Earnings Call Transcript - SNOW Q3 2025

Operator, Operator

Good afternoon. Thank you for attending the Snowflake Q3 Fiscal 2025 Earnings Conference Call. My name is Matt and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call for questions and answers at the end. I'll now pass the conference over to our host, Jimmy Sexton, Head of Investor Relations. Jimmy, please go ahead.

Jimmy Sexton, Head of Investor Relations

Good afternoon, and thank you for joining us on Snowflake's Q3 Fiscal 2025 Earnings Call. Joining me on the call today is Sridhar Ramaswamy, our Chief Executive Officer; Mike Scarpelli, our Chief Financial Officer; and Christian Kleinerman, our Executive Vice President of Product, who will participate in the Q&A session. During today's call, we will review our financial results for the third quarter fiscal 2025 and discuss our guidance for the fourth quarter and full year fiscal 2025. During today's call, we will make forward-looking statements, including statements related to our business operations and financial performance. These statements are subject to risks and uncertainties, which could cause them to differ materially from our actual results. Information concerning these risks and uncertainties is available in our earnings press release, our most recent Forms 10-K and 10-Q, and our 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 metric definitions, including adoption. 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.

Sridhar Ramaswamy, CEO

Thanks, Jimmy. And hi, everyone. Thanks for joining us today. As you've seen by now, we had a strong third quarter, outperforming expectations and increasing our FY25 product revenue guidance. More and more, it is clear that our customers believe Snowflake is the easiest and most cost effective enterprise data platform out there. Our customers are getting tremendous value from us, with many of them going all in on Snowflake. Our product development engine continues to accelerate, as we launched the same number of tier 1 features to general availability in Q3 as we did in all of fiscal 2024. Our AI feature family, Snowflake Cortex, is showing significant adoption, and we improved our go-to-market motion across the board, and it's having a huge impact on new product adoption. We are firing on all cylinders. The credit goes to the entire Snowflake team, and I'm very encouraged by our progress showing up so well in the numbers. Product revenue for the quarter was $900 million, up a strong 29% year-on-year. Remaining performance obligations totaled $5.7 billion, with year-over-year growth accelerating to 55%. Given the strong quarter, we are again increasing our product revenue outlook for the year. In the quarter, non-GAAP operating margin improved to 6%. Having driven strong gains in product speed and revenue growth in Q3, we initiated an even more rigorous approach to cost management. We've been creating centralized and more efficient teams for some areas and removing redundant management layers, which enables us to make decisions faster, and we are deploying AI to drive higher velocity while reducing overall costs. We also eliminated a number of efforts that were underperforming and not aligned with our top goals as a company. I'm particularly proud of the team for driving efficiency throughout our business. This operational rigor is now a way of life for us, enabling us to improve profitability while aggressively investing in our innovation and go-to-market engines. Our obsessive drive to produce product cohesion and ease of use has built Snowflake into the easiest to use and most cost effective enterprise data platform. And that is what is leading us to win new logos after new logos, expand within our customer base, and displace our competition over and over again. Like in the quarter, when a global telecom giant went all in on Snowflake as their data foundation, we are helping them process network performance data from systems that carry a large volume of the world's mobile traffic, so they can consistently deliver superior network speeds and reliability to millions of mobile users worldwide. I personally spent a lot of time connecting with our customers around the world. Much of it took place during our Snowflake world tours, where we welcomed a record 29,000 attendees across 24 in-person events. In the cities we returned to, we saw a remarkable 40% increase in attendance year-over-year, demonstrating the incredible momentum we are seeing at a global scale. In city after city, we heard the same three things from our customers: how much they love our technology, how easy it is to use, and how quickly they get real value and lower total cost of ownership. On the flip side, we also consistently hear a lot of feedback that some of our competitors' technology is highly complex and requires a ton of expensive engineering resources. And with complexity comes risk. What is one step in Snowflake is 10 on some other platforms, and that's 10 times more chances for engineering mistakes. It's just not scalable. And the joy of Snowflake is that it works right out of the box. We are helping our customers drive down costs. For example, Snowpark is generating traction in data engineering, with multiple customers saying that they have saved at least 50% migrating to Snowflake from other providers, and that's how our technology sells itself. Snowflake's superpower is the ability to simplify the implementation of all the popular enterprise data architecture