Snowflake

“More favorable pricing with our cloud service providers, product improvements, scale in our public cloud data centers, and continued growth in large customer counts will contribute to year-over-year gross margin improvements.”

“the Company amended an existing three-year agreement with a third-party AI service provider that began in December 2025 to support the Company’s AI products.”

“Under the amended agreement, the Company has committed to spend an additional $190 million for the first contract year, increasing the total minimum purchase commitment over the three-year contract term ending November 2028 to $390 million.”

“As of July 31, 2026, the total remaining minimum purchase commitment was $270 million.”

“Services accessed through certain public cloud providers may be applied toward the Company’s contractual spend commitments under this amended agreement.”

“Frontier proprietary AI model providers have a strong market position and, as a result, enjoy substantial leverage over the prices of their technology and the commercial and product terms and conditions governing their use.”

“In order to gain and retain access to frontier AI models and remain competitive, we have accepted and may continue to accept pricing and other terms that deviate from our standard commercial terms, introduce increased risk related to operational complexities and liability exposure, and contribute to margin compression from our AI offerings.”

“In addition, our platform currently operates on public cloud infrastructure provided by Amazon Web Services (AWS), Microsoft Azure (Azure), and Google Cloud Platform (GCP), and services provided by these public cloud providers and frontier AI model providers such as Anthropic and OpenAI, and our costs and gross margins are significantly influenced by the prices we are able to negotiate with these providers, which in certain cases are also our competitors.”

“(1)Third-party cloud infrastructure expenses, including those related to AI inference and graphics processing units, incurred in connection with customers’ use of the Snowflake platform and the deployment and maintenance of the platform on public clouds, including different regional deployments, represented approximately 75% and 70% of cost of product revenue for the three months ended July 31, 2026 and 2025, respectively, and 74% and 69% of cost of product revenue for the six months ended July 31, 2026 and 2025, respectively.”

“As models have gotten more powerful, cost has absolutely become a concern.”

“We are absolutely seeing a lot of interest in being able to switch between different models and also to optimize cost.”

“Within our harnesses, many of the requests that we get from customers come in this mode that we call auto, where we can pair up the task with the model that is most appropriate for that particular task.”

“even the frontier models have been revising prices down on a regular basis and have been introducing additional models to their families, which have kept costs somewhat in check relative to the usage of organizations.”

“We have not changed the direction we've been on, which is we're not training models to go get into a frontier type of model.”

“To help our customers optimize cost, performance, and speed, we've introduced Cortex AI Gateway, which dynamically routes each task to the right model based on customer-defined policies and real-world performance data with cost and governance controls built in.”

“These increases were primarily due to an increase of $113.6 million and $199.7 million in third-party cloud infrastructure expenses (including those related to AI inference and GPUs) for the three and six months ended July 31, 2026, respectively, compared to the same periods in the prior year, mainly as a result of increased customer consumption of our platform.”

“We have heard from many, many customers that they made large commitments to one specific model company, and later on are saying, "Oh, I should have wanted to do a different model." Whereas the commitment to Snowflake gives them that flexibility, and as Sridhar said, automatic routing into what is the right model for the right task.”

“More favorable pricing with our cloud service providers, product improvements, scale in our public cloud data centers, and continued growth in large customer counts will contribute to year-over-year gross margin improvements.”

“Turning to margins, for FY 2027, we now expect 74% non-GAAP product gross margin.”

“This revised outlook includes a higher revenue mix from fast-growing AI workloads, which carry a lower contribution margin today.”

“You saw our non-GAAP product gross margin go down to 74% because we have increased our guidance so much.”

“Then we will work on sort of the margin implication of that.”

“Yes, we have pretty different economics when it comes to open source models since we run the inference ourselves.”

“We are delivering continued operating margin expansion as we offset growing cloud costs with slowing headcount expense.”

“These increases were primarily due to an increase of $113.6 million and $199.7 million in third-party cloud infrastructure expenses (including those related to AI inference and GPUs) for the three and six months ended July 31, 2026, respectively, compared to the same periods in the prior year, mainly as a result of increased customer consumption of our platform.”

