Q4 2025 Snowflake Inc Earnings Call

February 26, 2025

<unk> portion of the call up an opportunity for questions and answers that Ian if you would like to ask a question. Please press star one on your telephone keypad I'd now like to pass the conference over to our host Jimmy <unk> head of Investor Relations. Jimmy. Please go ahead.

Speaker Change: Thank you for joining our Q4 fiscal 2025 earnings call.

Jimmy: Joining me on the call today are Schrader Ramaswami, our Chief Executive Officer, Mike Scarpelli, Our Chief Financial Officer, and Christian <unk>, Our executive Vice President of product, who will participate in the Q&A session.

Jimmy: During today's call, we will review our financial results for the fourth quarter of fiscal 2025, and discuss our guidance for the first quarter and full year fiscal 2026.

Good afternoon, and thank you for attending the Q4 fiscal year 'twenty Fudge Snowflake earnings Conference call. My name is Matt and I'll be your moderator for today's call I'll always be muted during the presentation portion of the call up an opportunity for questions and answers at the end. If you would like to ask a question piece push star one on your telephone keypad I would now like to pass the conference over to.

Jimmy: During today's call, we will make forward looking statements, including statements related to our business operations and financial performance. These statements are subject.

Jimmy: Cause them to differ materially from our actual results.

Information concerning uncertainties is available in our earnings press release, our most recent Form 10-K.

Speaker Change: Arcos, Jimmy <unk> head of Investor Relations Jimmy Please go ahead.

Jimmy: And there are others.

Jimmy: All our statements are made as of today based on information currently available to us except as required by law, we assume no obligation to update any such statements.

Speaker Change: Good afternoon. Thank you for joining us it sounds like Q4 fiscal 2025 earnings call.

Speaker Change: Joining me on the call today are shooter Ramaswami, our Chief Executive Officer, Mike Scarpelli, Our Chief Financial Officer, and Christian Klein, Our executive Vice President of product, who will participate in the Q&A session.

Jimmy: During today's call. We will also discuss certain non-GAAP financial measures see our investor presentation for a reconciliation of GAAP to non-GAAP measures and business metric definitions, including adoption. The earnings press release and Investor presentation are available on our website at investors that snowflake Dot com a replay of today's call will also be posted on the website with that I would now like to turn.

Speaker Change: During today's call, we will review our financial results for the fourth quarter of fiscal 2025, and discuss our guidance for the first quarter and full year fiscal 2026.

Speaker Change: During today's call, we will make forward looking statements, including statements related to our business operations and financial performance.

Speaker Change: The call over to <unk>.

Speaker Change: Thanks, Jimmy and Hi, everyone. Thank you all for joining us today.

Speaker Change: These statements are subject.

Speaker Change: Should cause them to differ materially from our actual results.

Speaker Change: What are the trends that you hear me.

Speaker Change: It was on this call last year, but I was introduced to you snowflakes new CEO.

Speaker Change: As you can see certainties is available in our earnings press release, our most recent Form 10-K.

Speaker Change: I look at the progress we've made in just one year.

Speaker Change: And there are others.

Speaker Change: And I could not be more proud of our team.

Speaker Change: All our statements are made as of today based on information currently available to us except as required by law, we assume no obligation to update any such statements.

Speaker Change: Our core business is very strong.

Speaker Change: Our product deliveries in overdrive on our go to market engine is humming.

Speaker Change: Innovating better than ever and firing on all cylinders and we have an enormous opportunity ahead of us.

Speaker Change: During today's call. We will also discuss certain non-GAAP financial measures see our investor presentation for a reconciliation of GAAP to non-GAAP measures and business metric definitions, including adoption. The earnings press release and Investor presentation are available on our website at investors that snowflake Dot com a replay of today's call will also be posted on our website with that I would now like to turn.

Speaker Change: Right now Snowflake is the most consequential data and AI company on.

Speaker Change: On the planet.

As I said in our third quarter call, our North Star is to deliver the world's best end to end data platform powered by AI, and we're making great progress every day to deliver on that vision.

Sri: The call over to Sri are.

Sri: Thanks, Jimmy and Hi, everyone. Thank you all for joining us today.

Speaker Change: I'm incredibly proud of the operational rigor, we have incorporated into our company delivering greater efficiency, while also aggressively investing and delivering on growth.

Sri: What are the trends that you are mix. It was on this call last year that was introduced to you.

Speaker Change: Thanks Neil.

Speaker Change: I look at the progress we've made in just one year and I could not be more proud of our team.

Speaker Change: And our focus on our customers has never been stronger.

Speaker Change: Our core business is very strong.

Speaker Change: Continue to hear how easy and cost effective our platform it.

Speaker Change: Our product deliveries in overdrive and our go to market engine is humming.

Speaker Change: Andrea hitting more and more multi product adoption because of the tremendous value we are delivering to our customers.

Speaker Change: Innovating better than ever and firing on all cylinders and we have an enormous opportunity.

Speaker Change: We're keeping our foot on the gas we are building on our strengths and going after the opportunities ahead with urgency and focus to ensure we continue our strong momentum throughout this year.

Speaker Change: Right now Snowflake is the most consequential data and AI company on the planet.

Speaker Change: As I said in our third quarter call, our North Star is to deliver the world's best end to end data platform powered by AI, and we're making great progress every day to deliver on that vision.

Speaker Change: You can see this progress and our strong fourth quarter results, let me just getting started.

Speaker Change: Revenue for Q4 was $943 million up a strong 28% year over year.

Speaker Change: I'm incredibly proud of the operational rigor, we have incorporated into our company delivering greater efficiency, while also aggressively investing and delivering Andre.

Speaker Change: Remaining performance obligations totaled $6 9 billion.

Speaker Change: With year over year growth of 33%.

Speaker Change: Our net revenue retention was a very healthy 126%.

Speaker Change: And our focus on our customers has never been stronger we continue to hear how easy and cost effective our platform. It.

Speaker Change: In the quarter, our non-GAAP operating margin increased to 9%.

Speaker Change: And our non-GAAP adjusted free cash flow margin was 43%.

Speaker Change: And we're hearing more and more multi product adoption because of the tremendous value we are delivering to our customers.

Speaker Change: As you can see we delivered another quarter of strong revenue growth and overall very healthy.

Speaker Change: It gave me comfort on the gas we are building on our strengths and going after the opportunities ahead with urgency and focus to ensure we continue our strong momentum throughout this year.

Speaker Change: As I said last quarter, we are obsessed with driving product cohesion.

Speaker Change: You can see this progress and our strong fourth quarter results, let me just getting started.

Speaker Change: To win in the market because snowflake is easy to use helps customer breakdown silos to collaborate on b connected and is trusted by companies of all sizes and industries.

Speaker Change: Product revenue for Q4 was $943 million up a strong 28% year over year.

Speaker Change: This is why iconic Brian like Exxonmobil Honeywell, the London stock Exchange group.

Speaker Change: Remaining performance obligations totaled $6 9 billion.

Speaker Change: With year over year growth of 33%.

Speaker Change: <unk> more are betting their business on snowflake.

Speaker Change: Our net revenue retention was a very healthy 126%.

Speaker Change: <unk>, a global provider of payments and financial Technology. For example is transforming how businesses and financial institutions used data by providing them with their own analytics platform to snowflake. This.

Speaker Change: In the quarter, our non-GAAP operating margin increased to 9% and our.

Speaker Change: Our non-GAAP adjusted free cash flow margin was 43%.

Speaker Change: As you can see we delivered another quarter of strong revenue growth and overall very healthy.

Speaker Change: This empower spicer of customers to have access to insights from their transaction data combine it with market information and train their own AI models.

Speaker Change: As I said last quarter, we are obsessed with driving product cohesion continuing.

Speaker Change: Enabling smarter business decisions that were previously only possible for large enterprises.

Speaker Change: Continuing to win in the market because snowflake is easy to use helps customer breakdown silos to collaborate and be connected and is trusted by companies of all sizes and industries.

Speaker Change: Last quarter, we held our build summit, our biggest event of the year for our builders and developers followed by regional lead up and events around the world.

Speaker Change: This is why iconic brands like Exxonmobil Honeywell, the London stock Exchange group and thousands more are betting their business on spill sake.

So far a record of more than 20000 attendees I've joined these events showing incredible momentum and excitement about our product vision.

Speaker Change: <unk>, a global provider of payments and financial Technology. For example is transforming how businesses and financial institutions use data by providing them with their own analytics platform to snowflake.

Speaker Change: We continue to hear how we are making it simpler to develop build and deliver.

Speaker Change: On our platform.

Speaker Change: More and more customers are switching to snowflake and realizing the incredible ease of use and cost savings our platform delivers.

Speaker Change: Empower slicer of customers to have access to insights from their transaction data combine it with market information and train their own AI models, enabling smarter business decisions that were previously only possible for large enterprise.

We are also helping our customers develop entirely new revenue streams to monetize their data.

Speaker Change: For example supply chain leader Blue Yonder, Leverages snowflakes robust data management capabilities and scale to help companies transform their operations by offering AI powered insights.

Speaker Change: Last quarter, we held our build summit, our biggest event of the year for our builders and developers followed by regional lead up and events around the world.

Speaker Change: The Blue Yonder platform processes over 20 billion AI predictions daily.

Help retailers manufacturers and logistics providers, better manage inventory optimize deliveries and respond to disruptions.

Speaker Change: So far a record of more than 20000 attendees I've joined these events showing incredible momentum and excitement about our product vision.

Speaker Change: It enables their business their customers to access powerful supply chain intelligence that would be impossible to build on their own.

We continue to hear how we are making it simpler to develop build and innovate on our platform.

Speaker Change: As our competitors continue to quite expensive engineering resources to maintain and scale more and more customers are seeing real bottom line impact by turning to smoke.

Speaker Change: More and more customers are switching to snowflake and realizing the incredible ease of use and cost savings our platform delivers.

Speaker Change: We're also helping our customers develop entirely new revenue streams to monetize their data.

Speaker Change: We have seen more and more snowflake customers save over 50% by migrating to us from other providers.

Speaker Change: In fact, we recently announced that snow convert Snowflakes Native code conversion tooling is now free for anyone to help accelerate migrations from article that a data and many other system to realize these benefits in data analytics.

Speaker Change: The Blue Yonder platform processes over 20 billion AI predictions daily.

Speaker Change: To help retailers manufacturers and logistics providers, better manage inventory optimize deliveries and respond to disruptions.

Speaker Change: Snowflake is also the de facto circulatory system in the enterprise world the ability to collaborate and share data as one of our core differentiator.

It enables their business their customers to access powerful supply chain intelligence that would be impossible to build on their own.

Speaker Change: We are seeing strong adoption of our data sharing capabilities with customers like stripe NTT Andres.

Speaker Change: As our competitors continued required expensive engineering resources to maintain and scale more and more customers are seeing real bottom line impact by turning to snowflake.

Speaker Change: Each have active data sharing connections with over 160, <unk> partner and customer organizations.

Speaker Change: These connections enabled them to securely exchange data with their partners and customers driving value across our ecosystem.

Speaker Change: We have seen more and more snowflake customers saved well over 50% by migrating to us from other providers.

Speaker Change: In fact, we recently announced that snow convert Snowflakes Native code conversion tooling is now free for anyone to help accelerate migrations from article set of data and many other system to realize these benefits in data analytics.

Speaker Change: We are continuing to innovate at lightning speed.