patterns that customers want. It's what makes us the best enterprise-grade technology for the warehouse, the lakehouse, and data mesh architectures. We give our customers real architectural choice without trade-offs on enterprise capabilities, and they love it. One of those discovery uses Snowflake to unify data across their vast portfolio, including streaming, gaming, news, and studio divisions. This helps them deliver personalized entertainment recommendations to millions of viewers. A global hotel chain, Hyatt, is using Snowflake to better understand guest preferences across their properties, helping craft a more personalized stay for guests throughout their travel journey. We are accelerating across the business. As I said, our foot's on the gas when it comes to product innovation. Just last week, we held our Build Developer Summit for more than 10,000 attendees worldwide. We made some key announcements in our core business, like the general availability of Unistore and the internal marketplace, as well as cutting-edge innovations like Snowflake Intelligence, a platform to create data agents. Our AI adoption continues to be strong. As of the end of Q3, we have over 1,000 deployed use cases, which you can think of as individual projects we manage with our customers for our AI and ML products in production deployments. More than 3,200 accounts are now using our AI and ML features. Equally exciting is the momentum that our latest engineering features are seeing. Our push into interoperability and transforming data that previously would not have been addressed by Snowflake is proving to be a key differentiator for our customers. These features are now north of a $200 million run rate as of the end of Q3. We're also partnering with Microsoft and ServiceNow to increase data interoperability, making it easier for our customers to bring data in and out of Snowflake to build and run applications faster. As we launch new products like Unistore, Snowflake Open Catalog, and others, we are refining our go-to-market motion that brings together engineering, product, marketing, and sales to rapidly launch, test, iterate, and scale products. It is giving us a scalable way to broaden our footprint with our customers and also acquire new ones. Our product innovation is fueling alignment with our cloud infrastructure partners. Through our collaboration with AWS, we have booked over $3.9 billion over the past four quarters, an increase of 68% compared to the preceding four quarters. Looking at our results in Q3, I can tell you that these shifts are working and enabling us to drive multiproduct adoption and further strengthen our position in the market. Finally, I want to discuss the tectonic shifts happening in the world of data. We are seeing massive adoption of open data formats, especially truly open formats like Apache Iceberg. We are justifiably proud of our support for and investments in Iceberg under Snowflake Open Catalog based on Apache Polaris, which is seeing rapid adoption with developers and enterprises. Similarly, it is clear that AI is going to change how people consume data. Not only is AI going to make structured and unstructured data more interchangeable, but it is also going to heavily influence areas like business intelligence. With our unmatched product capability, ease of use, architectural flexibility, comprehensive governance, and prescient bets in Iceberg, Polaris, Cortex, and many others, we are well positioned to be the data platform of choice for enterprises over the next decade. Our intended acquisition of Datavolo strengthens our foundation to deliver an extensible and flexible connectivity platform for unstructured, as well as structured data. It accelerates our ability to bring in and vastly simplify data engineering workloads for our customers. On the consumption side, the GA of Snowflake notebooks, as well as the success and adoption of products like Cortex AI, position us well to take advantage of the new capabilities that AI will enable us to create. As you've probably seen, we just announced a partnership with Anthropic to bring their most powerful models to our customers through Snowflake Cortex AI. This provides enterprises the choice to build cutting-edge AI applications using the model of their choice with the ease, built-in security, and governance of the Snowflake platform. The cost efficiency, flexibility, and extensibility we deliver are why iconic brands like Accor, Chipotle, Comcast, Hyatt, Kraft Heinz, NBC Universal, Sanofi, Toyota, and thousands more are betting their business on Snowflake. As we move forward, we have a big opportunity to continue to expand with AI throughout the data journey. This isn't just our product vision. If you ask some of our most significant customers, they see the ease of use and quality and savings we provide today and want to expand further, so they can reduce even more costs by Snowflake handling more and more of their data journey. We see a day when we can power the end-to-end data lifecycle for our customers, and that's our North Star. We come at this from a position of strength that we will continue to leverage. Our core long-term differentiation of an easy-to-use, simple, efficient, integrated product with comprehensive governance, cross-cloud consistency, and collaboration will continue to set us apart. This is exciting, and I look forward to sharing more and more of our progress along the way. With that, Mike, I'll turn it over to you.

