What changed in this filing

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Item 1. Business

2023-03-29 compared with 2022-03-30 · 103 added, 70 removed, 300 unchanged (37% of the section changed)

We believe in a data connected world where organizations have seamless access to explore, share, and unlock the value of data.

To realize this vision, we deliver the Data Cloud, a network where Snowflake customers, partners, data providers, and data consumers can break down data silos and derive value from rapidly growing data sets in secure, governed, and compliant ways.

Our platform is the innovative technology that powers the Data Cloud, enabling customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications, and share data.

To realize this vision, we deliver the Data Cloud, a network where Snowflake customers, partners, developers, data providers, and data consumers can break down data silos and derive value from rapidly growing data sets in secure, governed, and compliant ways.

We provide our platform through a customer-centric, consumption-based business model, only charging customers for the resources they use.

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Delivered as a service, our platform requires near-zero maintenance, enabling customers to focus on deriving value from their data rather than managing infrastructure.

Our cloud-native architecture consists of three independently scalable but logically integrated layers across storage, compute, and cloud services.

The storage layer ingests massive amounts and varieties of structured, semi-structured, and unstructured data to create a unified data record.

Our cloud-native architecture consists of three independently scalable but logically integrated layers across compute, storage, and cloud services.

The compute layer provides dedicated resources to enable users to simultaneously access common data sets for many use cases with minimal latency.

The storage layer ingests massive amounts and varieties of structured, semi-structured, and unstructured data to create a unified data record.

The cloud services layer intelligently optimizes each use case’s performance requirements with no administration.

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These deployments are generally interconnected to deliver the Data Cloud, enabling a consistent, global user experience.

Our platform supports a wide range of workloads that enable our customers’ most important business objectives, including data warehousing, data lakes, data engineering, data science, data application development, and data sharing.

From January 1, 2022 to January 31, 2022, we processed an average of over 1,496 million daily queries across all of our customer accounts, up from an average of over 777 million daily queries during the corresponding month of the prior fiscal year.

We also recently launched our Powered by Snowflake program to help companies build, operate, and grow applications in the Data Cloud by supporting developers across all stages of the application journey.

Members of the program have access to go-to-market, customer support, and engineering expertise.

Our platform supports a wide range of workloads that enable our customers’ most important business objectives, including data warehousing, data lakes, and Unistore, as well as collaboration, data engineering, cybersecurity, data science and machine learning, and application development.

From January 1, 2023 to January 31, 2023, we processed an average of approximately 2.6 billion daily queries across all our customer accounts, up from an average of approximately 1.5 billion daily queries during the corresponding month of the prior fiscal year.

We are committed to expanding our platform’s use cases and supporting developers in building their applications and businesses.

In 2021, we launched Snowpark for Java to allow developers to build in the language of their choice, and in 2022 we added support for Python.

We continue to invest in our Powered by Snowflake program to help companies build, operate, and market applications in the Data Cloud by supporting developers across all stages of the application journey.

As of January 31, 2023, we had over 820 Powered by Snowflake registrants.

We have an industry-vertical focus, which allows us to go to market with tailored business solutions.

For example, we have launched the Financial Services Data Cloud, the Media Data Cloud, the Healthcare and Life Sciences Data Cloud, and the Retail Data Cloud.

Each of these Data Clouds brings together Snowflake’s platform capabilities with industry-specific partner solutions and datasets to drive business growth and deliver improved experiences and insights.

For example, we have launched the Telecom Data Cloud, the Financial Services Data Cloud, the Media Data Cloud, the Healthcare and Life Sciences Data Cloud, and the Retail Data Cloud.

Each of these brings together Snowflake’s platform capabilities with industry-specific partner solutions and datasets to drive business growth and deliver improved experiences and insights.

Our business benefits from powerful network effects.

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We believe this network effect will help us drive our vision of the Data Cloud.

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Our platform is used globally by organizations of all sizes across a broad range of industries.