“Our product gross margin was 71% for each of the three and six months ended July 31, 2026, compared to 72% for each of the three and six months ended July 31, 2025, primarily due to costs attributable to newly launched product capabilities and features that have not yet reached economies of scale, partially offset by higher discounts for our purchases of third-party cloud infrastructure.”

“We have experienced and may continue to experience difficulties sourcing GPUs to support our AI offerings, and we are required to make long-term commitments in an unpredictable market which may lead to GPU spending in excess of actual utilization.”

“On the other hand, incorporating open-source AI models into our products may require us to host and operate those models, which requires significant infrastructure investment and creates additional operational and performance responsibilities without product features or commitments that proprietary AI model providers offer.”

“In order to gain and retain access to frontier AI models and remain competitive, we have accepted and may continue to accept pricing and other terms that deviate from our standard commercial terms, introduce increased risk related to operational complexities and liability exposure, and contribute to margin compression from our AI offerings.”

“Services accessed through certain public cloud providers may be applied toward the Company’s contractual spend commitments under this amended agreement.”

“Within our harnesses, many of the requests that we get from customers come in this mode that we call auto, where we can pair up the task with the model that is most appropriate for that particular task.”

“The mix between our AI products and the course changed a little, but we are still committed as we guided to increasing our overall operating margin.”

“(1)Third-party cloud infrastructure expenses, including those related to AI inference and graphics processing units, incurred in connection with customers’ use of the Snowflake platform and the deployment and maintenance of the platform on public clouds, including different regional deployments, represented approximately 75% and 70% of cost of product revenue for the three months ended July 31, 2026 and 2025, respectively, and 74% and 69% of cost of product revenue for the six months ended July 31, 2026 and 2025, respectively.”

“In addition, our platform currently operates on public cloud infrastructure provided by Amazon Web Services (AWS), Microsoft Azure (Azure), and Google Cloud Platform (GCP), and services provided by these public cloud providers and frontier AI model providers such as Anthropic and OpenAI, and our costs and gross margins are significantly influenced by the prices we are able to negotiate with these providers, which in certain cases are also our competitors.”

“•the amount and timing of operating expenses, particularly research and development expenses, including with respect to GPUs to develop AI Technology”

“Third-party cloud infrastructure expenses incurred in developing our platform also increased $42.4 million for the fiscal year ended January 31, 2024, compared to the prior fiscal year.”

“Research and development expenses increased $75.5 million and $138.0 million for the three and six months ended July 31, 2026, compared to the three and six months ended July 31, 2025, respectively. These increases were primarily due to an increase of $42.5 million and $61.6 million for the three and six months ended July 31, 2026, respectively, compared to the same periods in the prior year, in third-party cloud infrastructure expenses, including those related to AI inference and GPUs, incurred primarily in developing our platform.”

“We are delivering continued operating margin expansion as we offset growing cloud costs with slowing headcount expense.”

“AI is driving greater efficiency and reducing our reliance on headcount growth.”

“Finally, we are increasingly using AI as part of our internal operations. For example, we use AI to enhance research and development, sales and marketing, services delivery, and compliance activities.”

“We have not changed the direction we've been on, which is we're not training models to go get into a frontier type of model.”

“During the three months ended July 31, 2023, we acquired all outstanding stock of Neeva Inc. and its equity investee (collectively, Neeva), a privately-held company which developed search technology powered by artificial intelligence language models, for $185.4 million in cash.”

“Snowflake had an early start in support of language models through last year's acquisition of Applica, now in private preview.”

“On June 3, 2026, the Company acquired all of the outstanding capital stock of Natoma Labs, Inc. (Natoma), an enterprise Model Context Protocol platform for AI agents.”

“The preliminary purchase consideration was $128.3 million, which was comprised primarily of approximately 0.5 million shares of our common stock valued at $110.5 million as of the acquisition date and $17.7 million in cash.”

“The $54.4 million fair value of these shares is accounted for as post-combination stock-based compensation over the requisite service period of three years.”

“Cortex AI Gateway also extends AI from insight to action through its integration of Natoma.”

“Amortization of acquired developed technology intangible assets also increased $11.9 million and $23.7 million for the three and six months ended July 31, 2026, respectively, compared to the same periods in the prior year.”

