Snowflake Posts Strong Q4 Growth
Data cloud giant Snowflake reported a strong fourth quarter, with product revenue up 30% year-over-year. The company highlighted its "largest-ever contract wins" and a 125% net revenue retention rate, indicating that enterprise spending on data, analytics, and AI readiness remains a top priority.
The leadership announcement overshadowed the strong quarterly performance, as Frank Slootman retired as CEO, effective immediately. Sridhar Ramaswamy, who had been leading the company's AI strategy, was named the new CEO, while Slootman will remain Chairman of the Board. Ramaswamy joined Snowflake in May 2023 after it acquired his AI-powered search engine startup, Neeva. Before co-founding Neeva, Ramaswamy spent 15 years at Google, where he rose to become the Senior Vice President of Ads & Commerce. Beyond the headline growth, total fourth-quarter revenue reached $1.28 billion. The company's remaining performance obligations (RPO), which represent future revenue under contract, surged by 42% year-over-year to $9.77 billion, signaling a strong sales pipeline. Growth was driven by significant expansion with large customers. The number of clients spending over $1 million annually grew 27% to 733. This quarter also included the company's largest-ever deal, a contract worth over $400 million. The company's push into artificial intelligence is showing tangible results, with more than 9,100 accounts now utilizing its AI products. Ramaswamy has been central to this strategy, leading the launch of Snowflake Cortex, a service designed to help customers build AI applications securely with their own data. Despite the strong results, the company's stock fell in after-hours trading following the news. For the upcoming fiscal year, Snowflake projects product revenue growth of approximately 27%.