As of January 31, 2023, we had 7,828 total customers, increasing from 5,967 customers as of January 31, 2022.

As of January 31, 2022, our customers included 241 of the Fortune 500, based on the 2021 Fortune 500 list, and 488 of the Global 2000, based on the 2021 Forbes Global 2000 list, and those customers contributed approximately 26% and 40% of our revenue, respectively, for the fiscal year ended January 31, 2022.

Each of our Fortune 500 and Global 2000 customer counts is subject to adjustments for annual updates to the Fortune 500 list by Fortune and to the Global 2000 list by Forbes, respectively, as well as acquisitions, consolidations, spin-offs, and other market activity with respect to such customers.

As of January 31, 2023, our customers included 573 of the Forbes Global 2000, based on the 2022 Forbes Global 2000 list, and those customers contributed approximately 41% of our revenue for the fiscal year ended January 31, 2023.

Our Forbes Global 2000 customer count is subject to adjustments for annual updates to the Global 2000 list by Forbes, as well as acquisitions, consolidations, spin-offs, and other market activity with respect to such customers, and we present our Forbes Global 2000 customer count for historical periods reflecting these adjustments.

As our customers experience the benefits of our platform, they typically expand their usage significantly, as evidenced by our net revenue retention rate, which was 158% as of January 31, 2023.

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We have achieved significant growth in recent periods.

For the fiscal years ended January 31, 2022, 2021, and 2020, our revenue was $1.2 billion, $592.0 million, and $264.7 million, respectively, representing year-over-year growth of 106% and 124%, respectively.

For the fiscal years ended January 31, 2023, 2022, and 2021, our revenue was $2.1 billion, $1.2 billion, and $592.0 million, respectively, representing year-over-year growth of 69% and 106%, respectively.

Our net loss was $797.5 million, $679.9 million, and $539.1 million for the fiscal years ended January 31, 2023, 2022, and 2021, respectively.

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We believe the Data Cloud can enable a world without data silos, allowing organizations to effortlessly discover, access, derive insights from, and share data from a variety of sources.

Customers can share and provide access to each other’s data, augment data science and machine learning algorithms with more data sets, connect global supply chains through data hubs, and create new monetization channels by connecting data providers and consumers.

Customers can share and provide access to each other’s data or data products, augment data science and machine learning algorithms with more data sets, connect global supply chains through data hubs, build data products, and create new monetization channels by connecting data providers and consumers.

As the Data Cloud grows through broad adoption and increasing usage, there are enhanced benefits from greater data availability.

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Organizations can adjust their consumption to precisely match their needs, always optimizing for price-performance.

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• Easy to use.

Our platform can be up and running in seconds and is priced based on a consumption-based business model, reducing hidden costs and ensuring customers pay only for what they use.

Snowpark, our developer framework, allows developers to interact with Snowflake through various popular programming languages.

This, combined with our familiar SQL-based programming model and query language, provides choice for organizations and saves time and costs to learn new skills or hire specialized analysts or data scientists.

Snowpark, our developer framework, allows developers to interact with Snowflake through various popular programming languages, including Python.

This, combined with our familiar SQL-based programming model and query language, provides choice for organizations without governance tradeoffs and saves time and costs to learn new skills or hire specialized analysts or data scientists.

• Delivered as a service with no overhead.

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These deployments are generally interconnected to provide a global and consistent user experience.

• Seamless and secure data sharing.

• Seamless and secure collaboration.

Our platform enables governed and secure sharing of live data within an organization and externally across customers and partners, generally without copying or moving the underlying data.

When sharing data across regions and public clouds, our platform allows customers to easily replicate data and maintain a single source of truth.

Our platform also enables organizations to securely share and monetize data products.

Key Benefits to our Customers

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It also simplifies governance and minimizes the errors, complexity, and costs associated with managing data silos.

• Increase agility and augment insights through seamless data sharing.

• Increase agility, augment insights, and create new monetization streams through seamless collaboration.

