Snowflake reports 33% year-over-year revenue growth in Q1, with CEO citing consumption-based pricing model as key to thriving in AI era

Snowflake reported Q1 revenue growth of 33% year-over-year, the fastest pace in two years, and announced a $6 billion commitment to purchase Amazon Graviton chips over the next five years. The results sent shares up 36% and extended five-day gains past 50%.

Unlike traditional software vendors that rely on seat-based pricing, Snowflake uses a consumption-based model where the company 'recognize[s] revenue only when a customer actually uses Snowflake's capabilities.' CEO Sridhar Ramaswamy argues this model positions the company to benefit from agentic AI (autonomous software agents that complete tasks independently), as seat-based competitors will struggle to justify premiums when employees leverage AI to accomplish more work.

Snowflake's AI initiatives include Cortex Code, a coding agent in use across more than 7,100 accounts, and Snowflake Intelligence, an agentic application whose user accounts more than doubled quarter-over-quarter.