second quarter fiscal two thousandand twenty discuss our guidance for the third quarter and full year fiscal two and twenty-five

Speaker Change: during today's call we will make forward-looking statements including statements related to our business operations and financial performance these statements are subject to risks and uncertainties which could cause them to differ materially from our actual results

Speaker Change: information concerning these risks and uncertainties is available in our earnings press release our most recent forms ten -k and and q and our other sec reports all our statements are made as a today based on information currently available to us

Speaker Change: except as required by law we assume no obligation to update any such statements

Speaker Change: during today's call we will also discuss certain non-gaap financial measures see our investor presentation for a reconcilation of gaap tonon-gaap measures and business metric definitions including adoption

shedar: the earnings press release investor presentation are available on our website and investorsdo snowflike do com a replay of today's call will also be posted on the website but that i would now like to turn the call over to shedar

shedar: thanks j me and hiire everyone thanks for joining us today

Speaker Change: as you've seen by now we had another strong quarter weing guidance and increasing our fy twenty-five product revenue expectations

Speaker Change: i'm really part of the team and how we accelerated our innovation pipeline

Speaker Change: and our product delivery momentum continues to be really strong

Speaker Change: in the first half of this year alone we brought as much product to market as we did call of last year

Speaker Change: we are making snow pl the best cloud for computation collaboration and applications on all dataand were leveraging the part of ai to make all of these easier to create maintain and youth

Speaker Change: this what our team is aligned around and i can tell you our customers that are adopting our new capabilities at an incredible base

Speaker Change: as said last quarter i have three key areas time personally focused on

Speaker Change: listening to and' learning from our customers

Speaker Change: fueling innovation and product delivery

Speaker Change: driving execution and alignment within our go-to-market tates

Speaker Change: and in q two we delivered on all fronts which you can see in our results

Speaker Change: product revenue for the quarter was eight hundred and twenty-nine million dollars up thirty percent year-over-year remaining performance obligation total five point two billion dollars with year-over-year growth accelerating to forty-eight percent

25 Earnings Call.

Cole: 25 Earnings Call. My name is Cole, and I'll be the 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.

Cole: My name is Cole, and I'll be the 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.

Jimmy Sexton: I'd now like to pass the call over to Jimmy Sexton, head of investor relations, please go ahead.

Jimmy Sexton: I'd now like to pass the call over to Jimmy Sexton, head of investor relations, please go ahead. Good afternoon, and thank you for joining us on Snowflake's Q2 fiscal 2025 Earnings Call. Joining me on the call today is Sridhar Ramaswamy, our Chief Executive Officer, Mike Scarpelli, our Chief Financial Officer, and Christian Kleinerman, our Executive Vice President of the Product, who will participate in the Q&A session.

Speaker Change: given the strong quarter we are increasing our product revenue outlook for the year

Sridhar Ramaswamy: Good afternoon, and thank you for joining us on Snowflake's Q2 fiscal 2025 Earnings Call.

Speaker Change: companies like capital one nbcu petco fier snapchat and western union are all relying on snowfplag to help them fuel their businesses

Sridhar Ramaswamy: Joining me on the call today is Sridhar Ramaswamy, our Chief Executive Officer, Mike Scarpelli, our Chief Financial Officer, and Christian Kleinerman, our Executive Vice President of the Product, who will participate in the Q&A session.

Speaker Change: unwillually encouragageed by the strength of our core business under rapid progress we have made on the ai front

Sridhar Ramaswamy: During today's call, we will review our financial results for the second quarter fiscal 2025, and discuss our guidance for the third quarter in full year fiscal 2025.

Jimmy Sexton: During today's call, we will review our financial results for the second quarter fiscal 2025, and discuss our guidance for the third quarter in full year fiscal 2025. During today's call, we will make forward looking statements, including statements related to our business operations and financial performance. These statements are subject to risks and uncertainties, which could cause them to differ materially from our actual results. Information concerning these risks and uncertainties is available in our earnings press release, our most recent forms 10K and NQ. And our other SEC reports. All our statements are made as a today based on information currently available to us. Except as required by law, we assume no obligation to update any such statements.

Speaker Change: i'm very optimistic about where we are going on the opportunities we have in front of us to deliver for our customers

Sridhar Ramaswamy: During today's call, we will make forward looking statements, including statements related to our business operations and financial performance. These statements are subject to risks and uncertainties, which could cause them to differ materially from our actual results.

Sridhar Ramaswamy: Information concerning these risks and uncertainties is available in our earnings press release, our most recent forms 10K and NQ. And our other SEC reports.

Speaker Change: in fact the more i with our customers the more i appreciate just how critical we are to their business and how much they are counting on us to be their trusted advisor in their aay idea jred

Sridhar Ramaswamy: All our statements are made as a today based on information currently available to us.

Speaker Change: nothing brings to life how strong and truustut relationship is then when you go through challenges together

Sridhar Ramaswamy: Except as required by law, we assume no obligation to update any such statements.

Speaker Change: we obviously had some rough headines in the quarter at some of our customers dealt with a cybersecurity thrends

Sridhar Ramaswamy: During today's call, we will also discuss certain non-gap financial measures. See our investor presentation for a reconciliation of gaps, non-gap measures, and business metric definitions, including adoption. The earnings press release investor presentation are available on our website at investors.snowflake.com.

Jimmy Sexton: During today's call, we will also discuss certain non-gap financial measures. See our investor presentation for a reconciliation of gaps, non-gap measures, and business metric definitions, including adoption. The earnings press release investor presentation are available on our website at investors.snowflake.com. A replay of today's call will also be posted on the website.

Speaker Change: as extensively reported the issue wasn't on the snow-sake side

Speaker Change: after multiple investigations by internal and external cybersecurity experts we found no evidence that our platform was breached our compromised

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

Jimmy Sexton: With that, I would now like to turn the call over to Shridhar.

Sridhar Ramaswamy: With that, I would now like to turn the call over to Shridhar. Thanks, Jimmy, and hi, everyone. Thanks for joining us today.

Speaker Change: however we understand that when it comes to cybersecurity we are all in it together

Thanks, Jimmy, and hi, everyone.

Sridhar Ramaswamy: Thanks for joining us today.

Speaker Change: my one ask of all businesses around the world whether there are not playate customer are not is to enable and thenenforce multifactor authentication in your organization and ensure that you have network policies are as strong as possible

Sridhar Ramaswamy: As you'll see by now, we had another strong quarter, beating guidance, and increasing our FY25 product revenue expectations.

Sridhar Ramaswamy: As you'll see by now, we had another strong quarter, beating guidance, and increasing our FY25 product revenue expectations. I'm really part of the team and how we accelerate our innovation pipeline. And our product delivery momentum continues to be really strong. In the first half of this year alone, we brought as much product to market as we did all of last year. We're making snowflake the best log for computation, collaboration, and applications on all data.

Sridhar Ramaswamy: I'm really part of the team and how we accelerate our innovation pipeline.

Snowflake: two things we a snowflake have supported since two thousand and sixteen

Sridhar Ramaswamy: And our product delivery momentum continues to be really strong. In the first half of this year alone, we brought as much product to market as we did all of last year.

Speaker Change: there are a lot of bright spots in the quarter none more than the time i spent with over one hundred customers many of them on my travels to the u k germany canada and across the u s

Sridhar Ramaswamy: We're making snowflake the best log for computation, collaboration, and applications on all data.

Sridhar Ramaswamy: And we're leveraging the part of AI to make all of these easier to create, maintain and use.

Sridhar Ramaswamy: And we're leveraging the part of AI to make all of these easier to create, maintain and use. This is what our team is aligned around, and I can tell you our customers are adopting our new capabilities at an incredible pace.

Speaker Change: and of course that's not like summonit in jwe

Speaker Change: the affinity for our product is incredible and the consistent team i hear from the seassuite across industries and geographies is that snowpeflake is delivering ease efficiency and reliability to their business

Sridhar Ramaswamy: This is what our team is aligned around, and I can tell you our customers are adopting our new capabilities at an incredible pace.

Sridhar Ramaswamy: As I said last quarter, I have three key areas I'm personally focused on.

Sridhar Ramaswamy: As I said last quarter, I have three key areas I'm personally focused on. Listening to and learning from our customers, fueling innovation and product delivery, driving execution and alignment within our go-to-market team. And in Q2, we delivered on all fronts, which you can see in our results. Product revenue for the quarter was $829 million up 30% year-over-year. Remaining performance obligations total $5.2 billion with year-over-year growth accelerating to 48%.

Speaker Change: and so much of this gentallife but snowfla summer we have fifteen thousand onsite does indeed uptwenty eight percent year-on-year with customers and partners from around the world we hoed our first sever developers day with over three thousand tende the energy was simply incredible

Sridhar Ramaswamy: Listening to and learning from our customers, fueling innovation and product delivery, driving execution and alignment within our go-to-market team.

Sridhar Ramaswamy: And in Q2, we delivered on all fronts, which you can see in our results. Product revenue for the quarter was $829 million up 30% year-over-year. Remaining performance obligations total $5.2 billion with year-over-year growth accelerating to 48%.

Speaker Change: and if you're there we experienced a lot of our innovation and product momentum where we brought the life cortex aion and announced striceberg being generally available both of which have gained a lot ofattraction already with customers

Speaker Change: venskcalelogistics a leading provider of transportation and warehousing solutions has develolldeveloped k variety of innovative use cases involving ktex i

Sridhar Ramaswamy: Given the strong quarter, you're increasing our product revenue outlook for the year. Companies like Capital One, NBCU, Petco, Pfizer, Snapchat, and Western Union are all relying on snowflake to help them fuel their business.

Sridhar Ramaswamy: Given the strong quarter, you're increasing our product revenue outlook for the year. Companies like Capital One, NBCU, Petco, Pfizer, Snapchat, and Western Union are all relying on snowflake to help them fuel their business. , Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Also, one of the largest financial services companies is using Cortex AI to analyze unstructured text data, running sentiment analysis on call center transcripts to improve their customer support experience.

Speaker Change: in one example pkyplans to use cortex to consume various performance metrics related to its transportation business

Speaker Change: cortect analys will help thaide feedback to penssky's operations managers with the goal of improving performance and enhancing truck driver reattention

Sridhar Ramaswamy: , Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Chris Hussie, Also, one of the largest financial services companies is using Cortex AI to analyze unstructured text data, running sentiment analysis on call center transcripts to improve their customer support experience.

Speaker Change: also one of the largest financial services companies is using cartex ai to analyze unstructured text data

Speaker Change: running sentiment analysis on callst center transcript to improve their customer support experiedence

Speaker Change: truulios segments reverse eil integrates with nonowflax carardte i and enabable to liio customers to derive insight from their onstructured data to improve the customer journy

Speaker Change: an iceberg is providing one of the largest consumer services and hospitality companies with a more flexible and interoperable deployment model enabling them to accelerate their migration to the cloud

Speaker Change: iceberg is enabling us to play office and address a larger data footprint

Speaker Change: many of our largest customers have indicated they will now lever it's notlake for more of their workloads as a result of this functionality

Speaker Change: more than four hundred accounts are using experg as a pend of qtwo

Speaker Change: i go you last quarter that product delivery on of our highest priorities and in q two we made nine net nine net new product announcements and brought more than fifteen product capabilities to general availability to the market

Speaker Change: that's what we call progress we're also seeing broader option of our products across our customer base

Speaker Change: as of the end of q two more than two thousand five hundred accounts we'are using snowfflla ai on a weekly basis

Speaker Change: we expect this an option to continue to increase and revenue contribution to follow

Speaker Change: our note cokes offering is also seeing great traction in public preview with more than sixteen hundred accounts using that feature

Speaker Change: this is critical to engage the data sciences and will unlock new opportunities that we previously did not address

Speaker Change: we are inthe early endnings of this opportunity and we'll continue to bring new features to market

Speaker Change: cortex search and cortex analysts are expected to be generally available in q three

Speaker Change: we are continuing to responsibly investorin a and machine learning to deliver enterprise ai that is easy efficient and most of all trusted

Speaker Change: it's great to have so much momentum on the product front is fueling our incredible go-to- market team which as you know is one of our biggest advantages

Speaker Change: trapping up

Speaker Change: our innovation engineand product delivery are in order right

Speaker Change: the combination of our platform and the network effect of collaboration as well as the innovation we are working on in ai iss not flake future and create a huge opportunity ahead

Speaker Change: we have a lot of up to them

Speaker Change: but it's in our hands to deliver and take advantage of it

Sreer: my unturn autority you thank you sreer

Speaker Change: q two product revenue grew thirty percent year-over-year totalally eight hundred and twenty nine million dollars

Speaker Change: financial services and technology verticals drove growth in the quarter we continue to see signs with a stable optimization environment our largest customers are contributing sequential product revenue growth in line with historical patternance

Twilio's segments reverse ETL integrates with Snowflake's Cortex AI and enables Twilio customers to derive insight from their unstructured data to improve the customer journey.

Sridhar Ramaswamy: Twilio's segments reverse ETL integrates with Snowflake's Cortex AI and enables Twilio customers to derive insight from their unstructured data to improve the customer journey. Iceberg is providing one of the largest consumer services and hospitality companies with a more flexible and interoperable deployment model, enabling them to accelerate their migration to the cloud. Iceberg is enabling us to play offense and address a larger data footprint. Many of our largest customers have indicated they will now leverage Snowflake for more of their workloads as a result of this functionality. More than 400 accounts are using iceberg. Iceberg, as of the end of Q2.

Speaker Change: we delivered strong bookings in the quarter ourpo grew forty-eight percent year-on-year to reach more than five point two billion dollars we signed two nine figure deals in the quarter

Sridhar Ramaswamy: Iceberg is providing one of the largest consumer services and hospitality companies with a more flexible and interoperable deployment model, enabling them to accelerate their migration to the cloud.

Speaker Change: earlier this year we announced an f pointy twenty-five sales incentus that would prioritize consumption and new customer acquisitions and are to drive consumption sales reps prosecute new use cases in sell new product features

Sridhar Ramaswamy: Iceberg is enabling us to play offense and address a larger data footprint.

Speaker Change: we believe this focus will convert into meaningful revenue over time

Sridhar Ramaswamy: Many of our largest customers have indicated they will now leverage Snowflake for more of their workloads as a result of this functionality.

Speaker Change: our new customer acquisition motion is ramping we expected to have a more material impact in fy twenty-six

Sridhar Ramaswamy: More than 400 accounts are using iceberg.