Our platform allows customers to seamlessly share and consume live data across their organizations, and with their partners, customers, and suppliers, without moving the underlying data.

Customers can also leverage the Snowflake Data Marketplace, which provides access to hundreds of live, ready-to-query third-party data sets across a wide range of categories.

Through data sharing within and outside of their ecosystems, our customers are able to blend their existing data with broader context to gain deeper insights and enhance their partnerships.

• Create new monetization streams and data-driven applications.

Our platform allows customers to unlock previously untapped monetization streams and create new data-driven applications.

This enables organizations to better reach, engage, and retain their end customers.

Our platform also allows customers to unlock previously untapped monetization streams through creating and sharing data applications and data products.

Customers can also leverage the Snowflake Marketplace, which provides access to hundreds of live, ready-to-query third-party data sets and data products across a wide range of categories.

Through collaborating within and outside of their ecosystems, our customers are able to enhance insights and better reach, engage, and retain their end customers.

• Benefit from a global multi-cloud strategy.

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Security and governance, including the encryption of data in transit and at rest, were designed into our platform architecture.

This provides customers with the confidence to share their data inside their organizations, as well as with their partners, customers, and suppliers, to unlock new insights.

This provides customers with the confidence to share their data inside their organizations, as well as with their partners, customers, and suppliers, to unlock new insights and build new applications.

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Our Growth Strategies

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We have a history of technological innovation, releasing new features on a regular basis and making frequent updates to our platform.

We intend to continue making significant investments in research and development and hiring top technical talent to enable new use cases, strengthen our technical lead in our platform’s architecture, and increase our differentiation through enhanced data sharing capabilities.

For example, in 2021 we launched Snowpark and introduced support for unstructured data which allows expanded use of our platform.

For example, in 2021 we launched Snowpark for Java to allow developers to build in the language of their choice, and we continue to expand Snowpark’s capabilities and supported languages, most recently with Python in 2022.

• Drive growth by acquiring new customers.

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We continue to make investments in sales and marketing, research and development, customer support, and public cloud deployments across the EMEA, Asia-Pacific and Japan (APJ), and Latin America regions.

• Expand data content and data sharing across our global ecosystem.

Our platform provides an innovative way for organizations to share, collaborate, and connect with data, including through the Data Marketplace.

We plan to continue investing in adding new customers, partners, data providers, and data consumers to connect on our platform, and to drive market awareness of the Data Cloud.

• Expand data content and collaboration across our global ecosystem.

Our platform provides an innovative way for organizations to collaborate and connect with data and data products, including through our Marketplace.

We plan to continue investing in adding new customers, partners, data providers, data consumers, and forms of sharing to connect on our platform, and to drive market awareness of the Data Cloud.

• Grow and invest in our partner network.

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We plan to continue investing in building out our partner program to drive more consumption on our platform, broaden our distribution footprint, acquire new customers, and drive greater awareness of our platform.

For example, we launched our Powered by Snowflake program in 2021 to help customers and partners build, operate, and grow their applications built using Snowflake.

Our platform unifies data and supports a growing variety of workloads, including data warehousing, data lakes, data engineering, data science, data application development, and data sharing.

Customers can leverage our platform for any one of these workloads, but when taken together, it provides an integrated, end-to-end solution that delivers greater insights, faster data transformations, and improved data sharing.

For example, we launched our Powered by Snowflake program in 2021 to help customers and partners build, operate, and grow their applications built using Snowflake, and we continue to invest in expanding the program.

Our platform unifies data and supports a growing variety of workloads, including data warehousing, data lakes, and Unistore, as well as collaboration, data engineering, cybersecurity, data science and machine learning, and application development.

Delivered as a service, our platform is deployed across multiple public clouds and regions, is easy to use, and requires near-zero maintenance.

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Organizations use our platform to power the following workloads:

• Data Warehouse.

Our platform provides reporting and analytics to increase business intelligence.

Our platform provides reporting and analytics to improve business intelligence.

