Our most recent Forms 10 ks and 10 Q, and 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 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 joining us today. We are off to a strong start to the year, and I couldn't be more proud of our team. Our core business is very strong, Our product delivery remains in overdrive. And our go to market engine continues to get stronger. And stronger. We are in the zone and there's still an enormous opportunity ahead. At Snowflake, our mission is to empower every enterprise to achieve its full potential. Data. And AI. Our AI data cloud helps customers get more value out of their data innovate faster, and remove friction from their business operations.

And now they have shared the past few quarters we are extending that value throughout the data life cycle.

We remain disciplined in driving operational rigor across our business gaining greater efficiency even as we continue to invest aggressively in growth. We are building on our strength and executing with urgency and focus. To capture the opportunities ahead.

And sustain durable momentum. Product revenue for q one was $997,000,000 up a strong 26% year over year. Excluding the impact of leap year, product revenue group 28% year over year. Our growth rate was stable quarter over quarter. Showing no deceleration Remaining performance obligations totaled $6,700,000,000 with year over year growth of 34%. Our net revenue retention was a very healthy 124%. As you can see, we have started the year with strong revenue growth and overall very healthy results. And we are increasing our growth expectations. For the year. As I've shared the past few quarters, Snowflake is obsessed with creating product cohesion to make it easier and easier for our customers to innovate [indiscernible] and unlock more value from their data. From ingestion to influx. Enterprise leaders like Canva and JPMorgan Chase bet their business on Snowflake, because our platform is easy to use, connected to enable fluid access to data wherever it sits, and trusted by companies of all sizes and industries. And we are continuing to deliver on our vision of being the end to end technology provider for our customers. Data journey.

We've made important progress in delivering an extensible and flexible connectivity platform for unstructured as well as structured data. Snowflake connectors, which leverages the technology from our acquisition of Datavolo enables customers with seamless connectivity and data integration with key platforms like Google Drive, Workday, Slack, SharePoint, and more, to tap into critical data across the business. Global pharmaceutical leader AstraZeneca, for example, can now analyze critical business data from systems like SAP, and Workday. With the And customers like CloudZero leverage, hundreds of powerful active data sharing connections. To securely exchange data with their partners and customers driving value across our ecosystem. As our data engineering business continues to show strength, we are helping our customers streamline and scale their data pipelines with less and less friction. And realize meaningful cost By consolidating data in Dentsu, marketing agency managing data for numerous Fortune 500 clients, reduced cost by 20% through simplified data architecture, and reduce dependence. On third party They now use Snowflake Data Ping Room to help global brands securely combine customer data without compromising privacy. Enabling more personalized marketing campaigns, while reducing risk. On the analytics front, our world class solutions continue to power. Mission critical operations for our customers.

Global technology leader, Siemens, is collaborating with Snowflake to help manufacturers unlock new levels of operational efficiency and scale. This enables customers unifying their information technology data such as supply chain management and financial data, with operational technology data. Like data from plant floor systems industrial equipment. Leveraging [indiscernible] and Snowflake AI data cloud to gain better insights improve machine performance, and optimize production processes across their business. And as AI reshapes the enterprise, Snowflake is helping our customers lead the way with AI ready data. Take Samsung Ads, a leader in connected TV advertising. They leverage Snowflake to connect advertisers with millions of Samsung consumers while upholding strict privacy standards. By unifying their data on Snowflake, Samsung Ads drives innovation in personalized customer experiences and accelerates the development of new AI and ML powered advertising features enabling advertisers to deliver more relevant content and enhance the advertising We have incredible product momentum. And we are continuing to innovate at lightning speed. In fact, this quarter alone, we have brought over 125 product capabilities to market a % increase over what we delivered in q one of last year. We continue to see strong adoption of open data formats. Especially truly open modern table format like Apache Xperf.

We recently announced that our customers can now leverage many of Snowflake's core capability including data sharing, security, and performance optimization, using Apache Iceberg giving them even more flexibility to manage and query data at scale. When it comes to AI, it's pretty amazing to see our products. A year ago, were just getting started. Now we have over 5,200 accounts using our AI and machine learning on a weekly basis. Cortex AI has gone from a nascent product area to a foundational pillar of enterprise AI strategies for customers around the world. It's accelerating clinical research healthcare companies with unified access to information and turning automotive customer reviews into actionable insights to help them personalize their search. As one of the world's largest food and beverage company, Captimes, is leveraging Snowflake Carthex to empower its employees with innovative innovative AI tool. [indiscernible] Or Kraft Heinz AI. Their new internal AI assistant. This initiative is designed to revolutionize internal workflows enhance efficiency, and drive AI adoption across the organization paving the way for future advancement in agentic AI. Earlier this year, we launched Cortex agents, is now helping customers like Luminate Data, a leading provider of entertainment insight. Scale how they process and retrieve both unstructured and structured data.