Speaker Change: in q two non-gaap product gross margin of seventy-six percent was down slightly year-over-year as mentioned on our prior call we are incurring gpu -related costs and arts of fulfilled customer demand for our newer product features

Iceberg, as of the end of Q2.

Sridhar Ramaswamy: I told you last quarter that product delivery is one of our highest priorities. And in Q2, we made 9 new product announcements and brought more than 15 product capabilities to general availability to the market.

Sridhar Ramaswamy: I told you last quarter that product delivery is one of our highest priorities. And in Q2, we made 9 new product announcements and brought more than 15 product capabilities to general availability to the market. That's what we call progress. We're also seeing broader adoption of our products across our customer base. As of the end of Q2, more than 2500 accounts were using Snowflake AI on a weekly basis. We expect this adoption to continue to increase and revenue contribution to follow.

Speaker Change: non-gaap operating margin of five percent exceed our guidance benefing from revenue out performance as expected non-gaap operating margin is down year-on-year as a result of rd and goto-market investments

That's what we call progress.

Sridhar Ramaswamy: We're also seeing broader adoption of our products across our customer base.

Sridhar Ramaswamy: As of the end of Q2, more than 2500 accounts were using Snowflake AI on a weekly basis. We expect this adoption to continue to increase and revenue contribution to follow.

Speaker Change: our non-gaap adjusted free cash flow margin was eight percent we continue to see approximately eighty percent of our customers paying annually in advance we ended the quarter with three point nine billion dollars in cash cash equivalents short-term and long-term investments

Sridhar Ramaswamy: Our Notebook's offering is also seeing great traction in public preview with more than 1600 accounts using that feature.

Sridhar Ramaswamy: Our Notebook's offering is also seeing great traction in public preview with more than 1600 accounts using that feature. This is critical to engage with data scientists and will unlock new opportunities that we previously did not address. We are in the early earnings of this opportunity and will continue to bring new features to market. Cortex Search and Cortex Analyst are expected to be generally available in Q3. We are continuing to responsibly invest in AI and machine learning to deliver enterprise AI that is easy, efficient, and most of all trusted. It's great to have so much momentum on the product front. It's fueling our incurable go-to-market team which, as you know, is one of our biggest advantages.

Speaker Change: in q two we used four hundred million to repurchase three million shares

Sridhar Ramaswamy: This is critical to engage with data scientists and will unlock new opportunities that we previously did not address.

Speaker Change: from our original two billion repurchase plan we have four hundred and ninety-two million remaining through march two thousand and twenty-five

Sridhar Ramaswamy: We are in the early earnings of this opportunity and will continue to bring new features to market.

Speaker Change: our board of directors authorizede the repurchase of an additional two point five billion dollars under our doctor purchase program through march two thousand and twenty seven

Sridhar Ramaswamy: Cortex Search and Cortex Analyst are expected to be generally available in Q3.

Sridhar Ramaswamy: We are continuing to responsibly invest in AI and machine learning to deliver enterprise AI that is easy, efficient, and most of all trusted.

Speaker Change: this allows us to use our cash balance and expected free cash flow to manage dution over this period our share count guidance does not include the impact from the stockk reppurchased

Sridhar Ramaswamy: It's great to have so much momentum on the product front.

It's fueling our incurable go-to-market team which, as you know, is one of our biggest advantages.

Speaker Change: now let's turn to our outlook

Speaker Change: beforeforecast product revenue based on observedve behavior our fy twenty-five guidance includes contribution from snow park as previously stated our guidance does not include material contribution from the new product features our forecast does include revenue headwinds associated with performance improvements

To wrap things up, our innovation engine and product delivery are in overdrive. The combination of our platform and the network effect of collaboration, as well as the innovation we are working on in AI is Snowflake Future and create a huge opportunity ahead. We have a lot of work to do, but it's in our hands to deliver and take advantage of it.

Sridhar Ramaswamy: To wrap things up, our innovation engine and product delivery are in overdrive. The combination of our platform and the network effect of collaboration, as well as the innovation we are working on in AI is Snowflake Future and create a huge opportunity ahead. We have a lot of work to do, but it's in our hands to deliver and take advantage of it.

Speaker Change: for q three we expect produ ct revenue between eight hundred and fifty and eight hundred and fifty five million dollars

Michael Scarpelli: Mike, I'll turn it over to you.

Michael Scarpelli: Mike, I'll turn it over to you. Thank you, Shreder. Q2 product revenue grew 30% year over year, totaling $829 million. Financial services and technology verticals drove growth in the quarter. We continue to see signs of a stable optimization environment. Our largest customers are contributing sequential product revenue growth in line with historical patterns. We delivered strong bookings in the quarter. Our PO grew 48% year on year to reach more than $5.2 billion.

Michael Scarpelli: Thank you, Shreder.

Speaker Change: we are increasing our f y twenty-five product revenue guidance we now expect full year product revenue of approximately three point three five six billion dollars representing twenty-six percent year-over-year growth

Michael Scarpelli: Q2 product revenue grew 30% year over year, totaling $829 million.

Michael Scarpelli: Financial services and technology verticals drove growth in the quarter.

Michael Scarpelli: We continue to see signs of a stable optimization environment. Our largest customers are contributing sequential product revenue growth in line with historical patterns. We delivered strong bookings in the quarter. Our PO grew 48% year on year to reach more than $5.2 billion. We signed two nine-figure deals in the quarter.

Speaker Change: turning to margins for q three we expect three percent non-gaap operating merchin

Speaker Change: we are maintaining full year margin guidance for fy twenty-five we expect approximately seventy-five percent non-gaap product margin three three percent non-gaap operating margin in twenty-six percent non-gaap adjusted free cash flow emergins

Michael Scarpelli: We signed two nine-figure deals in the quarter. Earlier this year, we announced FY25 sales incentives that would prioritize consumption and new customer acquisitions. In order to drive consumption, sales reps prosecute new use cases and sell new product features. We believe this focus will convert into meaningful revenue over time. Our new customer acquisition motion is ramping. We expected to have a more material impact in FY26. In Q2, non-GAF product growth margin of 76% was down slightly year over year.

Michael Scarpelli: Earlier this year, we announced FY25 sales incentives that would prioritize consumption and new customer acquisitions. In order to drive consumption, sales reps prosecute new use cases and sell new product features. We believe this focus will convert into meaningful revenue over time.

Speaker Change: with that operator you can now open up the line for questions

Speaker Change: and if you'd like to que for a question you can do so about pressing star one and if for any reason you'd like to rebe your question you compress ar to again it is star one to join the question q

Speaker Change: our first question is from keith wise withth morgan family your line is now open

Michael Scarpelli: Our new customer acquisition motion is ramping.

Michael Scarpelli: We expected to have a more material impact in FY26.

Michael Scarpelli: In Q2, non-GAF product growth margin of 76% was down slightly year over year. As mentioned on our prior call, we are incurring GPU related costs in order to fulfill customer demand for a newer product fee.

Keith Wise: excellent i think you guys to taking the question and congrulations on on a solid quarter really good to hear about the optimization starting to normal ize eas are seem to be settling into just about like a thirty percent product revenue growth rate over over the past cou of quarters

Michael Scarpelli: As mentioned on our prior call, we are incurring GPU related costs in order to fulfill customer demand for a newer product fee. Reuters, Non-Gap Operating Margin of 5% Exceeded Our Guidance, Ben Antony from Revenue Out Performance. As expected, Non-Gap Operating Margin is down year-on-year as a result of R&D and go-to-market investments. Our non-Gap adjusted free cash flow margin was 8%. We continue to see approximately 80% of our customers paying annually in advance. In Q2, we used 400 million to repurchase 3 million shares. From our original $2 billion repurchase plan, we have $492 million remaining through March 2025.

Michael Scarpelli: Reuters, Non-Gap Operating Margin of 5% Exceeded Our Guidance, Ben Antony from Revenue Out Performance.

Speaker Change: doing a lot of concerns coming into this quarter about

Michael Scarpelli: As expected, Non-Gap Operating Margin is down year-on-year as a result of R&D and go-to-market investments. Our non-Gap adjusted free cash flow margin was 8%.

Speaker Change: impacts from iceberg cables there was concerned that accruue during the quarter about the the

Speaker Change: data leakage that wasn't your fault but it definitely was a marketing headwind who was concerned about the crowch drag cyber security and concident may be impacting consumption or any of these outsized impacts were any of these additional impacts

Michael Scarpelli: We continue to see approximately 80% of our customers paying annually in advance.

Michael Scarpelli: In Q2, we used 400 million to repurchase 3 million shares. From our original $2 billion repurchase plan, we have $492 million remaining through March 2025. Our Board of Directors authorized the repurchase of an additional $2.5 billion under our stock repurchase program through March 2027. This allows us to use our cash balance and expected free cash flow.

Speaker Change: onthe consumption in the quarter versus what you guys are expecting when you originally gave us the guid

Speaker Change: i would say the

Speaker Change: cyber security incident was still for girly had no impact on us at all from a consumption and standpoint in the crowd strike outage was minimal it was a day with a few customers but nothing of any substancecident never really impacted us

Michael Scarpelli: Our Board of Directors authorized the repurchase of an additional $2.5 billion under our stock repurchase program through March 2027. This allows us to use our cash balance and expected free cash flow. To manage dilution over this period, our share count guidance does not include the impact from the stock repurchase.

Speaker Change: itself in our production is not rely on microstop for that so we didn't have

Michael Scarpelli: To manage dilution over this period, our share count guidance does not include the impact from the stock repurchase.

Michael Scarpelli: Now, let's turn to our outlook.

Michael Scarpelli: Now, let's turn to our outlook. The forecast product revenue based on observed behavior. Our FY25 guidance includes contribution from Snowpark as previously stated. Our guidance does not include material contribution from the newer product features. Our forecast does include revenue headwinds associated with performance improvements. For Q3, we expect product revenue between $850 and $855 million. We are increasing our FY25 product revenue guidance. We now expect full-year product revenue of approximately $3.356 billion representing 26% euro-rear growth.

Speaker Change: gotand then was ice for cables in line with your expectations

Michael Scarpelli: The forecast product revenue based on observed behavior.

Speaker Change: icepert tables is rolling out this we said we have four hundred customers that are using it we haven't seen customers

Michael Scarpelli: Our FY25 guidance includes contribution from Snowpark as previously stated.

Michael Scarpelli: Our guidance does not include material contribution from the newer product features.

Speaker Change: move storage of the snow like but we're seeing a lot of our customers we mentioned four hundred that we know of that are actually using iceberg with new workloads or trying that out and we're very pleased with the progress we're seeing there storage is still running about eleven percent of our revenue

Michael Scarpelli: Our forecast does include revenue headwinds associated with performance improvements. For Q3, we expect product revenue between $850 and $855 million.

Michael Scarpelli: We are increasing our FY25 product revenue guidance. We now expect full-year product revenue of approximately $3.356 billion representing 26% euro-rear growth.

Speaker Change: cat assuperablel thank you much

rmow lynchchow: our next question is from rmow lynchchow with arclays your line is now open

Michael Scarpelli: Turning to margins for Q3, we expect 3% non-Gap operating margin. We are maintaining full-year margin guidance.

Michael Scarpelli: Turning to margins for Q3, we expect 3% non-Gap operating margin. We are maintaining full-year margin guidance. For FY25, we expect approximately 75% non-Gap product margin. 3% non-Gap operating margin and 26% non-Gap adjusted free cash flow margin.

rmow lynchchow: prefect thank you to quick quest my the girlls margins this quarter are better than what a lot of people have model can you speak to some of the factors for that and then streeder for you like in iran the iceberg ecosystem is obviously there was a lot of changed this quarter with

Michael Scarpelli: For FY25, we expect approximately 75% non-Gap product margin.

Michael Scarpelli: 3% non-Gap operating margin and 26% non-Gap adjusted free cash flow margin.

Speaker Change: with the tabary acquisition by someone el what do you see in terms of attracting talent to drive the rogmentant forward er like you know how is your positioning in that i start ecosystem evolving thank you

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

Operator: With that operator, you can now open up the line for questions. Great. If you'd like to give you a question, you can do so by pressing star one. And if for any reason you'd like to remove your question, you can press star two. Again, it is star one to join the question queue.

Great.

If you'd like to give you a question, you can do so by pressing star one.

And if for any reason you'd like to remove your question, you can press star two.

Speaker Change: on the margin side the margins were slow lightly better than what we had

Again, it is star one to join the question queue.

Keith Weiss: Our first question is from Keith Weiss with Morgan Stanley.

Keith Weiss: Our first question is from Keith Weiss with Morgan Stanley. Your line is now open. Excellent.

Speaker Change: forecast internally but it doesn't change the guidance that we've given seventy five percent per the year

Your line is now open.

Speaker Change: part of that is we're still waiting in some deployments for gpuse that around the world that we don't have yet that we were anticipating would have come in this quarter that's really on the margin side the gross margin side

Excellent.

Thank you guys for taking the question and congratulations on a solid quarter.

Michael Scarpelli: Thank you guys for taking the question and congratulations on a solid quarter. It's really good to hear about the optimization starting to normal. I think it seems to be settling into just about like a 30% product revenue growth rate over the past couple of quarters. There were a lot of concerns coming into this quarter about impacts from iceberg tables. There was concern that occurred during the quarter about the data leakage. That wasn't your fault, but it definitely was a marketing headwind.

It's really good to hear about the optimization starting to normal.

I think it seems to be settling into just about like a 30% product revenue growth rate over the past couple of quarters.

Speaker Change: and then on the iceberg side it's important to understand that the acquisition of tabular the company has no impact on the iceberg project which is an ap bache open source project

There were a lot of concerns coming into this quarter about impacts from iceberg tables.

There was concern that occurred during the quarter about the data leakage.

Speaker Change: this has contributors and program committee members from a number of cloud companies

That wasn't your fault, but it definitely was a marketing headwind.

It was concerned about the crouch drag cyber security incident, maybe impacting consumption.

Michael Scarpelli: It was concerned about the crouch drag cyber security incident, maybe impacting consumption. Were any of these outsized impacts, were any of these additional impacts on the consumption in the quarter versus what you guys were expecting when you originally gave us the guys? I would say the cybersecurity incident was still really had no impact on us at all from a consumption standpoint. And the crowd strike outage was minimal. It was a day with a few customers, but nothing of any substance that had never really impacted us itself.

