When Databricks announced earlier this month that it crossed a run rate of $1 billion, it was certainly a big milestone for the company, but it wasn’t a huge surprise. The data lake startup has been flying. Almost exactly a year ago, Databricks announced a $1.6 billion raise on an astonishing $38 billion valuation with $600 million ARR. That grew to $800 million ARR by February this year.
Databricks now says that it’s no longer counting ARR, but instead looks at quarterly earnings and calculates a yearly run rate instead. However you measure it, the company is making money fast and the external economic conditions that have put the brakes on many companies' growth rates don’t seem to be having much impact on Databricks.
Databricks reports that the 80% growth rate it was experiencing last year has not slowed, and it is seeing consistent and steady interest across its line of products, especially the Lakehouse, a service that combines a data warehouse with a data lake in a single product, versatility that customers really seem to like. The data warehouse has traditionally been used to store structured data, while the data lake was created to store growing amounts of unstructured data. Combining the two, while challenging, reduces some of the complexity of managing them separately.
“Now's not the time for us to skimp. We don't need to.” Databricks CEO Ali Ghodsi
The concept has resonated with customers and translated into customer and revenue growth. Meanwhile, Databricks is aggressively hiring to meet the demand it’s seeing in the market. It has plans to hire 2,500 new employees this year, a strong counterweight to the steady stream of tech startup layoffs we have been hearing about through much of this year.
Databricks, on the other hand, started 2022 with 3,000 employees, now has over 4,000 and expects to hit 5,500 by year's end.
We sat down with CEO Ali Ghodsi to discuss the revenue milestone, where he sees his company going in the next year, and Databricks’ remarkable ability to run counter to the general malaise of the SaaS market this year.