That foundation is critical. For developing deploying, and orchestrating the data agents driving their AI applications. And we have further solidified our leadership by continuing to integrate cutting edge models into Cortex. Ensuring day one availability [indiscernible] As I shared last quarter, announced an expanded partnership with Microsoft to host OpenAI model on Microsoft Azure region. We continue to provide our customers with choice and flexibility to leverage the world's leading model for their enterprise AI applications. We also launched the first of our AI powered migration enhanced Now customers can use Cortex to test and review issues during their migration journey making a time intensive process much more efficient. And this is just a start of what AI can do to make migrations go fast. All of these innovations are focused on driving real value for our We are making it easy to tap into structured data. We're making it easy to tap into unstructured data as well. And we're helping our customers with a strong foundation to lead in the era of agentic AI. We're continuing all this momentum. And you'll see even more from us in just a few weeks. During the June, we'll be joined by tens of thousands of customers.

Partners, and developers at Snowflake Summit a four day event, [indiscernible] where we'll reveal some truly exciting new capabilities we are bringing to market to support our customers at every stage of their data churn. As we innovate, we remain committed to scaling efficient. Under the leadership of our new chief revenue officer, Mike Gannon, we have renewed focus and rigor across our go to market needs. We're growing our go to market operation while maintaining our close collaboration across engineering.

Products. Marketing, and sales, bring products to market effectively. This ensures that we're able to deliver greater value to our existing customers while continuing to win new ones. We're also expanding addressable market. With the launch of Snowflake Public Sector Inc. And our recent Department of Defense impact level provisional authorization We're now equipped to deliver. Mission critical data and AI solutions.

To the national security community. Including the United States Department of Defense, its military branches, and industry partners. We also introduced new automotive solutions as part of our AI data cloud for manufacturing. These solutions empower companies like Carmack, and Nissan with advanced data and AI solutions to drive innovation and efficiency. And we are using our own AI internally to boost productivity Our go to market teams use our sales knowledge assistance powered by Cortez. To access insights from our sales knowledge base using natural language. With fast intuitive stream with apps like our customer three sixty app, they can tap into rich insights, on customer consumption.

I'm from of the discipline and efficiency we've built across the business We've got a strong operational rhythm We're investing strategically for growth. And we are laying the groundwork for scale. Mike? Don't you take us through more of the financial details?

Thank you, Shreedhar. In Q1, product revenues grew 26% year over year to reach $997,000,000 As Sridhar mentioned, we saw no deceleration in the business when adjusting for leap debt.

We continue to see meaningful growth from new product offerings. Both Snowpark and Dynamic Tables outperformed expectations in Q1. Other areas of strength included technology in retail sectors. Q1 was a strong quarter for bookings. On our last call, I noted two large customers ran out of capacity in q four. And elected to delay their larger renewals. As expected, both of these accounts signed $100,000,000 plus contracts in Q1 we view this variability in bookings as normal for our model. Our focus on new customer acquisitions is yielding positive results. We added four fifty one net new customers in Q1 growing 19% year over year. Turning to margins.

In Q1, our non GAAP product gross margin was 75.7%.

Our non GAAP operating margin was 9% up four forty two basis points year over year. We continue to focus on driving greater efficiency across the entire company while investing for growth.

Non GAAP adjusted free cash flow margin was 20%, as discussed on our last earnings call.

We had several large customers purchase as they consumed in Q4. This booking behavior impacts the seasonality of our free cash flow. We expect this year to be more second half weighted.

In Q1, we used $491,000,000 to repurchase 3,200,000.0 shares at an average weighted price per share of $152.63 we still have $1,500,000,000 remaining on our authorization through March 2027. We ended the quarter with $4,900,000,000 in cash cash equivalents, short term and long term investments. Now moving to our outlook. We expect Q2 product revenue between 1.035 and $1,040,000,000 representing 25% year over year growth.

We expect Q2 non GAAP operating margin of 8% For FY 2026, we are increasing our revenue guidance to $4,325,000,000 representing 25% year over year growth.

As always, we forecast based on observed customer behavior.

We expect non GAAP gross product gross margin approximately 75% non GAAP operating margin of 8% non GAAP adjusted free cash flow margin of 25%.

Finally, we will host our Investor Day on June 3 in San Francisco in conjunction with Snowflake Summit. If you are interested in attending, please email irsnowflake dot com. Before opening up the line for questions, I just wanted to update you on my transition as mentioned on the Q4 conference call last quarter. We are in the process of interviewing many great candidates We will make an announcement in the future when we have more firm details to share. With that, operator, you can now open up the line for questions.

