SAN FRANCISCO — Snowflake reported first quarter revenue growth of 33% year-over-year, the fastest pace in two years. The data cloud company attributed the acceleration to strong adoption of its AI products and a major infrastructure agreement with Amazon.

Snowflake announced it would pay Amazon $6 billion over the next five years for Graviton chips, deepening its reliance on the cloud provider that already accounts for over 70% of how Snowflake operates its business. The company prices its products by consumption, recognizing revenue only when customers actively use its platform. Snowflake has integrated AI into its offerings over the past two-and-a-half years, developing tools such as Cortex Code, a coding agent now used in more than 7,100 customer accounts, and Snowflake Intelligence, an agentic application whose user base more than doubled from the prior quarter.

"We recognize revenue only when a customer actually uses Snowflake’s capabilities," CEO Sridhar Ramaswamy said. "We have to show value to make money." Ramaswamy, who became CEO in 2024, emphasized Snowflake’s consumption-based model as a differentiator in an evolving software market. "I liken it to the new browser," Ramaswamy said of Snowflake's control plane, which he describes as a "cockpit of work" where users orchestrate tasks across different applications.

Ramaswamy predicted that companies reliant on seat-based income will scramble to justify their premiums as employees use AI to accomplish an immense amount of work. "There will be major applications that folks will continue to buy, but there will definitely be a consolidation," Ramaswamy said, referring to a shift away from hundreds of off-the-shelf SaaS applications toward fewer major and more bespoke, small-scale applications.

Following the earnings report, Snowflake’s shares rose 36%.