Frank Slootman, CEO of Snowflake, on the day of the company's initial public offering on September 16, 2020.
CNBC
Snowflake Billionaire CEO Frank Slootman, who joined the cloud software company in 2019 and took it public the following year, will retire and will be replaced by a former president, he said on Wednesday. Google Head of Advertising Sridhar Ramaswamy. Snowflake shares fell 24% in extended trading.
Slootman, 65, previously led a software vendor Service now In the public markets and before that, he led Data Domain. But Snowflake was his biggest endeavor and became the largest software IPO ever when it went public on the New York Stock Exchange in 2020 and more than doubled in its debut. Slootman will remain Chairman of the Board of Directors.
Ramaswamy, 57, spent 15 years at Google, most recently leading advertising and business until 2018. He then left to co-found Neeva in 2019, a consumer search engine that had hoped to rival Google until last year, when he announced the company. Its product has been shut down.
Snowflake acquired Neeva in June for $185 million, according to the filing.
“There is no better person than Sridhar to lead Snowflake into this next phase of growth and seize the next opportunity in AI and machine learning,” Slootman said in a statement. “He is a visionary technologist with a proven track record of managing and scaling successful businesses.”
Snowflake also released its fourth-quarter financial results. Sales rose 32% year over year to $774.7 million during the period. Product revenue for the fourth quarter was $738.1 million, an increase of 33% from the prior year.
Operating losses for the fourth quarter were $275.5 million, up from $239.8 million during the previous year's fourth quarter.
The company said first-quarter product revenue will range between $745 million and $750 million, below analysts' expectations of $759 million, according to StreetAccount. Additionally, Snowflake said its adjusted operating margin for the first quarter will be 3%, compared to analyst estimates of 7.2%.
Slootman's total compensation in 2023 was $23.7 million, almost entirely from stock awards and options. As of February 9, Slootman owned 10.6 million shares of Snowflake stock, according to a regulatory filing. At Wednesday's close, this stake is worth about $2.4 billion.
Before Slootman arrived at Snowflake, the company was led by former Microsoft CEO Bob Muglia, whose valuation reached $4 billion. Moglia was suddenly ousted in April 2019 and replaced by Slootman. The company's market value reached $75 billion on Wednesday before declining after hours.
CNBC's Jennifer Elias and Jordan Novitt contributed to this report.
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