Speaker Change: This past year, we brought over 400 product capabilities to market or double the amount we launched the previous year.

Speaker Change: <unk> seen incredible growth in our data engineering business and continue to see strong adoption of open data formats, especially truly open modern data formats like Apache iceberg, which is transforming how organizations manage and credit data at scale.

Speaker Change: Snowflake is also the de facto circulatory system in the enterprise World.

Speaker Change: <unk> to collaborate and share data is one of our core differentiator.

Speaker Change: We are seeing strong adoption of our data sharing capabilities with customers like stripe NTT Andres.

Speaker Change: We have also seen amazing growth in the number of companies building and collaborating on snowflake with over a third of our capacity customers collaborating with data on a regular basis.

Speaker Change: Each have active data sharing connections with over 160, <unk> partner and customer organizations.

Speaker Change: When it comes to AI austere was foundational for us.

Speaker Change: These connections enabled them to securely exchange data with their partners and customers driving value across our ecosystem.

Speaker Change: <unk> II, which is now being used by customers to seamlessly build eight agents for both structured and unstructured data with state of CRD retrieval using cortex search and <unk>.

Speaker Change: We're continuing to innovate at lightning speed.

Speaker Change: This past year, we brought over 400 product capabilities to market or double the amount realized the previous year.

Speaker Change: Yeah.

Speaker Change: They are supporting a range of market, leading models, including Anthropic, Claude <unk> Lama and deep sea.

Speaker Change: <unk> seen incredible growth in our data engineering business and continue to see strong adoption of open data format, especially truly open modern data formats like Apache iceberg, which is transforming how organizations manage and credit data at scale.

Speaker Change: And I'm sure you saw that we just announced our expanded partnership with Microsoft that brings open AI models into cortex.

Speaker Change: This makes us the only data platform to seamlessly hosts both on traffic and open AI world, leading models, enabling our customers to build data agents, while ensuring that their data remains secure and snowflake.

Speaker Change: And just a few weeks ago, we introduced cortex agents are world class agent orchestration framework to enable seamless planning and execution of top across structured and unstructured data all powered by leading modeled such as on tropics Claude.

Speaker Change: When it comes to AI austere was foundational for us.

Speaker Change: <unk> AI, which is now being used by customers to seamlessly build data agents for both structured and unstructured data with state of the art retrieval using cortex search and analysts.

Speaker Change: They leveraged cortex analysts and cortex search to deliver set up the art accuracy, along with enterprise grade reliability and governance, so customers can build agents at scale.

Speaker Change: They are supporting a range of market, leading models, including on tropics, Claude <unk> Lama and deep sea.

Speaker Change: And I'm sure you saw that we just announced our expanded partnership with Microsoft that brings open AI models into cortex.

Speaker Change: And today, we announced that we are deepening our partnership with Microsoft We are making <unk> available in Microsoft 365, Copilot and Microsoft teams, bringing millions of users seamless access to information and accelerated productivity all within the Microsoft platform.

Speaker Change: This makes us the only data platform seamlessly host both on traffic and open AI world, leading models, enabling our customers to build data agents, while ensuring that their data remains secure and snowflake.

Speaker Change: All of these innovations are focused on driving real value for our customers, we make it easy for people to create a chatbot on structured or.

Speaker Change: And just a few weeks ago, we introduced cortex agents are world class agent orchestration framework to enable seamless planning and execution of top cross structured and unstructured data all powered by leading models such as on tropics <unk>.

Speaker Change: Unstructured data.

Speaker Change: And these in turn are the essential building block for our strong AI Foundation as we head to the next inflection point with agents.

Speaker Change: We have leveraged cortex analysts and cortex search to deliver setup, the art accuracy, along with enterprise grade reliability and governance, so customers can build agents at scale.

Speaker Change: We now have over 4000 customers using our AI and ml technology on a weekly basis.

Speaker Change: Astrazeneca they are harnessing the power of data and snowflake.

Speaker Change: To revolutionize healthcare by making its data AI <unk>.

Speaker Change: By unifying their research data that accelerating drug discovery and clinical development to deliver life saving medicines to patients faster working towards that ambitious goal of 20, new medicine by 2030.

Speaker Change: All of these innovations are focused on driving real value for our customers, we make it easy for people to create a chatbot on structured or.

Speaker Change: And State Street, which manages 10% of the world's financial assets is using snowflake AI and machine learning to uncover new market insight that help financial institutions make better investment decisions.

Speaker Change: Unstructured data.

Speaker Change: And these in turn are the essential building blocks for a strong foundation as we head to the next inflection point with agents.

Speaker Change: As our AI offerings continue to scale I'd lightning speed, our core business continues to be incredibly strong.

Speaker Change: We now have over 4000 customers using our AI and ml technology on a weekly basis.

Speaker Change: <unk> talked a lot about delivering on our vision of being the end to end technology provider for our customers' data journey.

Speaker Change: Astrazeneca Theyre harnessing the power of data and Snowflake.

Speaker Change: Already we are introducing additional snowflake connectors in private preview leveraging the technology from our acquisition of <unk> to provide seamless connectivity and data integration.

Speaker Change: To revolutionize healthcare by making its data AI ready.

Speaker Change: By unifying their research data, they're accelerating drug discovery and clinical development to deliver life saving medicines to patients faster working towards their ambitious goals.

Speaker Change: With key platforms like Sharepoint, Google drive Workday slack and many more are.

Speaker Change: <unk> new medicines by 2030.

Speaker Change: Our customers are loving this capability and we have strengthened our foundation to deliver an extensible and flexible connectivity platform.

Speaker Change: And State Street, which manages 10% of the world's financial assets is using snowflake AI and machine learning to uncover new market insights that help financial institutions make better investment decisions.

Speaker Change: On structured data as well as structured data.

Speaker Change: As we continue to bring new innovations to market are focused on scaling efficiently investing in the growth of our go to market operation and maintaining our seamless collaboration between engineering product marketing and sales to bring products to market effectively delivering more value to existing customers as well as winning new work.

Speaker Change: As our AI offerings continue to scale I'd lightning speed, our core business continues to be incredibly strong.

Speaker Change: <unk> talked a lot about delivering on our vision of being the end to end technology provider for our customers' data journey.

Speaker Change: Already we are introducing additional snowflake connectors in private preview leveraging the technology from our acquisition of data wall to provide seamless connectivity and data integration.

Speaker Change: With key platforms like Sharepoint, Google drive Workday slack and many more.

Speaker Change: And with our fast <unk>, they can get deep insights into our customers consumption trends in our customer 360, yes.

Speaker Change: Our customers are loving this capability and we have strengthened our foundation to deliver an extensible and flexible connectivity platform.

Speaker Change: You will also see our emphasis on rigor and efficiency in our growth plans.

Speaker Change: Unstructured data as well as structured data.

Speaker Change: Our head count growth over the next year is focused on engineering and sales, which are themes the direct impact to revenue.

Speaker Change: As we continue to bring new innovations to market. They are focused on scaling efficiently. We are investing in the growth of our go to market operations and maintaining our seamless collaboration between engineering product marketing and sales to bring products to market effectively delivering more value to existing customers as well as winning new ones.

Speaker Change: We are using internally to drive efficiency in incredible ways. Our teams are able to tap into a wealth of data and information faster than ever before.

Speaker Change: It is this operational rigor that we instituted in fiscal 'twenty five that is now our way of life going forward.

Speaker Change: Using our cortex AI technology, our JDM teams can now quickly discover the most relevant sales content by asking natural language questions of our sales knowledge assistant and with our fast <unk>. They can get deep insight into our customers' consumption trends in our customer 360, yes.

Speaker Change: Investing in growth, while having a maniacal focus on driving efficiencies throughout our business.

Mike: Mike why don't you take us through more of the financial details.

Mike: Thank you Streeter.

Speaker Change: Why 25 product revenue grew 30% year over year to reach $3 $5 billion. Our core business is strong we continue to see stable consumption patterns as evidenced by our 126 net revenue retention rate.

Speaker Change: You will also see our emphasis on rigor and efficiency in our growth plans.

Speaker Change: Our head count growth over the next year is focused on engineering and sales, which our teams the direct impact to revenue.

Speaker Change: New products are becoming an important growth driver Snow park contributed 3% of FY.

Speaker Change: We are using internally to drive efficiency in incredible ways. Our teams are able to tap into a wealth of data and information faster than ever before.

Speaker Change: With revenue and we are seeing strong adoption of our new data engineering and AI features.

Speaker Change: It is this operational rigor that we instituted in fiscal 'twenty five that is now our way of life going forward investing in growth, while having a maniacal focus on driving efficiencies throughout our business.

Speaker Change: Q4 technology customers outperformed or financial services continues to be our top vertical EMEA was another strength source of strength.

Speaker Change: The Q4 holiday impact was consistent with our expectations remaining performance obligations grew 33% year over year during the quarter. Several large customers ran out of capacity before their contract end date as the revenue outpaced their contracted bookings.

Mike Scarpelli: Mike why don't you take us through more of the financial details.

Mike Scarpelli: Thank you Schreder FY 'twenty five product revenue grew 30% year over year to reach $3 $5 billion. Our core business strong we continue to see stable consumption patterns as evidenced by our 126 net revenue retention rate new.

Speaker Change: Instead of pulling forward the renewal cycle. These accounts are now purchasing as they consume this is common for large customers and we do not view. This choice is indicative of their future consumption patterns.

Mike Scarpelli: New products are becoming an important growth driver Snow park contributed 3% of FY.

Mike Scarpelli: Revenue and we are seeing strong adoption of our new data engineering and AI features.

Speaker Change: Turning to margin FY 'twenty, five non-GAAP product gross margin of 76% and landed in line with expectations FY 'twenty five non-GAAP operating margin was 6% last quarter, we discussed our plans to improve efficiency. These efforts include centralizing teams target.

Mike Scarpelli: Q4 technology customers outperformed our financial services continues to be our top vertical EMEA was another strength source of strength.

Mike Scarpelli: The Q4 holiday impact was consistent with our expectations remaining performance obligations grew 33% year over year during the quarter. Several large customers ran out of capacity before their contract end date as the revenue outpaced their contracted bookings.

Speaker Change: Good early career hiring removing redundant management layers and continuous performance management in Q4. These efforts yielded meaningful margin games Q4, non-GAAP operating margin of 9% outperformed expectations FY.

Mike Scarpelli: Instead of pulling forward the renewal cycle. These accounts are now purchasing as they consume this is common for large customers and we do not view. This choice is indicative of their future consumption patterns.

FY 'twenty five non-GAAP adjusted free cash flow margin of 26% landed in line with our expectations in FY 'twenty five we used $1 9 billion to repurchase $14 8 million shares at a weighted average share price of $130 87.

Mike Scarpelli: Turning to margin FY 'twenty, five non-GAAP product gross margin of 76% and landed in line with expectations FY 'twenty five non-GAAP operating margin was 6% last quarter, we discussed our plans to improve efficiency. These efforts include centralizing teams target.

Speaker Change: We did not make any per purchases in Q4, we still have $2 billion remaining on our authorization through March 2027.

Mike Scarpelli: Good early career hiring removing redundant management layers and continuous performance management in Q4. These efforts yielded meaningful margin games Q4, non-GAAP operating margin of 9% outperformed expectations FY.

Speaker Change: Ended the year with $5 $3 billion in cash cash equivalents short term and long term investments.