As a reminder, We will pause here briefly as questions are registered. First question is from the line of Keith Weiss Morgan Stanley. Your line is now open. Thank you. This is Sandra Singh for Keith Weiss. Congrats on an outstanding Q1. Shreedhar, I want to talk about some of the 10 lines of the business particularly around consumption as it progressed through the quarter. How was consumption sort of exiting the quarter and through the month of May? That's my first question that I had a -up. As you know, we don't comment on consumption within a quarter. Overall, q one consumption was was was very strong coming out of the coming out of the holiday period. And, you see that in, in in our results. Of course, q one had one less day compared to q one, last year. But overall, we feel very good about where consumption is.

I don't say, Sanjay, we just gave you guidance for the quarter, and that's based upon the customer behaviors we're seeing through today.

Yeah. And that and that q two guide was very strong.

So I think there's a lot to take away from there.

And then, Shu, maybe on the product front, you mentioned about the adoption of Cortex continuing to build was wondering to see what are sort of the monetization trends associated with Cortex and to what extent are customers making commitments associated with with with Cortex in mind and driving that into their sort of overall consumption of I would split that into a few parts, Sanjay. One is that it is very, very [indiscernible] That invest in Snowflake. People invest in data systems. Not just for what they used to be able to do before, which is things like analytics and machine learning. But increasingly for what they will be able to do today, and in the future And part of what I tell our customers is that by working with us, by bringing data into into Snowflake, They're making their data. They're making their processes AI ready as it were. And we have taken a very measured approach to how we have had our customers use [indiscernible] As you know, we don't sell AI separately. It's not a skew. Customers are not signing up for, you know, contracts on AI. So it's on the existing spend. We have focused a lot on use cases that deliver value today.

I've talked about some of these examples. It's everything from being able to create chatbots on documents, like have created for our own internal enablement or Siemens has created for all of the PDF manuals. Of their 50,000 devices. Two, putting business data directly into the hands of end without needing analysts or BI tools. In in in the mix. We are beginning to see compound systems get adopted where you bring in more than one data source that can, disambiguate between the kinds of questions that the user has or monthly step close where you take data from one source and use that to questions or do from, from other? So it's very graduated from that, you know, from the from that perspective. But the overall point that I want to make is that every user of data, every CDO, our own, now realizes that their data strategy, especially one with Snowflake, is a direct unlock for whatever they're going to do with AI both today and several years down the road. In that sense, I think the the road maps are emerging. It's not do AI separate on the side. It is more of invest in Snowflake to get your data house in gear and realize value from AI as you go along.

Awesome. Appreciate the thoughts.

Thank you for your question. Next question is from the line of Kirk Materne with Evercore ISI. Your line is now open.

Yeah. Thanks very much and congrats on a nice start to the year. Shreedhar, I was wondering if you could just dive in a little bit on the comment around Snowpark and Dynamic Tables outperforming. I was just curious and I'm sure it's a bit of both, how much is just the product maturation and sort of the readiness for customers to take those on? Versus some of the things you guys have got done on the go to market side over the last year. Terms of enablement and, you know, sales enablement with those products? Thanks.

Good question. It's clearly going to be and clearly, it's going to be it's both. You need the you need great products that drive utility. And in in in addition to those features that that you mentioned, Snowpark and Dynamic Table, I would say that our investments in things like Iceberg also vastly increased the scope of the kinds of things that our customers can do with the data And similarly, Snowflake Connectors is then going to make more and more data available for the data engineering tools as well as unlimited. And this is why Christian and I stress the end to end data life cycle a lot and our motto often is that we want to be there from injection to insight. It comes to when it comes to data. Having said that, we have hired in addition to my amazing leaders in sales, that are in charge of driving these more specialized motion. Yes. Not everybody in the Snowflake sales. Team is going to become an expert on our AI products, or the latest advancements in Snowflake connectors out of the box. So we have a specialist motion that is that is very targeted that identifies the highest value use cases that our customers have pioneers implementations for them so that they can be used as a template to be repeated in other places and increasingly with our GSI partners.

And so you need to be able to do both. You need great products that create value but then a go to market team that can initiate the value and do the hard work of both establishing the flagship customers and then driving sales across the team. Great. Thank you all. See you in a couple of weeks.

Thank you for your question.

Question is from the line of Raimo Lenschow with Barclays. Your line is now open.

Hey. Perfect. Sridhar, if if you looking at Snowpark and adoption there, how do you see this playing out at the moment and maybe more in the future? In terms of like going wall to wall with one vendor versus kind of having different pockets of data that is sitting in Europe system versus kind of other systems. How do you What are you seeing there at the moment, and then how do you think that will evolve?

