Frank Slootman, CEO of Snowflake, announces retirement; stock price drops 20%.

• Snowflake said that CEO Frank Slootman is retiring.
• The stock dropped in extended trading.
• Snowflake forecasted that product revenue in the first quarter would range from $745 million to $750 million, which is below the $759 million analysts predicted.

On Wednesday, it was announced that CEO Frank Slootman, 65, will be retiring and will be replaced by former Google ad chief Sridhar Ramaswamy. As a result, the shares dropped 20% in extended trading.

Ramaswamy, 57, spent 15 years at Google, where he led Ads and Commerce until 2018. He then left to co-found Neeva in 2019, a consumer search engine he hoped to rival Google. However, he announced the shutdown of Neeva last year.

Neeva was acquired by Snowflake for $185 million in June, as per a filing.

"Sridhar is the ideal candidate to lead Snowflake through its next phase of growth and capitalize on the opportunities in AI and machine learning, according to Slootman. He is a highly skilled technologist with a demonstrated ability to successfully manage and expand businesses."

In the fourth quarter, Snowflake reported a 32% year-over-year increase in sales, reaching $774.7 million, while product revenue grew by 33% to $738.1 million compared to the previous year.

The operating losses for the fourth quarter increased from $239.8 million to $275.5 million compared to the previous year.

The company announced that it expects product revenue in the first quarter to be between $745 million and $750 million, lower than the $759 million analysts had predicted. Furthermore, Snowflake stated that its first-quarter adjusted operating margin would be 3%, surpassing analyst expectations of 7.2%.

In 2023, Slootman's total compensation was $23.7 million, primarily from stock and option awards. As per the company's last proxy filing in 2023, he owned approximately 13 million Snowflake shares, or 3.8% of the outstanding stock. As of Wednesday's close, his stake would be worth approximately $3 billion.

This is breaking news. Please check back for updates.

Jennifer Elias and Jordan Novet contributed reporting