Speaker Change: Moving to our outlook, we expect Q1 product revenue between 955, and $960 million, representing 21% to 22% year over year growth as a reminder, Q1.

Mike Scarpelli: 2025, non-GAAP adjusted free cash flow margin of 26% it landed in line with our expectations in FY 'twenty five we used $1 9 billion to repurchase $14 8 million shares at a weighted average share price of $130 87.

Speaker Change: Difficult year over year comparison, as we lapped leap year, we expect Q1 non-GAAP operating margin of 5%. This margin outlook includes expenses associated with our annual sales kickoff event posted in Q1, we expect approximately $15 million in expenses similar to last year.

Mike Scarpelli: We did not make any per purchases in Q4, we still have $2 billion remaining on our authorization through March 2027.

Speaker Change: For FY 'twenty six we expect product revenue of approximately $4 two 8 billion.

Mike Scarpelli: Ended the year with $5 $3 billion in cash cash equivalents short term and long term investments.

Speaker Change: Representing 24% year over year growth, we're forecasting stable growth within our core business. We expect new product features to contribute to the step up in year over year growth rates in the second half of the year.

Mike Scarpelli: Moving to our outlook, we expect Q1 product revenue between 955000 $960 million.

Mike Scarpelli: Turning 21% to 22% year over year growth as a reminder, Q1.

Speaker Change: As always our forecast includes headwinds associated with performance improvements as I said last quarter product improvements are an ongoing part of our business and we will not be breaking out assumptions for specific features moving forward.

Mike Scarpelli: Difficult year over year comparison, as we lapped leap year, we expect Q1 non-GAAP operating margin of 5%. This margin outlook includes expenses associated with our annual sales kickoff event posted in Q1, we expect approximately $15 million in expenses similar to last year.

Speaker Change: Turning to margins, we expect non-GAAP product gross margin of approximately 75% longer term, we expect easier GPU access and growing AI revenue to benefit product gross margins associated with new product features non.

Mike Scarpelli: For FY 'twenty six we expect product revenue of approximately $4 two 8 billion.

Speaker Change: non-GAAP operating margin will expand to reach 8% for the year.

Mike Scarpelli: Representing 24% year over year growth.

Mike Scarpelli: Forecasting stable growth within our core business, we expect new product features to contribute to the step up in year over year growth rates in the second half of the year.

Speaker Change: We expect non-GAAP adjusted free cash flow margin of 25% for the year.

Speaker Change: Our strong revenue growth combined with a more thoughtful approach to hiring and increased leverage from AI will benefit stock based compensation as a percent of revenue in FY 'twenty six we expect SBC as a percent of revenue to decrease to approximately 37% from 41% and we will.

Mike Scarpelli: As always our forecast includes headwinds associated with performance improvements as I said last quarter product improvements are an ongoing part of our business and we will not be breaking out assumptions for specific features moving forward.

Mike Scarpelli: Turning to margins, we expect non-GAAP product gross margin of approximately 75% longer term, we expect easier GPU access and growing AI revenue to benefit product gross margins associated with new product features.

Speaker Change: <unk> to decrease year on year.

Speaker Change: We will be hosting our investor day in conjunction with our summit conference. The week of June 2nd in San Francisco, If you're interested in attending please email IR snowflake dot com.

Before opening up the line for questions, you've likely seen our filing sharing that I plan to retire once a successor is in place and up to speed the company executed well in FY 'twenty five under the new leadership of Treater and I feel we are set up for success in 2026 and beyond this is the right time to hand the.

Mike Scarpelli: non-GAAP operating margin will expand to reach 8% for the year.

Mike Scarpelli: We expect non-GAAP adjusted free cash flow margin of 25% for the year.

Mike Scarpelli: Our strong revenue growth combined with a more thoughtful approach to hiring and increased leverage from AI will benefit stock based compensation as a percent of revenue in FY 'twenty six we expect SBC as a percent of revenue to decrease to approximately 37% from 41% and we will.

Speaker Change: <unk> over to a new CFO the company will be kicking off a search for my replacement and I will stay on board full time until a suitable replacement is in place and the transition is completed.

Mike Scarpelli: Continued to decrease year on year.

Speaker Change: Mike before we jump into Q&A I wanted to take a moment to express my gratitude.

Mike Scarpelli: We will be hosting our investor day in conjunction with our summit conference. The week of June 2nd in San Francisco, If you're interested in attending please email IR dot.

Speaker Change: Over the past year <unk> been an incredible partner.

Speaker Change: And I'm deeply appreciate it that you will continue to be as we work together to make this a smooth transition.

Mike Scarpelli: Dot com.

Speaker Change: For opening up the line for questions, you've likely seen our filing sharing that I plan to retire once a successor is in place and up to speed.

Speaker Change: Softly wouldn't be the iconic company. It is today without your years of leadership.

Speaker Change: Company executed well in FY 'twenty five under the new leadership of Treater and I feel we are set up for success in 2026 and beyond this is the right time to hand, the reins over to a new CFO. The company will be kicking off a search for my replacement and I will stay on board full time until a suitable replacement.

Speaker Change: I know I speak on behalf of all of our employees and I say, so happy for you and we look forward to celebrating your or they're coming.

Speaker Change: We can now open up the line for questions.

Speaker Change: If you'd like to ask a question. Please press star followed by one on your telephone keypad. If for any reason why kind of moving a question. Please press star followed by two again to ask a question press Star one as a reminder, if you're using a speakerphone. Please remember to pick up your handset before asking a question, we'll pause briefly as questions registered.

Speaker Change: <unk> is in place and the transition is completed.

Speaker Change: Mike before we jump into Q&A I wanted to take a moment to express my gratitude.

Speaker Change: Over the past year <unk> been an incredible partner and.

Speaker Change: I am deeply appreciate it that you will continue to be as we work together to make this a smooth transition.

Speaker Change: The first question is from the line of Keith Weiss with Morgan Stanley. Your line is now open.

Speaker Change: Snowflake wouldn't be the iconic company. It is today without your years of leadership.

Thank you Ms Sandra Zhang for Keith I want to extend my congrats not many software companies at scale again, 130%.

Speaker Change: And I know I speak on behalf of all of our employees.

Mike: Environment, and then Mike Congrats on a.

Mike: Our stellar distinct career and software.

Speaker Change: So happy for you and we look forward to celebrating your or are they are coming.

Speaker Change: With that maybe just some of the some of the questions.

Speaker Change: We can now open up the line for questions.

Speaker Change: Maybe if I could start with you on your comment on these large customers in Q4.

Speaker Change: Yes.

Speaker Change: If you'd like to ask a question. Please press star followed by one on your telephone keypad. If for any reason why kind of moving a question. Please press star followed by two.

Speaker Change: Exhausting their commitments, but not necessarily renewing going on demand.

Speaker Change: To ask a question press Star one as a reminder, if youre using a speakerphone. Please remember to pick up your handset before asking your question, we will pause briefly as questions registered.

Speaker Change: Usual or unusual in that and do you expect these customers just sign a contract in due course.

Speaker Change: Yes.

Speaker Change: We expect theyre going to assign a new commitment that as you know we typically sign a three year contract with our customers. Once they are up and running many new customers started one year. The first year, then go to three years and under their contract.

Speaker Change: The first question is from the line of Keith Weiss with Morgan Stanley. Your line is now open.

Speaker Change: Thank you Ms. Sandra Zhang for Keith I want to extend my congrats not many software companies have scale ago and 30% in this environment and then Mike Congrats on a.

Speaker Change: They make a capacity commitment to us based on what they expect they're going to go through but if they burn through that commitment before the end of the contract term.

Speaker Change: Stellar distinct career and software.

Speaker Change: Maybe just some of the some of the questions.

Speaker Change: I'd like to start with you on your comment on these large customers in Q4.

Speaker Change: Customer has two options they can do an early renewal.

Speaker Change: And make a new capacity purchase typically they only do that if that youre going to get some economics for that debt.

Speaker Change: Exhausting their commitments, but not necessarily when new incoming on demand how usual or unusual is that and do you expect these customers to sign a contract in due course.

Speaker Change: That makes sense to them or they continue to purchase under the same terms as they go to the end of their contract period at which time, they must do a new capacity purchase of equal to or greater than to get the same economics that they have in her contract. So this has always happened we just had a few big.

Speaker Change: Yes, I fully expect theyre going to assign a new commitment that as you know we typically sign a three year contract with her customers. Once they are up and running many new customers started one year. The first year, then go to three years and under their contract they.

Speaker Change: Customers that happen to in this quarter and I fully expect.

Speaker Change: Sometime over the next month to six months, so those people will sign new contracts.

Speaker Change: They make a capacity commitment to us based on what they expect they're going to go through but if they burn through that commitment before the end of the contract term. The customer has two options. They can do an early renewal and make a new capacity purchase typically they only do that if there was going to get some economics for.

Speaker Change: I'll just add on a couple of statements which is that.

Speaker Change: This customer three thing.

Speaker Change: Their capacity earlier is a good thing it means that.

Speaker Change: Their consumption has gone over what they predicted at the beginning of the contract generally speaking these accounts are in a pretty happy place.

Speaker Change: That debt.

Speaker Change: And yes.

Speaker Change: There is sometimes a little movement here and there with timing.

Speaker Change: Yes that makes complete sense and then she got maybe for you.

Speaker Change: Mike also sort of taking the guidance, where the new products probably shows some more muster.

Speaker Change: Second half of this year.

Speaker Change: <unk> that happened two in this quarter and I fully expect.

Speaker Change: <unk> done a lot of work that you've done a lot of work accelerating the pace of product innovation could you give us some color on the adoption trends within the data engineering portfolio into one bucket and then looking at sort of the AI ml application platform side.

Speaker Change: Sometime over the next month to six months of those people will sign new contracts.

Speaker Change: I'll just add on a couple of obvious statement, which is that.

Speaker Change: This customer <unk>.

Speaker Change: Their capacity earlier is a good thing it means that.

Speaker Change: Some of the announcements supporting both open AI models and Entropic models. When do you think that starts to unlock.

Speaker Change: Their consumption has gone over what they predicted at the beginning of the contract generally speaking these accounts are in a pretty happy place.

Speaker Change: More workloads more customer adoption and ultimately a greater revenue as we look to the balance of this year.

Speaker Change: And yes, there is.

Speaker Change: Sometimes a little movement here and there with timing.

Speaker Change: Yes.

Speaker Change: That's a great question.

Speaker Change: Yes.

Speaker Change: In areas like data engineering as you know.

Speaker Change: And then she got maybe for you.

Speaker Change: So sort of tying the guidance, where the new products probably shows some more muster.

Speaker Change: We've been working on technologies like Snow Park.

Speaker Change: Which is.

Speaker Change: Our version of arc and.

Speaker Change: Second half of this year.

Speaker Change: And we have talked about how that has already driven robust adoption.

Speaker Change: Got a lot of work that you've done a lot of work accelerating the process pace of product innovation could you give us some color on the adoption trends within the data engineering portfolio into one bucket and then looking at sort of the AI ml application platform side.

Speaker Change: I think what is new in the world of open data.

Speaker Change: Is what all of the technologies that we're bringing allows us to do and dislike vastly expanded scope of data that is available to us and we're increasing that by making investments in companies like data Volvo and turning that into a into a large set of connectors that can bring in more.

Speaker Change: Some of the announcements supporting both open AI models and Entropic models. When do you think that starts to unlock.