For Data Warehouse, our platform enables organizations to:

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◦ Build a modern scalable data lake in the cloud.

Consolidate data into one centralized place with the scalability, security, and analytical power of data warehousing in the cloud to enable real-time analytics on all data.

Consolidate data into one centralized place with the scalability, security, and power of the cloud to enable real-time analytics on all data.

Customers can rely on this centralized data repository to address a variety of use cases.

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Simplify data governance and provide rich security and controls to ensure data is managed and accessed according to regulatory and corporate requirements.

• Collaboration .

Our platform enables organizations to securely share, monetize, and acquire live data sets and data products.

For Collaboration, our platform enables organizations to:

◦ Securely share live data .

Build a private data exchange for employees across all parts of the organization to access, share, and analyze live data.

◦ Acquire data sets to enrich analytics .

Leverage public data sets on our Marketplace to enrich insights, augment analysis, and inform machine learning algorithms.

◦ Monetize new data sets and data products .

List data sets or data products to our Marketplace and tap into new monetization streams.

◦ Invite external parties to access governed data .

Invite customers, suppliers, and partners to securely access their data, streamline operations, and increase transparency.

◦ Enable data clean rooms .

Our platform enables data clean rooms, allowing organizations to design their own collaborative data environment in a privacy-compliant manner.

◦ Easy data replication .

Our platform allows for easy replication of data, accounts, policies, and pipelines for multiple users across multiple public cloud providers and regions without compromising data integrity and governance, enabling our customers and their users to rely on a single source of truth and achieve cross-cloud business continuity.

• Data Engineering.

Our platform enables data engineers, IT departments, data science teams, and business analytics teams to efficiently build and manage data pipelines using SQL or other programming languages to transform raw data into actionable data for business insights.

Our platform enables data engineers, IT departments, data science teams, and business analytics teams to efficiently build and manage data pipelines using SQL, Python, or other programming languages to transform raw data into actionable data for business insights.

For Data Engineering, our platform enables organizations to:

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Meet fluctuating business demands by instantly scaling resources up and down.

• Data Science.

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• Cybersecurity .

Our platform helps eliminate data silos, which can enable robust analytics and better security outcomes.

For Cybersecurity, our platform enables organizations to:

◦ Accelerate security analytics .

Unify logs, enterprise data, and contextual data sets to achieve better fidelity and automation.

◦ Leverage customized resources .

Access dynamically updated threat intelligence from our Marketplace and a wide network of connected applications that provide out-of-the-box integrations, content, and visualizations to enable initiatives such as threat detection and response.

• Data Science and Machine Learning.

A majority of data science efforts involve transforming massive amounts of raw data at scale to enable advanced analytics, such as advanced statistical analysis and machine learning techniques.

For Data Science, our platform enables organizations to:

For Data Science and Machine Learning, our platform enables organizations to:

◦ Accelerate transformations across massive data sets.

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Manage resources for data transformation and use leading data science tools, with the support of Scala, R, Java, and Python, to build machine learning algorithms in a single cloud platform.

• Data Application Development.

• Application Development.

Our platform can power new applications as well as enable existing applications with capabilities for reporting and analytics.

For Data Application Development, our platform enables organizations to:

For Application Development, our platform enables organizations to:

◦ Develop analytical applications.

Build data-driven applications with our platform serving as the analytical engine to provide massive scalability and insights.

Build data applications with our platform serving as the analytical engine to provide massive scalability and insights with minimal operational overhead.

◦ Embed Snowflake into existing applications.

Feed data and analytics directly into business applications in the context of daily workstreams.

• Data Sharing.

Our platform enables organizations to securely share, connect, collaborate, monetize, and acquire live data sets.

For Data Sharing, our platform enables organizations to:

◦ Create a private data hub.

Build a private data hub for employees across all parts of the organization to access, collaborate, and analyze data.

◦ Acquire data sets to enrich analytics.

