Snowflake CEO joins Jim Cramer after earnings report drives stock higher

It's Snowflake back on track after a couple months in the wilderness. The last time we heard from this enterprise software and data and analytics companies back in February, they put a strong quarter with the tepid full year forecast. Stock plunged from 230 deadly mid one hundreds since then, while many other tech names have rebounded like crazy stuff like someone traded back up to 163 as of today's close. But tonight these guys reported tremendous quarter stuff like beating expectations on every key line item for the quarter, revenue, product revenue, operating income, free cash flow, you name it take time management gave a strong product revenue guidance for the current quarter and raised their full year product revenue forecast. They gave you a little less a lower margin number, but we'll find out about that. So with the stock coming into the quarter cold, these numbers were enough to send it higher in after hours. Is this the beginning? Let's check in with Ramaswami. He is the new CEO of Still Fight. We interviewed much before we on TTC. Find out more about the quarter, where it's going. Mr. Ramasamy, welcome back to bed Money. Great to be chatting with you, Jim. OK, so this was a very impressive set of numbers. The one that really stood out was this 46% growth in what's known as remaining performance obligation. I regard that as the key indicator of the future. What's driving it, Jim? I think overall, like there are two broad strokes to the quarter. One is that our financial performance was really, really good. Our product revenue was up 34%. Remaining performance obligations as you talked about was up 46%, some very huge deals. It's really an indication of how much our customers believe in us, our free cash flow margins, but also amazing the other part of Q1 is really how our product pipeline, especially in AI has been an OverDrive. Our AI products are now generally available. Over 750 customers are developing on it, sending applications to production. And I would say the EDA of enterprise AI is here, right here at Snowflake. Well, let's talk about enterprise AI because you gave a number of use cases and some real some customers everybody knows, I'm going to pick when people know because it's on their their dining room table. Craft Hines. Why does why does Craft Hines need Snowflake? Can you repeat the question? Why does Kraft Heinz need Snowflake? Well, Kraft Heinz is an iconic brand, but they have lots and lots of data. And so part of the magic that Snowflake brings to the table with its AI offerings is that you can analyze customer feedback data very easily using, using language models and figure out which questions, for example, have automated responses as you can send which ones you should send to like an actual human. These are the kinds of applications that people are thinking and implementing with, with Snowflake. And the beauty is we make it real easy out-of-the-box and super efficient to get these done. Now you also made an acquisition. Some people said to me, you know what? I, I can use Snowflake, but I have to, I have to interrogate my own data. I, I don't know. I mean I rent these guys. I have to bring it back. Tell me about what it will mean that you have true era AI observability now that you've bought this new company that I think is going to make it so that you guys are, I don't know how much you need Amazon Web Services once you do that, I don't know, you tell me. Well, one small clarification. We signed a definitive agreement to acquire them. The actual acquisition we expect to happen soon enough, but as people are racing to develop AI applications, you know, things like observability becomes important because let's say you change the prompt, you still want to make sure that the application's working well or you want to try out a new model. It's all part of our mission to make AI reliable. And change management, which observability closely ties into, is an important part of making AI reliable. That's why we acquired this great team. But the general theme again is Vmake end to end AI. Easy to implement, easy to maintain, dramatically lower total cost of ownership. You don't have to run GPU's if you want to use AI with Snowflake. That's the stuff our customers. OK, let's talk about GPU because you've got your June 3rd to six Data Cloud Summit. I remember watching a video of Jensen Wong with your predecessor, Mr. Sluban. Mr. Sluban was famously tough on price when it came to Jensen. What will the powwow be like this time? Well, you know, I've gotten to know Jensen really well. Or the past few months. We are super excited by the promise of accelerated computing. Language models are just the beginning. I think it's a powerful way to scale things. We collaborated with NVIDIA on a number of fronts. Our foundation model, Arctic was unsurprisingly done on top of NVIDIA chips. We collaborate with them on on models. There's a lot to come and Jensen's of course the visionary when it comes to AI. We're going to be talking about all of this and many other new product announcements at our user conference as well. We're going to be exciting and I'm looking forward to seeing you. Oh well, let's see what we can do. I do want to ask you about the margins. You know your revenues going very well. The margins a little a bit of decline, something I should be worried about. You know how much we care about margins in this business. Margins are really, really important. You know, I, of course I work with Mike who is amazing at this. We are leaning ahead into investing with, with AI. Now these are modest size investments and I don't expect these numbers to like dramatically go up. And what Arctic clearly showed is that you can get a lot done with a small motivated team and a small amount of compute. Arctic was done on $2,000,000 of of of GPU compute and of course the products are out in GA and we are driving it. We are taking it to market. We want customers to use it for us to make dollars. I think we're very much in the mode of driving revenue for our AI, AI products and definitely hope to share more of that in the coming. Got it. Now Mike, your CFO did mention at one point that growth moderated in April, but he said that was a normal component of the way that things are in your business. Why is that? Well, the snowflake is a consumption model, which means that we make money only when our customers consume AH. Now, when there are holidays, for example, people don't run certain kinds of jobs as you know, like Easter is usually ah in April. So there are seasonal variations like that. But the overall trend that we are seeing in the business, the just you know, the conversations, the vibe that I have with the the customers that I talk to is hugely positive. People are truly excited by Snowflake as their data platform for data for collaboration and now AI applications. And you have customer after customer take multi million, you know, multi year contracts with with Snowflake. It points to a bright future where the coat is strong and you're pressing the gas really hard on new things like that. All right, so do you still speak to Mr. Sloopman? I only mentioned because he's one of the few friends of the show where I I just respect him greatly. So how's the communication? It's, it's actually, he is incredibly kind. I talk to him every other week. So we also chit chat on WhatsApp pretty often. Obviously, he's the chairman of the board and spent ten quality hours with him yesterday. I kind of tapped into his wisdom for how to create a great business and he is going to stay, you know, my friend and Snowflakes friend for the foreseeable future and very much a part of oh, you tell him we said hi and congratulations on a great quarter. That's Sridhar Ramaswamy, Snowflake CEO. Thank you, Sir. Great to see you. Great to see you. Thank you. Everybody's back yet coming up Hit us with your best shot and electrified fast fire lightning round is next. Don't miss a second of mad money. Follow at Jim Cramer on X Have a question? Tweet Kramer hashtag mad mentions Send Jim an e-mail to [email protected] or give us a call at one 807 four three CNBC Miss something? Head to Mad money dot CNBC dot dot com.