Speaker Change: the hyperscalers yes but also other companies and we also have members within snowfplay so we very much intend for this to be an industry standard that we take a pretty significant role

Were any of these outsized impacts, were any of these additional impacts on the consumption in the quarter versus what you guys were expecting when you originally gave us the guys?

I would say the cybersecurity incident was still really had no impact on us at all from a consumption standpoint.

Speaker Change: in in shaping

Speaker Change: and so from that perspective

Speaker Change: we actually feel that the tabler acquisition in many ways

And the crowd strike outage was minimal.

Speaker Change: is a vindication of our strategy to bet on iceberg because that was the format that was truly interroperable you know hopefully this is the you know end of the bitmax wars and everybody with everybody centering around

It was a day with a few customers, but nothing of any substance that had never really impacted us itself.

And our production does not rely on Microsoft for that.

Michael Scarpelli: And our production does not rely on Microsoft for that. So we didn't have that. Got it. And then was Iceberg Cables in line with your expectations? You know, Iceberg Cables is rolling out as we said, we have 400 customers that are using it. We haven't seen customers move storage out of Snowflake, but we're seeing a lot of our customers. We mentioned 400 that we know that are actually using Iceberg with new workloads or trying that out. And we're very pleased with the progress we're seeing there. Storage is still running about 11% of our revenue. Got it. That's super helpful.

So we didn't have that.

Michael Scarpelli: Thank you, Mike.

Speaker Change: the one format that has brought support and as they said we will continue to be a key player in this ecosystem to ensure that the format truly serves everybody and most industry forward

Got it.

And then was Iceberg Cables in line with your expectations?

You know, Iceberg Cables is rolling out as we said, we have 400 customers that are using it.

We haven't seen customers move storage out of Snowflake, but we're seeing a lot of our customers.

Speaker Change: look the taking with them

We mentioned 400 that we know that are actually using Iceberg with new workloads or trying that out.

Speaker Change: i

mark mury: our next question is from mark mury with j p morgan your line is now open

And we're very pleased with the progress we're seeing there.

mark mury: thank you very much so that i conguress ikeyou mentioned a couple of nine figure deals in the quarter i'm curious if those are renewals with expansion or perhaps this 've related to anything else for instance

Storage is still running about 11% of our revenue.

Got it.

That's super helpful.

Thank you, Mike.

Raimo Lenschow: Our next question is from Raimo Lynchow with Barclays.

Raimo Lenschow: Our next question is from Raimo Lynchow with Barclays. Your line is now open. Perfect. Thank you. Two quick questions. Mike, can you dig the growth margins? This quarter are better than what a lot of people have model. Can you speak to some of the factors for that?

Speaker Change: iceberg cables on locking you know you do business where companies want to happen to some larger data sources that are in format or just there's anything else to to call out on the nine figure deals and havea quick followall up

Your line is now open.

Perfect.

Thank you.

Two quick questions.

Mike, can you dig the growth margins?

This quarter are better than what a lot of people have model.

Can you speak to some of the factors for that?

And then streeter for you like around the iceberg ecosystem is obviously there was a lot of change this quarter with the with the tabular acquisition by someone.

Sridhar Ramaswamy: And then streeter for you like around the iceberg ecosystem is obviously there was a lot of change this quarter with the with the tabular acquisition by someone.

Speaker Change: those were existing customers

Speaker Change: you're never going to see and i never want to say never you're going to see a n figure deal from

What do you see in terms of attracting talent to drive the roadmap forward there like, you know, how is your position in that iceberg ecosystem evolving?

Michael Scarpelli: What do you see in terms of attracting talent to drive the roadmap forward there like, you know, how is your position in that iceberg ecosystem evolving? Thank you. Yeah, on the margin side, the margins were slightly better than what we had forecast internally, but it doesn't change the guide that we've given 75% per the year. Part of that is we're still waiting in some deployments for GPUs that around the world that we don't have yet that we were anticipating would have come in this quarter. That's really the on the margin side, the gross margin side.

Speaker Change: and net new customer

Speaker Change: those are really as part of the renewal process and but expansion in both of those customers as they're looking to do more

Thank you.

Yeah, on the margin side, the margins were slightly better than what we had forecast internally, but it doesn't change the guide that we've given 75% per the year.

Speaker Change: i can't specifically say that iceberg either those that i'm seeing but ' they both plan on either doing more with snowsf like

Speaker Change: yeah i understand okay and then um

Part of that is we're still waiting in some deployments for GPUs that around the world that we don't have yet that we were anticipating would have come in this quarter.

Speaker Change: as a follow-up as we search to think forward into the next fiscalyear i think

Speaker Change: we're trying to balance out the large fator products that recently reached g a that you mentioned treatar in might start to the contribute then on the other side ofthe legger you know potential for any discrete headwinds from hardware and sofware software improvements that you pass along

That's really the on the margin side, the gross margin side.

And then on the iceberg side, it's important to understand that the acquisition of tabular the company has no impact on the iceberg project, which is an Apache open source project.

Sridhar Ramaswamy: And then on the iceberg side, it's important to understand that the acquisition of tabular the company has no impact on the iceberg project, which is an Apache open source project. This has contributors and program committee members from a number of cloud companies, the hyperscalers, yes, but also other companies and we also have members with and snowflake so we very much intend for this to be an industry standard that we take a pretty significant role in in shaping.

Speaker Change: you know storage compression in the past you had auto warehouse sii think any kind i level thoughts on streed ar on how to pencil that out in terms of few products you know ramping and then on the other side some of those improvements

This has contributors and program committee members from a number of cloud companies, the hyperscalers, yes, but also other companies and we also have members with and snowflake so we very much intend for this to be an industry standard that we take a pretty significant role in in shaping.

Speaker Change: i'll start to answer and christian should and mike should china and first of all you we obviously can't say anything about next year it is next year

Speaker Change: but bit ever possible where we have

Speaker Change: um

And so from that perspective, we actually feel that the tabular acquisition in many ways is a vindication of our strategy to bet on iceberg because that was the format that was truly interoperable.

Sridhar Ramaswamy: And so from that perspective, we actually feel that the tabular acquisition in many ways is a vindication of our strategy to bet on iceberg because that was the format that was truly interoperable. You know, hopefully this is the end of the beta max wars and everybody with everybody centering around the one format that has broad support. And as I said, we will continue to be a key player in this ecosystem to ensure that the format truly serves everybody and most industry forward.

Speaker Change: indication of our how new products are going to perform we certainly tell you about it we have given guidance for example about what sno park is going to do

Speaker Change: this year

Speaker Change: and similarly with the ai products as i said we are seeing broad adoption and we expect that it will begin to contribute materially to revenue

You know, hopefully this is the end of the beta max wars and everybody with everybody centering around the one format that has broad support.

Speaker Change: ah next year

And as I said, we will continue to be a key player in this ecosystem to ensure that the format truly serves everybody and most industry forward.

Speaker Change: with respect to performance optimizations i would say that's more of an ongoing thing we have totalk to you about the things that we have on tap for

Speaker Change: on top for this year it is important to understand that these optimizations turn into massive cost savings for our our customers

Christopher, thank you.

Sridhar Ramaswamy: Christopher, thank you.

Our next question is from Mark Murphy with JP Morgan.

Mark Murphy: Our next question is from Mark Murphy with JP Morgan. Your line is now open. Thank you very much. You mentioned a couple of nine-figure deals in the quarter. I'm curious if those are renewals with expansion or perhaps if they're related to anything else, for instance, iceberg cables unlocking, you know, you know, do business where companies want to tap into some larger data sources that are in an open format or just whether there's anything else to call out on the nine-figure deals and have a quick follow-up.

Speaker Change: and make the core product strong and it's really important that our teams continue to do that because that's what protects our overall base chris

Mark Murphy: Your line is now open.

Thank you very much.

You mentioned a couple of nine-figure deals in the quarter.

Speaker Change: i would just empahasize that our leadership position on price performance continues to be a priority for all of us and at this point you've seen several years of us continue to innovate but also the very growth and icual use for our customers

I'm curious if those are renewals with expansion or perhaps if they're related to anything else, for instance, iceberg cables unlocking, you know, you know, do business where companies want to tap into some larger data sources that are in an open format or just whether there's anything else to call out on the nine-figure deals and have a quick follow-up.

Chris: thank you

Chris: yeah

kirk mturnn: we have a question from kirk mturnn with evercore your line is now open

Those who are existing customers, you're never going to see, I never want to say never.

Mark Murphy: Those who are existing customers, you're never going to see, I never want to say never. You're going to see a nine-figure deal from a net new customer. Those are really, as part of the renewal process and but expansion in both of those customers as they're looking to do more. I can't specifically say that iceberg, either of those that I'm seeing, but they both plan on you doing more with Snowflake. Yeah, I understand. Okay.

kirk mturnn: yesi think just really quick ones i reed are actually a lot of your partners and customers the submitb talked about you know the exciting around that some these corretex

You're going to see a nine-figure deal from a net new customer.

Those are really, as part of the renewal process and but expansion in both of those customers as they're looking to do more.

Speaker Change: it's no part but one of the brain was we just better ap understand how did use them and and that it from an industry perspect and they came up a lot too kind really you are being

I can't specifically say that iceberg, either of those that I'm seeing, but they both plan on you doing more with Snowflake.

Speaker Change: the product that they can per the harle i that heard cur your li sprianything out that we can't really hear you

Yeah, I understand.

Okay.

And then as a follow-up, as we start to sink, you know, forward into the next fiscal year, I think we're trying to balance out the large, later products that recently reached a GA that you mentioned, Trudar, and might start to contribute.

Sridhar Ramaswamy: And then as a follow-up, as we start to sink, you know, forward into the next fiscal year, I think we're trying to balance out the large, later products that recently reached a GA that you mentioned, Trudar, and might start to contribute. Then on the other side of the ledger, you know, potential for any discrete headwinds from hardware and software, software improvements that you pass along. You know, storage compression, the in the past, you had auto warehouse, I think any high level thoughts on Trudar on how to pencil that out in terms of due products.

Speaker Change: elwhere

Speaker Change: that enentiref

Speaker Change: getting a really bad to echo and it's hard to hear you

Then on the other side of the ledger, you know, potential for any discrete headwinds from hardware and software, software improvements that you pass along.

Speaker Change: pop sto here

You know, storage compression, the in the past, you had auto warehouse, I think any high level thoughts on Trudar on how to pencil that out in terms of due products.

Goldman: we have a question cash wrongun with goldman your line is now open

You know, ramping and then on the other side, some of those improvements.

Sridhar Ramaswamy: You know, ramping and then on the other side, some of those improvements. I'll start to answer and Christian should and Mike should chime in. First of all, you know, we obviously can say anything about next year. It is next year. But wherever possible, where we have indication about how new products are going to perform, we certainly tell you about it. We have given guidance, for example, about what snowpark is going to do this year.

Speaker Change: it thank you guys so one for you see the one you ic

Speaker Change: so that when you look at the product portfolioof some clearly initives of get these services

I'll start to answer and Christian should and Mike should chime in.

Speaker Change: can quick caseat you pointed out to ne you eight or nine services but one of the conversations with customers like when they are discussing the services with you what is the take on where we

First of all, you know, we obviously can say anything about next year.

It is next year.

But wherever possible, where we have indication about how new products are going to perform, we certainly tell you about it.

Speaker Change: going to be a year out with the consumption profile

We have given guidance, for example, about what snowpark is going to do this year.

Speaker Change: of an average so fflate custosm kind of the iness anicon average how do you see that mix changing between the core the one just bluntly call it 'are housing later revenueu versus on structureddata whatever we on calledred corttekes a i in the other emergening buckets had that mix

And similarly with the AI products, as I said, we are seeing broad adoption and we expect that it will begin to contribute materially to revenue next year.

Sridhar Ramaswamy: And similarly with the AI products, as I said, we are seeing broad adoption and we expect that it will begin to contribute materially to revenue next year. With respect to performance optimizations, I would say that's more of an ongoing thing. We have talked to you about the things that we have on tap for this year. It is important to understand that these optimizations turn into massive cost saving for our customers and make the core product strong.

Speaker Change: change for customers as they start to appreciate the net new products you have come on and one for you might

With respect to performance optimizations, I would say that's more of an ongoing thing.

We have talked to you about the things that we have on tap for this year. It is important to understand that these optimizations turn into massive cost saving for our customers and make the core product strong.

Speaker Change: he said that the cleforce compensation took towards consumption

Speaker Change: still in is early days but you also intimated that in fisco twenty six we could start to see the food of all this so help us understand what what you mean that what of the kpiis that you'd be tory monitoring

Speaker Change: to inform you and therefore us that that tilt towards getting more consumption within your customers is actually working to your advantage thank you so much

And that it is really important that our teams continue to do that because that's what protects our overall base.

Sridhar Ramaswamy: And that it is really important that our teams continue to do that because that's what protects our overall base. Christian. I would just emphasize that our leadership position on price performance continues to be a priority for all of us. And at this point, you have seen several years of us continue to innovate, but also the growth and additional users from us.

Christian.

Sridhar Ramaswamy: Thank you.

I would just emphasize that our leadership position on price performance continues to be a priority for all of us.

Speaker Change: thank you gosh on the product side

Speaker Change: i would say that our customers go to a journey

And at this point, you have seen several years of us continue to innovate, but also the growth and additional users from us.

Speaker Change: typically starting with a desire to have a really good data platform that gives visibility they end up adopting different architectures

Thank you.

Speaker Change: but often the enterprises most like pristine clean data the goal layer so to say

Kirk Materne: We have a question from Kirk Materne with Evercore.

Kirk Materne: We have a question from Kirk Materne with Evercore. Your line is now open. Yeah, thanks. I just took really quick ones. Sridhar, actually, a lot of your partners and customers at the summit event talked about, you know, the excitement around that some of these nearby subcore techs. It's no part, but one of the reasons was we just need better maps to understand how to use them and from an industry perspective that came up a lot too.

Your line is now open.

Yeah, thanks.

Speaker Change: is the one that's put into into snowfflla and there are lots of customers that have standardized on snowflake as that key data backplane

I just took really quick ones.

Sridhar, actually, a lot of your partners and customers at the summit event talked about, you know, the excitement around that some of these nearby subcore techs.

It's no part, but one of the reasons was we just need better maps to understand how to use them and from an industry perspective that came up a lot too.

Speaker Change: next

Speaker Change: usually

Speaker Change: there is a leaning

Speaker Change: towards collaboration because all companies exist in the context ofp and ecosystem they have partners that have customers

It's a kind of curious, really, if you are being a product that they can understand the ROI that you have.