“From the date of acquisition through July 31, 2026, revenue attributable to Natoma, included in the Company’s condensed consolidated statements of operations for the three and six months ended July 31, 2026, was not material.”

“This includes approximately one percentage point of growth from Observe, consistent with our previous outlook.”

“Accelerated Product Velocity: Launched over 330 product capabilities to general availability in the first half of fiscal 2027, up 35% year-over-year, and recently introduced Cortex Sense for business context and Cortex AI Gateway, which extends AI from insight to action through its integration of Natoma.”

“Professional services and other gross margin declined for the fiscal year ended January 31, 2024, compared to the prior fiscal year, primarily due to overall increased costs from scaling our professional services organization, including increased headcount and amortization of an acquired developed technology intangible asset as a result of the Mountain business combination.”

“We are still focused on investing in efficient growth with a concentration on continuing to sign new customers, ensuring these customers are migrated quickly and successfully, leveraging our PS team and partner resources, and selling our newer solutions, such as Snowpark and Streamlit, to win more personas in the enterprise.”

“We've also hired a set of exceptional folks that have industry expertise that can answer simple questions around what are the top six things that are going to make the biggest difference to a company's top line and bottom line, and is there a new perspective that we can offer to these?”

“This is what the frontier engineering team is doing. It is combining a knowledge of what is possible with the data platform, with the harnesses like CoCo and CoWork, with the industry-specific knowledge needed to drive meaningful outcomes to our customers.”

“Obviously, we get paid only when we deliver outcomes in situations like this, but it's also in the fact that Snowflake is an open, well-understood platform.”

“We have talked publicly about working with folks like Sanofi in our frontier engineering program.”

“Cost of professional services and other revenue increased $6.2 million and $20.3 million for the three and six months ended July 31, 2026, compared to the three and six months ended July 31, 2025, respectively. These increases were primarily due to an increase of $8.9 million and $24.3 million in personnel-related costs and allocated overhead costs for the three and six months ended July 31, 2026, respectively, compared to the same periods in the prior year, as a result of increased headcount.”

“Professional services and other revenue increased $0.5 million and $11.8 million for the three and six months ended July 31, 2026, compared to the three and six months ended July 31, 2025, respectively, as our professional services organization continues to expand and evolve to help our customers further realize the benefits of our platform.”

“We will continue to prioritize hiring in product and engineering. We have slowed our hiring plan for the year. We expect to add approximately 1,000 employees in fiscal 2024, inclusive of M&A.”

“In the sales organization, we're only doing backfills right now, and we will look at, performance management and upgrading people. We could reallocate heads from one region that's underperforming to another region, but no net new hires.”

“Our outperformance was driven by strong revenue growth and disciplined headcount management.”

“we have added 334 employees, which includes 173 from our Observe acquisition. This compares to 935 added in the year-ago period.”

“Internally, AI is unlocking greater productivity. Across the organization, from sales to engineering to finance, our use of AI is transforming our daily work.”

“As we drive this AI transformation for our customers, we are leading from the front, using CoCo and CoWork throughout our own business to accelerate productivity and efficiency.”

“In finance, our long-range planning used to require a three-person team and more than 50 spreadsheets. It now runs with one analyst and a series of models that reflect our pricing structure and consumption dynamics.”

“Within our sales teams, we have automated prospecting for over 125,000 contacts and leads, with 70% of initial outreach emails for inbound leads now being generated automatically before SDR involvement.”

“At the same time, use cases won per account executive increased 43% year -over -year, demonstrating both growing customer demand and strong sales productivity.”

“So, the adoption within the finance organization is almost at 100%.”

“The pattern that we are seeing is we are leveraging CoCo and CoWork throughout pretty much every function and every key business process throughout Snowflake.”

“Sales and marketing expenses increased $109.7 million and $240.1 million for the three and six months ended July 31, 2026, compared to the three and six months ended July 31, 2025, respectively. These increases were primarily due to an increase of $38.2 million and $101.7 million in personnel-related costs (excluding commission expenses) and allocated overhead costs for the three and six months ended July 31, 2026, respectively, compared to the same periods in the prior year, as a result of increased headcount, stock-based compensation, and overall costs to support the growth in our business.”