First of all, I think one of the things that is making us successful us Snowflake, a company, is our acknowledgment and willingness to work with customers that have complex data ecosystem. It's always going to be just actually true. That there are, on prem legacy systems and most large customers. Or that there are large data states that are sitting in, in in cloud storage. But I think what is unique about this moment is that customers are, a little unhappy about needing to stitch together many different tools in order to achieve even relatively simple things. If you think about it, if you wanted if you, in your wanted to build a chatbot on a corpus sitting in SharePoint, it's rather painful. Have to use four different tools in order to produce that. And at the end of it, you won't even have your governance. Right? Because you have to go reinvent. Part of what we want to be able to do for cases like that is have Snowflake connectors [indiscernible] And if there is any augmentation or, you know, of the data that is needed, you get that done. Example, with Snowpark. And then you create an index with CAR TEC search and hook it up to a hook it up to a chatbot.

I think we will continue to see specialist players that, exist [indiscernible] know, we partner with them and we value our partnerships with them. But there are also a number of use cases that are right for effectively like, ease of use and consolidation. And that's the thing that we are leaning into. Anything to add, Krishna? Maybe super quickly, the the other investment that we made is around iceberg. Which also creates the opportunity for customers to have an open architecture and be able to mix and match technologies as they see fit.

Yep. Okay. Perfect. And then one quick one for Mike. Obviously, it was very good opportunistic on the share buyback side this quarter. How do you think about that traction there for the rest of the year now that shares are starting to get a look better? Thank you.

You know, we will continue to evaluate share buyback on a quarterly basis, and we have no plans right now. We've been more opportunistic in terms of the buyback, but we do fully anticipate between now and 2027, we will utilize that.

Okay. Thank you.

Thank you for your question. Next question is from the line of Karl Keirstead with UBS. Your line is now open.

Okay, great. Thanks.

Mike, in the comments from you and Sridhar, there was really no mention of macro per se and no evidence in the number that you guys really saw much pressure. You certainly did back in 2022, '23. And I'm just curious Mike, how you would draw a contrast? Is it that a lot of the post COVID optimization efforts are now largely behind you, Snowflake just in a better place in terms of the product portfolio or maybe just the degree of macro pressure, the wobbliness we've all seen in the last couple of months is just not as severe as you had to deal with that post COVID downturn. Some contrast might be helpful. Thank you.

I would say coming out of COVID, think it was very different.

In that environment, we had a lot of digitally native, well funded startups that were spending crazy and weren't really focused on costs. As much. Our customer base has really evolved into the some of the largest companies in the world that are much more mature. That are much more cost [indiscernible] and I am not seeing any big optimizations planned within our customers. Like what we saw coming out of COVID. With those. But I will remind you, our customers are constantly optimizing. That may be a little bit, but they're always looking to do things more efficiently, and that will continue. I would say in terms of the macro right now, we really have not seen the impact of anything with the current all the news on tariffs and other things today.

I I think if we would have seen that, we would have saw it in the new number of new customers. We had a great new customer ad. And we had great additions to RPO with this confidence And that shows the confidence our customers have on making big bets with Snowflake. [indiscernible] is that this is something that our sales team practices as well. Which is to make sure that whenever a use case gets implemented, that they actually take the trouble to tidy things up and make sure that things are optimized. Because our sales team has learned thanks to 2022 and 2023, that inefficient spend from customers inevitably leads to a contraction later anyway. And we are better off making sure that it is always efficient spend.

Okay. Thanks. And maybe as a follow-up to Mike. Mike, did Snowflake have any exposure to any of the larger AI natives that on the margin might have given you a little extra oomph this quarter?

Nothing extraordinary. We do have a number of the AI companies. Our but none of them are they're all less than 1% of our revenue. Okay. Thank you.

Thank you for your question. Next question is from the line of Mark Murphy with JPMorgan. Your line is now open.

Yes. Congrats on the great execution, Mike. Even if we were expecting a strong start to the year in terms of the hiring in sales and marketing, I don't think we would have pictured this many hires.

It's very big number. Can you speak to that dynamic and just whether are you hiring into a pipeline that is strengthening around Cortex or Snowpark or some other opportunity that you'd see opening up?

What I would say, Mark, is just our conference we have in the business. And it's not just AI. It's everything that we're seeing in Snowflake. And as you know, q one is always our biggest hiring from a sales and marketing perspective. Because we try to get those people on board at the beginning of the year to deal so they can be part of our sales kickoff and all of our sales and and enablement that we do with the employees in the beginning of the year with all the new features and stuff. So I wouldn't read that much other than the confidence we see in our business. Okay. But as as you know, we talked about we're still really looking for operational excellence, and we are constantly looking at productivity of people and we will add people, and we will stop adding if we don't see productivity payout with those people.