Kirk Materne: It's a kind of curious, really, if you are being a product that they can understand the ROI that you have. Kirk, Kirk, your line is breaking up and we can't really hear you. Is that an entire line? Getting a really bad echo and it's hard to hear you. Thanks.

Speaker Change: and collaboration of various kinds stly starting with data sharing

Christian: becomes the key next thing that they adopt broadly and you'veoften heard christian talk about things like stable edleges which is a metric that that we track because it creates value and it obviously also creates a network effect

Kirk, Kirk, your line is breaking up and we can't really hear you.

Is that an entire line?

Speaker Change: our overall strategy at snowblake is to make sure that all of the sort of data workloads that a company has is satisfied by is satisfied by snowflake

Getting a really bad echo and it's hard to hear you.

Thanks.

Speaker Change: and this is where things like data engineery which you have played a pretty significant role in for a while you know has been an investment for up and this is where things like iceberg become pretty key because all of a sudden

We have a question for Cass.

Unknown Attendee: We have a question for Cass. Wrong on with Goldman.

Unknown Attendee: Wrong on with Goldman.

Your line is now open.

Cass Wrong: Your line is now open. Thank you, guys. So one for you, Sridhar, one for you, Mike. Sridhar, when you look at the product portfolio of some clearly initiative is to get these services out and put in a certain point out the net view eight or nine services. One of the conversations with customers like when they are discussing the services with you, what does it take on where are we going to be a year out with the consumption profile of an average snowflake customer kind of the setting on average.

Thank you, guys.

Unknown Attendee: So one for you, Sridhar, one for you, Mike.

Sridhar, when you look at the product portfolio of some clearly initiative is to get these services out and put in a certain point out the net view eight or nine services.

Speaker Change: the universe of data that can be acted upon by snowplla goes through a large expansion because precisely because not all data needs to be inested into snowflake before before things happen

One of the conversations with customers like when they are discussing the services with you, what does it take on where are we going to be a year out with the consumption profile of an average snowflake customer kind of the setting on average.

Speaker Change: i would say i is a little unusual in this front

Speaker Change: because of obviously the industry excitement around it but we approach ed very much from a view point i think this was part of the previous question or how do we go about creating utility to our customers we just don't going and say you a i we talk about you know

How do you see that mix changing between the core, if you want to just bluntly call it a warehousing later revenues versus unstructured data, whatever you want to call it cortex AI and the other emerging bucket patterns that mix.

Cass Wrong: How do you see that mix changing between the core, if you want to just bluntly call it a warehousing later revenues versus unstructured data, whatever you want to call it cortex AI and the other emerging bucket patterns that mix. Change for customers as they start to appreciate the net new products you have coming up and one for you, Mike, you said that the Salesforce compensation towards consumption is still in early days, but you also intimated that in fiscal 26.

Change for customers as they start to appreciate the net new products you have coming up and one for you, Mike, you said that the Salesforce compensation towards consumption is still in early days, but you also intimated that in fiscal 26.

Speaker Change: how it can be used to derive much better insights

Speaker Change: or onunstructured information for example by using an em function for doing data transformation like sentiment detection an easier access to data whether it is with a chat bot or text docks

We could start to see the food of all this.

Cass Wrong: We could start to see the food of all this. So help us understand what you mean by that and what are the KPIs that you'd be internally monitoring to inform you and therefore that that tilt towards getting more consumption within your customers is actually working to your next. Thank you so much. Thank you, gosh, on the product side, I would say that our customers go through a journey typically starting with a desire to have a really good data platform that gives visibility they end up adopting different architectures.

Unknown Attendee: So help us understand what you mean by that and what are the KPIs that you'd be internally monitoring to inform you and therefore that that tilt towards getting more consumption within your customers is actually working to your next.

Speaker Change: or using something like analyst to give a business user access to structured data tend to be the follow-on applications

Speaker Change: and really we feel comfortable enough to be able to be investing in these in parallel and driving revenue growth i would say it's too early to talk about ex percent for this versus y percent for that our goal is to be relevant and for me relevance is lots and lots of for customers thousands of customers using our products and driving meaningful you know nine ten digit revenue for

Thank you so much.

Thank you, gosh, on the product side, I would say that our customers go through a journey typically starting with a desire to have a really good data platform that gives visibility they end up adopting different architectures.

Cass Wrong: But often the enterprises most like pristine cleaned data, the goal layer so to say is the one that's put into into into into snowflake and there are lots of customers that have standardized on snowflake as that key data back plane. Next, usually there is a leaning towards collaboration because all companies exist in the context of an ecosystem. They have partners, they have customers and collaboration of various kinds certainly starting with data sharing becomes the key.

But often the enterprises most like pristine cleaned data, the goal layer so to say is the one that's put into into into into snowflake and there are lots of customers that have standardized on snowflake as that key data back plane.

Speaker Change: and n cash on your question for me and the sales com changes what i was meaning by that is you know we really bifcated our sales force into the acquisition reps

Speaker Change: and those customers they're landing today we really have the focused on

Speaker Change: trying to land the right type of customers that can grow we think they will have a meaningful impact on revenue

Next, usually there is a leaning towards collaboration because all companies exist in the context of an ecosystem. They have partners, they have customers and collaboration of various kinds certainly starting with data sharing becomes the key.

Speaker Change: next year with those new ones and then also the new muscle that we've been building in the sales organization where the repstorers is pank being paid on consumption as what is driving them it's really the growth within customers' consumption

The next thing that they adopt broadly and you've often heard Christian talk about things like stable edges, which is a metric that that we track because it creates value and it obviously also creates a network effect.

Cass Wrong: The next thing that they adopt broadly and you've often heard Christian talk about things like stable edges, which is a metric that that we track because it creates value and it obviously also creates a network effect. Our overall strategy of snowflake is to make sure that all of the sort of data workloads that a company has is satisfied by is satisfied by snowflake and this is where things like data and during which you have played a pretty significant role in for a while.

Speaker Change: it's a new muscle for them to learn how to go and find and help forecast new workloads coming online in that muscle they're developing we see is going to have a really positive impact in two thousand and twenty six for us

Our overall strategy of snowflake is to make sure that all of the sort of data workloads that a company has is satisfied by is satisfied by snowflake and this is where things like data and during which you have played a pretty significant role in for a while.

Speaker Change: excellent thank you so much

carl ked: we'have a question from carl ked with ub your line is now open

carl ked: okay great to he might i 't to just ask you about usage trends as you closed the july quarter and

You know has been an investment for us and this is where things like iceberg become pretty key because all of a sudden the universe of data that can be acted upon by snowflake goes through a large expansion because precisely because not all data needs to be ingested into snowflake before things happen.

Cass Wrong: You know has been an investment for us and this is where things like iceberg become pretty key because all of a sudden the universe of data that can be acted upon by snowflake goes through a large expansion because precisely because not all data needs to be ingested into snowflake before things happen. I would say AI is a little unusual in this front because of obviously the industry excitement around it but we approach it very much from a viewpoint that I think this was part of the previous question of how do we go about creating utility to our customers.

Speaker Change: what assumptions you' embedding in the second half product revenue guide i think we've

Speaker Change: everybody in the line of se charly ample evidence from microsoft all the way down that it's a tough ip spending environment so i'm just curious as you

Speaker Change: set the three q and four q product red guide what you would call out as the key variables or maybe changes in macro related assumptions that you embedded in that guy thank you

I would say AI is a little unusual in this front because of obviously the industry excitement around it but we approach it very much from a viewpoint that I think this was part of the previous question of how do we go about creating utility to our customers.

Speaker Change: i'll just say quarter showed from a booking standpoint that it's a normal environment we're very pleased with the deals we closseed in the quarter

Speaker Change: i don't see it any worse it's not euphor or anything but it's very stable customerbuying pattern we're seeing and in terms of

We just don't go in and say use AI we talk about you know how it can be used to derive much better insights or unstructured information for example by using an LLM function for doing data transformations like sentiment detection and easier access to data whether it is with a chatbot or text docs or using something like analysts to give a business user access to structured data.

Cass Wrong: We just don't go in and say use AI we talk about you know how it can be used to derive much better insights or unstructured information for example by using an LLM function for doing data transformations like sentiment detection and easier access to data whether it is with a chatbot or text docs or using something like analysts to give a business user access to structured data. Those tend to be the follow on applications and really we feel comfortable enough to be able to be investing in these in parallel and driving revenue growth.

Speaker Change: consumption trends obviously we just guided our revenue right now for the quarter we deat en we raised the full year as as well too and that's seeing the consumption trends up through this week so 're pleased with that right now is what we're seeing

Speaker Change: okay can then just maybe a follow- up i know that you've embedded in your guidance the assumption of some degree of runoff of the

Those tend to be the follow on applications and really we feel comfortable enough to be able to be investing in these in parallel and driving revenue growth.

Speaker Change: storage revenues that you just repeated earlier still represent eleven percent of res is the expected pace at that storage run off in this new guidance tracking similar to what you embedded three months ago or or is it a little bit lighter a little bit faster

I would say it's too early to talk about X percent for this versus Y percent for that our goal is to be relevant and for me relevance is lots and lots of our customers thousands of customers using our products and driving meaningful you know 910 digit.

Cass Wrong: I would say it's too early to talk about X percent for this versus Y percent for that our goal is to be relevant and for me relevance is lots and lots of our customers thousands of customers using our products and driving meaningful you know 910 digit.

Speaker Change: yes well i would they said earlier we really haven't seen any storage le st like that but that was always forecast to happen in the second half of this year year and we are expecting that is some of that is going to happen and that is factored into our guidance

I would rather you for And I'm cash on your question for me on the sales comp changes.

Michael Scarpelli: I would rather you for And I'm cash on your question for me on the sales comp changes. What I was meaning by that is, you know, we really bifurcated our sales force into the acquisition reps. And those customers that are landing today, we really have them focused on trying to land the right type of customer that can grow. We think they will have a meaningful impact on revenue next year with those new ones.

What I was meaning by that is, you know, we really bifurcated our sales force into the acquisition reps.

Mike: ok thank you mke

Michael Scarpelli: And those customers that are landing today, we really have them focused on trying to land the right type of customer that can grow.

Brentail: our next question is from brrentail with jeffrey' your line is now open

We think they will have a meaningful impact on revenue next year with those new ones.

Brent Thill: think shedter can you give us an update on the adoption of cortex and how you're seeing that friend and for mike just on r po it's good to see

And then also the new muscle that we've been building in the sales organization where the reps are just being paid on consumption is what is driving them.

Michael Scarpelli: And then also the new muscle that we've been building in the sales organization where the reps are just being paid on consumption is what is driving them. It's really the growth within customers consumption. It's a new muscle for them to learn how to go and find and help forecast new workloads coming online. And that muscle they're developing we see is going to have a really positive impact in 2026 for us.

It's really the growth within customers consumption.

Unknown Attendee: Excellent. Thank you so much.

Mike: really a good sequential growth in the acceleration of r po

It's a new muscle for them to learn how to go and find and help forecast new workloads coming online.

Speaker Change #103: but the gap between revenue and our poo continues to be one of the highest we've seen is there anything that's going on that we should consider there business just similar consistent patterns you've seeseenin the past

And that muscle they're developing we see is going to have a really positive impact in 2026 for us.

Excellent.

Thank you so much.

Mike: i'll actually answer that first just whates on my mind as we said before we have customers that sign long-term contracts

We have a question from Carl Kerstead with UBS.

Carl Kerstead: We have a question from Carl Kerstead with UBS. Your line is now open. Okay. Great. Hey, Mike.

Your line is now open.

Speaker Change #104: if they have consumed everything under their contract they have the ability to buy monthly we have two over top ten customers right now

Okay.

Great.

Hey, Mike.

I'd love to just ask you about usage trends as you closed the July quarter and what assumptions you're embedding in the second half product revenue guide.

Michael Scarpelli: I'd love to just ask you about usage trends as you closed the July quarter and what assumptions you're embedding in the second half product revenue guide. I think we've everybody in the line has heard clearly ample evidence from Microsoft all the way down that it's a tough IT spending environment. So I'm just curious as you set the 3Q and 4Q product revs guide what you would call out as key variables or maybe changes in macro related assumptions that you embedded in that guide. Thank you.

Speaker Change #105: that can continue to buy through the end of the year and we're seeing that so they're in their top ten customers and think topten customers are roughly in the fifty million to forty million dollar range

I think we've everybody in the line has heard clearly ample evidence from Microsoft all the way down that it's a tough IT spending environment.

So I'm just curious as you set the 3Q and 4Q product revs guide what you would call out as key variables or maybe changes in macro related assumptions that you embedded in that guide.

Speaker Change #104: those aren't reflected in current rpo very much because they're just buying as they go

Speaker Change #106: on a c efrision here in the adoption of of corta believe we have a number of product capabilities under that umbrella

Thank you.

I was just saying quarter showed from a booking standpoint that it's a normal environment.

Michael Scarpelli: I was just saying quarter showed from a booking standpoint that it's a normal environment. We're very pleased with the deals we close in the quarter. I don't see it any worse. It's not you fork or anything, but it's very stable customer buying pattern we're seeing.

Speaker Change #107: por differentf lensps which referenents the

Speaker Change #107: different in language model that available

We're very pleased with the deals we close in the quarter.

Speaker Change #107: that onewhen the adoption quite strong ts of the use cases as we are toon

I don't see it any worse.

Speaker Change #107: exmarization taxand tax sentiment analysis

It's not you fork or anything, but it's very stable customer buying pattern we're seeing.

Speaker Change #107: that that's some but also we'reintroduced

And in terms of consumption trends.

Michael Scarpelli: And in terms of consumption trends. Obviously we just guided our revenue right now for the quarter. We beaten we raised the full year as well too. And that's seeing the consumption trends up through this week. So we're pleased with that right now is what we're seeing.

Speaker Change #108: at sumit both court aninies and cortickx search as a wekely enable users across

Obviously we just guided our revenue right now for the quarter.

We beaten we raised the full year as well too.

Speaker Change #108: i wearere going to do to be able to

And that's seeing the consumption trends up through this week.

Speaker Change #108: cat and interrogated data with is structure andinstructured

So we're pleased with that right now is what we're seeing.

Speaker Change #108: those two our impponent for you but the adots and at this stage this is quite strong we have

Okay.

Mike and then just maybe a follow up.