Speaker Change: More workloads more customer adoption and ultimately a greater revenue as we look to the balance of this year.

Speaker Change: Data.

Christian: And both Christian and I and the sales team.

Speaker Change: Yes.

Speaker Change: That's a great question.

Christian: On track these different areas, we have talked to you previously about.

Speaker Change: In areas like data engineering as you know.

We've been working on technologies like Snow Park.

Christian: Product features like dynamic tables. This is truly an amazing product.

Speaker Change: Which is.

Speaker Change: Our version of arc.

Christian: We're setting up complicated pipelines is roughly as simple as writing writing.

Speaker Change: And we have talked about how that has already driven robust adoption.

Christian: Writing a sequel query.

Speaker Change: I think what is new in the world of open data.

Christian: Being a lot of brisk adoption.

Christian: It can also lead to scale very quickly because it feeds very naturally into large scale applications.

Speaker Change: Is.

Speaker Change: What all of the technologies that we are bringing allows us to do and dislike vastly expanded scope of data that is available to us and we're increasing that by making investments in companies like data Volvo and turning that into a into a large set of connectors that can bring in more data.

Christian: Both Chris and I and others are very confident on that side.

Speaker Change: AI is interesting in the sense that it is.

Christian: It's a much newer product.

Christian: Set of products generally speaking and throughout the world not just at.

Christian Klein: And both Christian and I and the sales team.

Christian: Not just a snowflake.

Christian Klein: Track these different areas, we have talked to you previously about.

Christian: We are seeing broad adoption of AI.

<unk> approach, which is to build a rock solid primitive our search product for example.

Christian Klein: Product features like dynamic tables. This truly is an amazing product.

Christian Klein: They're setting up complicated pipelines is roughly as simple as writing.

Christian: As among the best in the World, We published a benchmark recently showing how it was in the top three.

Christian Klein: Writing a sequel query so we are seeing.

Christian Klein: Seeing a lot of brisk adoption.

Christian: And so products like that have a lot of potential but you'll also see a multiplicative effect the mod.

Christian Klein: And you can also reach scale very quickly because it feeds very naturally into large scale applications.

Christian: The great connectors that you have in portfolio the more data can be brought in.

Christian Klein: So we are very both Chris and I and others are very confident on that side.

Christian: For applications like search in turn will drive other applications that.

Christian Klein: AI is interesting in the sense that it is.

Christian: Our customers are our partners can build on top of Snowflake. For example, let's say like an insurance underwriting application or like a like like a legal analysis kind of application more and more of those kinds of things become possible with a combination of data engineering and AI technologies.

Speaker Change: It's a much newer product.

Christian Klein: Set of products generally speaking and throughout the world not just us.

Speaker Change: Not just a snowflake.

Christian Klein: We are seeing broad adoption of AI.

Christian Klein: <unk> approach, which is to build a rock solid primitive our search product for example.

Christian Klein: It is among the best in the World, We published a benchmark recently showing how it was in the top three.

Christian: We have seen broad adoption of AI, we expect that to turn into real revenue or the coming quarters, but the point that I want to make is that.

Christian Klein: And so products like that have a lot of potential but you'll also see a multiplicative effect the mod.

Christian: All of these fit together seamlessly the more we can do with ingestion. The more options that are for us to do meaningful things. Good data entering the more we can do that data engineering in support of formats like iceberg. The easier. It is for people to use snowflake for AD hoc analytics use cases on data that is CIT.

Christian Klein: The great connectors that you have in portfolio the more data can be brought in.

Christian Klein: For applications like search in turn will drive other applications that.

Christian Klein: Our customers are our partners can build on top of Snowflake. For example, let's say like an insurance underwriting application or like a like a like a legal analysis kind of application more and more of those kinds of things become possible with a combination of data engineering and AI technologies.

Christian: In that is sitting in cloud storage and the more data that is sitting in our accessible to snowflake. The more value you can get out of products like cortex analyst.

Christian: And now Snowflake intelligence. So it is this tying in that I think is pretty unique to us.

Christian Klein: We have seen broad adoption of AI, we expect that to turn into into real revenue or the coming quarters, but the point that I want to make is that.

Christian: And yes, we expect these to meaningfully contribute in the latter half of the year.

Christian: I appreciate the thoughtfulness country there. Thank you.

Christian Klein: All of these fit together seamlessly the more we can do with ingestion. The more options that are for us to do meaningful things. Good data entering the more we can do that data engineering in support of formats like iceberg. The easier. It is for people to use snowflake for AD hoc analytics use cases on data that is CIT.

Speaker Change: Thank you for your question next question is from the line of Kirk <unk> with Evercore ISI. Your line is now open.

Christian: Yeah.

Kirk: Thanks, very much congrats on a great quarter and Mike Congrats on a great run that snowflake.

Kirk: Sure I don't know if this for you or Christian but you know over the last six months to 12 months, we've seen a lot of new announcements from data companies sort of partnering up with enterprise software vendors like service and our sales force you guys to partner with them.

Christian Klein: In that is sitting in cloud storage and the more data that is sitting in our accessible to snowflake. The more value you can get out of products like cortex analyst.

Kirk: One of your competitors is partnering with us.

Kirk: Partner with SAP I guess, what's the best way to interpret these announcements in terms of where the center of gravity from a data perspective lives I was just wondering if you guys could.

Christian Klein: Now Snowflake intelligence. So it is this tying in that I think is pretty unique to us.

Christian Klein: And yes, we expect these to meaningfully contribute in the latter half of the year.

Kirk: Comment on that and then Mike really quickly for you just any adjustments to the sales comp model that we should be aware of this year. Thanks very much.

Christian Klein: I appreciate the thoughtful essentially there thank you.

Christian Klein: Yes.

Speaker Change: Thank you for your question next question is from the line of Kirk <unk> with Evercore ISI. Your line is now open.

Firstly on.

Kirk: On the comp model.

Christian Klein: Yeah.

Kirk: Probably the biggest change is taking.

Speaker Change: Thanks, very much congrats on a great quarter and Mike Congrats on a great run that snowflake.

Kirk: Taking a little bit of a step back in terms of allocation, we're still principally paying people on their variable comp on revenue, but we do think it's important that reps also have a total contract bookings number as well too.

Speaker Change: Sure I don't know if this for you or Christian but over the last six to 12 months, we've seen a lot of new announcements from data companies sort of partnering up with enterprise software vendors like service and our sales force you guys would partner with them.

Speaker Change: You know one of your competitors is partnering with us.

Kirk: So theres going to be a quota as well on bookings, but the bulk of the earth.

Speaker Change: Partner with SAP I guess, what's the best way to interpret these announcements in terms of where the center of gravity from a data perspective lives. I was just wondering if you guys could comment on that and then Mike really quickly for you just any adjustments to the sales comp model that we should be aware of this year. Thanks very much.

Kirk: Earnings will come from consumption revenue.

Kirk: Okay.

Kirk: Great and going back to the first question.

Kirk: We call herself.

Kirk: AI data cloud for a good reason.

Speaker Change: Firstly on.

Kirk: This is because most customers.

Speaker Change: On the comp model.

Kirk: See us as the best place.

Speaker Change: Probably the biggest change is taking.

Kirk: To get value from data, especially analytic and predictive value from data.

Speaker Change: Taking a little bit of a step back in terms of allocation, we're still principally paying people on their variable comp on revenue, but we do think it's important that reps also have a total contract bookings number as well too.

Kirk: A snowflake itself for example.

Kirk: We have connectors that.

Kirk: That bring in data.

Kirk: From from from Salesforce from service now from Github and the list startup.

Speaker Change: And so theres going to be a quota as well on bookings, but the bulk of the earnings will come from consumption revenue.

Kirk: It goes on and on and I think what.

Kirk: Obviously, you've been very interesting for all of us even prior to the Ed evolution is being able to look at this data I'll say workday data as well as snowflake data along with Salesforce data all in the same pain.

Speaker Change: Great and going back to the first question.

Speaker Change: We call ourselves the AI data cloud for a good reason.

Kirk: All of us have access to the ports that can stitch these kinds of data together.

Speaker Change: This is because most customers.

Kirk: And so we've done a number of partnerships with many companies.

Speaker Change: As the best place.

Speaker Change: To get value from data, especially analytic and predictive value from data.

Kirk: Some of our best ones.

Kirk: With folks like service now and Salesforce, we have bidirectional integrations with them.

Speaker Change: A snowflake itself for example.

Speaker Change: We have connectors that.

Kirk: A lot of customers bring data from those applications into snowflake. It works very very smoothly.

Speaker Change: That bring in data.

Speaker Change: From from from Salesforce from service now from Github and the list startup.

I think what is unique in the world of agent AI is the time to value.

Speaker Change: It goes on and on and I think what's obviously been very interesting for all of us even prior to the evolution is being able to look at this data say workday data as well as snowflake data along with Salesforce data all in the same paint.

Kirk: From data can become exceptionally quick because you are not in the process of building painful integrations painful new applications and some of the things. We are south again have been able to build with Snowflake intelligence has been pretty has been pretty remarkable.

Speaker Change: All of US have access to reports that can assist these kinds of data together.

Kirk: We do expect this.

Kirk: Trend to continue.

Speaker Change: And.

Kirk: Of course players like service now or Salesforce or SAP.

Speaker Change: So we've done a number of partnerships with many companies.

Speaker Change: Some of our best months.

Kirk: We're going to have a class of applications.

Speaker Change: With folks like service now and Salesforce, we have bidirectional integrations with them.

Kirk: Which can benefit from data that is coming from that is coming from outside and hence we do bidirectional partnership the larger theme that I would point to in both of the is that of giving customers choice customers should have.

Speaker Change: A lot of customers bring data from those applications into snowflake. It works very very smoothly.

Speaker Change: I think what is unique in the world of agent AI is the time to value.

Kirk: The right to decide where it is that their data should be and.

Speaker Change: From data can become exceptionally quick because you are not in the process of building painful integrations painful new applications and some of the things we ourselves again have been able to build with Snowflake intelligence has been pretty have been pretty remarkable.

Kirk: As far as we are concerned I think we are very uniquely positioned as a central and very efficient repository of data.

Kirk: Most companies and yet some of our customers will take data over to one of the folks that I mentioned.

Speaker Change: We do expect this.

Kirk: S&P in particular Christian will give us an update.

Speaker Change: Trend to continue.

Kirk: Yes, so so.

Speaker Change: Of course players like service, now or Salesforce or SAP or.

Kirk: So what I've said, we have always done by directional type of share.

Speaker Change: They're going to have a class of applications, which can benefit from data that is coming from that is coming from outside and hence we do bidirectional partnership the larger theme that I would find two in both of this is that of giving customers choice customers should have.

Kirk: Sharing and data movement with a number of partners.

Kirk: We don't have a specific announcement as to shareowners happy today I can tell you that we are working with S&P, we like what they're doing with their business data cloud product and we have a common commitment to foster an open data environment and hope to share more with all of you soon.

Speaker Change: The right to decide where it is that their data should be and.

Speaker Change: As far as we are concerned I think we are very uniquely positioned.

Kirk: Okay.

Kirk: Thank you all.

Speaker Change: A central and very efficient repository of data.

Speaker Change: Thank you for your question next question is from the line of Raimo <unk> with Barclays. Your line is now open.

Speaker Change: Most companies and yet some of our customers will take data over to one of the folks that I mentioned.