Leverage public data sets on our Data Marketplace to enrich insights, augment analysis, and inform machine learning algorithms.

◦ Monetize new data sets.

List data sets to our Data Marketplace and tap into new monetization streams.

◦ Invite external parties to access governed data.

Invite customers, suppliers, and partners, to securely access their data to streamline operations and increase transparency.

◦ Enable data clean rooms .

Our platform enables data clean rooms, allowing organizations to design their own collaborative data environment in a privacy-compliant manner.

◦ Easy data replication.

Our platform allows for easy replication of data for multiple users across multiple public cloud providers and regions without compromising data integrity and governance, enabling our customers and their users to rely on a single source of truth.

Our platform was built from the ground up to take advantage of the cloud, and is built on an innovative multi-cluster, shared data architecture.

It consists of three independently scalable layers deployed and connected globally across public clouds and regions:

It consists of three independently scalable layers deployed and generally connected globally across public clouds and regions:

• Centralized storage.

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This architecture is built on three major public clouds across 38 regional deployments around the world.

These deployments are generally interconnected to deliver the Data Cloud, enabling a global and consistent user experience.

These deployments are generally interconnected through our Snowgrid technology to deliver the Data Cloud, enabling a global and consistent user experience.

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Our Technology

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This enables a variety of customer use cases such as making copies of production data for data scientists, creating custom snapshots in time, or testing data pipelines.

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• Compute Model.

Our platform offers a variety of capabilities to operate on data, from ingestion to transformation, as well as rich query and analysis.

Our compute services are primarily presented to users in one of two models, either through explicit specification of compute clusters or through a number of serverless services.

Our compute services are primarily presented to users in one of two models, either through explicit specification of compute clusters or through a number of serverless features.

◦ Compute Clusters.

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This gives us the ability to offer extremely high levels of concurrency with a simple configuration specification.

◦ Serverless services.

We also offer warehouse recommendations for workloads that have large memory requirements, such as machine learning use cases.

◦ Serverless features.

We offer a number of additional services that automatically provide the capacity our customers require.

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our replication service moves data between regions or clouds;

and our search optimization service analyzes changes in data, maintains information that speeds up lookup queries, and accelerates queries performing lookups of specific values.

our search optimization service analyzes changes in data, maintains information that speeds up lookup queries, and accelerates queries performing lookups of specific values;

and our query acceleration service automatically offloads parts of eligible queries to shared, flexible compute clusters to handle high-burst workloads.

• Data Sharing.

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As such, the data consumer sees no latency relative to updates from the data provider, and incurs no cost to move or transform data to make it usable.

Based on the same technology principles, our platform enables data clean rooms.

• Global Infrastructure

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It also supports customer-managed keys, where an additional layer of encryption is provided by keys controlled by customers, giving them the ability to control access to the data.

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Sales and Marketing

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Our system integrator partners help make the adoption of and migration to our platform easier by providing implementations, value-added professional services, managed services, and resale services.

Our technology partners provide strategic value to our customers by providing software tools, such as data loading, business intelligence, machine learning, data governance, and security, as well as data sets on our Data Marketplace, to augment the capabilities of our platform.

Our technology partners provide strategic value to our customers by providing software tools, such as data loading, business intelligence, machine learning, data governance, and security, as well as data sets on our Marketplace, to augment the capabilities of our platform.

We continue to invest in formal alliances with the leading consulting, data management, and implementation service providers to help our customers migrate their legacy database solutions to the cloud.

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It is also responsible for operating and scaling our platform, including the underlying public cloud infrastructure.

Many of our research and development employees are currently working remotely.

As our research and development employees return to an office, we expect them to be located primarily in or around Bellevue, Washington;

Berlin, Germany;

San Mateo, California;

Our research and development employees are located primarily in or around Bellevue, Washington and San Mateo, California in the United States, and internationally in Berlin, Germany;

Toronto, Canada;

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• other established vendors of legacy database solutions or big data offerings;

• new or emerging entrants seeking to develop competing technologies.