Michael Scarpelli: Okay. Mike and then just maybe a follow up. I know that you've embedded in your guidance the assumption of some degree of runoff of the storage revenues that you just repeated earlier still represent 11% of res is the expected pace of that storage runoff in this new guidance tracking similar to what we're seeing. What you embedded three months ago or is it a little bit lighter or a little bit faster? Yeah.

Speaker Change #108: quite a iddle demandfor going to general availability

I know that you've embedded in your guidance the assumption of some degree of runoff of the storage revenues that you just repeated earlier still represent 11% of res is the expected pace of that storage runoff in this new guidance tracking similar to what we're seeing.

Speaker Change #109: and maybe what that will colld is the toblical pilot we see a lot of usage on customers getting aassistance and hundred right better peopleple queries which also drives consumption back and go into lo so all all of a strong product swed and interest in adoption across in

What you embedded three months ago or is it a little bit lighter or a little bit faster?

Speaker Change #109: thanks

Yeah.

Well, as I said earlier, we really haven't seen any storage leave.

Michael Scarpelli: Well, as I said earlier, we really haven't seen any storage leave. Stunned like yet, but that was always forecast to happen in the second half of this year. And we are expecting that is some of that is going to happen. And that is factored into our guidance.

brad zelmc: we have a question from brad zelmc with doorghter bank your line is nownot open

Stunned like yet, but that was always forecast to happen in the second half of this year.

Michael Scarpelli: Okay. Thank you, Mike.

brad zelmc: great thanks somuch forre taking a question it's really a bigger picture question for reedar maybe christian if the world increasingly interacts with data through generative ai and l

And we are expecting that is some of that is going to happen.

And that is factored into our guidance.

Okay.

brad zelmc: how does role of the data warehouse as we've known it for decades evolved from here and why itis no fla wellpositionedto help enterprises bridge these worlds leveraging mountains of enterprise data to build newer generation a i applications thanks

Unknown Attendee: Thank you, Mike.

Our next question is from Brent Hill with Jeffries.

Brent Hill: Our next question is from Brent Hill with Jeffries. Your line is now open. Thanks, streeter.

Your line is now open.

Thanks, streeter.

Could you give us an update on the adoption of cortex and how you're seeing that friend.

Michael Scarpelli: Could you give us an update on the adoption of cortex and how you're seeing that friend. And for Mike, just on our PO was good to see really good sequential growth and the acceleration of our PO. But the gap between revenue and our PO continues to be one of the highest we've seen. Is there anything? that's going on that we should consider there. It's just similar, you know, consistent patterns you've seen in the past.

Speaker Change #111: i mean

Speaker Change #112: first of all snowpelake is often at the center of all of the interesting data in companies absolutely we started out of as a warehouse

And for Mike, just on our PO was good to see really good sequential growth and the acceleration of our PO.

But the gap between revenue and our PO continues to be one of the highest we've seen.

Speaker Change #113: but increasingly er the data backplanane that provides a single unified view

Is there anything?

Speaker Change #114: obviously this comes from production systems but pas increasingly from multiple connectors we have to you know other systems whether they are you know sales force or segment or ssaapp or any of the other applications that that you use

that's going on that we should consider there.

It's just similar, you know, consistent patterns you've seen in the past.

I'll actually answer that first, just what's on my mind.

Michael Scarpelli: I'll actually answer that first, just what's on my mind. You know, as we said before, we have customers that sign long-term contracts. If they have consumed everything under their contract, they have the ability to buy monthly. We have two of our top 10 customers right now that can continue to buy through the end of the year. And we're seeing that so they're in their top 10 customers and think top 10 customers are roughly in the $50 million to $40 million range. Those aren't reflected in current RPO very much because they're just buying as they go.

You know, as we said before, we have customers that sign long-term contracts.

Speaker Change #114: and what we are doing with additional capabilities like machine learning like ai is to be able to act on that data to then drive operationalsystem

If they have consumed everything under their contract, they have the ability to buy monthly.

We have two of our top 10 customers right now that can continue to buy through the end of the year.

Speaker Change #115: disney for example uses snow flag to a lot of in part optimization

And we're seeing that so they're in their top 10 customers and think top 10 customers are roughly in the $50 million to $40 million range.

Speaker Change #115: and we see a lot of people that bring

Those aren't reflected in current RPO very much because they're just buying as they go.

Speaker Change #115: supply chain data into snowthquake and then optimizede within snowthflake

Speaker Change #116: obviously that are also partners like yonder which is a supply chain company act

I'm Christian here in the adoption of Cortex.

Christian Kleinerman: I'm Christian here in the adoption of Cortex. Obviously, we have a number of product capabilities under that umbrella, Cortex and Lens, which references the different language models are available. That one, the adoption is quite strong. Lots of use cases that Sweden are doing too on text summarization, text sentiment analysis, that that's very strong, but also we're introduced at some. It both Cortex analysts and Cortex search as a way to enable users across all types of organizations to be able to chat and interrogate their data with its structure and structure.

Speaker Change #116: platform on snowfplayla and then provide additional capability to their customers so they can combine the supply chain data with other data that there is

Obviously, we have a number of product capabilities under that umbrella, Cortex and Lens, which references the different language models are available.

Speaker Change #117: our bed is really that a and machine learning are going to go where the data is data is going to have a strong gravity and this is the reason why we are seeing such produ oction

That one, the adoption is quite strong.

Lots of use cases that Sweden are doing too on text summarization, text sentiment analysis, that that's very strong, but also we're introduced at some.

It both Cortex analysts and Cortex search as a way to enable users across all types of organizations to be able to chat and interrogate their data with its structure and structure.

Speaker Change #118: and by providing easy to use products with cortect a i for example any analyst that no sequel was able to use languish models you don't need to go by new systems set up new things and things like data transformation tex transformations become as simple as writing like a tool line sequel it is really this ease of use that makes sno such an amazing platform to be able to do all these value applications

Those two are in public for you, but the adoption at this stage is quite strong.

Christian Kleinerman: Those two are in public for you, but the adoption at this stage is quite strong. We have quite a bit of demand for going to general availability. And maybe the last one that I will call out is the doubly copilot. We see a lot of usage on customers getting assistance and how to write better people queries, which also drives consumption back into slowly. So all of us from part of Sweden and interested adoption across all of them.

We have quite a bit of demand for going to general availability.

Christian Kleinerman: Thanks.

And maybe the last one that I will call out is the doubly copilot.

We see a lot of usage on customers getting assistance and how to write better people queries, which also drives consumption back into slowly.

Speaker Change #118: in addition to the core analytics applications and the data sharing that people have done on snow like

So all of us from part of Sweden and interested adoption across all of them.

Speaker Change #119: thank you very much for the treat may it'sthe quick one for you mi and i too optimistic to think that in r can stabilize here especially in light of all the new products you guys are bring online thank you

Thanks.

Brad Zelnick: We have a question from Brad Zelnick with Deutsche Bank.

Brad Zelnick: We have a question from Brad Zelnick with Deutsche Bank. Your line is now open. Great. Thanks so much for taking the question. It's really a bigger picture question.

Speaker Change #120: as we said before i'm not really going to guide and our and i said it will over time convert with our revenue and

Your line is now open.

Great.

Thanks so much for taking the question.

It's really a bigger picture question.

Speaker Change #121: clearly we'd like to see and our stabiliz at this level but we'll see at the end of the quarter m i'm not disappointed with our or argiven a revenue growth i'm happy with it

Unknown Attendee: If the world increasingly interacts with data through generative AI and LLMs, how does the world of data warehouse as we've known it for decades evolved from here?

Sridhar Ramaswamy: If the world increasingly interacts with data through generative AI and LLMs, how does the world of data warehouse as we've known it for decades evolved from here? And why is Snowflake well positioned to help enterprises bridge these worlds, leveraging mountains of enterprise data to build newer generation AI applications. Thanks. I mean, first of all, Snowflake is often at the center of all of the interesting data in companies. Absolutely. We started out of it as a warehouse, but increasingly we are the data backplane that provides the single unified view.

And why is Snowflake well positioned to help enterprises bridge these worlds, leveraging mountains of enterprise data to build newer generation AI applications.

Speaker Change #122: makekes sense thanks so much guys

Thanks.

mike feos: our next question is for mike feos with needum company your line is now open

I mean, first of all, Snowflake is often at the center of all of the interesting data in companies.

mike feos: great thanks for taking the questions to you guys the first one for streetor and i just wanted to come back to keep

Absolutely.

We started out of it as a warehouse, but increasingly we are the data backplane that provides the single unified view. Obviously, this comes from production systems, but also increasingly from multiple connectors.

Speaker Change #124: question at the top of the q a i know we're seeing that there wasn't an impact on consumption in the quarter related to the

Sridhar Ramaswamy: Obviously, this comes from production systems, but also increasingly from multiple connectors. We have to, you know, other systems, whether they are, you know, Salesforce or segment or SAP or any of the other applications that that you use. And what we are doing with additional capabilities like machine learning, like AI, is to be able to act on that data to then drive operational systems. Disney, for example, uses Snowflake to do a lot of import optimization.

Speaker Change #125: muddled headlines around security but has snonowfke noticice any change when thinking about the timeline for salees cycles or the the man genz are as it relate to some of those headlines that we're out there

We have to, you know, other systems, whether they are, you know, Salesforce or segment or SAP or any of the other applications that that you use.

Mike: and then the follow up for for mike would be when we look at the reiterated margin guidance that we have today is there anything to think about what was there any delayed spend that's now expected in the back half you're justgiven snowflakess outperformance on a year to datebasis through the first half

And what we are doing with additional capabilities like machine learning, like AI, is to be able to act on that data to then drive operational systems.

Speaker Change #126: on the first one about the model security headline obviously we make sure that we bring up the topic when we whether we talk to an existing customer are to a new customer

Disney, for example, uses Snowflake to do a lot of import optimization. And we see a lot of people that bring supply chain data into Snowflake and then optimize within Snowflake.

Sridhar Ramaswamy: And we see a lot of people that bring supply chain data into Snowflake and then optimize within Snowflake. And obviously, there are also partners like Blue Yander, which is a supply chain company that platform on Snowflake and then provide additional capability to their customers so they can combine the supply chain data with other data that there is. Our bet is really that AI and machine learning are going to go where the data is data is going to have strong gravity.

And obviously, there are also partners like Blue Yander, which is a supply chain company that platform on Snowflake and then provide additional capability to their customers so they can combine the supply chain data with other data that there is.

Speaker Change #127: we point to the security capabilities that we have had honestly for close to a decade

Speaker Change #127: and try to ensure

Speaker Change #127: that all existing customers for example follow best practicesyou know there'are simple like mms like multiffacttor authentication like network policies

Our bet is really that AI and machine learning are going to go where the data is data is going to have strong gravity.

Speaker Change #127: when it comes to security and our sales team as well as i whenever we have conversations with potential new customers bring this up front and centered

And this is the reason why we are seeing such broad adoption.

Sridhar Ramaswamy: And this is the reason why we are seeing such broad adoption. And by providing easy to use products with cortex AI, for example, any analyst that knows SQL now is able to use language models. You don't need to go buy new systems set up new things and things like data transformation text transformations become as simple as writing like a two line sequel. It is really this ease of use that makes Snowflake such an amazing platform to be able to do all these value add applications in addition to the core analytics applications and the data sharing that people have done on Snowflake.

And by providing easy to use products with cortex AI, for example, any analyst that knows SQL now is able to use language models. You don't need to go buy new systems set up new things and things like data transformation text transformations become as simple as writing like a two line sequel.

Speaker Change #128: and part of the reason why we are slightly muted about thisis like these are the customers that got you know the people got reach these areour customers and we want to work closely with and to make sure that they get out of the difficult situation that they are inand both existing customers and new customers appreciate that sp of partnership and helping them get through a difficult situations we had them dr to our ses we had the drctor or security field os advice then on best practices

It is really this ease of use that makes Snowflake such an amazing platform to be able to do all these value add applications in addition to the core analytics applications and the data sharing that people have done on Snowflake.

Michael Scarpelli: Thank you very much for that, Sridhar, maybe just a quick one for you Mike, am I too optimistic to think that Interar could stabilize here, especially in light of all the new product that you guys are bringing online, thank you.

Michael Scarpelli: Thank you very much for that, Sridhar, maybe just a quick one for you Mike, am I too optimistic to think that Interar could stabilize here, especially in light of all the new product that you guys are bringing online, thank you. You know, as we've said before, I'm not really going to guide Interar and I said it will over time converge with our revenue and clearly we'd like to see Interar stabilized at this level, but we'll see at the end of the quarter. I'm not disappointed with Aaron or given a revenue growth. I'm happy with it, makes sense.

Speaker Change #129: so it's like roughly i would say that there's not really been any noticeable effect

Speaker Change #129: or delay in things like aability to sign up customers or get i mean sign of new customers or get existing customers to deploy new projects we just thought need to be more proactive about having the security conversation and we absolutely do that

You know, as we've said before, I'm not really going to guide Interar and I said it will over time converge with our revenue and clearly we'd like to see Interar stabilized at this level, but we'll see at the end of the quarter.

Speaker Change #130: in your question my gun whether there's any delayed spend or not having the impact of there's no delayed spend

I'm not disappointed with Aaron or given a revenue growth.

Speaker Change #130: but i will tell you is we are looking at accelerating and it doesn't change our guidance our guidance is the same way it was we are looking at potentially accelerating some of hiring in the second half of theyear in particular for the salesforce and some of the areas where we want and that's factored into our full year guidance which is

I'm happy with it, makes sense.

Michael Turrin: Thanks so much, guys, our next question is from Mike Cikos, with Needham Company.

Michael Cikos: Thanks so much, guys, our next question is from Mike Cikos, with Needham Company. Your line is now open, great. Thanks for taking the question to your guys. The first one for Sridhar and I just wanted to come back to Keith's question at the top of the Q&A. I know we're seeing that there wasn't an impact on consumption in the quarter related to the muddled headlines around security, but has Snowflake noticed any change when thinking about the timeline for sales cycles or the demand gen as a relate to some of those headlines that were out there.

Your line is now open, great.

Thanks for taking the question to your guys.

Speaker Change #130: guidance we gave last quarter

The first one for Sridhar and I just wanted to come back to Keith's question at the top of the Q&A.