Speaker Change: Perfect. Thank you congrats from my end for the quarter and for Mike as well it was on our working with you over the last few years.

Christian Klein: <unk> been particular Christian will give us an update.

Speaker Change: Yes so.

Speaker Change: Two questions one for three different from Mike.

Speaker Change: That's right I said, we have always done by directional type of.

Speaker Change: How do we think about adjacencies.

Speaker Change: Sharing and data movement with a number of partners.

For your offering that you kind of might want to consider or how do you think about then like for example, this quarter it was a.

Speaker Change: While we don't have a specific announcement as to share at S&P today I can tell you that we are working with S&P, we like what they're doing with their business data cloud product and we have a common commitment to foster an open data environment and hope to share more with all of you soon.

Speaker Change: Big debate about streaming and how that might fit into you.

Speaker Change: So maybe can you talk about like how you see David the product evolving from your perspective, and then Mike for you on guidance.

Speaker Change: How conservative are the assumption this year and the guidance versus kind of what you're for example last year. When you had the CEO change obviously, how does the economy also play into the guidance for this year. Thank you.

Speaker Change: Thank you all.

Speaker Change: Thank you for your question.

Speaker Change: The next question is from the line of Raimo <unk> with Barclays. Your line is now open.

Speaker Change: Great I'll take.

Speaker Change: Perfect. Thank you congrats from my end for the quarter and for Mike as well it was on our working with you over the last few years.

Speaker Change: <unk>.

Speaker Change: Sorry can you repeat the first question I want to make sure I get it right.

Speaker Change: It's just more if you think about adjacencies.

Speaker Change: Two questions one first street, everyone for Mike <unk>.

Speaker Change: For where you want to play versus where you want to partner.

Speaker Change: How do we think about adjacencies.

Speaker Change: For your offering that you kind of might want to consider or how do you think about then like for example, this quarter it was a.

Speaker Change: <unk>.

Speaker Change: Think about streaming for example is one of the kind of areas.

Speaker Change: Yes.

Speaker Change: Big debate about streaming and how that might fit into you.

Speaker Change: <unk>.

Speaker Change: Overall, we work with.

Speaker Change: We worked with a number of partners. The data space is a very large space, we try to be very open and clear with our partners about there are big areas of.

Speaker Change: So maybe can you kind of talk about like how you see David the product evolving from your perspective, and then Mike for you on guidance.

Speaker Change: Of investment are.

Speaker Change: And.

Speaker Change: Absolutely we worked with a number of folks.

Speaker Change: <unk>.

Speaker Change: In streaming.

Speaker Change: But both streaming on ingestion or areas, where we think it is important for us to.

Great I'll take.

Speaker Change: <unk>.

Speaker Change: Sorry can you repeat the first question I want to make sure I get it right.

Speaker Change: Have a good offering in place and while it looks simple streaming comes in many shapes and sizes that are on Prem solutions that are great that are more cloud native sort of solutions and the same goes for connectors, we will have a robust ingestion.

Speaker Change: It's just more if you think about adjacencies.

Speaker Change: For where you want to play versus where you want to partner.

Speaker Change: <unk>.

Speaker Change: Think about streaming for example is one of the kind of areas.

Speaker Change: Yes.

Speaker Change: <unk>.

Speaker Change: Offering.

Speaker Change: Overall, we work with.

Speaker Change: And we continue to work with partners. We do continue we do think of streaming as a.

Speaker Change: Work with a number of partners the data space is a very large space.

Speaker Change: Try to be very open and clear with our partners about there are big areas of.

Speaker Change: A critical area of Florida, Snowflake, just like we think of Snowflake intelligence, which begins to merge the line bid.

Speaker Change: <unk> investment are.

Speaker Change: And.

Speaker Change: Between what one would think off as <unk> and a new class of application that is literally it's a new thing. We think is important for us to have a presence there Christian any thoughts to it.

Speaker Change: Absolutely we work with a number of folks in.

Speaker Change: Streaming.

Speaker Change: But both streaming on ingestion or areas, where we think it is important for us to.

Speaker Change: At the same time partnering with a number of players we continue to be partners. We have lots of customers that use us alongside other technologies you may be alluding to read upon level. We're also a company that constantly that are great partners and we will continue to do that.

Speaker Change: Have a good offering in place and while it looks simple as training comes in many shapes and sizes that are on Prem solutions that are great that are more cloud native sort of solutions and the same goes for connectors, we will have a <unk>.

Speaker Change: Robust ingestion.

Speaker Change: And then Raimo on your question on guidance.

Speaker Change: Offering.

And we continue to work with partners. We do continue we do think of streaming as a as a.

Speaker Change: I'm just going to say the guidance I feel is appropriate.

Speaker Change: We've always tried to give meaningful guidance and given the scale we're at right now.

Speaker Change: A critical area of Florida, Snowflake, just like we think of Snowflake intelligence, which begins to merge the mine.

Speaker Change: We think 3% beat is a should be considered a big beat.

Speaker Change: I mean, one would think off as <unk> and a new class of applications. It's literally it's a new thing.

Speaker Change: And I feel good about the guidance, we've set for the quarter and the year.

Christian Klein: Think it is important for us to have a presence there Christian any thoughts to us.

Speaker Change: And by the way everyone. It makes it sound like this is my last call I think it will be here for a while longer.

Christian Klein: At the same time partnering with a number of players we continue to be partners.

Speaker Change: You can't congratulate them a few times.

Christian Klein: Partners, we have lots of customers that use us alongside other technologies you may be alluding to Revpar level. We're also a company that constantly they are great partners and we will continue to do that.

Speaker Change: Okay.

Speaker Change: Alright, thank you.

Speaker Change: Thank you for your question.

Speaker Change: Next question is from the line of Brad Zelnick with Deutsche Bank. Your line is now open.

Christian Klein: And then Raimo on your question on guidance.

Brad Zelnick: Great. Thank you so much for taking the questions maybe first for <unk>.

Christian Klein: Just going to say the guidance I feel is appropriate.

Speaker Change: With cortex agents announced region orchestration can you talk a little bit more about what differentiates your offering versus many other regional offerings out there and maybe where the product came from was this something customers were asking for.

Christian Klein: We've always tried to give meaningful guidance and given the scale we're at right now.

Christian Klein: We think 3% beat is a should be considered a big beat.

Christian Klein: And I feel good about the guidance that we've set for the quarter and the year.

Brad Zelnick: Are there any early adopters, maybe that youre working with out there.

Speaker Change: It's.

Speaker Change: It's a good question.

Christian Klein: And by the way everyone makes it sound like this is my last call I think it will be here for a while longer.

Speaker Change: I think the best answer to that goes back to something that I talked about earlier in the context of the data cloud I think we are rapidly approaching.

Christian Klein: You can't congratulate them a few times.

Christian Klein: Okay.

Christian Klein: Alright, thank you.

Speaker Change: <unk>.

Speaker Change: In which data is even more central than before.

Christian Klein: Thank you for your question.

Christian Klein: Next question is from the line of Brad Zelnick with Deutsche Bank. Your line is now open.

Speaker Change: Previously.

Speaker Change: <unk>.

Speaker Change: You had you had datasets and wanted to stitch them together and our build an application you have to painfully engineers semantic figured out how to do it build an application and then figure out how to write for example, how to use an API to write back data.

Brad Zelnick: Great. Thank you so much for taking the questions maybe first for <unk>.

Brad Zelnick: With cortex agents announced region orchestration can you talk a little bit more about what differentiates your offering versus many other regional offerings out there and maybe where the product came from was this something customers were asking for.

Speaker Change: What.

Speaker Change: For example, cloud does incredibly well is it could it can produce pretty professional grade UI with instructions in English, which was just like unthinkable. A couple of years ago. I think it is that centrality of data that plays into how we think about agent agent flows.

Brad Zelnick: Are there any early adopters, maybe that youre working with out there.

Brad Zelnick: It's.

Brad Zelnick: It's a good question.

Brad Zelnick: I think the best answer to that goes back to something that I talked about earlier in the context of the data cloud I think we are rapidly approaching.

Speaker Change: Then other software vendor talk about agent pickup locations. They are generally limited to the context of the particular function that they serve so for example, if you have a customer service offering.

Brad Zelnick: <unk>.

Brad Zelnick: And this data is even more central than before.

Brad Zelnick: Previously.

Brad Zelnick: <unk>.

Brad Zelnick: You had you had datasets and wanted to stitch them together and our build an application you have to painfully engineers semantics figured out how to do it build an application and then figure out how to write for example, how to use an API to write back data.

Speaker Change: Then you will naturally offer a customer service agent.

Speaker Change: Ken.

Speaker Change: That can automate parts of the work that that agent is going to do.

Brad Zelnick: What.

Speaker Change: We are uniquely positioned in that we had a horizontal platform customers.

Brad Zelnick: For example, cloud does incredibly well is it could it can produce pretty professional grade UI with instructions in English, which was just like unthinkable. A couple of years ago. I think it is that centrality of data that plays into how we think about agent agent flows.

Speaker Change: We're all kind of all different kinds of data with us.

Speaker Change: And that makes it possible to create pretty interesting new obligations.

It's too early for me to speak in public about.

Speaker Change: Customers and use cases, just yet, but I can give you lots of examples even within snowflake.

Speaker Change: Then other software vendor talk about agent take applications generally limited to the context of the particular function that they serve so for example, if you have a customer service offering.

Speaker Change: The ability to look at data that is sitting in sales force, which is that all are meeting data lives.

Speaker Change: Then you will naturally offer customer service agent.

Speaker Change: The on simultaneously look at all of our enablement material or notes from the each of the use cases, and then using that to update some stores update the status of things. There is an obligation that we're super excited about it is this combination of structured data unstructured data pool, calling.

Speaker Change: Ken.

Speaker Change: That can automate parts of the work that that agent is going to do.

Speaker Change: We are uniquely positioned in that we had a horizontal platform customers.

Speaker Change: We're all kind of all different kinds of data with us.

Speaker Change: <unk>.

Speaker Change: What are the basic ingredients.

Speaker Change: And that makes it possible to create pretty interesting new obligations.

Speaker Change: We can also scale these very effectively with a number of partners that we have companies like elemental build on top of Snowflake and theyre going to use the core infrastructure that we provide to drive these kinds of agent applications.

Speaker Change: It's too early for me to speak in public about.

Customers and use cases, just yet, but I can give you lots of examples even within snowflake.

Speaker Change: The ability to look at data that is sitting in Salesforce, which is that all are meeting data lives are the and simultaneously look at all of our enablement material or notes from the each of the use cases, and then using that to update some store update the status of things.

Speaker Change: That's really helpful. Thank you <unk> and Mike just for you with Q4 being such a bonanza bookings quarter, where you do a lot of big deals with large large customers can you talk more about the trends youre seeing with your largest customers, maybe the momentum and expansion rates and the services that they are embracing and plans to consume this year. Thanks.

Speaker Change: There is an obligation that we are super excited about it is this combination of structured data unstructured data pool, calling.

Speaker Change: Yes, I'll just say the momentum continues with their large customers they continue to grow.

Speaker Change: And consume.

Speaker Change: What are the basic ingredients.

Speaker Change: Like any quarter, some overachieve our forecast summer under there was nothing unusual there.

Speaker Change: Large customers really are the ones that drive our revenue growth.

Speaker Change: I was very pleased with the number of million plus customers growing.

Speaker Change: Number five and $10 million as well too so I'm very pleased there.

