Ali
Ghodsi,
co-founder
and
CEO
of
Databricks,
speaks
at
a
press
conference
at
Databricks’
Data
and
AI
Summit
in
San
Francisco
on
June
12,
2024.
Jordan
Novet
|
CNBC
Databricks,
the
data
analytics
software
vendor
that’s
among
the
most
richly
valued
private
U.S.
tech
companies,
told
investors
on
Wednesday
that
annualized
revenue
will
reach
$2.4
billion
by
the
midpoint
of
this
year.
Annualized
sales
through
July,
or
the
first
six
months
of
fiscal
2025,
will
increase
60%
from
a
year
earlier,
Databricks
CFO
Dave
Conte
said
at
an
investor
briefing
concurrent
with
the
company’s
Data
and
AI
Summit
in
San
Francisco
on
Wednesday.
Databricks’
growth
contrasts
with
parts
of
the
software
industry
that
have
continued
to
struggle
since
soaring
inflation
and
rising
interest
rates
in
2022
put
an
end
to
the
extended
bull
market.
In
recent
weeks
Okta,
Salesforce,
UiPath
and
other
software
companies
have
blamed
disappointing
results
or
guidance
on
the
economy
or
other
macro
issues.
“Obviously
there’s
some
volatility
going
on
in
enterprise
software,
but
I’ve
been
really
eager
to
get
up
and
share
how
we’re
performing
financially,”
Conte
said.
“It’s
pretty
exciting.”
Databricks
is
one
of
a
handful
of
prominent
venture-backed
software
makers
that
have
long
been
on
the
path
to
an
IPO.
Others
include
Canva,
Figma
and
Stripe.
However,
the
IPO
market
has
been
quiet
for
over
two
years,
even
with
some
activity
in
2024.
In
April,
security
software
company
Rubrik
debuted
on
the
New
York
Stock
Exchange.
While
Conte
didn’t
provide
an
update
on
Databricks’
plans
to
go
public,
he
did
say
that
business
is
strengthening.
In
March,
the
company
told
media
outlets
outlets
that
it
generated
$1.6
billion
in
revenue
for
the
year
ending
Jan.
31,
up
more
than
50%
year
over
year.
The
11-year-old
startup
had
an
annualized
run
rate
of
$1.5
billion
and
50%
growth
for
the
quarter
that
ended
July
31,
2023.
When
it
issued
those
figures
in
September,
Databricks
said
it
had
raised
$500
million
in
funding,
valuing
the
company
at
$43
billion.
Top
competitor
Snowflake,
which
debuted
on
the
NYSE
in
2020,
was
valued
at
$43.6
billion
at
the
end
of
Wednesday’s
trading
session.
In
the
January
quarter,
Databricks
saw
221
transactions
that
exceeded
$1
million,
Conte
said.
Existing
clients
are
spending
more,
and
the
company
is
adding
Fortune
500
clients,
he
said.
Net
revenue
retention
in
the
2024
fiscal
year,
which
ended
in
January,
was
higher
than
140%.
That
figure
indicates
growth
from
existing
customers.
Meanwhile,
Databricks
is
investing
in
growth.
Research
and
development
spending
as
a
percentage
of
revenue
was
33%
in
each
of
the
past
three
fiscal
years,
compared
with
19%
for
its
peer
group
and
23%
for
a
group
of
89
companies
that
have
gone
public
since
2018,
Conte
said.
Databricks’
subscription
gross
margin
for
the
2024
fiscal
year
was
above
80%.
Databricks
CEO
Ali
Ghodsi
told
reporters
in
a
briefing
on
Wednesday
that
some
growth
is
coming
from
the
data
warehouse
product
the
company
launched
in
2020.
That
business
topped
$400
million
in
annualized
revenue.
“I
think
by
any
B2B
standard,
it’s
one
of
the
fastest-growing
probably
out
there,”
Ghodsi
said.
Databricks
and
Snowflake
have
been
trying
to
reduce
costs
of
cleaning
up
and
running
queries
for
clients
by
using
a
standard
format
called
Apache
Iceberg.
Last
week
Databricks
said
it
was
paying
over
$1
billion
to
buy
Tabular,
a
startup
whose
founders
created
Iceberg.
Snowflake
was
also
bidding
for
Tabular,
CNBC
reported.
WATCH:
Everybody
is
interested
in
building
their
own
AI
models
today,
says
Databricks
CEO
watch
now
