Snowflake's Frank Slootman to Retire From CEO Role, Will Remain Board Chair

(Bloomberg) -- Snowflake Inc. tumbled in late trading after the software maker delivered a disappointing sales forecast and announced that Chief Executive Officer Frank Slootman is stepping down from the role.
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Product revenue — a closely watched measure — will be $745 million to $750 million in the first quarter, Snowflake said in a statement Wednesday. Analysts had predicted $769.5 million on average, according to data compiled by Bloomberg. A full-year forecast also fell well short of projections.
Snowflake’s revenue growth slowed sharply in 2023 after many businesses cut back on their software purchases. This trend, termed cost optimization, also affected cloud providers like Amazon.com Inc. and Microsoft Corp. But both those companies, which lead the market for renting out computing power and storage, signaled recently that this cost-cutting behavior among customers had begun to wane.
The challenge of reinvigorating Snowflake will fall to the company’s senior vice president of AI, Sridhar Ramaswamy, who is taking over the CEO role. He joined Snowflake last year with the company’s acquisition of Neeva, an AI-powered search engine. Ramaswamy previously ran Google’s ad products.
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His elevation underscores a focus on AI for Snowflake. The company, which makes data analysis and storage software, stands to benefit from new projects tied to generative artificial intelligence, Mandeep Singh and Damian Reimertz of Bloomberg Intelligence said ahead of earnings. Snowflake’s products may be attractive when “enterprises aim to use their proprietary data to fine-tune foundational large language models without having to move the data to public clouds.”