Speaker Change #131: that's great thank you appreciate additional color

Unknown Attendee: I know we're seeing that there wasn't an impact on consumption in the quarter related to the muddled headlines around security, but has Snowflake noticed any change when thinking about the timeline for sales cycles or the demand gen as a relate to some of those headlines that were out there.

joel fishpen: our next question is from joel fishpen with touristists your line is now open

joel fishpen: and since to daddressress in a good execution friedark you spoke about this hospitality customer using niceberg can you give us some more color about that use case and maybe roi

And then the follow-up for Mike would be, when we look at the reiterated margin guidance that we have today, is there anything to think about?

Michael Cikos: And then the follow-up for Mike would be, when we look at the reiterated margin guidance that we have today, is there anything to think about? Was there any delayed spend that's now expected in the back half of the year just given Snowflake's out performance on a year-to-date basis through the first step? On the first one about the model of security headlines, obviously we make sure that we bring up the topic, whether we talk to an existing customer or to a new customer, we point to the security capabilities that we've had honestly for close to a decade and try to ensure that all existing customers, for example, follow best practices, you know, they're simple, like multifactor authentication, like network policies when it comes to security.

Speaker Change #133: and maybe if that may use case may be used as an example to attract other customers thanks

Was there any delayed spend that's now expected in the back half of the year just given Snowflake's out performance on a year-to-date basis through the first step?

Speaker Change #134: can you repeat the first sentence in your question what customer

Speaker Change #135: you'll talk about a hospitalality customer using iceberg first specific use because i was just hoping to get a little bit more detail and color around that and then maybe if that can be used as an example to tract other customers

On the first one about the model of security headlines, obviously we make sure that we bring up the topic, whether we talk to an existing customer or to a new customer, we point to the security capabilities that we've had honestly for close to a decade and try to ensure that all existing customers, for example, follow best practices, you know, they're simple, like multifactor authentication, like network policies when it comes to security.

Speaker Change #136: yes i think the general pattern that that we saw there and we see use not promo customers is the desdesignire to adopt an architecture that is based on open kind of formmanat

Speaker Change #136: and usually the adoption starts with a small use cape here's some incremental spend validating into our probility between engines and then you can go and before your larger scale and i think that's the pattern that we see

And our sales team, as well as I, whenever we have conversations with potential new customers, bring this up front and center.

Michael Cikos: And our sales team, as well as I, whenever we have conversations with potential new customers, bring this up front and center. And part of the reason why we are slightly muted about this is like these are our customers that got, you know, the people that got breached, these are our customers. And we want to work closely with them to make sure that they get out of the difficult situation that they are in.

Speaker Change #137: okay thank you

Speaker Change #138: wehave a question from patrick cdo with scotia bank your line is now open

And part of the reason why we are slightly muted about this is like these are our customers that got, you know, the people that got breached, these are our customers. And we want to work closely with them to make sure that they get out of the difficult situation that they are in. And both existing customers and new customers appreciate that spirit of partnership and helping them get through a difficult situation.

Patrick: i thank you so much for taking my question

We have them talk to our CEOs, we have them talk to our security field CEOs, advise them on best practices.

Patrick: sosmall as the reeder i mean i want to ask about kind of classic dataanalytics and wousing too much commmenting on the pace of migrations

Michael Cikos: And both existing customers and new customers appreciate that spirit of partnership and helping them get through a difficult situation. We have them talk to our CEOs, we have them talk to our security field CEOs, advise them on best practices. So like roughly, I would say that there's not really been any noticeable effect or delay in things like our ability to sign up customers or get, I mean, sign up new customers or get existing customers to deploy new projects.

Speaker Change #140: new analytical workloads coming alline querity prepricing competition in analytics now versus six months ago an into coll out there

So like roughly, I would say that there's not really been any noticeable effect or delay in things like our ability to sign up customers or get, I mean, sign up new customers or get existing customers to deploy new projects.

Speaker Change #141: yeah in the core analytics sur space

Speaker Change #142: we are the best in the world that that is especially when people consider migrating from

Speaker Change #142: complex on prem systems

Speaker Change #144: we have a professional services team that is exceptionally skilled that is and a very large ecosystem of partners that have been battle tested with massive migration

We just thought need to be more proactive about having the security conversation and we absolutely do that.

Michael Cikos: We just thought need to be more proactive about having the security conversation and we absolutely do that. In your question, Mike, on whether there's any delayed spend or not having an impact that there's no delayed spend. But I will tell you is we are looking at accelerating and it doesn't change our guidance. Our guidance is the same what it was. We are looking at potentially accelerating some of our hiring in the second half of the year in particular for the sales force in some of the areas where we want. And that's factored into our full year guidance, which is guidance we gave last quarter. That's great. Thank you.

Sridhar Ramaswamy: In your question, Mike, on whether there's any delayed spend or not having an impact that there's no delayed spend.

Michael Cikos: I appreciate the additional color.

Speaker Change #144: and we have done migrations from on-preme workloads

But I will tell you is we are looking at accelerating and it doesn't change our guidance.

Speaker Change #144: that end up

Speaker Change #144: saving something like sixty percent of the you know off of the cost the customer has to you know has to bear and there's no flike implementations end up being very very efficient and low maintenance

Our guidance is the same what it was.

We are looking at potentially accelerating some of our hiring in the second half of the year in particular for the sales force in some of the areas where we want.

And that's factored into our full year guidance, which is guidance we gave last quarter.

Speaker Change #144: this is an area that continues to be important for us and we see migrations from a wide variety of legacy systems

That's great.

Thank you.

I appreciate the additional color.

Joel Fishbein: Our next question is from Joel Fishbein with Truist.

Joel Fishbein: Our next question is from Joel Fishbein with Truist. Your line is now open. Thanks, and congratulations on the good execution. Sridhar, you spoke about the hospitality customer using iceberg. Can you give us some more color about that use case and maybe ROI and maybe if that may use case, maybe use as an example to attract other customers. Thanks.

Your line is now open.

Speaker Change #144: and there is also increasing interest in having ai aided tools we have a two call snow convert that is used both by our professional services tes but sometimes also by our customers

Thanks, and congratulations on the good execution.

Unknown Attendee: Sridhar, you spoke about the hospitality customer using iceberg.

Sridhar Ramaswamy: Can you repeat the first sentence in your question, what customer? You talked about hospitality customer using iceberg for a specific use case. I was just hoping to get a little bit more detail in color around that and then maybe if that can be used as an example to attract other customers. Yeah, I think the general pattern that we saw there and we see another use case, not from other customers, is the desire to adopt an architecture that is based on open platform.

Can you give us some more color about that use case and maybe ROI and maybe if that may use case, maybe use as an example to attract other customers.

Speaker Change #144: and especially in the worldle of ai we are investing more intotools likelight these so that migrations can be faster i would say these kinds of data migrations from legacy systems remain an important part of both new customer acquisition but also driving substantial consumption increases in existing customer

Thanks.

Can you repeat the first sentence in your question, what customer?

You talked about hospitality customer using iceberg for a specific use case.

I was just hoping to get a little bit more detail in color around that and then maybe if that can be used as an example to attract other customers.

Christi: christi you have a of backound in this icbecause may maybe there may be additional coloriesis that some of the asssystems run the most critical posies in organizations typically re closing the bobook of

Yeah, I think the general pattern that we saw there and we see another use case, not from other customers, is the desire to adopt an architecture that is based on open platform.

Christi: so oftentimes a big portion of the migration cycle is validation and ensuring that the results are correct and a should said we are conrenstantly looking at how to create technology and way to accelering the process but there are some parts of it where the valuation ting it' very important torifrom

And usually the adoption starts with a small use case, here's some incremental spend validating for our priority between engines and then you can go and deploy a larger scale and I think that's the pattern that we see.

Sridhar Ramaswamy: And usually the adoption starts with a small use case, here's some incremental spend validating for our priority between engines and then you can go and deploy a larger scale and I think that's the pattern that we see.

Christi: and you're in your question patrick on you you specifically we're talking about the cost of queries of how that has gone we don't price on a per query because every customerers' queries are different

Okay, thank you.

Unknown Attendee: Okay, thank you.

We have a question from Patrick Caldo with Scotia Bank.

Patrick Caldo: We have a question from Patrick Caldo with Scotia Bank. Your line is now open. Right, thank you so much to take my question. So, I was the Sridhar, I mean, I want to ask about kind of classic data analytics and housing. Do you mind just commenting on the pace of migrations, new analytical workloads coming online, query, pricing, competition in analytics, now versus six months ago. Yeah, in the code analytics space, you know, we are the best in the world that there is, especially when people consider migrating from complex on-prem systems, we have a professional services team that is exceptionally skilled at it.

Speaker Change #146: we do a per credit pricing you get so much compute that has remained stable quarter over quarter the sequentially it actually grew you over year one point three percent but when i can say is the price performance has gotten better quarter over quarter for customers

Your line is now open.

Right, thank you so much to take my question.

Patrick Caldo: So, I was the Sridhar, I mean, I want to ask about kind of classic data analytics and housing.

Do you mind just commenting on the pace of migrations, new analytical workloads coming online, query, pricing, competition in analytics, now versus six months ago.

Speaker Change #146: and that continues to be

Speaker Change #147: yeah and then then we have in public about a snowthke performance index but we had take not not synthetic benchmarins but actflow customer worklo

Sridhar Ramaswamy: Yeah, in the code analytics space, you know, we are the best in the world that there is, especially when people consider migrating from complex on-prem systems, we have a professional services team that is exceptionally skilled at it. And a very large ecosystem of partners that have been battle tested with massive migrations. And, you know, we've done migrations from on-prem workloads that end up saving something like 60% of the cost the customer has to bear.

Speaker Change #147: and we measure the performance improving over time and that's how we do us trans to our customers that the economics are getting better on a regular basis

Speaker Change #148: pursupervalple i thank you for three of you i'm answering a question

Speaker Change #149: i guess ionewant also could fall upi'll leaveit open to leve once was answer it's about the prepared remarks saying you're not facding benefit from new products and then only minimal benefit at fiscal twenty-five and quortex and snowpark i think

And there's no fake implementations end up being very, very efficient and low maintenance.

Patrick Caldo: And a very large ecosystem of partners that have been battle tested with massive migrations. And, you know, we've done migrations from on-prem workloads that end up saving something like 60% of the cost the customer has to bear. And there's no fake implementations end up being very, very efficient and low maintenance. This is an area that continues to be important for us. And we see migrations from a wide variety of legacy systems.

Speaker Change #150: when could those hockey stick and more materiity drive product revenue because you know the previous answer was of the callre is rock solid and very healthy so one about the new stuff and when that's going to really neglect thank you

Speaker Change #150: the

Speaker Change #151: the only itwer product that in the twenty-five guide for the full year is snow park as we said at the beginning of the year

This is an area that continues to be important for us.

And we see migrations from a wide variety of legacy systems.

Patrick Caldo: And there is also increasing interest in having AI-aided tools. We have a tool called snow convert that is used both by our professional services teams, but sometimes also by our customers. And especially in the world of AI, we are investing more into tools like these so that migrations can be faster. I would say these kinds of data migrations from legacy systems remain an important part of both new customer acquisition, but also driving substantial consumption increases in existing customers.

Speaker Change #152: can we say that's going to be about three percent of a revenue around or b dollars sen tracking to that nicely and the newer products are not facured into our ciance until we see more history i do expect to'll have an impact this year i don't know yet but two thousand and twenty six will have an impact

And there is also increasing interest in having AI-aided tools.

Speaker Change #153: firstto put it thank you so much

Michael Turn: our next question is from michael turn with wells fargo your line is now open

We have a tool called snow convert that is used both by our professional services teams, but sometimes also by our customers.

Michael Turn: hey great thanks i appreciate you ta the question sho i want to go back to that last and justdisask your perspective you mentioned innovation as a key focus area so as we're thinkingabout those newer product efforts and you're having those initial customer conversations

And especially in the world of AI, we are investing more into tools like these so that migrations can be faster.

Michael Scarpelli: Christian, you have a lot of background in this. Maybe they are the additional calories that some of the systems run the most critical processes in organizations, particularly close to the books. So oftentimes a big portion of the migration cycle is validation and ensuring that the results are correct. And as we just said, we are currently looking at how to create technology and ways to accelerate the process, but there are some parts of it where the validation and testing is very important.

Speaker Change #155: particularly around sumit what are the couple of product areas beyond snow park that you see the most early demand signals or just customer conversation around

I would say these kinds of data migrations from legacy systems remain an important part of both new customer acquisition, but also driving substantial consumption increases in existing customers.

Christian, you have a lot of background in this.

Speaker Change #156: so you know not only have we had customer conversations but we've also

Speaker Change #156: developped specific cadences that teams are implementing

Maybe they are the additional calories that some of the systems run the most critical processes in organizations, particularly close to the books.

Michael Scarpelli: And you're in your question, Patrick, on you, you specifically were talking about the cost of queries and how that has gone. We don't price on a per query because every customer's queries are different. We do a per credit pricing. You get so much compute that has remained stable quarter or quarter the sequentially it actually grew. You're over year 1.3%. But what I can say is the price performance has gotten better quarter over quarter for customers, and that continues to be.

Speaker Change #158: in taking new things to market so we play a special emphasis on what we call data engjy iceberg is definitely a part of it personal fflla can be used for different kinds of computation that is distinct from the analytic workloads that we've been running

So oftentimes a big portion of the migration cycle is validation and ensuring that the results are correct.

And as we just said, we are currently looking at how to create technology and ways to accelerate the process, but there are some parts of it where the validation and testing is very important.

Sridhar Ramaswamy: And you're in your question, Patrick, on you, you specifically were talking about the cost of queries and how that has gone.

Speaker Change #158: you know christian talked about how a hospitality customer is running snowflake on iceberg tables that were not created by us we very much focused on that we focus on other things like streaming inestions so in engineuring is one bro string definitely a big focus on on a i

We don't price on a per query because every customer's queries are different.

We do a per credit pricing.

You get so much compute that has remained stable quarter or quarter the sequentially it actually grew.

Michael Scarpelli: Yeah, and then we have been public about a snowflake performance index, but we take not synthetic benchmarks, but actual customer workloads. And we measure the performance improvement over time. And that's how we give us your answers to our customers that the economics are getting better on our regular basis. Super helpful, I think you all three of you answering that question. I guess I want to follow up, I'll leave it open to whoever wants to answer.

Speaker Change #158: we have basically a war room talked about and team from engineeruringing to sales that is focused on how we take a i products to market and we expect or notebooks for examplees to h g in a in a few weeks and we will be making an effort around making sure that those get into the hands of data scientists

You're over year 1.3%.