Speaker Change: I think our sales organization has really built up a lot of muscle to this year to really identify new workload opportunities and go live I think our professional services and our partners are getting better at migrations in handling a number of these things as well too I think our SCE organization has really.

Speaker Change: Yeah, I'll, just say the momentum continued with their large customers they continue to grow.

Speaker Change: We stepped up and is going to really help drive a lot of those new workloads next year and it sounds like so.

Speaker Change: And consume.

Speaker Change: Like any quarter some over achieved our forecast some are under there was nothing unusual there.

Speaker Change: Very pleased with what I'm seeing right now.

Speaker Change: <unk> customers really are the ones that drive our revenue growth.

Speaker Change: Great stuff and congrats on a strong finish to the year. Thank you.

Speaker Change: I was very pleased with the number of million plus customers growing.

Brent: Thank you for your question next question is from the line of Brent <unk> with.

Speaker Change: Number five and $10 million as well too so.

Piper Sandler your line is now open.

Speaker Change: Very pleased there.

Brent: Good afternoon, Mike happy to learn you're not leaving anytime soon here, we'll stay with the congrats but I did want to asking a question around product growth.

Brent: The guide implies an acceleration for the first time into the.

Speaker Change: Second half in three three and a half years.

Speaker Change: What's driving the optimism on acceleration is it all new products or are you feeling better about consumption activity across the base.

Speaker Change: <unk> has really stepped up and is going to really help drive a lot of those new workloads next year in South Lake So.

Speaker Change: It's both the core of our business is very strong.

Speaker Change: Very pleased with what I'm seeing right now.

Speaker Change: Great stuff and congrats on a strong finish to the year. Thank you.

Speaker Change: Coupled with the new products that we see that will be going into production also on top of I am pleased with the muscle we've been building on new customer acquisitions, and thats going to start to kick in in the second half of the year, we do get a lot of visibility into our existing customers with planned migrations that they have and I think that.

Speaker Change: Thank you for your question next question is from the line of Brent <unk> with Piper Sandler Your line is now open.

Speaker Change: Good afternoon, Mike happy to learn you're not leaving anytime soon here, we'll save the congrats but I did want to ask a question around product growth.

Speaker Change: Is looking very good for the second half of the year and remember our guidance for Q1.

Speaker Change: The guide implies an acceleration for the first time in the second half in three three and a half years whats driving the optimism on acceleration is it all new products or are you feeling better about consumption activity across the base.

Speaker Change: <unk> low but that is because of the that we miss one business day because of leap year and Thats.

Speaker Change: A fair chunk of revenue that comes out of that when youre looking at that growth rate just in Q1.

Speaker Change: It's both the core of our business is very strong.

Speaker Change: Helpful color, there and then <unk> just as you think about growth levers to the business. One area. You flagged was this idea of.

Speaker Change: We still flex roll in AI powered advertising you clearly know the advertising market well I never really thought of the large AD market as our SMB.

Speaker Change: As a meaningful opportunity for Snowflake can you just double click into when you think about the AI powered AD market is there and unlock that you see there for snowflake.

Speaker Change: <unk> is looking very good for the second half of the year and remember our guidance for Q1 seems low but that is because of the that we miss one business day because of leap year and Thats.

Speaker Change: That kind of new workloads scenario. Thanks.

Speaker Change: We've actually been in this area.

Speaker Change: In the area of marketing and advertising flawed a fairly long time.

Speaker Change: Fair chunk of revenue that comes out of that when Youre looking at that growth rate just in Q1.

Speaker Change: There are tons of CDP startups, others that custom cdp's that people build.

Speaker Change: Helpful color, there and then <unk> just.

Speaker Change: As you think about growth levers to the business. One area. You flagged was this idea of snowflakes role in AI powered advertising you clearly know the advertising market well I never really thought of the large ad market.

Speaker Change: Customer data platforms on top of Snowflake.

Speaker Change: In fact.

Speaker Change: We acquired a company called <unk>, because data clean rooms are really powerful.

Speaker Change: Enabling technology for things like pro things like conversion lift.

As a meaningful opportunity for Snowflake can you just double click into when you think about the AI powered AD market is there and unlock that you see there for snowflake.

Speaker Change: And <unk>.

Speaker Change: Part of what the first date.

Speaker Change: In this role.

Speaker Change: <unk> like a data ecosystem player is automating even more operations.

Speaker Change: That kind of new workloads scenario. Thanks.

Speaker Change: We talked last time.

Speaker Change: We've actually been in this area.

Speaker Change: Above this idea called AIC equal, which is what are the primitives you can put into sequel.

Speaker Change: In the area of marketing and advertising for a fairly long time.

Speaker Change: There are tons of CDP startups, others that custom cdp's that people build.

Speaker Change: Such that image analysis video analysis.

Speaker Change: Can be done very easily by analysts. So you can ask questions like.

Speaker Change: Customer data platforms on top of Snowflake.

Speaker Change: Thus, putting a Christmas tree.

Speaker Change: In fact.

Speaker Change: <unk> increased click through or the conversion rate of an AD that you show or the or the holidays.

Speaker Change: We acquired a company called <unk>, because data clean rooms.

Really powerful.

Speaker Change: And so I think like as we introduce multimodal capabilities into context.

Speaker Change: Enabling technology for things like for things like conversion lift.

Speaker Change: And <unk>.

Speaker Change: The lens of what is achievable the snowflake, we'll continue.

Speaker Change: Part of what the first date.

Speaker Change: In this role.

Speaker Change: To expand and of course that.

Speaker Change: Like a data ecosystem player is automating even more operations.

Speaker Change: With language models with AI models in general the agenda to the application how can you generate creative how can you generate copy what created those are also areas that become easier and easier to do so.

Speaker Change: We talked last time.

Speaker Change: About this idea called AIC equal, which is what are the perimeter is you can put into sequel.

Speaker Change: Such that image analysis video analysis.

Speaker Change: So thats all loaded.

Speaker Change: Our broad role, it's a it's an important vertical both marketing and advertising, Florida Snowflake.

Speaker Change: Can be done very easily by analysts. So you can ask questions like.

Speaker Change: Thus, putting a Christmas tree.

Speaker Change: But I think the.

Speaker Change: <unk> increased the click through or the conversion rate off of that that you show or the or the holidays.

Speaker Change: Arc is moving more from measurement and privacy preserving technology to also generative technologies that can power more automated testing.

Speaker Change: And so I think like as we introduce multimodal capabilities into context.

Speaker Change: Think the lens of what is achievable with snowflake.

Speaker Change: And like things like Ottawa measurement using using snowflake.

Speaker Change: New to.

Speaker Change: To expand and of course that with.

Speaker Change: Helpful. Thank you.

Speaker Change: With language models with AI models in general the agenda to the application how can you generate creative how can you generate copy.

Speaker Change: Okay.

Speaker Change: Thank you for your question next question is from the line of Alex <unk> with Wolfe Research. Your line is now open.

Speaker Change: What created those are also areas that become easier and easier to do.

Hey, guys. Thanks for taking the question and Mike I look forward to <unk>.

Speaker Change: And so that's all that's all.

Speaker Change: Bands or for at least a few more quarters.

Speaker Change: <unk>, it's a it's an important vertical both marketing and advertising for snowflake.

Speaker Change: Yes.

Speaker Change: We will have it.

Speaker Change: Yes.

Speaker Change: Sundar, maybe just.

Speaker Change: But I think the.

Speaker Change: Looking at the spend intensity in your market.

Speaker Change: Arc is moving more from.

Speaker Change: It seems like something has changed to the positive over the past six months. It seems like it's gotten better you've been meeting with a lot of customers, Mike mentioned that the tech and financial services verticals outperforming, but maybe can you talk to how much of this is broader demand environment versus sales execution improvements versus confidence in kind of like better product innovation velocity.

Speaker Change: Measurement and privacy preserving technology to also generative technologies that can power more automated testing.

<unk> like things like Ottawa measurement, using using still thick.

Okay.

Speaker Change: Helpful. Thank you.

Speaker Change: Thank you for your question next question is from the line of Alex Zukin with Wolfe Research. Your line is now open.

Speaker Change: The release of new products and anything you can do there I think would be helpful.

Speaker Change: How this works positive feedback cycle like feed on themselves and so on.

Speaker Change: Hey, guys. Thanks for taking the question and Mike I look forward to our bands or for at least a few more quarters.

Speaker Change: But I would say in my mind, the pretty substantial changes.

Speaker Change: Yes, we.

Speaker Change: We will have it.

Speaker Change: Yes.

Speaker Change: We have made in how we operate as a company absolutely first is around product velocity.

Speaker Change: Sundar, maybe just.

Speaker Change: Looking at the spend intensity in your market. It seems like something has changed to the positive over the past six months. It seems like it's gotten better you've been meeting with a lot of customers.

Speaker Change: If you look at the pace.

Speaker Change: How we've been able to get AI products out to market.

Speaker Change: You mentioned that the tech and financial services verticals outperforming, but maybe can you talk to how much of this is broader demand environment versus sales execution improvements versus confidence in kind of like better product innovation velocity, releasing new products anything you can do there I think would be helpful.

Speaker Change: It's been it's been remarkable but theres a lot more innovation that is that is happening we have a big effort around AI powered migrations that you will hear more about.

Speaker Change: We have invested heavily in data collaboration and sharing with release of things like an internal marketplace.

Speaker Change: Well you know how this works positive feedback cycle like feed on themselves and so.

Speaker Change: For our data lots of new products in the data engineering space, including iceberg. So.

Speaker Change: But I would say in my mind, the pretty substantial changes.

Speaker Change: From that perspective, I think we are.

Speaker Change: Just feeling more confident about.

Speaker Change: About who we are and obviously expanding the upper tier of what is possible.

Speaker Change: That we've made in how we operate as a company absolutely first is around product velocity.

Speaker Change: It used to be that people would have to bring their data into snowflake to get something done, but the things like iceberg. We can we can take care of that right off the bat without any need for movement. I think product velocity is is one part but to what Mike was talking about I think that is in other.

Speaker Change: I think if you look at that pace.

Speaker Change: How we've been able to get AI products out to market.

Speaker Change: I think it's been it's been remarkable but theres a lot more innovation that is that is happening we have a big effort around AI powered migrations that youll hear more about we have invested heavily in data collaboration and sharing with release of things like an internal marketplace.

Speaker Change: None of the use case lifecycle up the discipline needed to understand.

Speaker Change: We can create value for our customers map it out in a thoughtful way.

Speaker Change: Far far data lots of new products in the data engineering.

Speaker Change: And then engage in a fairly.

Speaker Change: Base, including iceberg, so from that perspective, I think we are just feeling more confident.

Speaker Change: I would say constant.

Speaker Change: At constant conversation about what are the best places our account teams and our customers.

Speaker Change: Who we are and obviously expanding the upper tier of what is possible.

Speaker Change: Can come to a shared understanding of the projects that we should be that we should be working on anything.

Speaker Change: Previously it used to be that people would have to bring their data into snowflake to get something done, but the things like iceberg. We can we can take care of that right off the bat without any need for movement. I think product velocity is is one part but to what Mike was talking about I think that is in <unk>.

Speaker Change: And I think that area is becoming more and more of a science, where we are.

Speaker Change: Where we are able to say what the best people and the team do on have more folks too.

Speaker Change: To be more like them I think there's just a maturity when it comes to use case use cases prosecution.