Okay. Understood. And then, Shreedhar, can you speak to the federal government opportunity because you had touched on it in your comments. Do you think that Doge is going to run through this initial process of eliminating wasteful spend? And then maybe pivot back toward issuing some new RFPs And then you've got the right certifications. I'm just curious if you think some agencies might be moving off legacy on prem data warehouses and maybe be moving some of that onto Snowflake a little later in the year?

This is an active topic of conversation with many departments in the government. I think I was I was in DC a few weeks ago met with a number of folks, and there is both increasing awareness. Of what can do The fact that we have very low operational overhead figures prominence And there's also a little bit of an active change where they're very much focused on how do we make sure that our data infrastructure is run efficiently. There's also a desire for things like cross department sharing of data because that just leads to more efficiency. You'll have more to more to say more to say on this on this topic. And, Mike, our new CFO, certainly actively looking at this area as well. We are optimistic and, hopefully, we'll have more to say about this in the coming quarters.

Thank you.

Thank you for your question. Next question is from the line of Kash Rangan with Goldman Sachs. Your line is now open.

Hi, thank you very much. It's It's really heartening to see the the positive shift in the narrative, strategic positioning, and the, execution and and and handling of everything. So good to see that. Two things still, regardless, I mean, although you're approaching $4,000,000,000 run rate, and growing 26, 27%, which is remarkable, If I could take the liberty of poking at the NER, So one twenty four is good. Not many companies even reached that number. At your scale if they reach your scale. But you have had one one hundred and thirty five new products launched most recent quarter. And Scarpelli will be quick to point out that the NER metric is more of a twenty four month training metric, which I completely appreciate. But why wouldn't and why shouldn't NER be better given the tail effect of new product production the landing customers at record pace, and to Mike's point, the yield of enterprise customers is higher quality. You got AI, which didn't exist in 2022. The volatility, which should play to your advantage. So anything on that front and anything that your new CRO could do to land that number as good as it is even higher?

And I have a very quick follow-up question. Thank you so much.

What I would say on that is, a number of our newer customers that are not in that cohort are contributing to our growth. Beyond what the NRR is. And there was one of our large customers that grew so much last year And this year, they're still doing very well, but they didn't grow as much this year. And that's really the dynamics. It's those newer customers coupled with that. But once again, over time, NRR and revenue growth rate will converge as we become a more mature company.

Got it. And maybe one for you. Thank you, Mike. To hear your voice. One for you, Sridhar. When you look at what's happening with the hyperscalers, I mean, Microsoft certainly talked about Fabric yesterday. Satya was on at Build.

Certainly seem to be making a lot of progress and the idea of data fabric at scale truly open to enable AI agentic architecture is the thing that's not lost in the big guys. Where does that leave Snowflake, and what is going to be the one or two or three things that the Snowflake's platform will do better so you can build your vision towards being a 10 plus billion dollar revenue company. That's it for me. Thank Just like, you know, hyperscalers are [indiscernible] They are amazing both from an engineering execution and business perspective. But they also work with Entropic and OpenAI because they are the best among the best model makers in the world. Similarly, we are very uniquely positioned in terms of being the excellent data platform that that that is. And we've also learned how, cooperating really leads to a better outcome.

Whether it is with AWS, which is our biggest partner, or more and more with Azure. There are many customers that Azure plus Snowflake is just a better outcome for everybody that is involved. And we have deep partnerships between between the team, I think it was six, seven months ago that we announced, for example, that from Snowflake, you could read tables that are in OneLake, And we are also actively talking to them about one way being the data layer for Snowflake that's at the bottom. We also collaborate with them at the top where we have things like Cortex analysts and Cortex agents be available as components in Office Copilot.

Example.

So we very much take this approach of finding customers. For example, who are on on a modernization routine or who want to get value AI value from data, and figure out how we can work how we can work together. Yes. There is competition. But I think there are more cases than not where we are very, very effectively working together. And it's on the uptick, especially with Azure.

That'll be huge. Thank you so much.

Thank you for your question. Next question is from the line of Matthew Hedberg with RBC. Your line is now open.

Hey, guys. This is Mike Richards on for Matt. Thanks for taking the question and congrats on the results here. You know, you've clearly made great progress on the on the product front here, but I'm just curious how you feel about the maturity of the go to market motion to support your AI developments. That's it for me. Thanks.

I'm actually even more pleased with, how we've been able to see the AI opportunity. I've spoken to you folks previously. About how we created the what we then called the AI Ninja, which were a group of solution engineers that were deeply versed with our AI products that could be very close to our sales teams from the around the globe. And just the excitement that our sales team feels about AI but more importantly, their ability to drive AI use cases as to both pitch division, but also run POCs for them, win them, and get them into production. That's been a pretty remarkable transformation for us. And we are now in the process of making this kind of specialized knowledge available to more and more of the sales team. I think it is this combination of specialist teams that know more about a sophisticated area like AI doing the initial work, but having more of the team participate in it that's been hugely positive for us. And we apply similar techniques in data engineering, Though with data engineering, I would say, it's much closer to the knowledge and skill set of more of our sellers. In some sense, it is, it's it's more natural to them.