Mike Scarpelli, CFO

Thank you, Sridhar. Q3 was a quarter of strong execution across revenue, bookings, and margins. Growth in our core business outperformed. Net revenue retention rates stabilized at 127%. New product initiatives are beginning to contribute to growth. As Sridhar mentioned, Snowpark is well on track to represent 3% of product revenue and is growing nicely. With approximately 500 accounts adopting Iceberg and storage remaining 11% of our consumption, we have seen minimal headwinds from customers moving to Iceberg. We believe our contribution from data engineering features like Snowpark, dynamic tables, connectors, and Snowpipe Streaming will more than offset the potential loss of storage revenue. Bookings were strong in the quarter, and we are seeing large deal volume increase. We signed $350 million-plus total contract value deals, and we expect this momentum to continue in Q4. We had 18 Global 2000 customers in the quarter. Turning to margins for Q3. Non-GAAP product gross margin of 76% stabilized sequentially. Non-GAAP operating margin of 6% exceeded our guidance, benefiting from revenue outperformance, efficiencies in R&D, and expenses related to our new Bay Area office space being pushed to Q4. Our non-GAAP adjusted free cash flow margin was 9%, driven by strong bookings. We continue to see approximately 80% of our customers paying us annually in advance. In Q3, we issued $1.15 billion in 0% convertible senior notes due in 2027 and $1.15 billion in 0% convertible senior notes due in 2029. Proceeds from the offering were used to pay for the capped calls and concurrent share repurchase. We expect to use the remaining proceeds to fund stock repurchases and potential acquisitions and for general corporate purposes. Year-to-date, we have used $1.9 billion to repurchase 14.8 million shares at a weighted average price per share of $130.87. We have $2 billion remaining on our authorization through March 2027. Our share count guidance does not include the impact from potential upcoming stock repurchases. We ended the quarter with $5 billion in cash, cash equivalents, short-term, and long-term investments. Now let's turn to guidance. For the fourth quarter, we expect product revenue between $906 million and $911 million, representing 23% year-over-year growth. We are increasing our FY '25 product revenue guidance. We now expect full year product revenue of approximately $3.43 billion, representing 29% year-over-year growth. This includes contributions from our newer product features and product efficiency headwinds. We view product efficiencies as a normal part of our business, so we will not break out those assumptions going forward. Turning to margins. In FY '25, we are increasing our non-GAAP product gross margin guidance to 76% and our non-GAAP operating margin guidance to 5%. We expect approximately 26% non-GAAP adjusted free cash flow margin for the year. As Sridhar mentioned, we have gone through a rigorous process of evaluating our cost structure. We believe we can invest aggressively to address the large opportunity in front of us while also being more efficient. Our innovation and revenue-driving functions are being resourced to drive durable growth while also enabling us to show operating leverage for years to come. With that, operator, we will now open up the line for questions.

Operator, Operator

The first question is from Mark Murphy with JPMorgan. Your line is now open.

Mark Murphy, Analyst

Hi, thank you, Mike. It's impressive to see the strength here simultaneously in both the consumption revenue and the bookings, especially given the prioritization of consumption incentives this year. I'm curious to what you might attribute that, and specifically whether Iceberg tables might have contributed all or whether Snowpark might have picked up in any meaningful way? And then I have a quick follow-up.

