Frank Slootman, CEO of Snowflake, on the day of the corporate’s initial public offering on Sept. 16, 2020.
CNBC
Snowflake said on Wednesday that billionaire CEO Frank Slootman, who joined the cloud software company in 2019 and took it public the next yr, is retiring and will probably be replaced by former Google ad chief Sridhar Ramaswamy. Shares of Snowflake plunged 24% in prolonged trading.
Slootman, 65, previously led software vendor ServiceNow into the general public markets and before that, led Data Domain. But Snowflake was his biggest endeavor and have become the biggest software initial public offering ever when it hit the Latest York Stock Exchange in 2020 and greater than doubled in its debut. Slootman will remain chairman of the board.
Ramaswamy, 57, spent 15 years at Google, most recently leading the ads and commerce business until 2018. He then left to co-found Neeva in 2019, a consumer search engine he hoped to rival Google until last yr, when he announced the corporate was shutting down its product.
Snowflake acquired Neeva in June for $185 million, based on a filing.
“There isn’t a higher person than Sridhar to steer Snowflake into this next phase of growth and deliver on the chance ahead in AI and machine learning,” Slootman said in a press release. “He’s a visionary technologist with a proven track record of running and scaling successful businesses.”
Snowflake also released fourth-quarter financial results. Sales increased 32% yr over yr to $774.7 million through the period. Product revenue for the fourth quarter was $738.1 million, a 33% increase from the previous yr.
Operating losses for the fourth quarter were $275.5 million, up from $239.8 million through the fourth quarter of the previous yr.
The corporate said product revenue in the primary quarter will probably be between $745 million and $750 million, lower than the $759 million analysts were expecting, based on StreetAccount. Moreover, Snowflake said its first-quarter adjusted operating margin can be 3%, topping analysts’ estimates of seven.2%.
Slootman’s total compensation in 2023 amounted to $23.7 million, almost entirely from stock and option awards. As of Feb. 9, Slootman owned 10.6 million Snowflake shares, based on a regulatory filing. At Wednesday’s close, that stake can be value about $2.4 billion.
Prior to Slootman’s arrival at Snowflake, the corporate was led by former Microsoft executive Bob Muglia, who built it as much as a $4 billion valuation. Muglia was ousted suddenly in April 2019 and replaced by Slootman. The corporate had a market cap of $75 billion on Wednesday prior to the after-hours plunge.
That is breaking news. Please check back for updates.
— CNBC’s Jennifer Elias and Jordan Novet contributed to this report.
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