Snowflake Inc at Morgan Stanley Technology, Media & Telecom Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Keith Weiss - Morgan Stanley - Analyst : Right. Got it. So I think one of the investor discussions from the outside in on Snowflake, and I think what investors are getting excited about on Snowflake heading into 2025 is this combination of product velocity increase. There's more product in the marketplace that positions for these new market opportunities. Whether it's AI or data engineering, but at the same time it feels like the core business is firming, right? We went through this period of optimization. We went through this period of kind of uncertainty on kind of what's going to happen with data management on a go forward basis, but this year NRR was fairly stable. I think it was 126% NNRR and Q4. Can you talk to us about that side of the equation, maybe to set the foundation, like, do you feel the core business has stabilized? What's the demand environment out there within those kind of core customers for that core data warehousing solution, if you will?

Question: Keith Weiss - Morgan Stanley - Analyst : So maybe shifting gears and start to talk about that sort of broader AI opportunity. From my perspective, the part of the equation that I'm very firm on, right, if you will, is that I think people have understood that data warehousing is a very effective and efficient way for sort of doing analytics against your core data, and that's not going to go away anytime soon. That's going to be a core foundation. The expansion part is Snowflake is going to be doing more for us on a go forward basis when it comes to different data types, sort of where we are in the data life cycle, how we're utilizing the data on a go forward basis. So can you talk to us about kind of your vision of how does that role Snowflake is playing for the end customer? How's that going to evolve over the next three years, the next five years? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 03, 2025 / 9:50PM, SNOW.N - Snowflake Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Keith Weiss - Morgan Stanley - Analyst : Got it. So I want to dig into sort of the product velocity and sort of what's changed over the past year, maybe starting with the foundational level of kind of the data engineering side of the equation. Snowpark was in place when you came on board, but that portfolio had to be expanded out and had to be fleshed out a little bit. Can you talk to us about kind of the missing pieces that you saw when we're thinking about data engineering and what you filled in that stack for Snowflake thus far.

Question: Keith Weiss - Morgan Stanley - Analyst : Got it. Digging in on the Iceberg tables debate, if you will, a lot of investors at the beginning of 2024 and most of the way through 2024 were worried about Iceberg tables. The potential for data to come out of the system, I would say even more so is the potential for what we thought of as one of the lock-in aspects of any kind of data management system or data warehouses a proprietary kind of data formats. If that goes away, does that sort of increased competition for any given workload on a go forward basis? And you guys were a little reticent at the beginning of the year and talked about potentially Iceberg being a little bit of a drag, but then that went away, right? If something changed in how you guys are thinking about or sort of communicating to us about Iceberg, you sound a lot more comfortable today that this is truly an expansive opportunity that those workloads are still going to come to Snowflake on a go forward basis.

Question: Keith Weiss - Morgan Stanley - Analyst : Got it. On the data engineering side of the equation, I think something that we hear a lot of positivity around when we talk to customers is Dynamic Tables. Data engineering, I think you guys talked about it. Last quarter getting to $200 million, it might have been two quarters ago, $200 million run rate with Dynamic Tables being a big part of it. What was it that that's pretty quick sort of expansion to a $200 million run rate for any product? What was it that resonated so well with the customer base that enabled that type of penetration?

Question: Keith Weiss - Morgan Stanley - Analyst : Got it. I want to shift gears and talk a little bit about the Cortex portfolio. Maybe starting with Cortex Analyst in that, this is something that's really started to hit a reflection point in our customer conversations. It sounds like the integration with laude from Anthropic. What was, something of a catalyst for that in terms of really sparking the imagination of a lot of customers. Can you talk to us about what customers are doing with the product? What are they using Cortex Analysts for, and how does that evolve over time?

Question: Keith Weiss - Morgan Stanley - Analyst : Got it. So when I think about Cortex Analysts and kind of abstract back to the sort of broader vision of Snowflake, from day one, one of the big opportunities of Snowflake was to democratize the access to data, right? And I'll be honest, as not a data analyst, I've never developed data pipelines. I've never been able to use Snowflake, right.

Question: Keith Weiss - Morgan Stanley - Analyst : Well, I did the [IPO]. I knew it existed, but yeah. Does this sort of now sort of unlock that promise? Can I start using Cortex Analysts? I don't know if they're going to give me the budget for it, but can I start using the Cortex Analyst and start interrogating using national language processing, and does that create that big unlock of that now the data is going to be in the hands of all the business users, not just the business analysts?

Question: Keith Weiss - Morgan Stanley - Analyst : Got it. Two other products I want to dig into, one, Cortex Search, another product sort of opening up the unstructured data side of the equation for you guys. Can you talk about sort of the evolution of how you approach customers with a product that's about the unstructured side of the equation when historically Snowflake has always been about the structured side of the equation. How do you get Cortex Search in there and get seen as a viable sort of vendor for that part of the equation? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 03, 2025 / 9:50PM, SNOW.N - Snowflake Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Keith Weiss - Morgan Stanley - Analyst : Got it. Last five, if I want to dig into on the Cortex portfolio, Cortex Agents. So you know that a few weeks ago that it's in preview now, allowing users to orchestrate some of the retrieval tasks that they're doing across the data. Can you talk to us a little bit like what is the customer use case for agents look like and how does that expand the ecosystem for Snowflake?

Question: Keith Weiss - Morgan Stanley - Analyst : Got it. I want to talk a little bit about the monetization side of the equation. A modernization with Snowflake used to be dead simple. Like it all drove back to driving more usage of the data warehouse. It was all about sort of that credit rate card with the end customer. These products are priced on a per token basis, so it's an expansion of kind of how you're looking to monetize. Why is that the right approach and ultimately, does it become something of like a pass through tax in terms of like what you're charging from the underlying model? Like how's that going to work out over time?

Question: Keith Weiss - Morgan Stanley - Analyst : Got it. I want to talk a little bit about partnerships. You guys recently announced that exciting new partnership with Microsoft and OpenAI. You're embedding OpenAI directly in Cortex on the Ager AI foundry. Two kind of related questions. One, it seems like you've brought in more of an expansive view on these partnerships and more of a willingness to do these first party partnerships. So question one is why are these first party partnerships important and sort of why are you expanding the purview there? And then two, the Microsoft partnership in particular with OpenAI. What's important about that?

Question: Keith Weiss - Morgan Stanley - Analyst : Got it. One last question I'm going to try to sneak in here. Coming off of the Q4 conference call, I think one of the things that investors really picked up on, was your confidence and acceleration into the back half of the year. Is it? The Microsoft partnership is a Cortex Analyst. Is it any specific product or is it just the accumulation of product velocity that gives you the confidence in that back acceleration?