8 Trends Driving Snowflake's Next Phase of Growth

It has more million-dollar customers and its Data Marketplace is thriving, but revenue growth is slowing

The truth sometimes hurts—and that includes the truth about data warehouse optimization.

Snowflake got punished after letting financial analysts know, during its Q4 FY22 earnings presentation on March 2, that its revenue projection for the current fiscal year would be negatively impacted by platform efficiencies that let customers do more with less.

The company’s stock dropped precipitously, from $266 before the earnings call to $216 within a few hours—a 19% decline. That, despite the fact that Snowflake’s product revenue grew 102% year over year in Q4 (to $359.6 million) and net revenue retention rate came in at a very healthy 178%.

Why the backlash? For one thing, revenue growth is slowing. But also, CFO Mike Scarpelli noted that improved efficiencies in the Snowflake platform resulted in lower consumption, which in turn caused the company to adjust its revenue outlook by $97 million for FY23.