“We are delivering continued operating margin expansion as we offset growing cloud costs with slowing headcount expense.”

“AI is driving greater efficiency and reducing our reliance on headcount growth.”

“Finally, we are increasingly using AI as part of our internal operations. For example, we use AI to enhance research and development, sales and marketing, services delivery, and compliance activities.”

“What CoCo has done for us in a super native way is it's made the entirety of Snowflake absolutely our sales team AI native.”

“It is our ability to take these powerful tools and drive our own transformation, whether it is in making SDRs more efficient, or in making account planning work much more effectively at scale, or in letting our sales leaders inspect and run their businesses a lot more effectively, or our finance team, under Brian, to be a lot more effective with what they do.”

“In addition, advertising costs and other expenses associated with our sales, marketing and business development programs increased $19.2 million for the fiscal year ended January 31, 2024, compared to the prior fiscal year.”

“Costs associated with outside services also increased $5.6 million due to increased legal fees, accounting and other professional service fees related to the normal course of operations.”

“For example, in our marketing organization, CoCo has helped bring search optimization in-house, eliminating $400,000 in annual agency spend, reducing keyword research from approximately 10 hours to 20 minutes, and content production from an estimated 24 hours down to just two.”

“Something like that would have required a specialized piece of software, a multi-quarter implementation cycle, and then a staged rollout.”

“Things like that are literally now a matter of a pretty smart sales leader saying things in English and having CoWork translate that into what looks like a product.”

“Personnel-related costs and allocated overhead costs also increased $33.3 million for the fiscal year ended January 31, 2024, compared to the prior fiscal year, as a result of increased headcount and overall costs to support the growth in our business, and increased stock-based compensation primarily related to additional equity awards granted to new and existing employees.”

“Professional services and other gross margin declined for the fiscal year ended January 31, 2024, compared to the prior fiscal year, primarily due to overall increased costs from scaling our professional services organization, including increased headcount and amortization of an acquired developed technology intangible asset as a result of the Mountain business combination.”

“We are still focused on investing in efficient growth with a concentration on continuing to sign new customers, ensuring these customers are migrated quickly and successfully, leveraging our PS team and partner resources, and selling our newer solutions, such as Snowpark and Streamlit, to win more personas in the enterprise.”

“We will continue to prioritize hiring in product and engineering. We have slowed our hiring plan for the year. We expect to add approximately 1,000 employees in fiscal 2024, inclusive of M&A.”

“Research and development expenses increased $499.9 million for the fiscal year ended January 31, 2024, compared to the prior fiscal year, primarily due to an increase of $423.3 million in personnel-related costs and allocated overhead costs, as a result of increased stock-based compensation, headcount, and overall costs to support the growth in our business.”

“In the first half of this year alone, we have launched over 330 product capabilities to general availability, 35% more than we did in the first half of last year, underscoring both the pace of our innovation and the breadth of platform expansion underway across Snowflake.”

“Internally, AI is unlocking greater productivity. Across the organization, from sales to engineering to finance, our use of AI is transforming our daily work.”

“In addition, personnel-related costs and allocated overhead costs increased $30.3 million and $69.9 million for the three and six months ended July 31, 2026, respectively, compared to the same periods in the prior year, as a result of increased stock-based compensation, headcount, and overall costs to support the growth in our business.”

“Accelerated Product Velocity: Launched over 330 product capabilities to general availability in the first half of fiscal 2027, up 35% year-over-year, and recently introduced Cortex Sense for business context and Cortex AI Gateway, which extends AI from insight to action through its integration of Natoma.”

“During the fiscal year ended January 31, 2024, capabilities like Marketplace Listing Auto-Fulfillment & Monetization, account replication & failover, Query Acceleration Service, geospatial analytics, and Snowpipe Streaming became generally available, while capabilities like Iceberg tables, Hybrid tables, and Cortex LLM and ML-powered functions became available in public preview and are expected to become generally available in the fiscal year ending January 31, 2025.”

“Data science, machine learning, and AI use cases on Snowflake are growing every day. In Q1, more than 1,500 customers leveraged Snowflake for one of these workloads, up 91% year-over-year.”