But AI is doing exceptionally well as well. And we have assembled a team of both specialist sellers in AI but also specialist technical experts that are driving change across the whole sales organization that combined with an increasing understanding of what it takes to drive great use cases in general, not just in AI and data engineering, but also other areas like analytics, really heralds a new era of data driven go to market, which I'm very, very happy about.

Thank you for your question. Next question is from the line of Brad Zelnick with Deutsche Bank. Your line is now open.

Great. Thanks so much and congrats on a good start to the year. Sridhar, as we think I just want to follow-up on Kirk's question. As we think about Snowpark adoption from here, beyond capturing maybe the Spark jobs where data was moving off platform, Can you talk about success that you're seeing in penetrating of the media data science use cases?

And any anecdotal evidence that that you're winning over the data science crowd and and maybe the impact that notebooks are having would be great.

Thanks.

Yeah. I'll start the answer. Christian, Christian can add on. Our notebooks are doing very well. Several thousand customers are actively, actively using them. And there is increasing ability, for example, to train larger and larger machine learning model.

As you folks know, like, the world has made enormous amounts of progress on the basis of machine learning. Even though AI is all the hotness hotness these days. But when it comes to many, many interesting use cases, for example, next best action prediction, which the likes of Hilton do. [indiscernible] you know, how to route guests to the right next ride which customers like Disney do.

These are all things that we have gained increasing market share around. Notebooks continue to expand. We continue to add product capabilities for training bigger, better, faster models. On machines running in running in container services. These tend to be more technical in terms of the kind of people that are involved, the implementations that happen. But definitely appealing to the developers, the data scientists, That's our of product led motion. It's something that is going on pretty well.

Krishna? Yeah. One one quick addition is Snowflake is is a is a collection of libraries and capabilities that our customers do a variety of activities. We see lots of people leveraging it for unstructured data processing which is core part of what we're doing as as as as Friedrich said. We're making more unstructured data available to customers So Snowpark for extracting structure and signal and doing traditional ML on on structured data is a common use case we're seeing. Thank you. Maybe just a quick follow-up, Mike.

Guidance implies a robust ramp through the remainder of the year.

And I think we all see the pace of innovation, excited for what what what's the comment summit.

But what, if anything, would you call out that underpins your confidence Things we might not be thinking about or any key assumptions worth calling out? Thank you. I would just say, as I said, guidance is based upon the observed behavior we see within our customers, coupled with weeks we spend a lot of time and we have for the last five quarters now, and really identifying new workloads going to production. We have a pretty good visibility of of of those, and we're very close with our customer And we know what we're doing. Migrations are are are are moving nicely. We we announced we're we've made snow convert available to all of our customers and partners, and we're seeing an uptick in the amount of usage around that, and that's what gives us the confidence and the guide that we gave.

Great to hear. Thanks again. Thank you for your question.

Next question is from the line of Brent Thill with Jefferies. Your line is now open.

Is Zoe Hin on for Brent, Bill. Thanks for taking the question.

With features like Cortex Analyst and Cortex Agents that, you know, can help users to write more efficient queries? Like, are are you seeing more query optimization as Cortex AI adoption picks up?

And what what's been the net impact on on usage so far in terms of net new queries and query optimization. Thanks. With things like Cortex, [indiscernible] [indiscernible] anything, the end users are a step removed from writing the writing SQL queries. He uses semantic model to aid in figuring out the intent of the user query and then auto generate the SQL [indiscernible] Certainly, we've made available Copilot like features both for, what we call worksheets, which is where people write SQL or Python. But also inside the notebook. To be honest with you, I think there's a huge amount of innovation that is coming there, some of which we will show at the at Summit. The bar for people being able to write code now [indiscernible] know, developer platforms like Cursor, which and get a Copilot and others which can massively increase productivity in terms of the volume of queries that can be written as well as the amount of work that can be done. While we don't have concrete measurements of this leads to x percent more query, we are we are very happy about being able to help our customers write very faster or write code faster and be able to debug it faster as well.

Hey. We we we're saying in the in this calls and other forums that our preference, our our goal is to make sure that customers are optimized all the time I think none of us like the go and and spend money and then optimize and go ups and downs. So we put a lot of effort in in technology. Some of the cortex examples that you have are part of that. But querying size, costing size, governance insights, of it is part of how we help customers be, you know, [indiscernible] all along.

Thank you for your question. Next question is from the line of Patrick Colville with Scotiabank. Your line is now open.