But what I can say is the price performance has gotten better quarter over quarter for customers, and that continues to be.

Yeah, and then we have been public about a snowflake performance index, but we take not synthetic benchmarks, but actual customer workloads. And we measure the performance improvement over time.

And that's how we give us your answers to our customers that the economics are getting better on our regular basis.

Super helpful, I think you all three of you answering that question.

Michael Scarpelli: It's about the pattern marks saying you're not facturing benefit from new products. And then only minimal benefit at this called 25 for cortex and snow park. I think when could those hockey stick and more maternity drive product revenue because the previous answer was that the call is rock solid and very healthy. So what about the new stuff and when that's going to reflect. Thank you. The only newer product that is in the 25 guide for the full year is snow park as we said at the beginning of the year.

Speaker Change #158: so that they can run the most complex machine learning algorithms saturdaythey want to run on top on top of snowplay so we have a pretty methodical approach to how we are taking new products to market but across the gamate whether it is ai or machine learning or more sophisticated data enyuring operations including with on structure data or things like notebooks appealing to a very different person

I guess I want to follow up, I'll leave it open to whoever wants to answer.

Unknown Attendee: It's about the pattern marks saying you're not facturing benefit from new products.

And then only minimal benefit at this called 25 for cortex and snow park.

Speaker Change #159: that is is that is broad interest it's a matter of organizing ourselves to put the to put the right product offering in front of the right customer at the right time

I think when could those hockey stick and more maternity drive product revenue because the previous answer was that the call is rock solid and very healthy.

Michael Scarpelli: And we said that's going to be about 3% of our revenue around the number of times tracking to that nicely. And the newer products are not factured until we see more history. I do expect to have an impact this year. I don't know yet, but 2026 will have an impact. Thank you so much.

Speaker Change #160: but the thelpful i also just in summarizing a lot of the little comments on rest of your guidance just go back to that point we initially started the year with i think it was around six hundred and twenty five basis points of potential impact contemplated from the mix of things

So what about the new stuff and when that's going to reflect.

Thank you.

Speaker Change #161: you've talked about throughout the calls is that still the right zip good for us to think about and is it fair toassume that you're leaving room for storage to come down from the eleven percent level in the second half but you're not seeing that at this point ' ep the right take away for us

Michael Turrin: Our next question is from Michael turn with Wells Fargo. Your line is now open. Hey, great. Thanks. I appreciate you taking the question. Shredar, I want to go back to that last point and just ask your perspective. You mentioned innovation is a key focus area.

Speaker Change #162: well the search we always plan with icesbert but that was going to be the second half of the year and we still think there will be an impact of that and that's facacktored in

The only newer product that is in the 25 guide for the full year is snow park as we said at the beginning of the year. And we said that's going to be about 3% of our revenue around the number of times tracking to that nicely.

And the newer products are not factured until we see more history.

Sridhar Ramaswamy: So as we're thinking about those newer product efforts and you're having those initial customer conversations, particularly around summit, what are the couple of product areas beyond snow park that you see the most early demand signals or just customer conversation around. So, you know, not only have we had customer conversations, but we've also, you know, developed specific cadences that teams are implementing in taking new things to market. So we place a special emphasis on what we call data engineering iceberg is definitely a part of it where snowflake can be used for different kinds of computation that is distinct from the analytic workloads that we've been running.

Speaker Change #163: but our every year we look at potential headwinds associated with reformance improvements and other things we don't update that on a quarterly basis and we're not going to try to reconcile back to that we never have and never well

I do expect to have an impact this year.

Speaker Change #164: let's star thank you

tyler radkey: our next question is from tyler radkey with city your line is now open

I don't know yet, but 2026 will have an impact.

tyler radkey: yes thanks for taking the question

Speaker Change #166: encouraging to hear that you didn't see negative impacts from the

tyler radkey: acyber headlines intra orarter i was wondering if you could just

tyler radkey: sort of talk about some of the offsets though to the strong consumption and tech and financial services customers that you saw

Thank you so much.

Sridhar Ramaswamy: You know, Christian talked about how a hospitality customer is running snowflake on iceberg tables that were not created by us. We very much focus on that. We focus on other things like streaming ingestion. So did engineering is one work stream. Definitely a big focus on on AI. We have a basically a water room, a top to bottom team from engineering to sales that is focused on how we take AI products to market.

Speaker Change #167: the magnitude of the beat was smaller than saw in q one and i know there were some

Michael Turrin: Our next question is from Michael turn with Wells Fargo.

Your line is now open.

Speaker Change #168: maybe positive trend in q one that didn't continue into q two but if you could just help us reconcile the magnitude of the smaller b from q one to q two that would be great thank you

Hey, great.

Thanks.

I appreciate you taking the question.

Speaker Change #169: you know on'm tiber

Speaker Change #170: wealways said that we try to manage this business that seta

Shredar, I want to go back to that last point and just ask your perspective.

Sridhar Ramaswamy: And we expect our notebooks, for example, to hit GA in a few weeks. And we will be making an effort around making sure that those get into the hands of data scientists so that they can run the most complex machine learning algorithms that they want to run on top on top of snowflake. And so we have a pretty methodical approach to how we are taking new products to market, but across the gamut whether it is AI or machine learning or more sophisticated data engineering operations, including with unstructured data, or things like notebooks appealing to a very different persona that is that is broad interest. It's a matter of organizing ourselves to put the right product offering in front of the right customer at the right.

Speaker Change #171: three or five percent beat is a big a good beat

You mentioned innovation is a key focus area.

Speaker Change #172: i think it more more in than fact is the beat that you're the rars that we're putting through the full year i think speaks more to what we see in the second half of the year happening how

So as we're thinking about those newer product efforts and you're having those initial customer conversations, particularly around summit, what are the couple of product areas beyond snow park that you see the most early demand signals or just customer conversation around.

Speaker Change #173: yeah not helpful i don'tful commentary

Speaker Change #173: a uncash flow it

Speaker Change #174: i think collections were a bit laterter i think there could be a function of

So, you know, not only have we had customer conversations, but we've also, you know, developed specific cadences that teams are implementing in taking new things to market.

Speaker Change #174: the bit of market changes talked about

Speaker Change #174: um

Speaker Change #174: the full year cash flow outlook was was maintained

Speaker Change #175: can just talk about the moving pieces in cash flow is there any

Michael Scarpelli: That's helpful. I also just, in summarizing a lot of the little comments on rest of your guidance, just go back to that point. We initially started the year with, I think it was around 625 basis points of potential impact contemplated from the mix of things you've talked about throughout the calls. Is that still the right zip code for us to think about and is it fair to assume that you're leaving room for storage to come down from that 11% level in the second half, but you're not seeing that at this point.

Speaker Change #175: impact from lower capex just given some of the gpu availab you talked and are you seeing kind of the billings terms compress more more than accepted

Speaker Change #177: now going terms are remain consistent as they say eighty percent of our customers

Speaker Change #178: our annually and mans and actually q two collections were actually pretty much as we plan payables were a little bit higher and the timing comppayble but our q four our q four remember we have a lot of seasonality and cash flow

Michael Scarpelli: Is that the right takeaway for us? Well, the storage we always planned with ice burden of that was going to be the second half of the year. And we still think there will be an impact that and that's factored in. But our every year, we look at potential headwinds associated with performance improvements and other things. We don't update that on a quarterly basis and we're not going to try to reconcile back to that we never have and never will.

Speaker Change #178: q one in q four are going to always going to be our strongest free cash flow quarter

Speaker Change #178: and so i'm comfortable keeping the twenty-six percent for the year right now

Speaker Change #179: thank you

So we place a special emphasis on what we call data engineering iceberg is definitely a part of it where snowflake can be used for different kinds of computation that is distinct from the analytic workloads that we've been running.

Michael Scarpelli: Let's start. Thank you.

You know, Christian talked about how a hospitality customer is running snowflake on iceberg tables that were not created by us.

Speaker Change #179: wehave a question from matt headburgh with r b c your line is now open

We very much focus on that.

Tyler Radke: Our next question is from Tyler Radke with city. Your line is now open. Yes, thanks for taking the question. Encouraging to hear that you didn't see any negative impacts from the cyber headlines that hit into quarter. I was wondering if you could just sort of talk about some of the offsets to the strong consumption and tech and financial services customers that you saw. The magnitude of the beat was smaller than you saw in Q1 and I know there were some maybe positive trends in Q1 that didn't continue in the Q2, but if you could just help us reconcile the magnitude of the smaller beat from Q1 to Q2, that would be great.

Matt Hedburgh: greatay thanks guys might for you there was early question on on calross margins it sounds like you still have some gapps to procure in the second half 'mcurious now that you're kind of you know thinking through the impact of ai on snowflake confidence in sort of the medium term that growross margins havenin fact bottom and that they we could see start seeing upper trajectory here at somepoint

We focus on other things like streaming ingestion.

So did engineering is one work stream.

Definitely a big focus on on AI.

We have a basically a water room, a top to bottom team from engineering to sales that is focused on how we take AI products to market.

Speaker Change #181: so first all one talk about procuring

And we expect our notebooks, for example, to hit GA in a few weeks. And we will be making an effort around making sure that those get into the hands of data scientists so that they can run the most complex machine learning algorithms that they want to run on top on top of snowflake.

Speaker Change #182: s we don't actually iqs we trent them

Speaker Change #183: so it want to clarify that and you know we have a lot of demand from customers outside of our major regions in asia and even in certain areas in europe that want us to have gpuse so they can be using some of our newer products and

And so we have a pretty methodical approach to how we are taking new products to market, but across the gamut whether it is AI or machine learning or more sophisticated data engineering operations, including with unstructured data, or things like notebooks appealing to a very different persona that is that is broad interest.

It's a matter of organizing ourselves to put the right product offering in front of the right customer at the right.

Tyler Radke: Thank you. You know, Tyler, we've always said that we try to manage this business that set a three to five percent beat is a good beat and we were 2.4%. Just as I don't get excited if it comes in at five, I'm not excited if it's at two. I just really trying to manage this business for the long term.

Speaker Change #183: iunfortunately that some of the cloud vendors are just not available yet in when i say they want be h one hundreds the bigger ones you can get the smaller gps

Speaker Change #184: and is this is this the bottom of margins you know a lot and i'm never going to say 's the bottom because on what's in the future with new products that could have an impact on the margin i'm not talking next year but i feel good about the seventy- five percent for the year as we've guidedit

That's helpful.

I also just, in summarizing a lot of the little comments on rest of your guidance, just go back to that point.

We initially started the year with, I think it was around 625 basis points of potential impact contemplated from the mix of things you've talked about throughout the calls.

Michael Scarpelli: I think what's more important is the beat that you're the race that we're putting through the full year, I think speaks more to what we see in the second half of the year happening now. Yeah, no, helpful commentary. On cash flow, it's, you know, I think collections were a bit lighter. I think that could be a function of, you know, the voter market changes you talked about. The full year cash flow outlook was maintained.

Speaker Change #185: got it thanks mike and then with s fed being a big quarter for you guys next arter sort i guess some of theuncertainty the u election have you discounted some of some of u us that expectations for three q kind kindof iouson sort ofhow you thinkabout how we think aboutthat verticalgoing next quter

Is that still the right zip code for us to think about and is it fair to assume that you're leaving room for storage to come down from that 11% level in the second half, but you're not seeing that at this point.

Is that the right takeaway for us?

Speaker Change #186: well i will say our federal business is our smallest vertical and as they said before it's only upside for us

Speaker Change #187: so there's not a lot of expectations in our numbers at all for federal and i do expect will close some deals this quarter and by the way public sector is pretty good worldwide and what we do but your question was on u s federal itself

Michael Scarpelli: Can you just talk about the moving pieces in cash flow? Is there any impact from, you know, lower cap X just given some of the GPU availability you talked and are you seeing kind of the billings terms compress more than expected. No, the billings terms are remain consistent as they say 80% of our customers are annually advanced and actually Q2 collections were actually pretty much as we plan. Pables were a little bit higher and the timing of payables, but our Q4 are Q4.

Speaker Change #187: i do expect some deal but in terms of impact on a revenue it takes time that won't be until the future once we close those deals we do have fed ramp high now we're working on some other things as well too and so i do expect to close some deals this quarter in the u s federal space

Speaker Change #188: god they all the things like

Michael Scarpelli: Remember, we have a lot of seasonality in cash flow. Q1 and Q4 are going to always going to be our strongest free cash flow quarter, and so I'm comfortable keeping the 26% for the year right now. Okay, thank you.

Alex Zukin: our next question is from alex zukin with wolfresearch your line is now open

Alex Zukin: heyguys thanks for taking a question might maybe to the andgard to the question youve got a little bit earlier obviously really really great commentary on bookings growth r po strength

Speaker Change #190: the raay

Matt Hedberg: We have a question from Matt Hedberg with RBC.

Speaker Change #191: being more than more than double to be which is i think the strongest grades in a while for product revenue but the boy like what it's a little bit surising to hear kind of technology being a strong vertical for you guys can you maybe talk about what you're seeing from the financial services

Michael Scarpelli: Your line is now open. Great, thanks guys.

Michael Scarpelli: Mike for you, there was an early question on Charles Margin. It sounds like you still have some GPUs to procure in the second half. But I'm curious.

Well, the storage we always planned with ice burden of that was going to be the second half of the year. And we still think there will be an impact that and that's factored in.

But our every year, we look at potential headwinds associated with performance improvements and other things.

We don't update that on a quarterly basis and we're not going to try to reconcile back to that we never have and never will.

Michael Scarpelli: Now that you're kind of thinking through the impact of AI on Snowflake, confidence in sort of the medium term that gross margins have in fact bottomed in that we could see start seeing upward trajectory here at some point. So first of all, we don't actually buy GPUs, we print them. So I just want to clarify that. And you know, we have a lot of demand from customers outside of our major regions in Asia and even certain areas in Europe that want us to have GPUs so they can be using some of our newer products and unfortunately some of the cloud vendors are just not available.

Speaker Change #192: and technology verticals that is maybe different is it just a macro in those areas as that use cases and maybe where it was a little bit on the other side a little bit weaker and kind of what you expect there

Let's start.

Speaker Change #193: i would have the financial services we should have some

Speaker Change #194: banks that are in the mid early innings of migrations like one of them has grown i think four hundred percent year-over- year and they re going to continue to grow and that really is deriving a lot of that

Thank you.

Our next question is from Tyler Radke with city.