“From our perspective, machine learning, data science, and AI are workloads that we enable with increased capability, continuous performance, and efficiency improvements.”

“•AI/ML. Our platform enables organizations to securely build and deploy large language models (LLMs) and machine learning (ML) models.”

“This momentum has enabled us to achieve a major milestone: $100 million in AI revenue run rate, achieved one quarter earlier than anticipated, thanks to our pace of innovation, cross-functional collaboration, and early adoption among many of our marquee customers. Because we operate as a consumption-based business, this number reflects real-world enterprise usage. It's a direct signal of how customers are using our AI capabilities in production to create value today.”

“The $100 million is primarily the product suite, but it's the whole stack. It is Cortex AI and AI SQL. It's accessible from SQL also as a REST API. And then the products that stack up on top of that, Cortex Search and Cortex Analyst, which are our unstructured and structured data products respectively. And then Snowflake Intelligence, which builds on these building blocks to provide an agentic solution for data products. That's roughly the suite.”

“As I said, AI revenue is predominantly driven by the Cortex product suite, including Snowflake Intelligence.”

“Q2 benefited from continued strength in our core data platform business and a meaningful step-up in AI revenue.”

“Our AI revenue reflects a broadening portfolio of AI capabilities.”

“CoCo delivered another standout quarter. Consumption of CoWork is scaling and driving revenue contribution alongside a diverse set of AI tools from AI functions and document processing to machine learning and notebooks.”

“I would roughly call it even. Our AI products, which is a pretty broad swath at this point. Absolutely, it's CoCo and CoWork, but it's also things like AI Functions that make data operations proceed at an impressive scale, or even newer products like the AI Gateway. They contributed approximately half of the acceleration that we are seeing.”

“After exiting Q4 of last fiscal year at 30% year-over-year growth, we have now added 7 points of acceleration in just two quarters.”

“Second, our first-party AI products, CoCo and CoWork, continue to see rapid adoption. As customers build and deploy agents on Snowflake, we are expanding our role into the agentic control plane and creating new opportunities for growth.”

“Given the strength we have observed both in our core data platform business and AI business, we are raising our product revenue guidance for the year.”

“What we saw is that we talked about CoCo, CoWork, and all the AI functions driving additional business, but as well as the people who adopt them, they're also increasing business within the core.”

“Q2 marks our third consecutive quarter of product revenue growth acceleration, driven by strength in both our core data platform and a meaningful step-up in AI revenue”

“To help our customers optimize cost, performance, and speed, we've introduced Cortex AI Gateway, which dynamically routes each task to the right model based on customer-defined policies and real-world performance data with cost and governance controls built in.”

“Within accounts adopting these products, we see a step change in user growth as Snowflake reaches new lines of business and expands its footprint within existing teams.”

“So there is a lot more personas that we are selling into this broader portfolio of products.”

“is the desire to post-train open models, which the training itself is an opportunity for us”

“Product revenue increased $401.4 million and $738.9 million for the three and six months ended July 31, 2026, compared to the three and six months ended July 31, 2025, respectively, primarily due to increased consumption of our platform by existing customers, as evidenced by our net revenue retention rate of 126% as of July 31, 2026.”

“CoWork and CoCo are driving transformational outcomes for our customers, while fueling rapid adoption, user growth, new workloads, and overall platform consumption.”

“Cortex AI Gateway also extends AI from insight to action through its integration of Natoma.”

“AI has created a powerful flywheel effect across our business, strengthening platform demand, driving adoption of our native AI products, and in turn, fueling greater consumption across the business.”

“As AI strengthens demand for our core platform, it is also expanding Snowflake's opportunity to deliver a new generation of AI-powered products and experience.”

“Importantly, our customers' success with AI translates directly into growth for Snowflake.”

“Meanwhile, CoCo continues to see rapid adoption, surpassing 9,100 accounts and adding more than 2,000 net new accounts in this quarter alone.”

“We had 9,100 CoCo accounts this quarter.”

“When we look at CoCo, the accounts that are using CoCo are consuming more of the core as well.”

