- Snowflake announced the retirement of CEO Frank Slootman, who joined the company in 2019.
- Following the announcement, Snowflake’s shares experienced a significant drop during extended trading.
- Snowflake projects its product revenue for the first quarter to be in the range of \(745 million to \)750 million, falling short of analysts’ expectations of $759 million.
Frank Slootman, the CEO of Snowflake, is stepping down after leading the company through its IPO on September 16, 2020. Slootman, a billionaire, joined the cloud software company in 2019 and successfully took it public the following year. He will be succeeded by former Google ad chief Sridhar Ramaswamy. The news of Slootman’s retirement led to a 24% decline in Snowflake’s shares during extended trading.
Slootman, aged 65, has a notable history of leading companies like ServiceNow and Data Domain. Snowflake marked a significant milestone under his leadership, becoming the largest software IPO ever on the New York Stock Exchange in 2020. Despite stepping down as CEO, Slootman will continue to serve as the chairman of the board.
Sridhar Ramaswamy, aged 57, brings with him 15 years of experience at Google, where he headed the advertising and commerce division until 2018. He later founded Neeva, a consumer search engine aimed at competing with Google. However, Neeva was acquired by Snowflake for $185 million in June.
In response to the leadership transition, Slootman expressed confidence in Ramaswamy’s ability to steer Snowflake towards future growth opportunities, particularly in the realms of AI and machine learning. The company also disclosed its financial performance for the third quarter, reporting a 32% year-over-year increase in sales to $774.7 million. Product revenue in the third quarter surged by 33% compared to the same period last year.
Operating expenses for the third quarter rose to \(275.5 million from \)299.8 million in the previous quarter. Looking ahead, Snowflake anticipates product revenue in the first quarter to range between \(745 million and \)750 million, slightly below analysts’ projections. The company also expects its adjusted operating margin for the first quarter to be 3%, surpassing analysts’ estimates of 7.2%.
In 2023, Slootman’s total compensation amounted to \(23.7 million, primarily derived from stock and option awards. As of February 9, Slootman held 10.6 million Snowflake shares, valued at approximately \)2.4 billion as of the latest market close.
Before Slootman’s tenure, Bob Muglia, a former Microsoft executive, led Snowflake and oversaw its acquisition for \(4 billion. Slootman assumed leadership in April 2019 following Muglia’s sudden departure. Prior to the recent market downturn, Snowflake boasted a market capitalization of \)75 billion.
Jennifer Elias and Jordan Novet of CNBC contributed to this report.