Thank you so much for taking my question. I guess my one is for Sreedhar. Last year, the Arctic LLM was launched. My question is how important are first party foundation models to Snowflake's strategy as of today? Or is there, like, a slight pivot more to kind of partnering with third party foundation models I've said this before. I think the business of training truly large foundation model has gotten to be very a very expensive proposition. We have an amazing team of AI researchers but they tend to focus more on things like post training We have published blogs, for example, about how we can be much more efficient like, more correct at generating SQL queries by using post training techniques. This makes Cortex analyst better I think at least for now, the era of us training, let's call it, frontier foundation models. It's not something that we are actively looking at. But the research team continues to do amazing work As I said in post training, but also in areas like inference optimization, which has a huge impact on latency. It has a huge impact on margins in AI. So we continue to have a robust presence in the area.

But we work with partners. Meta is a big partner. We were a day one launch partner for the Lama Core model that that came up. We actively collaborate with with [indiscernible] OpenAI. Mistral, Reika, lots of model providers. The one fun thing I'll add is that in the area of, embedding models, these are small on some heroes, but they are the models essentially produce fingerprints of documents. That you want the index for chatbots, for example. We have robust embedding models that we have that we have open source. We have to be opportunistic about where we can create value because we simply can't afford to spend the billions of dollars that it takes to be a frontier research lab today.

Crystal, perfect. Thank you, Sreedhar. And can I can I just squeeze in a follow on for Mike? I mean, bottom line is clearly less of a focus when you're growing the top line 26% with the possibility to reaccelerate in the back half of the fiscal year. But 1Q operating margin was strong. Nonetheless, the fiscal year op margin was left unchanged as was the fiscal year free cash flow margin target. So I guess what were the puts and takes there as to why leave those targets unchanged?

Well, what I would say is in q two is when we have our user events, and that's a very expensive event summit that we operate. And that typically has an impact on our operating margin. In Q2, and that's factored in. And we'll just continue to revise our forecast for the year on a quarterly basis going forward.

I actually think that we are being pretty thoughtful when it comes to expanding our operating margin It was 4% in Q1 last year. It's 9% Q1 this year. And this is part of the benefit of what we preach around AI. We spend a lot of time figuring out how engineers can be more productive. With AI, how we can get more work [indiscernible] Similarly, in the sales team, we want to automate many of the tasks that our sales team doesn't like to do anyway so that they can be more productive in front of sellers. We feel that we are in quite a bit of a Goldilocks moment where we can continue to grow revenue very strongly while continuing to be very efficient when it's comes to operating margin and free cash flow.

Thank you for your question.

Next question is from the line of Alex Soukin with Wolfe Research. Your line is now open.

Hey guys, thanks for taking my question.

Maybe just a high level one first for you, Shreedhar or Mike.

I guess, again, seems like what we're seeing what we're hearing from you is the demand environment is really unchanged, untouched by all the macro headlines. You're seeing new product adoption. Ahead of expectations. So maybe just the first one, are you seeing a change? Like, this being driven by you know, any kind of identifiable AI tailwinds you're seeing a change with how customers are either investing in their AI stack with Snowflake or building agents. Specifically. They're building more on data rather than on just folks on the models. Like, maybe just help us understand and and the the AI tailwind or your place within these AI budgets that a lot of your large customers clearly are making those bets.

As I was saying earlier, I think more and more people have internalized that to be good at AI, your data needs to be in here And what we have done on our side is to create the product whether it's a semantic model that is that's sits very close to the data usable by anyone, mind you, not just by Snowflake. But also products like Cortex Analyst, that can actually unlock the value of that data both by immediate use, like a chatbot on a specific dataset, but much more importantly, for use in an agentic workflow.

So more and more of our conversations can now focus on what creates value from a business perspective. So AI for Snowflake, rather than being this additional thing that we do, in some ways, becomes the natural end state for what investing well in data means. And, of course, we are using AI ourselves. Both within the company, but also in different aspects of the product We talked about code generation and notebooks being accelerated by cursor like experiences. On the other hand, we we made SnowConvert, our conversion tool free so that anyone could use them. And we're bringing agentic workflows into Snow Convert so that people can do things like, testing with synthetic data. Far sooner than what they would have done in a traditional waterfalls style migration. I think it's a combination of all of these trends that that are driving Snowflake forward.

Excellent. And maybe just as a follow-up, maybe, Shira, for you or for Christian. There's been a lot of excitement that we've sensed around Gen two and particularly the performance improvements that your customers are seeing.

I guess maybe just touch on are is this potentially leading to unlocking new use cases around the capabilities introduced? Or how should we think about the potential for some of these new functions as they percolate in the platform?

