Back in Action: 1Q26 Off-Cycle SMIDcap Software Earnings Preview

Research evidence excerpt

Back in Action: 1Q26 Off-Cycle SMIDcap Software Earnings Preview

Equity Research

Multi Company Update — May 20, 2026

Software

U.S. Software

Back in Action: 1Q26 Off-Cycle SMIDcap

Software Earnings Preview

Our Call Ryan MacWilliams, CFA

Investors likely favor NT execution, growth from AI tailwinds, and cleaner setups. For Equity Analyst | Wells Fargo Securities, LLC

Ryan.MacWilliams@wellsfargo.com | 212-214-1192

these reasons, we like BRZE for 1Q.

Zeeshan Rauf

Associate Equity Analyst | Wells Fargo Securities, LLC

Still convicted in Infra LT, but NT setups matter. Investors with duration should continue Zeeshan.Rauf@wellsfargo.com | 212-214-1120

positioning closest to AI beneficiaries (infra SaaS). However, investors remain sensitive to Chris Brazeau

NT datapoints, complicating setups for our infra coverage facing tough year-ago comps. Associate Equity Analyst | Wells Fargo Securities, LLC

We think the cleanest 1Q setups are BRZE and ESTC. Chris.Brazeau@wellsfargo.com | 929-767-5658

Cyrus Motakef

• SNOW / MDB setups more complicated. Both approaching more difficult comps, Associate Equity Analyst | Wells Fargo Securities, LLC Cyrus.Motakef@wellsfargo.com | 212-214-3334

though prefer SNOW as we think it becomes more ownable post 1Q with relatively

easier 2H comps, and has a ramping AI story with Cortex Code (link).

• We think investors should not look at DDOG's quarter as representative for the rest

of infra SaaS as DDOG saw strong contributions at scale from AI labs, along with new

hyperscaler wins, which is less applicable compared to other names.

1Q quick takes:

SNOW - Expect solid execution in 1Q, cautious of 2Q guide. Despite the CRO change,

strong results from DDOG likely have expects at a 2.5% or better beat. Ultimately, think