“It's among the easiest sales that we have done to our customers.”

“We have a pretty sophisticated methodology for measuring CoCo penetration from, we need to get through legal terms, all the way to there are a set of daily users of the product that are living inside CoCo.”

“In fact, our cost management skill in CoCo is a top 10 skill.”

“AI Momentum: CoCo surpassed 9,100 accounts1, adding more than 2,000 accounts in the quarter alone, while CoWork expanded to 5,800 accounts1.”

“CoCo delivered another standout quarter. Consumption of CoWork is scaling and driving revenue contribution alongside a diverse set of AI tools from AI functions and document processing to machine learning and notebooks.”

“Second, our first-party AI products, CoCo and CoWork, continue to see rapid adoption. As customers build and deploy agents on Snowflake, we are expanding our role into the agentic control plane and creating new opportunities for growth.”

“I think the thing that is also materially different this time around with folks that are investing is that products like CoCo make optimization far, far easier than before.”

“Sayari cut costs by more than half and is using CoCo to accelerate the migration of 12 billion records.”

“running these things on top of, you know, for example, Salesforce data in Snowflake, which is a very common thing, something that we're already doing internally. That's gonna be available in the second half all over the place, and people will like it.”

“The $100 million is primarily the product suite, but it's the whole stack. It is Cortex AI and AI SQL. It's accessible from SQL also as a REST API. And then the products that stack up on top of that, Cortex Search and Cortex Analyst, which are our unstructured and structured data products respectively. And then Snowflake Intelligence, which builds on these building blocks to provide an agentic solution for data products. That's roughly the suite.”

“As I said, AI revenue is predominantly driven by the Cortex product suite, including Snowflake Intelligence.”

“CoWork expanded to 5,800 accounts, up nearly 11% quarter-over-quarter.”

“What products like CoWork firmly demonstrated was the ability to get really flexible and quick value from data.”

“Things like that are literally now a matter of a pretty smart sales leader saying things in English and having CoWork translate that into what looks like a product.”

“AI Momentum: CoCo surpassed 9,100 accounts1, adding more than 2,000 accounts in the quarter alone, while CoWork expanded to 5,800 accounts1.”

“CoCo delivered another standout quarter. Consumption of CoWork is scaling and driving revenue contribution alongside a diverse set of AI tools from AI functions and document processing to machine learning and notebooks.”

“Second, our first-party AI products, CoCo and CoWork, continue to see rapid adoption. As customers build and deploy agents on Snowflake, we are expanding our role into the agentic control plane and creating new opportunities for growth.”

“Data science, machine learning, and AI use cases on Snowflake are growing every day. In Q1, more than 1,500 customers leveraged Snowflake for one of these workloads, up 91% year-over-year.”

“From our perspective, machine learning, data science, and AI are workloads that we enable with increased capability, continuous performance, and efficiency improvements.”

“Product revenue increased $728.1 million for the fiscal year ended January 31, 2024, compared to the prior fiscal year, primarily due to increased consumption of our platform by existing customers, as evidenced by our net revenue retention rate of 131% as of January 31, 2024.”

“You know, with AI right now, I mean, it's gonna, you know, drive a whole other vector in terms of workload to development.”

“Data has gravitational pull. Given the vast universe of data Snowflake already manages, it's no surprise that interest in these capabilities is escalating while its uses are still evolving.”

“Q2 benefited from continued strength in our core data platform business and a meaningful step-up in AI revenue.”

“I would roughly call it even. Our AI products, which is a pretty broad swath at this point. Absolutely, it's CoCo and CoWork, but it's also things like AI Functions that make data operations proceed at an impressive scale, or even newer products like the AI Gateway. They contributed approximately half of the acceleration that we are seeing.”

“After exiting Q4 of last fiscal year at 30% year-over-year growth, we have now added 7 points of acceleration in just two quarters.”

“Given the strength we have observed both in our core data platform business and AI business, we are raising our product revenue guidance for the year.”

“What we saw is that we talked about CoCo, CoWork, and all the AI functions driving additional business, but as well as the people who adopt them, they're also increasing business within the core.”