Yeah. The the the Christian here. The the the best way to think about Jim two is our latest and greatest compute environment. What we've done is we've combined the latest hardware instances that we can get from the cloud providers which are often faster but also more expensive. With a good number of software optimizations and improvements that we have And at the end of the day, it's part of our internal ongoing promise to customers to always deliver the best price performance in the market.

Some of the benchmarks that we have on on gen two are are completely phenomenal.

Relative both to Snowflake, say, a year ago, but also to many of the competitive platforms out there. So think of it as price performance, which continues to correlate with time to insight and time to value, and it's a a a material step forward.

Perfect. Thank you, guys. Congrats. Thank you for your question. Next question is from the line of Joel Fishbein with Truist. Your line is now open.

Thanks for taking the Mike, you mentioned earlier on the call you had the strongest new logo quarter, which was fantastic. Just a question around that. Are you seeing is this a result of better, stronger, it's actually execution and strategic focus? Or are you seeing a more favorable win rates in competitive environment? And just as a follow-up to that, is of those $200,000,000 deals, you just tell us which verticals they were in? Thanks.

So on the hundred million dollar deals, they were both in the financial services vertical. And what I would say on the number of new customers, this is not a result of something we put in place this quarter. We started last year with really breaking out an acquisition team that is just focused on new logos. And we're seeing the benefits of the groundwork that we put in place last year. And we're pleased with the results. I think we have a very good leader there. And we're replicating what we're doing in North America and in EMEA as well too. So we're we're pleased with the the number of new logos that we've added, and it's a big focus of ours.

Thank you. Thank you for your question.

Next question is from the line of Brad Reback with Stifel. Your line is now open.

Great. Thanks very much. Last quarter, Mike, you talked about some changes to the Salesforce comp plan as related to bookings, and commits, not just consumption. Maybe an update on how that's tracking and if that had any impact on the strong bookings in the quarter?

Yeah. Obviously, think it helped. But the the real strong bookings for those two big deals that we knew were going to come in, I I would say, I think in general, salespeople are happy with having a bookings but still the principal driver is consumption revenue. And as a reminder, we paid on bookings a stiff last year it's not like we weren't doing it last year. We just are giving them a quota now. For bookings as well too. And I and I and I think it's gonna take some time to see the real fruits of that change, whether that worked or not. But I'm pleased for Q1. I think we had a very solid Q1 and it it definitely helped.

That's great. And then just a quick one getting into the weeds a little bit. CapEx was up a bunch. To a fairly high number. Is there onetime items there? Is this the new level?

No. The CapEx was really associated with our new, headquarters and San Mateo as I I spoke about previously. We signed a new lease in a Menlo Park office, and there's a fair bit of CapEx that went into that as well as in Bellevue. We we talked about I talked about that before too. That really that just opened this week, that office, and it was a fair bit of CapEx that went into that as well too. I'm not expecting any major office build outs the next couple years actually now.

Perfect. Thank you.

Next question is from the line of Tyler Radke with Citi. Your line is now open.

Yeah. Thanks for taking the question here. Mike, you talked about some strength in technology customers in the quarter. Was wondering if you could double click on that and what are you seeing specifically among kind of larger AI native customers in terms of their consumption?

It's good. But as I called up before, we have a number of AI companies, and there's still less than 1% of our opinion.

Okay.

Great. And the follow-up question I had was for Sridhar.

We recently saw Databricks acquire Neon, which was a company that Snowflake Ventures had invested in and I'm just curious if we can an update on your strategy around UniStore and just sort of your view on the positioning over some of these serverless Postgres databases that are out there in the market.

We believed in transactional systems. For Ohio. This is why we got to work on Unistore, what, five years ago. It is for the product is doing very well. Postgres as a standard is nothing to be soft at. And it's adopted it's adopted widely. But we are pretty happy with what we have invested in terms of transactional source so far.

And we will continue to invest in the area because it's a very natural addition to what we do.

Okay. Thank you. Thank you for your question.

Are no additional questions waiting at this time. So I'll pass the call back to Sridhar for any closing remarks.

Thank you.

In closing, Snowflake. Is at the center of today's enterprise AI revolution.

Our focus on making Snowflake easy to use connected to enable fluid access to data wherever it sits, and trusted for enterprise grade performance, is what makes us differentiated and beloved by our customers.

And we are committed supporting them through their end to end data journey. From inception to insights. Our product revenue growth and strong outlook for FY twenty six demonstrate our continued ability to execute at scale. Our pace of innovation coupled with our ability to bring products to market quickly, is driving high growth, and we are committed to maintaining that momentum. We believe Snowflake's long term profile is one that showcases durable high growth and continued margin expansion. It's an exciting time for our company. I look forward to sharing more of our progress in the quarters ahead. Thank you all for joining us.

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