Data analytics software vendor Databricks, one of the most valuable privately held U.S. technology companies, told investors on Wednesday it expects annual sales to hit $2.4 billion by the middle of this year.
Databricks Chief Financial Officer Dave Conte said in an investor briefing held in conjunction with the company’s Data & AI Summit in San Francisco on Wednesday that the company expects revenue for the year ending in July, or the first six months of its fiscal 2025, to increase 60% year over year.
Databricks’ growth contrasts with parts of the software industry, which have struggled since higher inflation and interest rates ended a long bull market in 2022. In recent weeks, software companies including Okta, Salesforce and UIPath have blamed the economy and other macro issues for disappointing results and guidance.
“Obviously, there’s a lot of uncertainty in the enterprise software industry, but I was very eager to stand up and share our financial performance,” Conte said. “I’m very excited.”
Databricks is one of a handful of venture-backed software makers that have been on a long path to an IPO. Others include Canva, Figma and Stripe. But the IPO market has been quiet for more than two years, with some movement likely in 2024. In April, security software company Rubric It was listed on the New York Stock Exchange.
Conte did not provide an update on Databricks’ plans to go public, but said the business was strengthening. Spoke to the media The company made $1.6 billion in revenue in the year ended Jan. 31, up more than 50% from the previous year, in a media release. The 11-year-old startup is on track to achieve an annualized run rate of $1.5 billion and a growth rate of 50% for the quarter ending July 31, 2023.
that is issued In September, Databricks announced it had raised $500 million in funding, valuing the company at $43 billion. SnowflakeThe company, which listed on the New York Stock Exchange in 2020, had a market capitalization of $43.6 billion as of Wednesday’s close.
Databricks saw 221 transactions over $1 million in the January quarter, Conte said. Existing customers are spending more and the company is adding more Fortune 500 customers, he said. Net revenue retention rate for fiscal year 2024, which ended in January, was over 140%, indicating growth from existing customers.
Databricks, meanwhile, is investing in growth: Its research and development expenses as a percentage of sales have been 33% in each of the past three years, compared with 19% for its peers and 23% for the 89 companies that have gone public since 2018, Conte said. Databricks’ subscription gross margin for fiscal 2024 is more than 80%.
Databricks CEO Ali Ghodshi said at a press conference on Wednesday that the company is seeing growth from its data warehousing product, which it launched in 2020. The business has generated more than $400 million in annual sales.
“I think it’s probably one of the fastest growing companies even by B2B standards,” Ghodshi said.
Databricks and Snowflake have been trying to reduce the cost of cleaning up and running queries for clients by using a standard format called Apache Iceberg. Last week, Databricks announced it was acquiring Tabular, a startup whose founders developed Iceberg, for more than $1 billion. CNBC reported that Snowflake is also in the running to acquire Tabular.
clock: Databricks CEO says ‘everyone today is interested in building their own AI models’