Source URL: https://www.tomtunguz.com/snow-earnings-2025-08-28/
Source: Tomasz Tunguz
Title: The AI Tide Lifts Databases
Feedly Summary: Another day, another earnings report with accelerating growth from AI. Snowflake earnings yesterday demonstrates yet again the impact of AI on a $4.4B revenue business.
Snowflake’s revenue has rebounded from a low of 26% to 32% quarter over quarter.
And once [customers] are on our platform, AI becomes a cornerstone of their strategy, powering 25% of all deployed use cases with over 6,100 accounts using Snowflake’s AI every week.
Since Cortex’s launch in Q1 of fiscal 2024, AI is now in half of Snowflake accounts and represents 25% of workloads. Two years since launch, Snowflake’s AI features show the latency required for some of these innovations to percolate through organizations.
Snowflake’s growth resurgence mirrors MongoDB. In fact, over the analyzed time period, the correlation between the growth of these two businesses is 0.96, which is exceptionally high. AI’s tide is lifting all databases.
We knew it was going to be a strong quarter, but not as strong as it was, and that’s just the nature of a consumption model… NRR, net revenue retention, which was a very solid 125%. What is happening is that there is more and more recognition that the AI components of our data platform can deliver enormous value. And we are seeing budgets get allocated from large customers for AI projects.
AI is driving more compute workloads, querying the core warehouses via OpenAI and Anthropic models.
Europe is still developing, but it’s contributing…I would also say, too, that Microsoft is very strong in EMEA,
Competition on the continent! There were some questions about the dynamics with Microsoft. Fabric may have a stronger position in Europe.
We now have over 1,200 accounts using Iceberg, underscoring our leadership in bringing truly open standards to the enterprise.
It means approximately 10% of the Snowflake customer base is now using Iceberg. These are likely the larger accounts. Iceberg adoption is one-fifth of AI adoption, showing it’s lower priority.
AI Summary and Description: Yes
Summary: The text discusses Snowflake’s earnings report, highlighting significant growth driven by AI adoption, with AI now being integral to a substantial portion of their customer use cases. It indicates a strong correlation between Snowflake and MongoDB’s growth, emphasizing AI’s impact on data platforms and increasing budgets for AI projects.
Detailed Description: The content provides insights into Snowflake’s recent earnings report, illustrating the substantial role AI plays in the company’s revenue growth and customer strategy. Here are the major points:
– **Revenue Growth**: Snowflake has seen its revenue growth rate improve from 26% to 32% quarter over quarter, indicating strong performance.
– **AI as a Cornerstone**: A remarkable 25% of all deployed use cases on the platform are influenced by AI, with over 6,100 accounts utilizing Snowflake’s AI features weekly.
– **Cortex Launch Impact**: Since the introduction of Cortex in Q1 of fiscal 2024, AI has become a part of half of Snowflake’s accounts and constitutes 25% of overall workloads.
– **Latency of Innovation**: The text notes that it takes time for AI innovations to be fully adopted within organizations, reflecting the transitional phase of implementing new technologies.
– **High Correlation with MongoDB**: The data shows a very high correlation (0.96) between the growth patterns of Snowflake and MongoDB, suggesting that AI advancements are benefiting the entire database industry.
– **Net Revenue Retention**: Snowflake’s net revenue retention rate is reported at 125%, indicating that existing customers are increasing their spending, particularly in AI projects.
– **AI Workloads**: There is an increasing trend in compute workloads driven by AI, particularly through querying core warehouses via models from OpenAI and Anthropic.
– **European Market Dynamics**: The text notes developing competition in Europe, particularly with Microsoft, and mentions the potential strength of Microsoft Fabric in the region.
– **Iceberg Adoption**: With over 1,200 accounts using Iceberg, this open standard is being adopted by approximately 10% of Snowflake’s customer base, although its uptake is substantially lower compared to AI adoption.
The insights from this report are crucial for professionals focusing on AI, cloud computing, and data infrastructure security, as they highlight the evolving landscape where AI significantly enhances operational capabilities and budget allocations across organizations. Understanding these trends can help in aligning security and compliance measures accordingly to protect these growing AI workloads.