Speaker Change: Are there none of the use case lifecycle up the discipline needed to understand that we can create value for our customers map it out in a thoughtful way.

Speaker Change: I think the third piece.

Speaker Change: Which is what gives us confidence about new products is then how all of these come together.

Speaker Change: How things are multiplex OLED from the product team to the sales team I mean at the end of the day, it's unreasonable for Christian right to expect that one sales person is going to know about the 400 things that we launched last year is just not a thing until we increasingly have specialist teams that know what it is to take for example cleaner.

Speaker Change: And then engage in a fairly.

Speaker Change: I would say constant.

Speaker Change: Constant conversation about what are the best places our account teams on our customers Ken.

Speaker Change: Can come to a shared understanding after projects that we should be that we should be working on anything.

Speaker Change: <unk> to the two dozen most important customers that they must reach this year.

Speaker Change: And I think that area is becoming more and more of a science, where we are.

Speaker Change: Compared to pretty much all of our customers, who we think can benefit from key data engineering features are key AI features I think it is that maturity.

Speaker Change: Where we are able to say what the best people and the team do on have more folks too.

To be more like them I think there's just a maturity when it comes to use case use case prosecution.

Speaker Change: And the ability to take the right feature to the right customer to create value that I think positions us overall better.

Speaker Change: I think the third piece.

Speaker Change: Which is what gives us confidence about new products is then how all of these come together.

Speaker Change: And the final thing that I'll add on here is that we've also cleaned up how we work with partners.

Speaker Change: How things are multiplex OLED from the product team to the sales team I mean at the end of the day, It's unreasonable Parker Center I do expect that one salesperson, who is going to know about the 400 things that we launched last year is just not a thing until we increasingly have specialist teams that know what it is to take for example clean room.

Speaker Change: Definitely Isps, but also system integrators.

Speaker Change: And I think youll see more progress on that side as well. So we are very proud.

Speaker Change: Our ISP partners like relational AI.

Speaker Change: <unk> to the two dozen most important customers that they must reach this year.

Speaker Change: <unk> of course, Blue Yonder, with whom we have a fairly deep partnership.

Speaker Change: Compared to pretty much all of our customers, who we think can benefit from key data engineering features Archie AI features I think it is that maturity.

Speaker Change: Succeeding along with Snowflake, so it's a multifaceted effort, but they build on the same core primitive off great product sales.

Speaker Change: Sales team that knows how to execute at scale and ability to thoughtfully overlay of new things that we should be doing on what is a very large sales force.

Speaker Change: And the ability to take the right feature to the right customer to create value that I think positions us overall better and the final thing that I'll add on here is that we've also cleaned up how we work with partners.

Speaker Change: Super helpful and really clear.

Mike: Mike maybe one for you.

Speaker Change: Definitely Isps, but also system integrators.

Speaker Change: We still have you.

Speaker Change: The guide for next year. It does seem like it's starting I think you've done. This question a few different ways. It's starting at a stronger place than if I look a year ago. If we look a year ago. When you were incorporating maybe some iceberg risk so to the extent that you can put a finer point on that confidence that you have to put that guide out there again, implying some acts.

Speaker Change: And I think Youll see more progress on that side is also we are very proud.

Speaker Change: Our ISP partners like relational AI.

Speaker Change: <unk> of course, Blue Yonder, with whom we have a fairly deep partnership.

Speaker Change: Succeeding along with Snowflake, so it's a multifaceted effort, but they build on the same core primitive off great product sales.

Speaker Change: Celebration.

Speaker Change: You mentioned, some sugar I mentioned, some new products potentially ramping in the second half from a contribution standpoint, how do we think about iceberg.

Speaker Change: Sales team that knows how to execute at scale and ability to thoughtfully overlay of new things that we should be doing on what is a very large sales force.

Speaker Change: As a tailwind or headwind in that guide and how do we think about MLR stabilization.

Speaker Change: 126 in the context of that guide any finer points you would put on it.

Speaker Change: Super helpful and really clear.

Speaker Change: First of all I think NR is pretty stable I'm, not saying, it's not going to go to 125 or 124, but I don't really see it it's going to be in the mid 100 <unk> is what we are predicting.

Brad Zelnick: Mike maybe one for you.

Speaker Change: We still have you.

Speaker Change: The guide for next year. It does seem like it's starting to that you've gotten this question a few different ways. It's starting at a stronger place than if I look a year ago as we look a year ago. When you were incorporating maybe some iceberg risk so to the extent that you can put a finer point on that confidence that you have to put that guide out there again, implying some acts.

Speaker Change: In terms of iceberg, we're really now seeing iceberg is more of a tailwind than a headwind as we it's opening up so much more data for us we've yet to see massive amounts of data move out of self like yes. There has been some but storage silver remains at roughly 11% of our revenue.

Speaker Change: Celebration.

Speaker Change: You mentioned, some sugar I mentioned, some new products potentially ramping in the second half from a contribution standpoint, how do we think about iceberg.

Speaker Change: And we are seeing workloads, otherwise wouldn't have been accessible to snowflake. So I think that's good in our guide is based upon the strength of what we're seeing with customer commitments and as I said before we've done a really good job this year Theres still room for improvement always.

Speaker Change: As a tailwind or headwind in that guide and how do we think about MLR stabilization.

Speaker Change: 126 in the context of that guide any finer points you put on it.

Speaker Change: Yes first of all I think <unk> is pretty stable I'm, not saying, it's not going to go to 125 or 124, but I don't really see it it's going to be in the mid 100 <unk> is what we are predicting.

Speaker Change: And there will always be room for improvement but.

Speaker Change: I think we're getting much better at working with customers to identify new workloads that will go into production that gives us high confidence.

Speaker Change: In terms of iceberg, we're really now seeing iceberg is more of a tailwind than headwind as we it's opening up so much more data for us we've yet to see massive amounts of data move out of stocks like yes. There has been some but storage silver remains at roughly 11% of our revenue.

Speaker Change: To add on to what Mike said, which is I've said this before the iceberg story is one that snowflake can right. We've made all the right investments in the pharma how broadly it is it is getting adopted.

Speaker Change: And yes, while there will be some customers who might want to move data that is in snowflake or to iceberg.

Speaker Change: And we are seeing workloads that otherwise wouldn't have been accessible to snowflake, So I think thats good and.

Speaker Change: Vastly more opportunity for us to take snowflake.

Speaker Change: Our guide is based upon the strength of what we're seeing with customer commitments and as I said before.

Speaker Change: Well the data is and Thats, what I mean, when I say. This is this is our history right and Thats, what we are in the process.

Speaker Change: You've done a really good job this year Theres still room for improvement always.

Speaker Change: And we will always be room for improvement but.

Speaker Change: Doing well.

Speaker Change: We have had success with a number of data engineering use cases, we think that there are a lot of data analytics use cases to also go after and that's the exciting opportunity that that has opened up for us.

Speaker Change: We're getting much better at working with customers to identify new workloads that will go into production that gives us high confidence aside.

Speaker Change: I'll just add on to what Mike said, which is I've said this before the iceberg story is one that snowflake and right.

Speaker Change: I'll add that I think an iceberg, we've shifted from theoretical to actual consumption and actual revenue coming already materialized into us.

Speaker Change: Did all the right investments in the pharma how broadly it is it is getting adopted.

Speaker Change: While there will be some customers who might want to move data that is.

Speaker Change: Congrats to you guys. Thanks again.

Speaker Change: Thank you for your question. Our next question is from the line of Mark Murphy with Jpmorgan. Your line is now open.

Speaker Change: Or to the iceberg.

Speaker Change: <unk> more opportunity for us to take snowflake to where the data is and Thats, what I mean, when I say. This is this is our history to right and Thats. What we are in the process of doing.

Speaker Change: Great. Thank you for taking the question. This is <unk> on for Mark Murphy and I Echo the congrats.

Speaker Change: Curious to get your take on a couple of the major recent industry developments, one being deep seek models and the other being the large scale datacenter build outs at Star Gate of 100 to 500 billion and now meta announcing the 200 billion project.

Speaker Change: How would you think through the direct and indirect opportunities for snowflake with that much data in motion for instance, deep seek usage and cortex or some of the broader data management or due to integration needs as your customers start to tap into the services. Thank you.

Speaker Change: I'll add that I think an iceberg.

Speaker Change: Shifting from theoretical to actual consumption and actual revenue coming already materialized into us.

Speaker Change: Okay.

Speaker Change: Congrats to you guys. Thanks again.

Speaker Change: This is a pretty dynamic space, which seems to change pretty dramatically every every three months.

Speaker Change: Thank you for your question next question is from the line of Mark Murphy with Jpmorgan. Your line is now open.

Speaker Change: But.

Speaker Change: Great. Thank you for taking the question. This is <unk> on for Mark Murphy and I Echo the congrats.

Speaker Change: In as much as deep Sika is interesting I think the work that <unk> doing and dropped three and what it is capable of is is equally interesting.

Speaker Change: Curious to get your take on a couple of the major recent industry developments, one being deep seek models and the other being the large scale datacenter build outs at star gate of $100 billion to $500 billion in Alberta announcing the 200 billion project.

Speaker Change: I think we are.

Speaker Change: Definitely headed to a world in which there are now several players it's not to any longer.

Speaker Change: Or would you think through the direct and indirect opportunities for snowflake with that much data in motion for instance, deep seek usage and cortex or some of the broader data management or due to integration needs as your customers start to tap into the services. Thank you.

Speaker Change: That are leading the charge and then it comes to the world innovations.

Speaker Change: With AI and the fact that it is a healthy combination.

Speaker Change: Ill open source models as.

Speaker Change: As well as proprietary models.

Speaker Change: We think is a.

Speaker Change: Okay.

This is a pretty dynamic space, which seems to change pretty dramatically every every three months.

Speaker Change: Is a good thing.

Speaker Change: Our value comes.

Speaker Change: From our customers being able to bring all of their data together.

Speaker Change: But.

Speaker Change: In as much as deep seek is interesting I think the work that <unk> doing and dropped three and what it is capable of.

Speaker Change: Into one place and drive more and more value.

Speaker Change: It.

Speaker Change: And.

Speaker Change: What our partnerships with the leading module makers helped the world indicates.

Speaker Change: <unk> is equally interesting.

I think.

Speaker Change: Definitely headed to a world in which there are now several players it's not to any longer.

Speaker Change: <unk> is an implicit acknowledgment that we have a big role to play in this world of AI and so what we're doing is building the best products that can take advantage of the data gravity that we have.

Speaker Change: That are leading the charge and then it comes to the world innovations.

Speaker Change: With AI and the fact that it is a healthy combination.

Speaker Change: And access.

Speaker Change: Two the biggest best models that that are on that are on the planet.

Speaker Change: Open source models.

Speaker Change: As well as proprietary models.

Speaker Change: We think is a.

Speaker Change: Absolutely I think there is a belief on the part of many especially the ones that can afford it.

Speaker Change: Is a good thing.

Speaker Change: Our value comes.

Speaker Change: There are more breakthroughs to be had by investing hundreds of millions of dollars.

Speaker Change: From our customers being able to bring all of their data together.

Speaker Change: Sadly are not that's not us.

Speaker Change: Into one place and drive more and more value.

Speaker Change: But I think I'm very happy about our ability to work with these folks and create value for our customers.

Speaker Change: The.

Speaker Change: And.

Speaker Change: What our partnerships with the leading module makers of the world indicate.

