CrowdStrike Holdings, Inc. is a global leader in cybersecurity, offering an AI-native platform designed to prevent breaches through a software as a service (SaaS) subscription model. The company's unified platform provides cloud-delivered protection for endpoints, cloud workloads, identity, and data, spanning multiple security markets . CrowdStrike's Falcon platform is central to its offerings, with a significant portion of sales conducted through channel partners. The company is focused on expanding its international operations, which contributed to 32% of its total revenue in fiscal 2024 .
- Cloud Security - Delivers comprehensive protection for cloud workloads, achieving rapid growth and significant market presence.
- Identity Protection - Offers robust solutions to safeguard user identities, contributing substantially to the company's revenue growth.
- LogScale Next-Gen SIEM - Provides advanced security information and event management capabilities, enhancing threat detection and response.
- Corporate Endpoint Security - Protects corporate devices from cyber threats, forming a core part of the company's security offerings.
- Security and IT Operations - Integrates security measures with IT operations to streamline processes and improve efficiency.
- Managed Security Services - Offers expert-managed security services to help organizations strengthen their cybersecurity posture.
- Threat Intelligence - Provides actionable insights into emerging threats to help organizations proactively defend against cyber attacks.
- Data Protection - Ensures the security and integrity of sensitive data across various environments.
- Exposure Management - Identifies and mitigates potential vulnerabilities within an organization's infrastructure.
- Cybersecurity Generative AI - Utilizes AI to enhance cybersecurity measures and automate threat detection and response.
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What went well
- CrowdStrike's Charlotte AI is delivering significant efficiency gains, transforming SOC operations by automating tasks and reducing the time to create situational reports from 4 days to 1 hour.
- Strong growth in Next-Gen SIEM, with customers choosing CrowdStrike over legacy providers due to greater efficiency, speed, scalability, and cost advantages. This presents a tremendous opportunity in the short, medium, and long term.
- Customers are impressed with the performance and outcomes provided by CrowdStrike's integrated platform, leading to increased adoption and competitive wins against legacy providers.
What went wrong
- CrowdStrike may be lagging in addressing the latest AI trends, as the analyst noted that the topic of agentic AI was not mentioned in the CEO's prepared remarks.
- Reliance on external technologies for internal efficiencies, as the CEO stated they leverage partner technologies like Salesforce and ServiceNow, which could indicate a dependence on third-party solutions rather than internal innovation.
- Limited impact of Charlotte AI's capabilities, with the CEO providing only one example where a customer's situational report creation time was reduced from 4 days to 1 hour, possibly suggesting that widespread significant benefits are not yet evident.
Q&A Summary
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Q4 ARR and Revenue Expectations
Q: Will Q4 net new ARR be stronger than Q3?
A: Burt Podbere explained that although Q4 is usually their biggest quarter with many renewals, they remain cautious due to ongoing impacts from the July 19 incident. Factors such as delayed outbound pipeline activities, extended sales cycles, and limited visibility contribute to their cautious outlook. They are maintaining an estimated impact of approximately $30 million to both net new ARR and subscription revenue in Q4 from customer commitment packages. -
Falcon Flex Adoption and Impact
Q: How is Falcon Flex affecting deal sizes and future ARR?
A: Falcon Flex is ahead of expectations, with over 150 deals representing more than $1.3 billion in total deal value. The average Falcon Flex subscription is multiples larger than typical contracts, with customers adopting more than 9 modules on average. This has led to slightly longer deal durations and increased platform stickiness, encouraging reacceleration in the back half of next year. -
Customer Retention Post-Outage
Q: Are you seeing churn after the July 19 outage?
A: George Kurtz stated they haven't seen significant churn among larger customers. Conversations have reinforced recognition of CrowdStrike's superior technology and how they handled the outage, turning it into a customer trust-building opportunity. While there may be some churn in the very small MSP space, overall customer engagements are encouraging. -
Next-Gen SIEM Opportunity
Q: What are you seeing in the Next-Gen SIEM market?
A: George Kurtz highlighted that customers are embracing their Next-Gen SIEM due to greater efficiencies, speed, scalability, and cost differences compared to legacy products. By integrating workflows within the Falcon platform and leveraging Charlotte AI, they can deliver immediate outcomes. This represents a tremendous opportunity in a huge market, and they are expanding their ecosystem accordingly. -
ARR and Revenue Divergence
Q: Why is ARR and revenue coupling diverging temporarily?
A: Burt Podbere explained that customer commitment packages offering extended time lead to a more immediate impact on ARR than revenue, causing a temporary divergence. Revenue recognition will lag as a result, but this effect is expected to be temporary. -
RPO Growth Implications
Q: How should we view strong RPO bookings growth?
A: Burt Podbere noted that the accelerated RPO growth reflects longer deal durations and customers engaging more deeply with CrowdStrike over extended periods. This growth is driven by customer commitment packages and CrowdStrike Financial Services, which bodes well for future revenue recognition and ARR growth. -
Agentic AI with Charlotte AI
Q: How is CrowdStrike utilizing agentic AI?
A: George Kurtz described Charlotte AI as more than a copilot; it's designed to perform work on behalf of customers, transforming Security Operations Centers. For example, tasks that previously took four days now take one hour, showcasing significant efficiency gains through the agentic nature of Charlotte AI. -
Security Spending Outlook
Q: How do you gauge security spending next year?
A: George Kurtz believes the security environment is worsening, with increased e-crime and ransomware. Customers continue to seek the best products, platform consolidation, and operational cost reductions. He is encouraged by the forward-looking environment and expects companies to spend on top technologies due to threats and regulatory pressures. -
Falcon Flex Impact on Retention
Q: Does Falcon Flex improve customer retention?
