Snowflake Inc.

Good afternoon, thank you for attending the Q4 Fiscal Year 25 Snowflake Earnings Conference Call. My name is Matt and I'll be your moderator for today's call. All lines 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 will 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 Q4 Fiscal Year 2025 Earnings Call. Joining me on the call today are Sridhar Ramaswamy, our Chief Executive Officer, Mike Scarpelli, our Chief Financial Officer, and Christian Kleinemann, 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 fourth quarter of fiscal 2025 and discuss our guidance for the first quarter and full year fiscal 2026. 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 review. It caused them to differ materially from our actual results. Information concerning these certainties is available in our earnings press release, our most recent Forms 10-K SEC, 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 adoption. The 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. Thank you all for joining us today. What a difference a year makes. It was on this call last year that I was introduced to you as Snowflake's new CEO. I look at the progress we've made in just one year, and I could not be more proud of our team. Our core business is very strong. Our product delivery is in overdrive and our go-to-market engine is humming. We're innovating better than ever and fighting on all cylinders. And we have an enormous opportunity ahead of us. Right now, Snowflake is the most consequential data and AI company 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 are making great progress every day to deliver on that vision. 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. And our focus on our customers has never been stronger. We continue to hear how easy and cost-effective our platform is. And we are hitting more and more multi-product adoption because of the tremendous value we are delivering to our customers. 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. You can see this progress in our strong fourth quarter results. We're just getting started. Product revenue for Q4 was $943 million, up a strong 28% year-over-year. Remaining performance obligations total $6.9 billion, with year-over-year growth of 33%. Our net revenue retention was a very healthy 126%. In the quarter, our non-GAAP operating margin increased to 9%. And our non-GAAP adjusted free cash flow margin was 43%. As you can see, we delivered another quarter of strong revenue growth and overall very healthy results. As I said last quarter, we are obsessed with driving product cohesion. We are continuing to win in the market because Snowflake is easy to use, helps customers break down silos to collaborate and be connected, and is trusted by companies of all sizes and industries. This is why iconic brands like ExxonMobil, Honeywell, the London Stock Exchange Group, and thousands more are betting their business on Snowflake. Fiserv, 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 through Snowflake. This empowers Fiserv 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 enterprises. Last quarter, we had our Build Summit, our biggest event of the year for our builders and developers, followed by regional meetups and events around the world. So far, a record of more than 20,000 attendees have joined these events, showing incredible momentum and excitement for our product vision. We continue to hear how we are making it simpler to develop, build, and innovate on our platform. More and more customers are switching to Snowflake and realizing the incredible ease of use and cost savings our platform delivers. We are also helping our customers develop entirely new revenue streams to monetize their data. For example, supply chain leader Blue Yonder leverages Snowflake's robust data management capabilities and scale to help companies transform their operations by offering AI-powered insights. The Blue Yonder platform processes over 20 billion AI predictions daily to help retailers, manufacturers, and logistics providers better manage inventory, optimize deliveries, and respond to disruptions. It enables their customers to access powerful supply chain intelligence that would be impossible to build on their own. As our competitors continue to require expensive engineering resources to maintain and scale, more and more customers are seeing real bottom-line impact by turning to snow. We have seen more and more Snowflake customers save over 50% by migrating to us from other providers. In fact, we recently announced that SnowConvert, Snowflake's native code conversion tooling, is now free for anyone to help accelerate migrations from Oracle, Teradata, and many other systems to realize these benefits in data analytics. Snowflake is also the de facto circulatory system in the enterprise world. The ability to collaborate and share data is one of our core differentiators. We're seeing strong adoption of our data sharing capabilities with customers like Stripe, NTT, and Braze, which each have active data sharing connections with over 160 partner and customer organizations. These connections enable them to securely exchange data with their partners and customers, driving value across our ecosystems. We are continuing to innovate at lightning speed. This past year, we brought over 400 product capabilities to market, over double the amount we launched the previous year. We've 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 query data at scale. 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. When it comes to AI, last year was foundational for us. We introduced Cortex 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 Analyst. We are supporting a range of market-leading models, including Anthropix Cloud, MetaSlama, and DeepSea. And I'm sure you saw that we just announced our expanded partnership with Microsoft that brings OpenAI's models into Cortex. This makes us the only data platform to seamlessly host both Anthropix and OpenAI's world-leading models, enabling our customers to build data agents while ensuring that their data remains secure in SmartSync. And just a few weeks ago, we introduced Cortex Agents, a world-class agent orchestration framework to enable seamless planning and execution of tasks across structured and unstructured data, all powered by leading models such as Anthropix Cloud. They leverage Cortex Analyst and Cortex Search to deliver state-of-the-art accuracy along with enterprise-grade reliability and governance so customers can build agents at scale. And today, we announced that we are deepening our partnership with Microsoft We are making Cortex Agents available in Microsoft 365 Copilot and Microsoft Teams, bringing millions of users seamless access to information and accelerated productivity all within the Microsoft platform. All of these innovations are focused on driving real value for our customers. They make it easy for people to create a chatbot on structured or unstructured data. And these in turn are the essential building blocks for a strong AI foundation as we head to the next inflection point with agents. We now have over 4,000 customers using our AI and ML technology on a weekly basis. Take AstraZeneca. They are harnessing the power of data and snowflakes to revolutionize healthcare by making its data AI-ready. 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 goal of 20 new medicines by 2030. 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. As our AI offerings continue to scale at lightning speed, our core business continues to be incredibly strong. We have talked a lot about delivering on our vision of being the end-to-end technology provider for our customers' data journey. Already, we are introducing additional Snowflake connectors in private preview, leveraging the technology from our acquisition of DataVolo to provide seamless connectivity and data integration with key platforms like SharePoint, Google Drive, Workday, Slack, and many more. Our customers are loving this capability, and we have strengthened our foundation to deliver an extensible and flexible connectivity platform for unstructured data as well as structured data. As we continue to bring new innovations to market, we 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. Using our Cortex AI technology, our GTM teams can now quickly discover the most relevant sales content by asking natural language questions of our sales knowledge assistant. And with our fast streamlet apps, they can get deep insights into our customers' consumption trends in our Customer 360 app. You'll also see our emphasis on rigor and efficiency in our growth plan. Our headcount growth over the next year is focused on engineering and sales, which are teams with direct impact to revenue. We're using AI internally to drive efficiency in incredible ways. Our teams are able to tap into a wealth of data and information faster than ever before. It is this operational rigor that we instituted in fiscal 25 that is now our way of life going forward. investing in growth while having a maniacal focus on driving efficiency throughout our business. Mike, why don't you take us through more of the financial details?