Snowflake Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Snowflake Q3 FY21 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Kimmy Sexton, Head of Investor Relations, Thank you. Please go ahead.

Good afternoon, and thank you for joining us on Snowflake's Q3 Fiscal 2021 Earnings Call. Joining me are Frank Slootman, our Chairman and Chief Executive Officer, and Mike Scarpelli, our Chief Financial Officer. During today's call, we will review our financial results for third quarter fiscal 2021 and discuss our guidance for the fourth quarter and full year fiscal 2021. During today's call, we will make forward-looking statements, including statements related to the expected performance of our business, future financial results, strategy, long-term growth, and overall future prospects. These statements are subject to risks and uncertainties, which could cause them to differ materially from actual results. Information concerning those risks is available in our earnings press release distributed after market close today and in our SEC filings, including the Form 10-Q for the quarter ended October 31, 2020. That will be filed with the SEC today. We caution you not to place undue reliance on forward looking statements and undertake no duty or obligation to update any forward looking statements as a result of new information, future events, or changes in our expectations. We'd also like to point out that on today's call, we will report both GAAP and non-GAAP results. We use these non-GAAP financial measures internally for financial and operational decision making purposes and as a means to evaluate period to period comparisons. Non-GAAP financial measures are presented in addition to and not as a substitute for financial measures calculated in accordance with GAAP. To see the reconciliation of these non-GAAP measures, please refer to our earnings press release distributed earlier today and our investor presentation, which are posted at investors.snowflake.com. A replay of today's call will also be posted on the website. With that, I would now like to turn the call over to Frank.

Thanks, Jimmy, and good afternoon, everybody, and thanks for joining us on our inaugural earnings call. Let's review the results. We saw strong consumption trends across our customer base in Q3, with product revenue growing 115% year-on-year to $148 million and a net revenue retention rate of 162%. Coupled with this rapid growth, we continue to see improving unit economics, cash flow, and operating efficiency. Our growth is driven by long-term secular trends in data science and analytics, enabled by cloud-scale computing. With the onslaught of digital transformation, data operations have become the beating heart of the modern enterprise. The pandemic has been more or less neutral to our business. Some businesses were negatively affected in terms of demand sentiment, but others stepped up their data strategy, giving the new complexities of the health crisis and economic effects. It bears repeating that Snowflake is not a SaaS business model. We're a consumption company, and our reported revenue has a direct relationship with the consumption of our platform during the period. The consumption model is variable, not fixed, meaning our model places no limits on how much of our platform a customer can consume, and this contributes to our strong revenue retention rate. The technology is now ahead of people's ability to take advantage of virtually unbounded capacity, scale, and performance. Over the past year, Snowflake has augmented its selling motion to campaign some of the largest enterprises and institutions in the world. Snowflake is well represented now in eight of the Fortune 10, and we added 12 Fortune 500 customers in Q3, including Fiserv and Geico. Interest in Snowflake is growing. We hosted our Snowflake Data Cloud Summit two weeks ago at over 40,000 registrations, up from 15,000 registrations at our Snowflake Summit In June. Shifting gears, I'd like to take a moment here and introduce you to the Snowflake Data Club because it's the centerpiece of our mission and strategy. As an industry, we have struggled to mobilize our data, meaning that it's been hard to put data in the service of our enterprise, and we set out to change that. As we see it, we've never had a data cloud in the history of computing. We are used to SaaS applications as application clouds and the massive infrastructure clouds like AWS, Azure, and Google Cloud, servers and storage you can consume by the drain. But data lives absolutely everywhere in millions of places, held hostage by machines, applications, networks, and clouds. We have long needed to blend and join disparate data sets. That's why we built data warehouses in the first place. They were expensive, capacity constrained, and required tons of data preparation and manipulation prior to use. Only the largest, most demanding data estates could afford these platforms, so they were never pervasive. Snowflake changed that, drastically scaling down to the smallest jobs and radically changing the economics with a highly elastic utility model. Not only could everybody now afford these great powers, Snowflake also removed constraints on data volume, cluster performance, and concurrent workload execution. Even high-end users reported being able to cut their existing spend and expand their workloads dramatically at the same time. As compelling as Snowflake was to turbo existing workloads, old habits die hard. Many customers are still evaluating data platforms one workload at a time, basically limiting data operations to their silos. That's like steering a ship by its wake. Future workload will look different, with machine learning and data science becoming ultimate users. The workload at a time mentality leads to building the silos of the future. The Snowflake Data Cloud is a data universe, a global data orbit, where Snowflake users effortlessly plug in, discover, explore, and access data from an incredible growing variety of sources. It's a different way of thinking about the data needs of the future. The Snowflake Data Cloud combines world-class execution with unfettered data access. Customers need both. We're seeing promising signs of adoption with already 23% of our customers using our data sharing capabilities. We also continue to onboard new data providers. And in Q3, we added Standard & Poor's Global, Morningstar, and CoreLogic, to name a few. And we now have over 100 data providers on our marketplace. At the Snowflake Data Cloud Summit, we heard from customers about the impact that the data cloud is having on their business. A retail rewards customer has fully embraced the data cloud. Snowflake allows them to securely share data sets with media partners and power customer-facing applications to target their end users. Commercial data providers are also turning to Snowflake to reach new customers and monetize their data by making their data available in the Snowflake data marketplace. Experian helps retail customers accelerate their digital transformation efforts. Experienced retail customers are now reaching shoppers online with insights garnered from Snowflake Data Marketplace to reach customers who are no longer shopping in stores. Let's highlight some product announcements from the Snowflake Data Cloud Summit in November. First, we've grown our partnership with Salesforce. The previously announced Outlook Connector is now generally available and allows customers to more easily sync Salesforce data with Snowflake. Secondly, we announced Snowpark, our new developer experience. Snowpark will enable users to write code in their preferred language to build data transformations and score machine learning models, all processed by Snowflake. Third, we announced support for unstructured data, in addition to our longstanding support for structured and semi-structured data. And lastly, we are enhancing our data governance strategy with the introduction of row access policies, tagging, and column masking. This will help our customers control access by user type in a highly granular fashion. Very important given the heightened sensitivity around data governance. These capabilities are essential to grow in the data cloud, and you can expect more platform enhancements from us going forward. Before closing, I would like to highlight the upcoming release of our book, The Rise of the Data Clouds. We wrote this book because the data cloud is the centerpiece of our strategy and vision. We showcase many customers in numerous vertical industries with their Snowflake journeys and experiences. It's meant to enlighten and inspire, something we call the art of the possible. The book will be available on December 4th. In closing, we're pleased with our quarter and excited about the momentum coming out of the Data Cloud Summit as we head into the final quarter of our fiscal year. With that, I will turn the call over to Mike.