Snowflake reports 54 percent growth in Q4; bets big on hiring

Frank Slootman | Snowflake Q1

Fourth quarter results from Snowflake reported $555.3m in product revenue for the data cloud company, representing 54 percent year-on-year (YoY) growth. Fiscal year 2023 saw Snowflake achieve 70 percent YoY product revenue growth, totaling $1.9bn.

In its forecast for the first quarter of fiscal 2024, Snowflake’s product revenue is expected to fall between $568-573m, falling short of analyst anticipation. Stocks fell 6.8 percent accordingly following the results announcement.

The Snowflake results revealed a total of 7,828 customers for the company, and a net revenue retention rate of 158 percent. 330 of those customers boast trailing 12-month product revenue greater than $1m.

During fiscal 2023, Snowflake added approximately 1,900 net new employees, and plans to add 1,000 more in the new fiscal year, going against the current layoff curve in tech. According to an earnings call with chief financial officer Mike Scarpelli, the current hiring market is “favorable for Snowflake, and we’ll continue to prioritize hiring in product, engineering, and sales.”

The Q4 results from Snowflake came alongside news of the company expanding its partnership with Amazon Web Services (AWS). The agreement will see Snowflake growing its AWS spend to $2.5bn, with both companies jointly contributing millions of dollars to support go-to-market efforts. The expansion of the AWS collaboration will span across areas including sales and marketing, industry solutions and product integrations.

“This partnership is aimed at driving growth in innovation,” according to Scarpelli. “(With) Azure, we’re still two and a half years into (a) five-year contract. We will start discussing with Azure trying to get better terms… We’re clearly running ahead with Azure and AWS, and that’s why we did an early renewal, (a) new contract with AWS.”

Frank Slootman, chairman and CEO, Snowflake, commented: “We are operating in a vast and growing market, prioritizing capabilities that support the core mission of the enterprise, and staying on track for our $10bn product revenue goal in fiscal 2029.”