“Q2 marks our third consecutive quarter of product revenue growth acceleration, driven by strength in both our core data platform and a meaningful step-up in AI revenue”

“Within accounts adopting these products, we see a step change in user growth as Snowflake reaches new lines of business and expands its footprint within existing teams.”

“Product revenue increased $401.4 million and $738.9 million for the three and six months ended July 31, 2026, compared to the three and six months ended July 31, 2025, respectively, primarily due to increased consumption of our platform by existing customers, as evidenced by our net revenue retention rate of 126% as of July 31, 2026.”

“CoWork and CoCo are driving transformational outcomes for our customers, while fueling rapid adoption, user growth, new workloads, and overall platform consumption.”

“When we look at CoCo, the accounts that are using CoCo are consuming more of the core as well.”

“First, AI is bringing new workloads onto the platform.”

“Third, AI activation continues to lift overall platform consumption. Customers using AI on Snowflake consume more across the data platform, creating a structural multiplier for our business.”

“At this time, we are not ready to share the exact uplift numbers, but we do measure cohort behavior.”

“As CoCo adoption gets deeper, more users within an account adopting, and more accounts and more customers themselves adopting, the effect is pretty noticeable for all the different cohorts that we have worked with.”

“This metric has very, very visibly improved for the newest cohorts of customers that we are acquiring.”

“As customers move quickly to modernize their data estates and establish a strong contact layer for AI, more and more customers are migrating workloads to our platform, a process now massively accelerated with AI.”

“This includes approximately one percentage point of growth from Observe, consistent with our previous outlook.”

“Within our existing base, customer expansion is healthy, as evidenced by our net revenue retention rate of 126%. This expansion is underpinned by growth in both migrations and AI use cases.”

“First, I think we see the acceleration come from a very broad swath of customers.”

“Overall, I am pretty happy with both the fact that our growth is coming from a very broad swath of our customers, without a whole lot of concentration in any one particular sector”

“Sayari cut costs by more than half and is using CoCo to accelerate the migration of 12 billion records.”

“AI has created a powerful flywheel effect across our business, strengthening platform demand, driving adoption of our native AI products, and in turn, fueling greater consumption across the business.”

“As AI strengthens demand for our core platform, it is also expanding Snowflake's opportunity to deliver a new generation of AI-powered products and experience.”

“Importantly, our customers' success with AI translates directly into growth for Snowflake.”

“It is not concentrated, for example, with, let us say, AI-native companies. They continue to be a small part of our overall revenue stream.”

“Overall, I am pretty happy with both the fact that our growth is coming from a very broad swath of our customers, without a whole lot of concentration in any one particular sector”

“First, I think we see the acceleration come from a very broad swath of customers.”

“Generally, those two combined, we forecast that there's a 5% headwind every year to our revenue associated with those.”

“A few of our largest customers have scrutinized Snowflake costs as they face headwinds in their own businesses. For example, some organizations have reevaluated their data retention policies to delete stale and less valuable data. This lowers their storage bill and reduces compute cost.”

“We have heard from many, many customers that they made large commitments to one specific model company, and later on are saying, "Oh, I should have wanted to do a different model." Whereas the commitment to Snowflake gives them that flexibility, and as Sridhar said, automatic routing into what is the right model for the right task.”

“To your question on whether neutrality is a competitive advantage, absolutely it is.”

“But on the other hand, we understand that we live in a world where we have to play nice. Snowflake is only a part of the overall software estate that our customers have.”

“So I have been very, very consistent for now two-plus years in my conviction, in our conviction, that owning the user experience is critical.”

“That is up significantly from last quarter, and the gross retention rate has been relatively flat across the last several quarters.”

“I think the thing that is also materially different this time around with folks that are investing is that products like CoCo make optimization far, far easier than before.”

“In addition, companies have begun to use AI to develop their own software, reducing their need to purchase third-party solutions.”

“It is easier to consolidate in a single central platform like Snowflake.”

“Within our existing base, customer expansion is healthy, as evidenced by our net revenue retention rate of 126%. This expansion is underpinned by growth in both migrations and AI use cases.”

“As models have gotten more powerful, cost has absolutely become a concern.”

“In fact, our cost management skill in CoCo is a top 10 skill.”