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We believe we compete favorably based on the following competitive factors:

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• ease of deployment, implementation, and use;

• choice of programming language;

• performance, scalability, and reliability;

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Historically, we have received a higher volume of orders from new and existing customers in the fourth fiscal quarter of each year.

As a result, we have historically seen higher collections and consequently higher non-GAAP free cash flow in the first and fourth fiscal quarters of each year, and our sequential growth in remaining performance obligations has historically been highest in the fourth fiscal quarter of each year.

For more information, including a definition of non-GAAP free cash flow and a reconciliation of free cash flow to the most directly comparable financial measure calculated in accordance with GAAP, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

As a result, we have historically seen higher non-GAAP free cash flow in the first and fourth fiscal quarters of each year, and our sequential growth in remaining performance obligations has historically been highest in the fourth fiscal quarter of each year.

For more information, including a definition of non-GAAP free cash flow and a reconciliation of free cash flow to the most directly comparable financial measure calculated in accordance with U.S.

generally accepted accounting principles (GAAP), see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Human Capital Resources

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We recruit and hire employees in jurisdictions around the world based on a range of factors, including the available talent pool, the type of work being performed, the relative cost of labor, regulatory requirements and costs, and other considerations.

Since April 2020, the vast majority of our workforce has been working remotely.

Although we have recently opened most of our offices for voluntary use and we expect many of our employees to return to physical offices during the fiscal year ending January 31, 2023, the nature and extent of that return is uncertain.

Some of our employees continue to work remotely following the COVID-19 pandemic, but the majority of our workforce has returned to physical offices.

Culture and Engagement

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Our culture is driven by our core company values:

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• Put Customers First :

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We are mindful that everyone has different experiences, and we use our differences to strengthen who we are.

Total Rewards

We have invested substantial time and resources in building our team, and we measure employee performance against our company values.

We are dependent on our management, highly-skilled software engineers, and sales personnel, and it is crucial that we continue to attract and retain valuable employees.

To facilitate attraction and retention, we strive to provide opportunities for our employees to grow and develop in their careers, supported by strong compensation and benefits programs, including equity-based compensation that is designed to align our employees’ interests with those of our stockholders.

To facilitate attraction and retention, we strive to provide opportunities for our employees to grow and develop in their careers, supported by strong compensation and benefits programs.

We use a combination of fixed and variable cash compensation for all employees, and we award equity compensation to certain employees that is designed to align our employees’ interests with those of our stockholders.

Eligible employees are also able to participate in our Employee Stock Purchase Plan, which allows employees to purchase our stock at a 15 percent discount up to U.S.

Internal Revenue Code limits.

We offer employees benefits that vary by country and are designed to meet or exceed local legal requirements and to be competitive in the marketplace.

Intellectual Property

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Although we rely on intellectual property rights, including patents, copyrights, trademarks, and trade secrets, as well as contractual protections to establish and protect our proprietary rights, we believe that factors such as the technological and creative skills of our personnel, creation of new services, features and functionality, and frequent enhancements to our platform are more essential to establishing and maintaining our technology leadership position.

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We control access to and use of our proprietary technology and other confidential information through the use of internal and external controls, including contractual protections with employees, contractors, customers, and partners.

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See the section titled “Risk Factors” for a more comprehensive description of risks related to our intellectual property.

Government Regulation

Our business activities are subject to various federal, state, local, and foreign laws, rules, and regulations.

Compliance with these laws, rules, and regulations has not had a material effect on our capital expenditures, results of operations, and competitive position as compared to prior periods.

Nevertheless, compliance with existing or future governmental regulations, including, but not limited to, those related to global trade, business acquisitions, consumer and data protection, environmental or related requirements or disclosures, and taxes, could have a material impact on our business in future periods.

For more information on the potential impacts of government regulations affecting our business, see the section titled “Risk Factors.”

Available Information

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We make available on our website at www.snowflake.com, free of charge, copies of these reports and other information as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business