We continue to pair high growth with efficiency. The year began against an unsettled macroeconomic backdrop. We witnessed lackluster sentiment and customer hesitation due to lack of visibility in their businesses. Customers prefer to wait-and-see posture versus leaning in to longer-term contract expansions. This reversed in the second half of the year and we started seeing larger multi-year commitments.

Meanwhile, Snowflake has announced many new technologies that let customers mobilize AI, Streamlit in Snowflake, Snowpark ML Modeling API, and Cortex ML functions are all generally available.

We also received FedRAMP High authorization on the AWS GovCloud. This enables Snowflake to protect some of the Federal Government’s most sensitive and classified data.

Since joining us, Sridhar has been leading Snowflake’s AI strategies, bringing new products and features to market at an incredible pace. He led the launch of Snowflake’s Cortex, Snowflake’s new fully-managed service that makes AI simple and secure. Prior to Neeva, Sridhar lead all of Google’s advertising products. During his 15-year tenure at Google, he helped grow AdWords and Google’s advertising business from $1.5 billion to over $100 billion.

Now, let’s turn to outlook. Consumption trends have improved since the beginning of last year, but have not returned to pre-FY ’24 patterns. We have evolved our forecasting process to be more receptive to recent trends. For that reason, our guidance assumes similar customer behavior to fiscal 2024.

We are forecasting increased revenue headwinds associated with product efficiency gains, tiered storage pricing and the expectation that some of our customers will leverage Iceberg Tables for their storage. We are not including potential revenue benefits from these initiatives in our forecast. These changes in our assumption impact our long-term guidance. Internally, we continue to march towards $10 billion in product revenue. Externally, we will not manage expectations to our previous targets until we have more data. We are focused in executing in FY ’24 to ensure long-term durable growth.

For expenses, our forecast assumes meaningful investments in our AI initiatives. We expect approximately $50 million of GPU-related costs in fiscal year ’25, approximately $10 million flowing through cost of product revenue. For the purpose of forecasting, we’re not including any incremental revenue associated with these features.