Snowflake Inc.

Good afternoon. Thank you for attending the Snowflake Q3 Fiscal 2025 Earnings Conference Call. My name is Matt, and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call for an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad. I'll now have to pass the conference over to our host, Jimmy Sexton, Head of Investor Relations. Jimmy, please go ahead.

Good afternoon, and thank you for joining us on Snowflake's Q3 Fiscal 2025 Earnings Call. Joining me on the call today is Sridhar Ramaswamy, our Chief Executive Officer, Mike Scarpelli, our Chief Financial Officer, and Christian Kleinerman, our Executive Vice President of Product, who will participate in the Q&A session. During today's call, we will review our financial results for the third quarter fiscal 2025 and discuss our guidance for the fourth quarter and full year fiscal 2025. During today's call, we will make forward-looking statements, including statements related to our business operations and financial performance. These statements are subject to risks and uncertainties, which could cause them to differ materially from our actual results. Information concerning these risks and uncertainties is available in our earnings press release, our most recent forms 10K and 10Q, and our other SEC reports. 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. 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 adoptions. Earnings press release and investor presentation are available on our website 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 Sridhar.

Thanks, Jimmy. And hi, everyone. Thanks for joining us today. As you've seen by now, we had a strong third quarter, outperforming expectations and increasing our FY25 product revenue guide. More and more, it is clear that our customers believe Snowflake is the easiest and most cost-effective. Welcome back. I'd now like to pass the call back over to Sridhar. Thanks, Jimmy, and everyone. Thanks for joining us today. As you've seen by now, we had a strong third quarter, outperforming expectations and increasing our fiscal 25 product revenue guide. One and more, it is clear that our customers believe Snowflake is the easiest and most cost-effective enterprise data platform out there. Our customers are getting tremendous value from us, with many of them going all-in on Snowflake. Our product development engine continues to accelerate as we launched the same number of Tier 1 features to general availability in Q3 as we did in all of Fiscal 24. Our AI feature family, Snowflake Cortex, is showing significant adoption. And we improved our go-to-market motion across the board, and it's having a huge impact on new product adoption. We are firing on all cylinders. The credit goes to the entire Snowflake team, and I'm very encouraged by our progress showing up so well in the numbers. Product revenue for the quarter was $900 million, up a strong 29% year-on-year. Remaining performance obligations totaled $5.7 billion, with year-over-year growth accelerating to 55%. Given the strong quarter, we are again increasing our product revenue outlook for the year. In the quarter, non-graph operating margin improved to 6%. Having driven strong gains in product speed and revenue growth, in Q3, we initiated an even more rigorous approach to cost management. We've been creating centralized and more efficient teams for some areas and removing redundant management layers, which enables us to make decisions faster. And we are deploying AI to drive higher velocity while reducing overall costs. We also eliminated a number of efforts that were underperforming and not aligned with our top goals as a company. I'm particularly proud of the team for driving efficiency throughout our business. This operational rigor is now a way of life for us, enabling us to improve profitability while aggressively investing in our innovation and go-to-market engine. Our obsessive drive to produce product cohesion and ease of use has built Snowflake into the easiest-to-use and most cost-effective enterprise data platform. And that is what is leading us to win new logo after new logo, expand within our customer base, and displace our competition over and over again. Like in the quarter when a global telecom giant went all in on Snowflake as a data foundation. We are helping them process network performance data from systems that carry a large volume of the world's mobile traffic so they can consistently deliver superior network speeds and reliability to millions of mobile users worldwide. I personally spent a lot of time connecting with our customers around the world. Much of it took place during our Snowflake World Tours, where we welcomed a record 29,000 attendees across 24 in-person events. In the cities we returned to, we saw a remarkable 40% increase in attendance year over year, demonstrating the incredible momentum we are seeing at a global scale. In city after city, we heard the same three things from our customers. how much they allow our technology, how easy it is to use, and how quickly they get real value and lower total cost of ownership. On the flip side, we also consistently hear a lot of feedback that some of our computer's technology is highly complex and requires a ton of highly expensive engineering resources. And with complexity comes risk. What is one step in Snowflake? It's 10 on some other platform. That's 10 times more chances to engineer a mistake. It's just not that scalable. And the joy of Snowflake is that it works right out of the box. We're helping our customers drive down costs. For example, Snowpark is generating one data engineering win after another. We've had multiple customers saying that they have saved at least 50% migrating to Snowflake from