Databricks revenue growth tops 80% to $6.9 billion annualized

Databricks has a unique role in the AI ​​boom. Revenues continue to grow as businesses flock to the company’s data analytics tools. But as customers rely more on AI agents to clean data and ask questions, Databricks is incurring higher costs, leading to lower margins.

“This is the consumption-based business model and agency AI is coming,” Databricks CEO Ali Ghodsi told CNBC in an interview Tuesday at the company’s Data and AI Summit in San Francisco. “Agencies are generating a lot more queries. We have all these agencies, our agencies, and the agency platform we have also generates revenue, so it increases the consumption of everything around.”

Databricks told analysts at the conference that annual revenue is up 80 percent year-over-year and is now $6.9 billion, up from $5.4 billion in the fiscal quarter. fourth quarter.

With a private market valuation of $134 billion, Databricks is more valuable than its rivals SnowflakeThe market value of the company, which went public in 2020, is currently approximately $83 billion. Snowflake’s annual revenue is around $5.6 billion, according to its latest data. quarterly results It was published last month.

Databricks continues to sit on the sidelines of the public market even as its highly valued peers line up to go public. SpaceX It had its biggest breakout on record last week, surpassing the $2 trillion market cap on its first day of trading on Friday. Artificial intelligence model developers OpenAI and Anthropic applied for confidential bids.

Although Databricks is often grouped with AI model companies, it has a very different role in the market. Databricks Genie can answer business users’ questions about enterprise data, and Agent Bricks allows developers to build custom AI applications. As these products become more popular, Databricks needs to spend more on basic models.

Ghodsi declined to give Databricks’ current gross margin but said it would decline. His company’s annual revenue from artificial intelligence products has now increased from $1.4 billion in February to $1.7 billion.

One of the biggest trends in artificial intelligence today is that companies are taking precautions against illegal spending resulting from the use of tokens. Databricks’ Unity AI Gateway can notify people when they’re close to exhausting their AI budget.

Ghodsi said companies have stopped tokenmaxxing, or encouraging workers to use as many tokens as possible, and are now doing “value maxxing” to optimize productivity while still leveraging the powers of artificial intelligence.

Highlighting Anthropic’s Mythos, he said big companies “absolutely want to be able to use the most advanced and smartest models.” “They’re interested in that, but not for everything, right? For mundane tasks, they definitely want to reduce cost and use simple open-source models.”

Ghodsi said Chinese models are extremely popular among Databricks customers.

“Customers are really demanding choice,” he said.

Databricks aims to grow by selling tools developed for specific industries. The company announced its entry into the cybersecurity market in March with the introduction of its Lakewatch software. It said it would buy Databricks on Tuesday Panthera valued security initiative $1.4 billion It was introduced in 2021 and CustomerLake software to manage marketing data.

WRISTWATCH: Databricks CEO Ali Ghodsi: Artificial intelligence does not have an intelligence problem. There is a context problem