Dive Brief:
- Snowflake will add more than 1,000 employees this fiscal year, Mike Scarpelli, CFO of the cloud-based data warehouse company, said Wednesday during the company's FY2023 Q4 earnings call, for the period ending Dec. 31.
- The company added 1,900 net workers last year, bucking the tech sector’s downsizing trend which saw tens of thousands of employees at Alphabet, Amazon, Meta, Microsoft and other big tech companies losing their jobs.
- “We view the current hiring market as favorable for Snowflake, and we'll continue to prioritize hiring in product, engineering and sales,” Scarpelli said.
Dive Insight:
Snowflake reported year-over-year revenue growth of 54% for the quarter and 70% for the fiscal year, despite slowdowns in consumption patterns and “bookings reticence” among specific customer segments, Scarpelli said.
Short-term spending reticence was “more pronounced among international, SMB and commercial customers, and much less so at the high end of our customer base,” said Scarpelli.
Macroeconomic uncertainty and recession worries have prompted budgetary restraint, pushing CFOs to scrutinize spending.
Analysts dialed back their global IT spending forecasts accordingly. Yet large segments of IT remained largely untouched, as most companies continued to invest in cloud and data capabilities — two areas at the center of Snowflake’s business.
Financial services, as well as media and entertainment verticals, remained strong in Q4, Frank Slootman, Snowflake chairman and CEO, said during the earnings call.
But, overall, companies are being more cautious in their deployments.
“In the past, it was all about enabling growth as hard and as fast as they could because that was the dynamic of the times,” Slootman said. “Now, we're sort of in the opposite dynamic where they're looking to not get too far over their skis.”
Snowflake also announced a multi-year extension of its partnership with AWS, the largest domestic cloud service provider, on Wednesday.
The extension includes a commitment of $2.5 billion over the next five years by Snowflake to product integrations, sales collaborations, global marketing and industry cloud solutions for financial services, media, healthcare, retail and telecom, according to the announcement.
“As part of the new agreement, AWS is committing to support joint go-to-market efforts and more favorable pricing,” Scarpelli said.
Snowflake is halfway through a five-year deal with the second-largest hyperscaler, Microsoft Azure, and has a contract with Google Cloud coming up for renewal in May 2024, according to Scarpelli.