Speaker Change: Thank you Sri there and congrats on a very productive first year.

Speaker Change: Thank you.

Speaker Change: <unk> is an implicit acknowledgment that we have a big role to play in this world of AI and so what we are doing is building the best products that can take advantage of the data gravity that we have.

Speaker Change: Thank you for your question.

Speaker Change: Next question is from the line of Kash Rangan with Goldman Sachs. Your line is now open.

Speaker Change: Hey, Thanks for taking my question. This is Matt Marciano on for Kash Rangan treat our one for you I know snowflake as recently coming off their sales kickoff. So it would just be great to get some of your takeaways from the event and kind of what the key message was salesforce, whether it's around prosecuting new use cases or pushing some of the newer products Snowflake is starting tomorrow.

Speaker Change: And access.

Speaker Change: Two the biggest best models that that are on that are on the planet.

Speaker Change: Absolutely I think there is a belief on the part of many especially the ones that can afford it.

Speaker Change: Thank you.

Speaker Change: There are more breakthroughs to be had by investing hundreds of millions of dollars.

Speaker Change: Yeah.

Speaker Change: As you folks know.

Speaker Change: Thirdly are not that's not us.

Speaker Change: Sales kickoff.

Speaker Change: But I feel very happy about our ability to work with these folks and create value for our customers.

Speaker Change: Is about unifying around a common message a common theme of sense of purpose.

Speaker Change: I think I.

Speaker Change: Thank you Sri there and congrats on a very productive first year.

Speaker Change: The fund the.

Speaker Change: Into the anthem.

Speaker Change: Thank you.

Speaker Change: Among the books.

Speaker Change: Thank you for your question.

Speaker Change: To be infections I think it was it was very good.

Speaker Change: The next question is from the line of Kash Rangan with Goldman Sachs. Your line is now open.

Speaker Change: <unk>.

Speaker Change: I can't obviously at 10%.

Matt: Hey, Thanks for taking my question. This is Matt <unk> on for Kash Rangan treat our one for you I know so far it has recently coming off their sales kickoff. So it would just be great to get some of your takeaways from the event and kind of what the key message was to the sales force, whether it's us around prosecuting new use cases or pushing some of the newer products snowflake is bringing to mark.

Speaker Change: Hey.

Speaker Change: Like all of the meetings at all in parallel, but I've looked at some of the material I think the level of sophistication that our leaders are bringing to how they take care of business or they find out what do exemplary ESC too.

Speaker Change: And how do we hold them as a role model for others and.

Speaker Change: Thank you.

Speaker Change: And how we tactically add on new products.

Speaker Change: As you folks know.

Speaker Change: As I said, we are at a place that is pretty unreasonable for anyone to expect that they are not going to know everything that's northlake does so we've introduced things like colleges.

Speaker Change: Sales kickoff is about unifying around a common message a common theme of sense of purpose.

Speaker Change: I think.

Speaker Change: IPhone the.

Speaker Change: These are essentially construct within snowflake across specialization in different areas. So so that somebody that wants to become an expert in machine learning within a particular pod.

Speaker Change: Into the Azzam.

Among the books.

Speaker Change: To be infectious I think it was it was very good.

Speaker Change: I can't obviously.

Speaker Change: Hey.

Speaker Change: And sign up become that expert and serve as a point of contact for that particular bond.

Speaker Change: Like all of the meetings at all in parallel that looked at some of the material I think the level of sophistication that our leaders are bringing to how they take care of business, where they find out what do exemplary esc's too.

Speaker Change: So what I would say ISR was this sort of sophistication on confidence in being able to take our product to market.

And how do we hold them as a role model for others and.

Speaker Change: Of course, Theres a lot of how do we do right by the customer what creates value for them, how do we work with them.

Speaker Change: And how we talk fully add on new products.

Speaker Change: Also front and center, but these folks are also there anything else to add Mike Christian.

Speaker Change: Auto assignment for our product lineup on what's coming will share more at summit.

Speaker Change: These are essentially construct within snowflake cross specialization in different areas. So so that somebody that wants to become an expert in machine learning within a particular pod can sign up to become that expert and serve as a point of contact part of that particular part.

Speaker Change: Thanks, a lot appreciate your thoughts.

Speaker Change: Thank you for your question.

Speaker Change: Final question is from the line of Joel Fishbein with <unk> Securities. Your line is now open.

Joel Fishbein: Thanks for taking the question I guess, it's a.

Two part one for Rush Street, and one for Mike, but same topic.

Speaker Change: So what I would say ISR was this sort of sophistication on confidence in being able to take our product to market.

Joel Fishbein: You kind of expansion with your partnership with Microsoft.

Speaker Change: Through open AI would love to just get a little more granular about what that means for you guys for snowflake and Mike If you can potentially quantify what that could mean.

Speaker Change: And of course, there is a lot of how do we do right by the customer what creates value for them. How do we work with them that was also front and center, but these folks are also there anything else to add Mike Christian.

Speaker Change: From a revenue standpoint in the future. Thanks.

Speaker Change: I'll start and Christian.

Speaker Change: A lot of excitement for our product lineup on what's coming will share more at summit.

Speaker Change: I should add we have a broad and deep partnership with Microsoft.

Speaker Change: Thanks, a lot appreciate your thoughts.

Speaker Change: At the level of data.

Speaker Change: But also at the level of products the things that we create.

Speaker Change: Thank you for your question.

Speaker Change: Final question is from the line of Joel Fishbein with <unk> Securities. Your line is now open.

Speaker Change: Come out in Microsoft Copilot come out in teams.

Speaker Change: And so.

Joel Fishbein: Thanks for taking the question I guess, it's a two part one for Rush Street, and one for Mike, but the same topic.

Speaker Change: I am very happy with that partnership we are increasingly going to market together in a number of situations and so I think that is all the hugely positive.

Speaker Change: You kind of expansion with your partnership with Microsoft and relates through open AI would love to just get a little more granular about what that means for you guys for snowflake and Mike If you can potentially quantify what that could mean.

Speaker Change: What our the specifics of this partnership.

Speaker Change: <unk> is.

Speaker Change: That open AI models that effectively accessible within snowflake security perimeter.

Speaker Change: From a revenue standpoint in the future. Thanks.

Speaker Change: And that is that's a highly technical definition. It is basically the guarantee that we make to our customers.

Mike Scarpelli: I'll start and Christian.

Speaker Change: That their data is fully under our control is a big deal for our customers I.

Speaker Change: I should add we have a broad and deep partnership with Microsoft.

Speaker Change: At the level of data.

Speaker Change: I think what this means in practice is that every product that we make.

Speaker Change: But also at the level of products the things that we create.

Speaker Change: Starting with simply having the model available in a modern garden that we have I use in traffic all the time in one of our internal instances.

Speaker Change: Come out in Microsoft Copilot come out in teams.

Speaker Change: And so.

Speaker Change: I am very happy with that partnership we are increasingly going to market together in a number of situations and so I think that is all hugely positive.

Speaker Change: <unk> ability to have access to these world class models to then build different kinds of jackpot different kinds of agent take obligations.

Speaker Change: What our the specifics of this partnership means is.

Speaker Change: That open AI models that effectively accessible within snowflake security perimeter.

Speaker Change: And that is that's a highly technical definition. It is basically the guarantee that we make to our customers.

Speaker Change: Means that like open AI models that are available out of the box just like Entropic models are available on AWS out.

Speaker Change: Their data is fully under our control is a big deal for our customers I think what this means in practice is that every product that we make starting with simply having the model available in a modern garden that we have I use in traffic all the time in one of our internal instances.

Speaker Change: Out of the box. So I think this is a pretty big deal for a lot of our customers colour on the overall partnership.

Speaker Change: Okay.

Speaker Change: Leveraging for our own products on Pops of course on <unk>.

Speaker Change: Leveraging this model. So so it is good for our customers to use directly but also for ourselves.

Speaker Change: That ability to have access to these world class models to then build different kinds of jackpot different kinds of agents take applications.

Joel Fishbein: I'll, just say Joel from a.

Joel Fishbein: What does that impact going to be on our business. Obviously, we wouldn't do it if we didn't think it could be impactful to our business, but it's too early to say and I would say that would be upside in our revenue once we see traction with that but it's going to take some time before we get this rolled out to customers.

Speaker Change: And so what this enables is thought us and our customers is to be able to build world class applications without having to have data go anywhere else without special licenses that are needed. It just means that like open AI models that are available out of the box just like Entropic models are available on AWS out.

Joel Fishbein: Thank you very much.

Speaker Change: Thank you for your question there are no additional questions waiting at this time, so I'll pass the call back to <unk> for any closing remarks.

Speaker Change: Out of the box. So I think this is a pretty big deal for a lot of our customers colour on the overall partnership.

Joel Fishbein: Thank you.

In closing I think snowflakes tends to benefit enormously from the data and AI Revolution that is sweeping the enterprise market.

Speaker Change: Okay.

Speaker Change: We're leveraging for our own products on top so of course, that's directionally. That's helpful. In leveraging this model. So so it's good for our customers to use directly but also for ourselves.

Joel Fishbein: Our philosophy and easy to use fast to value efficient product makes us uniquely differentiated and much loved by our customers.

Joel Fishbein: I'll, just say Joel from a.

Joel Fishbein: 30% product revenue growth in fiscal 'twenty, five combined with our strong initial outlook for fiscal 'twenty six.

Joel Fishbein: Demonstrates our ability to execute at scale.

Joel Fishbein: And so we're going to continue our strategy of driving high growth and efficiency.

Joel Fishbein: Our ability to release products and take them to market quickly is what enables hydro simultaneously generating more than $1 billion of.

Joel Fishbein: Thank you very much.

Thank you for your question there are no additional questions waiting at this time, so I'll pass the call back to <unk> for any closing remarks.

Joel Fishbein: Adjusted free cash flow, expanding operating margin and increasing SBC efficiency further demonstrate the strength of the business.

Joel Fishbein: Thank you.

In closing I think snowflake stands to benefit enormously from the data and AI Revolution that is sweeping the enterprise market.

Joel Fishbein: I think the long term profile of Snowflake is one that showcases durable growth and continued margin expansion, which I think is very unique.

Joel Fishbein: Our philosophy and easy to use fast value efficient product makes us uniquely differentiated and much loved by our customers.

Joel Fishbein: And this is really exciting and I look forward to sharing more and more of our progress with all of you along the way. Thank.

Joel Fishbein: 30% product revenue growth in fiscal 'twenty five combined with our strong initial outlook for fiscal 2006 and demonstrates our ability to execute at scale.

Joel Fishbein: Thank you all for joining us.

Joel Fishbein: That concludes the conference call. Thank you for your participation you may now disconnect your lines.

Joel Fishbein: And so we're going to continue our strategy of driving high growth and efficiency.

Joel Fishbein: Our ability to release products and take them to market quickly is what enables high growth simultaneously generating more than $1 billion of.

Joel Fishbein: Adjusted free cash flow, expanding operating margin and increasing SBC efficiency further demonstrate the strength of the business.

Joel Fishbein: I think the long term profile of Snowflake is one that's showcases durable growth and continued margin expansion, which I think is very unique.

Joel Fishbein: And this is really exciting and I look forward to sharing more and more of our progress with all of you along the way.

Joel Fishbein: Thank you all for joining us.

Joel Fishbein: That concludes the conference call. Thank you for your participation you may now disconnect your lines.

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