Review|SNOW 1Q26: Cortex Code Driving Acceleration, Reconfirmed

This was a Snowflake quarter that genuinely excited me. We're also thrilled that in our Preview we boldly articulated the Snowflake upside we'd seen in our research, and built into our model that Cortex Code alone could contribute 2% of incremental revenue to Snowflake.

Looking back at our views on Snowflake over the past several quarters:

• We first turned constructive on Snowflake's inflection in 3Q24, arguing that Iceberg was incremental rather than a headwind, and boldly predicted that Snowflake would slow hiring and focus on OPM.
• In our 3Q25 Preview, we believed Snowflake would face headwinds from Gen2 optimization and Snowpark Connect. At the same time, frontier labs were also optimizing on Snowflake, putting Snowflake's revenue at risk.
• In our 4Q25 Preview, we argued that Gen2 optimization was complete, Snowpark Connect had flipped from a negative to a positive, and frontier labs had finished optimization and were beginning to ramp consumption.
• In our 1Q26 Preview, we interviewed 6 experts to understand Cortex Code's progress. We boldly called Cortex Code the fastest-growing product in Snowflake's history—far faster than Snowpark. We highlighted that Cortex Code is not just the data version of a coding agent, but also directly absorbs non-data workloads, which is why Cortex Code's growth is far outpacing products like Text-to-SQL. We also argued that Cortex Code's gross margin could come in higher than the market expects, because Cortex Code is priced 40% higher than Claude Code.