other providers. And that's how our technology sells itself and why Snowpark is on track to be roughly 3% of our revenue. Snowflake Superpower is the ability to simplify the implementation of all the popular enterprise data architecture patterns that customers want. It's what makes us the best enterprise-grade technology for the warehouse, the lake house, and data mesh architectures. We give our customers real architectural choice without trade-offs on enterprise capabilities, and they love it. Warner Brothers Discovery uses Snowflake to unify data across their vast portfolio, including streaming, gaming, news, and studio divisions. This helps them deliver personalized entertainment recommendations to millions of viewers. And global hotel chain Hyatt is using Snowflake to better understand guests' preferences across their properties, helping craft a more personalized stay for guests throughout their travel journey. and we are accelerating across the business. As I said, our foot's on the gas when it comes to product innovation. Just last week, we held our Build Developer Summit for more than 10,000 attendees worldwide. We made some key announcements in our core business, like the general availability of Unistore and internal marketplace, and cutting-edge AI innovations like Snowflake Intelligence, a platform to create data agents. Our AI adoption continues to be strong. As of the end of Q3, we have over 1,000 deployed use cases, which you can think of as individual projects we manage with our customers, of our AI and ML products in production deployment. More than 3,200 accounts are now using our AI and ML features. Equally exciting is the momentum that our latest data engineering features are seeing. Our push into interoperability and transforming data that previously would not have been addressed by Snowflake is proving to be a key differentiator with our customers. These features are now north of a $200 million run rate as of the end of Q3. We're also partnering with Microsoft and ServiceNow to increase data interoperability, making it easier for our customers to bring data in and out of Snowflake to build and run applications faster. As we launch new products like Unistore, Snowflake Open Catalog, and others, we are fine-tuning our go-to-market motion that brings together engineering, product, marketing, and sales to rapidly launch, test, iterate, and scale products. It is giving us a scalable way to broaden our footprint with our customers and also acquire new ones. Our product innovation is fueling alignment with our cloud infrastructure partners. Through our collaboration with AWS, we have booked over $3.9 billion over the past four quarters, an increase of 68% versus the preceding four quarters. Looking at our results in Q3, I can tell you that these shifts are working and enabling us to drive multi-product adoption and further strengthen our position in the market. Finally, I want to talk about the tectonic shifts happening in the world of data. We're seeing massive adoption of open data formats especially truly open formats like Apache Iceberg. We are justifiably proud of our support for and our investments in Iceberg and the Snowflake Open Catalog based on Apache Polaris that is seeing rapid adoption with developers and enterprises. Similarly, it is clear that AI is going to change how people consume data. Not only is AI going to make structured and unstructured data more interchangeable, it is also going to heavily influence areas like business intelligence. With our unmatched product capability, ease of use, architectural flexibility, comprehensive governance, and prescient bets in Iceberg, Polaris, Cortex, and many others, we are well positioned to be the data platform of choice for enterprises for the next decade. Our intended acquisition of DataVolo strengthens our foundation to deliver an extensible and flexible connectivity platform for unstructured as well as structured data. It accelerates our ability to bring in and vastly simplify data engineering workloads for our customers. On the consumption side, the GA of Snowflake Notebooks, as well as the success and adoption of products like Cortex AI, position us well to take advantage of the new capabilities that AI will enable us to create. As you've probably seen, we just announced a partnership with Anthropic to bring their most powerful models to our customers through Snowflake Cortex AI. This gives enterprises the choice to build cutting-edge AI applications using the model of their choice with the ease, built-in security, and governance of the Snowflake platform. The cost efficiency, flexibility, and extensibility we deliver are why iconic brands like Accor, Chipotle, Comcast, Hyatt, Kraft Heinz, NBCUniversal, Sanofi, Toyota, and thousands more are betting their business on Snowflake. As we move forward, we have a big opportunity to continue to expand with AI throughout the data journey continuum. This isn't just our product vision. It's the ask from some of our most significant customers. They see the ease of use and quality and savings we provide today and want to expand further so they can reduce even more cost by Snowflake handling more and more of their data journey. We see a day when we can power the end-to-end data lifecycle for our customers, and that's for an art star. We come at this from a position of strength that we will continue to leverage. Our core long-term differentiation of an easy-to-use, simple, efficient, integrated product with comprehensive governance, cross-cloud consistency, and collaboration will continue to set us apart. This is exciting, and I look forward to sharing more and more of our progress along the way. With that, Mike, I'll turn it over to you.