Mike Scarpelli, CFO

I would say we're starting to see the positive benefit of Iceberg with a number of customers that are now bringing new workloads that are being addressed by Snowflake and Iceberg tables. But I would just say it's broad-based demand across our customers. Yes, there are a few verticals that were very strong, including technology, financial services, and health care. But it's really broad-based, and we are seeing the uptick, as Sridhar was mentioning, in a lot of the data engineering stuff, as well too. Snowpark is part of that.

Mark Murphy, Analyst

Great to hear. And Sridhar, I believe you had mentioned displacing the competition over and over again and that stood out to me. I'm curious if you saw an increase in those competitive displacements during Q3 and what you think might be triggering it? Because we always hear the data sharing is unparalleled, but you had released a slew of AI-related products. And I'm also wondering if you think that might be swaying some of these competitive accounts over.

Sridhar Ramaswamy, CEO

At one level, the products that we're releasing make everybody feel great about the future of the platform, and what they can do with it, both today and also tomorrow. The kind of things that people are already getting done with Cortex, AI search, and analysts is already pretty impressive. But when it comes to the displacement, I would say that the core aspects of the product, which are ease of use, faster time to value, and the lack of needing a very large team to set up deployments and maintain them as we go along, are the things that contribute most to people trying something and coming back to Snowflake and realizing this is a much better way to make progress with data. That is the reason why we obsess on making sure Cortex is tightly integrated with everything else. You build a chatbot on Snowflake, and it is automatically going to obey all of the permissions on the data that is underneath. And that's the magic of Snowflake. Christian, any additional thoughts?

Christian Kleinerman, EVP of Product

Governance continues to be an important reason, and we continue to invest in security, privacy, and compliance, in addition to everything Sridhar mentioned.

Mark Murphy, Analyst

Thank you very much, and congrats.

Operator, Operator

Thank you for your question. Next question is from the line of Keith Weiss with Morgan Stanley. Your line is now open.

Keith Weiss, Analyst

Excellent. Thank you guys for taking the question, and congratulations on a really solid quarter. Mike, a question for you just in terms of the strength in the quarter. From your commentary, things like the core business, like the core data warehousing business, were really the standout in the quarter, and that's firming up and the NRR firming up. I was hoping you could give us some visibility into the ramp that you're seeing with the new AI products like Cortex, and how does that compare to what you saw with Snowpark if we think about them in the same time in their evolution? So that's a top-line question. And then also a bottom-line question for you. Last quarter, we talked about accelerating investments, particularly in distribution. It sounds like that's being somewhat offset by being able to find redundancies or headcount reductions. We didn't really see it in the headcount number, and that addition was relatively modest. So it seems like you guys were able to kind of drive investment but also find nets to take out of headcount. Is that the right way to think about it?

Mike Scarpelli, CFO

Yes. On your first question regarding the core business, we are observing strong performance in data warehousing along with data engineering. We are seeing the uptick in new products. Cortex is starting to take off; it's still very much in the early innings. We are optimistic about what that's going to do in the future. Snowpark will continue to track as expected and is forecasted to be 3% of our revenue for the year, and it's growing very nicely year-on-year. In terms of the efficiencies we've accomplished, we've done a lot of performance management, especially in the sales organization. They've been hiring, and there will be a lot of hiring in the sales organization this quarter as well. We also looked across the company combining teams where possible and not backfilling replacements as quickly. That's why we are seeing the operating savings that we're realizing.

Keith Weiss, Analyst

Got it. That is super helpful. Thank you.