Speaker Change #194: and on the technology side we just have some and a number of other companies that are growing nicely in the the text pace for us as well

Your line is now open.

Michael Scarpelli: Yet in what I say, they want the H 100s, the bigger ones, you can get the smaller GPUs. And you know, is this is the bottom of margins, you know, a lot. And I'm never going to say it's the bottom because I don't know what's in the future with new products that could have an impact on the margin. I'm not talking next year, but I feel good about the 75% for the year as we've guided. Got it. Thanks, Mike.

Speaker Change #194: in a different consideration which we actively work on is the

Speaker Change #194: like the size and quality of the teams that we put to play in the different areas we have among the best teams and financial services that's where we were strong to begin with

Yes, thanks for taking the question.

Encouraging to hear that you didn't see any negative impacts from the cyber headlines that hit into quarter.

Speaker Change #194: and we are early pioneers of things like data sharing where that the positive momentum fed on itself there are other areas like the federal business for example where we'are still building out a crackte

Michael Scarpelli: And then, you know, with US Fed being a big quarter for you guys next quarter, I guess some of the uncertainty on the US election, have you discounted some of some US Fed expectations for 3Q is kind of curious on sort of how you should think about how we should think about that vertical going to the next quarter. Well, I will say our federal business is our smallest vertical. And as I said before, it's only upside for us.

Speaker Change #194: and that's driving growth as much as one likes to think that it's the macroeconomic differences between sectors what we can do often ends up influencing out ofrobust the growth is

Speaker Change #195: got it and then maybe just just one more

Speaker Change #195: if you think about the competitive landscape that's kind of been a

Speaker Change #196: like got a little bit of charge topic this year particularly for investors what are maybe some of the major misconceptions or misunderstandings that you you would

Michael Scarpelli: So there's not a lot of expectations in our numbers at all for federal. And I do expect we'll close some deals this quarter. And by the way, public sector is pretty good worldwide in what we do, but your question was on US federal itself. I do expect some deals, but in terms of impact on revenue, it takes time. That won't be until the future once we close those deals. We do have Fed ramp high now. We're working on some other things as well, too. And so I do expect to close some deals this quarter in the US federal space.

Speaker Change #197: sayay out there and at how or any changes you observed in the competitive landscape over the course of the quarter or even the first half of the year or or from a pipeline perspective

Chrisan: i'll start chrisan and i should should add down i think you know i've spent a lot of time on the road just this quarter i've met with over one hundred of our biggest customers one on one

Sridhar Ramaswamy: God, they call the next mic. Our next question is from Alex Zoukin with Wolf Research. Your line is now open. Hey, guys, thanks for taking a question. My maybe to the answer to the question, you got a little bit earlier. Obviously, really, really great commentary on bookings, growth, RPO strength, the raise, you know, being more than more than double the beat, which is, I think the strongest raise in a while for product revenue.

Speaker Change #199: and the thing that fairly stands up from like an analytic capability core data capability data sharuring

Speaker Change #199: is that we are barn on we are the best platform that that is and our customers absolutely recognize that

Speaker Change #200: and we see more and more of their data workloads move over to snowplay that doesn't make the process easy a you a migration of a large complex system that's managing the books of a bank so they can close it every month is nothing to sme that it's a mululttiquar project that has to be done

I was wondering if you could just sort of talk about some of the offsets to the strong consumption and tech and financial services customers that you saw.

Sridhar Ramaswamy: But to the point of what it's a little bit surprising to hear kind of technology being a strong vertical for you guys. Can you maybe talk about what you're seeing from the financial services and technology verticals that is maybe different? Is it just the macro in those areas? Is it use cases? And maybe where it was a little bit on the other side, a little bit weaker and kind of what you expect.

Speaker Change #201: exceptionally carefully so one thing you know that i wouldn't call it a misconception but the one thing that i would reinforce is the strength that we have in our in our co capabilities

The magnitude of the beat was smaller than you saw in Q1 and I know there were some maybe positive trends in Q1 that didn't continue in the Q2, but if you could just help us reconcile the magnitude of the smaller beat from Q1 to Q2, that would be great.

Sridhar Ramaswamy: I would say on the financial services we just have some banks that are in the midst early innings of migrations like one of them has grown I think 400% year over year and they are going to continue to grow and that really is driving a lot of that. And on the technology side we just have some a number of other companies that are growing nicely in the tech space for us as well.

Thank you.

You know, Tyler, we've always said that we try to manage this business that set a three to five percent beat is a good beat and we were 2.4%.

Just as I don't get excited if it comes in at five, I'm not excited if it's at two.

Speaker Change #202: then it comes to newyour things like ai we've been open about the fact

Speaker Change #202: that you know we were a little behind early last year in terms of how much we were invested in it and the kind of products that we could are rapidly moving field and the kind of products that we could deploy but even before my coming on the management team here recognize the opportunity invested heavily in a

I just really trying to manage this business for the long term.

I think what's more important is the beat that you're the race that we're putting through the full year, I think speaks more to what we see in the second half of the year happening now.

Speaker Change #203: and things like the evv acquisition through which i came when an accellerant to things that we re already in place at at snowplay and i would say the change over the previous quarters is that we can tell our customers we can tell you with confidence

Yeah, no, helpful commentary.

Sridhar Ramaswamy: And a different consideration which we actively work on is the like the size and quality of the teams that we put to play in the different areas we have among the best teams in financial services that's where we were strong to begin with and we're early pioneers of things like data sharing where that you know that positive momentum fed on itself. There are other areas like the federal business for example where we are still building out a crack team and that's driving growth in as much as one likes to think that you know it's the macro economic differences between sectors what we can do often ends up influencing how robust the growth is.

Speaker Change #203: that our ai products or role class

Speaker Change #203: and honestly that we are much more reliable than building products off a api that you can get elsewhere because we they a lot of medtical as attention to how we craft products

On cash flow, it's, you know, I think collections were a bit lighter.

Speaker Change #203: and it's that combination of reliability and ease of you that we are turning into a majorstrength for us in ai as long

Speaker Change #203: one quick last comment and on toou what we had said

Speaker Change #203: our products philosophyon

Speaker Change #204: e of you smart depuls how do you make things work easy out of the box

I think that could be a function of, you know, the voter market changes you talked about.

Sridhar Ramaswamy: Got it and then maybe just just one more if you think about the competitive landscape that's kind of been a you know a little bit of a charge topic this year particularly for investors what are maybe some of the major misconceptions or misunderstandings that you you would say are out there and and how or any changes you observed in the competitive landscape over the course of the quarter or even the first half of the year or from a pipeline perspective. I'll start Christian and Mike should should add on I think you know I've spent a lot of time on the road just this quarter I've met with over 100 of our biggest customers one on one and the thing that clearly stands out from like an analytic capability core data capability data sharing is that we are bar none we are the best platform that there is.

Speaker Change #205: we hear competitively it's a strong advage for us across areas for an alytics for data engineering and for ai and wewillll continue to inest that philosoby

Speaker Change #205: i promise last comment on this to give to talk about something very concrete that comes with the snowfflag platform especially after you know the incidident of the summer like crowd strike

Speaker Change #206: one of the hot topics has been how we set up replications it's not like this is now a battle tested operation and most customers are shocked to find out that he can run a full replica of an important deployment that's something like fifteen percent the cost of the original deployment because the reapplichas shust

The full year cash flow outlook was maintained.

Speaker Change #207: he's basically keeping up it's not running any of the workloads that are going on in the main onesone it features liestyle that continue to drive our strength in the core

Can you just talk about the moving pieces in cash flow?

Sridhar Ramaswamy: And our customers absolutely recognize that and we see more and more of their data workloads move over to snowflake that doesn't make the process easy a you know a migration of a large complex system that's managing the books of a bank so that they can close it every month is nothing to see that it's a multi quarter project that has to be done. Exceptionally carefully so one thing you know that I wouldn't call it a misconception but the one thing that I would reinforce is the strength that we have in our in our code capabilities.

Speaker Change #208: super helpful thank you guys

Speaker Change #209: we are out of time for questions so thank you all for your participation you may now let disconnect your line

Is there any impact from, you know, lower cap X just given some of the GPU availability you talked and are you seeing kind of the billings terms compress more than expected.

No, the billings terms are remain consistent as they say 80% of our customers are annually advanced and actually Q2 collections were actually pretty much as we plan.

Sridhar Ramaswamy: When it comes to newer things like AI we've been open about the fact that you know we were a little behind early last year in terms of how much we were invested in it and the kind of products that we could. Deploy but even before my coming on the management team here recognize the opportunity invested heavily in it and things like the new acquisition through which I came but an excellent to things that were already in place at at snowflake and I would say the change or the previous quarter is that we can tell our customers we can tell you with confidence that our AI products are world class and we can.

Pables were a little bit higher and the timing of payables, but our Q4 are Q4.

Remember, we have a lot of seasonality in cash flow.

Sridhar Ramaswamy: And honestly that we are much more reliable than building products of API such you can get elsewhere because we pay a lot of meticulous attention to how we craft products and it's that combination of reliability and ease of use that we are turning into a major strength for us in AI as well. And one quick last comment on top of what Sridhar said, our product philosophy on ease of use, smartly pause, how do you make things work easily out of the box? We hear, comparatively, it's a strong advantage for us across areas for analytics, for data engineering and for AI, and we'll continue to invest with that philosophy in mind.

Q1 and Q4 are going to always going to be our strongest free cash flow quarter, and so I'm comfortable keeping the 26% for the year right now.

Okay, thank you.

We have a question from Matt Hedberg with RBC.

Sridhar Ramaswamy: I promise last comment on this, to talk about something very concrete that comes with the Snowflake. [inaudible]

Your line is now open.

Great, thanks guys.

Mike for you, there was an early question on Charles Margin.

It sounds like you still have some GPUs to procure in the second half.

But I'm curious.

Now that you're kind of thinking through the impact of AI on Snowflake, confidence in sort of the medium term that gross margins have in fact bottomed in that we could see start seeing upward trajectory here at some point.

So first of all, we don't actually buy GPUs, we print them.

So I just want to clarify that.

And you know, we have a lot of demand from customers outside of our major regions in Asia and even certain areas in Europe that want us to have GPUs so they can be using some of our newer products and unfortunately some of the cloud vendors are just not available.

Yet in what I say, they want the H 100s, the bigger ones, you can get the smaller GPUs.

And you know, is this is the bottom of margins, you know, a lot.

And I'm never going to say it's the bottom because I don't know what's in the future with new products that could have an impact on the margin.

I'm not talking next year, but I feel good about the 75% for the year as we've guided.

Got it.

Thanks, Mike.

Michael Scarpelli: And then, you know, with US Fed being a big quarter for you guys next quarter, I guess some of the uncertainty on the US election, have you discounted some of some US Fed expectations for 3Q is kind of curious on sort of how you should think about how we should think about that vertical going to the next quarter.

Well, I will say our federal business is our smallest vertical.

And as I said before, it's only upside for us.

So there's not a lot of expectations in our numbers at all for federal.

And I do expect we'll close some deals this quarter.

And by the way, public sector is pretty good worldwide in what we do, but your question was on US federal itself.

I do expect some deals, but in terms of impact on revenue, it takes time.

That won't be until the future once we close those deals.

We do have Fed ramp high now.

We're working on some other things as well, too.

And so I do expect to close some deals this quarter in the US federal space.

God, they call the next mic.

Alex Zoukin: Our next question is from Alex Zoukin with Wolf Research.

Your line is now open.

Hey, guys, thanks for taking a question.

My maybe to the answer to the question, you got a little bit earlier.

Obviously, really, really great commentary on bookings, growth, RPO strength, the raise, you know, being more than more than double the beat, which is, I think the strongest raise in a while for product revenue.

But to the point of what it's a little bit surprising to hear kind of technology being a strong vertical for you guys.

Can you maybe talk about what you're seeing from the financial services and technology verticals that is maybe different?

Is it just the macro in those areas?

Is it use cases?

And maybe where it was a little bit on the other side, a little bit weaker and kind of what you expect.

I would say on the financial services we just have some banks that are in the midst early innings of migrations like one of them has grown I think 400% year over year and they are going to continue to grow and that really is driving a lot of that.

And on the technology side we just have some a number of other companies that are growing nicely in the tech space for us as well.

And a different consideration which we actively work on is the like the size and quality of the teams that we put to play in the different areas we have among the best teams in financial services that's where we were strong to begin with and we're early pioneers of things like data sharing where that you know that positive momentum fed on itself.

There are other areas like the federal business for example where we are still building out a crack team and that's driving growth in as much as one likes to think that you know it's the macro economic differences between sectors what we can do often ends up influencing how robust the growth is.

Got it and then maybe just just one more if you think about the competitive landscape that's kind of been a you know a little bit of a charge topic this year particularly for investors what are maybe some of the major misconceptions or misunderstandings that you you would say are out there and and how or any changes you observed in the competitive landscape over the course of the quarter or even the first half of the year or from a pipeline perspective.

I'll start Christian and Mike should should add on I think you know I've spent a lot of time on the road just this quarter I've met with over 100 of our biggest customers one on one and the thing that clearly stands out from like an analytic capability core data capability data sharing is that we are bar none we are the best platform that there is.

And our customers absolutely recognize that and we see more and more of their data workloads move over to snowflake that doesn't make the process easy a you know a migration of a large complex system that's managing the books of a bank so that they can close it every month is nothing to see that it's a multi quarter project that has to be done.

Exceptionally carefully so one thing you know that I wouldn't call it a misconception but the one thing that I would reinforce is the strength that we have in our in our code capabilities.

When it comes to newer things like AI we've been open about the fact that you know we were a little behind early last year in terms of how much we were invested in it and the kind of products that we could.

Deploy but even before my coming on the management team here recognize the opportunity invested heavily in it and things like the new acquisition through which I came but an excellent to things that were already in place at at snowflake and I would say the change or the previous quarter is that we can tell our customers we can tell you with confidence that our AI products are world class and we can.

And honestly that we are much more reliable than building products of API such you can get elsewhere because we pay a lot of meticulous attention to how we craft products and it's that combination of reliability and ease of use that we are turning into a major strength for us in AI as well.

And one quick last comment on top of what Sridhar said, our product philosophy on ease of use, smartly pause, how do you make things work easily out of the box?

We hear, comparatively, it's a strong advantage for us across areas for analytics, for data engineering and for AI, and we'll continue to invest with that philosophy in mind.

I promise last comment on this, to talk about something very concrete that comes with the Snowflake.

[inaudible]