Operator, Operator

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

Kash Rangan, Analyst

Hi, thank you very much. One for you, Sridhar, and one for Mike. Sridhar, there is a narrative, which you will definitely dispute that the core of the Snowflake Data platform that structured data does not really have a long runway in the world of generative AI, and that Snowflake has a lot to prove with respect to generative AI on unstructured data. What proof points can you talk to from the quarter that would invalidate that bearish view and reinforce your conviction? And one for you, Mike, with the headwinds from storage not being as much as was dialed-in, should we safely assume that you're guiding to product revenue—29% for the year? Or takeaway 3 points for Snowpark container services? That the core is actually at a point where you can see it be stable going to next year? I know you're not giving guidance, and if we can start to think about doing the dream of all the new products to be largely incremental to that growth, right? Thank you so much and congratulations.

Sridhar Ramaswamy, CEO

Thank you, Kash. On the core business side, analytics will still be vital in getting the most important data about your business. But being able to act on it quickly in real-time is what will set great companies apart. If you look at the best companies created in the past two to two-and-a-half decades, they have integrated data into their core operations. When I talk to customers, I emphasize not just analytics and clean data but also being able to act quickly on it to see trends. Companies like Hyatt and Disney exemplify this at scale. So there's a very long runway because analytics flows seamlessly into machine learning. AI becomes an accelerant because it makes it easy to transition from unstructured to structured data. That's the magic of products like Cortex AI and the new features we announced, enabling multimodal models. Imagine the world where you write a SQL statement that goes to act on a PDF and produces structured information. This redefines what analytics can achieve, expanding the range of possible outcomes. As for examples, Siemens, Bayer, and Zoom are all customers using our AI products and deriving immense value, having publicly talked about it. So I'm confident in our execution in this area.

Mike Scarpelli, CFO

As I mentioned, the core business is very stable and strong. We just had a very good quarter, but more importantly, our NRR has remained at 127% over the last two quarters. We're guiding to 23% product revenue for Q4. I want to remind everyone that Q4 has a high number of holidays, leading to some seasonality we experience during that period. Our business remains robust, and I feel good about next year. Our sales teams have built a good muscle this year in identifying new workloads that customers are primed to move into production next year.

Kash Rangan, Analyst

Great to see this momentum. Thank you, so much. Congrats.

Operator, Operator

Thank you for your question. Next question is from the line of Raimo Lenschow with Barclays. Your line is now open.

Raimo Lenschow, Analyst

Hi, thank you. Sridhar, can you talk a little bit about the acquisition today? Historically, you always said you wanted to do some ETL, but there's obviously quite a few ETL players in the market. How do you see that evolving between what you want to do, what the other players want to do, and what this brings to Snowflake? And then I have a follow-up for Mike.

Sridhar Ramaswamy, CEO

First of all, these are all very large spaces. The overall vision, especially with the interoperable data landscape emerging, indicates a significant opportunity for Snowflake to help our customers act on all of their data, not just the gold data that they historically put into Snowflake for analytics. Anecdotally, many customers report that they have hundreds or even thousands of times more data sitting in cloud storage than in structured data platforms. They feel important in owning that data. This shift is leading to de-siloing application data, paving the way for transformative innovations in data transformation, engineering, and AI. In this context, something like Datavolo is very important for us, coming with over 100 different connectors, allowing us to bring data in from sources where we previously couldn't run Snowflake. It serves as a multiplier for our data engineering pipelines and AI products. I want to emphasize that this space is enormous; we estimate that data products as a whole will reach several hundred billion dollars within ten years. Thus, our value-add is our easy, integrated, and efficient platform, with solutions like Datavolo being crucial.

Christian Kleinerman, EVP of Product

I think you've covered that well. We have many partners also involved with their integrations. The reality is that there are numerous sources of data. A key focus of Datavolo addresses the unstructured data that Sridhar mentioned.

Raimo Lenschow, Analyst

Okay, perfect. And then, Mike, if you look at this quarter, the strong performance—congratulations from me as well. If you think about the question that everyone is going to ask, is it the economy or are you guys executing better? Can you share comments on what you’re seeing in the field regarding demand?

Mike Scarpelli, CFO

I would say from the economy, it is similar to what I said last quarter. It's not bad, but it's not great either. I think we're executing exceptionally well, and the results reflect the efforts of our go-to-market strategy focused on identifying new workloads rather than merely chasing bookings. This mindset is paying off, and it encourages our salespeople to strengthen their relationships with customers.

Raimo Lenschow, Analyst

Okay, perfect. Makes sense. Thank you, and congrats.

Operator, Operator

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

Kirk Materne, Analyst

Yeah, thanks very much. I will echo the congrats on a nice quarter. Sridhar, obviously, we're going to hear a lot more about autonomous agents over the next year from many providers in the market. Can you discuss what that means for consumption on Snowflake's data platform, as it seems agents will be heavy consumers of data? How do you think about that opportunity as it becomes more prevalent?

Sridhar Ramaswamy, CEO

That is a good question, but I always focus on customer value. That is important because it will drive consumption. With products we've launched like Cortex Search, it is now possible to create effective chatbots and utilize them at low frequencies for negligible costs. Our goal is to make technology accessible; consumption follows broad use. Our AI investments emphasize trustworthiness and reliability. When I discuss AI with customers, I point out that our AI solutions are easy, efficient, and trusted. This enables customers to create chatbots that cite their sources, ensuring the accuracy of the answers provided. Cortex Analyst, for example, is being designed to improve reliability, assuring that users can trust the structured answers they receive. Snowflake Intelligence, coupled with our partnership with Anthropic, allows for seamless integration of these elements. If you're a salesperson, you could search for action items from past meetings in one application and then check Snowflake for consumption trends with a specific customer, updating Salesforce accordingly. We envision a future where many of these tasks are automated in the background, alerting you if problems arise. This ability to conduct anomaly detection and automate actions is intriguing. We provide technology focused on creating value, and we are confident these agents will represent the next evolution in operations.

Kirk Materne, Analyst

That's really helpful. Mike, a quick one. International is a key opportunity for you. How do you feel you're positioned in Europe and Asia Pacific as you head into 2025? Thanks again.

Mike Scarpelli, CFO

I think we are very well-positioned going into Europe. Our focus has been on the higher end of the market, but we plan to focus more on the mid-market in Europe. The Asia Pacific region continues to grow nicely, with substantial growth noted in Japan, along with emerging traction in India and Korea. Australia has always performed well for us, and New Zealand, although a smaller market, also shows great potential.

Sridhar Ramaswamy, CEO

Fun fact: we power most of the government agencies in New Zealand, where data sharing occurs more extensively than in most US government agencies.

Kirk Materne, Analyst

Thank you all.

Operator, Operator

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

Brad Zelnick, Analyst

Great. Thank you so much. Congratulations. It's really great to see the pace of innovation showing up in results. I wanted to ask how customers are utilizing Cortex and how it is becoming available in their organizations. How much of it should we think of as driving incremental consumption versus actions that might have been performed with conventional SQL queries?

Sridhar Ramaswamy, CEO

The use cases that Cortex AI enables are distinct from conventional SQL operations. I'll let C.K. elaborate. In a self-referential example of using our products, our sales team needed better insights into the use cases they created. The traditional approach would have involved navigating through 50,000 different use cases, which is not appealing. By running a few queries, we extracted structured information from the available notes, an achievement that would have been difficult to execute as a project earlier. These types of transformations are precisely what the Cortex family facilitates, with a focus on delivering value to customers.

Christian Kleinerman, EVP of Product

Many of the use cases Sridhar mentioned are centered around text analytics, an area we've dominated for some time. At Build, we expanded our capabilities beyond text to encompass images, audio, and video. Additionally, Cortex Search and Cortex Analyst are helping democratize data access, which is going well.

Brad Zelnick, Analyst

Exciting. Mike, just a follow-up for you. Based on your comments on Iceberg, are you anticipating less headwind for the year in your guidance? What’s the latest on how customers are contemplating the mix of where data resides? Thanks a lot.

Mike Scarpelli, CFO

Yes. I'm not going to break down different performance improvements going forward, but it's factored into our guidance where we see it. As I mentioned, we aren't facing significant storage headwinds because many customers are moving to Iceberg to use new workloads that were previously outside of Snowflake. We believe net-net, this opens more opportunities for us, especially since a considerable amount of data is not currently in Snowflake but accessible to us through Iceberg.

Sridhar Ramaswamy, CEO

I'd like to emphasize that customers generally have 100 to 1,000 times more data in cloud storage than in structured formats. Our developments in data engineering, as well as products like Cortex AI, are enabling streamlined data pipelines. For instance, Cortex allows generating insights from video transcripts and performing sentiment analysis through simple SQL queries, exploiting the open data estates available. These possibilities were previously inconceivable in a pre-Iceberg or pre-AI world. That's the essence of Snowflake: converting complex technologies into accessible applications for a wide audience. This creates significant opportunities rather than focusing on the potential migration of snippets of data within Snowflake to Iceberg formats which isn't a big deal.

Alex Zukin, Analyst

Thank you for the additional insight. Next question is from the line of Alex Zukin with Wolfe Research. Your line is now open. Hi, guys. Taking another stab at the Iceberg question, perhaps, Sridhar, in terms of the customer experiences you’ve observed from early adopters leveraging Snowflake to broaden their data estate insights, what increases have you seen in data volume and the trade-off between storage and additional services unlocked?

Sridhar Ramaswamy, CEO

As mentioned earlier, our customers are realizing with our Iceberg support that they can leverage Snowflake’s compute engine for analytics on historical data stored in other data estates. Those incremental use cases are flowing into our data sharing category, which we provided insights on. This is the synergy between Iceberg and AI features or data piping capabilities like dynamic tables creating new opportunities for us.

Christian Kleinerman, EVP of Product

Notably, customer behavior suggests that it's simpler for them to declare that they have data within Snowflake and successfully utilize it. As they explore using Snowflake with data in cloud storage, we're seeing a substantial month-over-month increase in data volume accessible via Iceberg tables, resulting in greater consumption, significantly surpassing any storage headwinds.

Raimo Lenschow, Analyst

Thank you. That makes sense. Mike, regarding the sales changes, with performance management, should we anticipate any cautiousness in our future outlook compared to a potentially more favorable budget backdrop in next year's models, especially in key verticals like Financial Services and Technology? Anything we should keep in mind?

Mike Scarpelli, CFO

Our sales leaders have realized they can engage in performance management throughout the year instead of waiting until the end. We're already witnessing positive results from enhanced performance management, and we're strategically backfilling positions with personnel better suited for our needs. While I won't specify conservative stances or precise guidance for future quarters, I can assert that I feel confident with the outlook for next year. When constructing your models, please consider that Q1 lacks the benefit of leap year that we experienced last year, which will impact year-over-year growth rates.

Sridhar Ramaswamy, CEO

Additionally, our sales teams are developing a new methodology to transition from transactional activity to conceptualizing use cases through deployment. Crediting them for their ability to manage this process rationally highlights their potential for driving results.

Alex Zukin, Analyst

Thank you, guys, and congratulations on the solid quarter.

Operator, Operator

We are now out of time for additional questions. I will pass the call back to Sridhar for any closing remarks.

Sridhar Ramaswamy, CEO

Thank you. Before we end the call, I want to leave you all with this: we have great momentum, and I'm immensely proud of our execution day in and day out. Our growth rate at this scale is incredibly impressive, and we have our foot on the gas. Our core business is strong, our new products are driving revenue growth, and our operational rigor is enhancing our growth and profitability for years to come. Thank you all for joining us.

Operator, Operator

That concludes the conference call. Thank you for your participation. You may now disconnect your lines.