A: George Kurtz confirmed that Falcon Flex makes the platform stickier as customers adopt more modules, making it increasingly difficult to leave. Customers are adopting modules faster, allowing CrowdStrike to upsell and top up Falcon Flex pools, enhancing confidence in reacceleration next year. -
Average Deal Term for Falcon Flex
Q: What is the average deal duration for Falcon Flex?
A: Burt Podbere mentioned they didn't provide specific numbers but are seeing deals being slightly longer, which is exciting and contributes to longer customer relationships.
- Can you explain in more detail the temporary divergence between ARR and revenue growth due to the customer commitment packages, and when do you expect ARR to align with revenue again?
- Given that customer commitment packages may result in muted upsell rates and higher-than-typical contraction in Q4, how are you planning to manage these risks to meet your guidance?
- While you mentioned that Falcon Flex customers have adopted more than nine modules on average, it's still too early to determine renewal trends; what evidence supports your confidence in ARR reacceleration next year?
- With the majority of outbound pipeline-generating activities delayed following the July 19 incident, what specific steps are you taking to rebuild pipeline and address extended sales cycles?
- Despite the strong increase in RPO due to longer deal durations, how should investors interpret this in terms of future ARR and revenue recognition, considering the lag effects you've mentioned?
Q3 2025 Earnings Call
- Issued Period: Q3 2025
- Guided Period: Q4 2025 and FY 2025
- Guidance:
- Q4 2025:
- Total Revenue: $1,028.7 million to $1,035.4 million (22% YoY growth) .
- Non-GAAP Income from Operations: $184.0 million to $189.0 million .
- Non-GAAP Net Income Attributable to CrowdStrike: $210.9 million to $215.8 million .
- Diluted Non-GAAP Net Income Per Share: $0.84 to $0.86, with 252 million shares .
- FY 2025:
- Total Revenue: $3,923.8 million to $3,930.5 million (28% to 29% growth) .
- Non-GAAP Income from Operations: $804.4 million to $809.4 million .
- Non-GAAP Net Income Attributable to CrowdStrike: $937.5 million to $942.6 million .
- Non-GAAP Net Income Per Share: $3.74 to $3.76, with 251 million shares .
- Q4 2025:
Q2 2025 Earnings Call
- Issued Period: Q2 2025
- Guided Period: Q3 2025 and FY 2025
- Guidance:
- Q3 2025:
- Total Revenue: $979.2 million to $984.7 million (25% YoY growth) .
- Non-GAAP Income from Operations: $166.7 million to $170.8 million .
- Non-GAAP Net Income Attributable to CrowdStrike: $201.2 million to $205.2 million .
- Diluted Non-GAAP Net Income Per Share: $0.80 to $0.81, with 252 million shares .
- FY 2025:
- Total Revenue: $3,890.0 million to $3,902.2 million (27% to 28% growth) .
- Non-GAAP Income from Operations: $774.7 million to $783.9 million .
- Non-GAAP Net Income Attributable to CrowdStrike: $908.8 million to $980 million .
- Non-GAAP Net Income Per Share: $3.61 to $3.65, with 252 million shares .
- Q3 2025:
Q1 2025 Earnings Call
- Issued Period: Q1 2025
- Guided Period: Q2 2025 and FY 2025
- Guidance:
- Q2 2025:
- Total Revenue: $958.3 million to $961.2 million (31% YoY growth) .
- Non-GAAP Income from Operations: $208.3 million to $210.5 million .
- Non-GAAP Net Income Attributable to CrowdStrike: $245.7 million to $247.8 million .
- Diluted Non-GAAP Net Income Per Share: $0.98 to $0.99, with 250 million shares .
- FY 2025:
- Total Revenue: $3,976.3 million to $4,010.7 million (30% to 31% growth) .
- Non-GAAP Income from Operations: $890.1 million to $916.5 million .
- Non-GAAP Net Income Attributable to CrowdStrike: $985.6 million to $1,012 million .
- Non-GAAP Net Income Per Share: $3.93 to $4.03, with 251 million shares .
- Free Cash Flow Margin Target: 31% to 33% of revenue .
- Q2 2025:
Q4 2024 Earnings Call
- Issued Period: Q4 2024
- Guided Period: Q1 2025 and FY 2025
- Guidance:
- Q1 2025:
- Total Revenue: $902.2 million to $905.8 million (30% to 31% YoY growth) .
- Non-GAAP Income from Operations: $188.1 million to $190.8 million .
- Non-GAAP Net Income Attributable to CrowdStrike: $220.4 million to $223.1 million .
- Diluted Non-GAAP Net Income Per Share: $0.89 to $0.90, with 248 million shares .
- FY 2025:
- Total Revenue: $3,924.9 million to $3,989.0 million (28% to 31% growth) .
- Non-GAAP Income from Operations: $863.6 million to $913.0 million .
- Non-GAAP Net Income Attributable to CrowdStrike: $940.3 million to $989.7 million .
- Non-GAAP Net Income Per Share: $3.77 to $3.97, with 250 million shares .
- Free Cash Flow Target: 31% to 33% of revenue .
- Q1 2025:
Competitors mentioned in the company's latest 10K filing.
- Legacy antivirus product providers: Offer a broad range of approaches and solutions including traditional signature-based anti-virus protection .
- Alternative endpoint security providers: Generally offer a mix of on-premise and cloud-hosted products that rely heavily on malware-only or application whitelisting techniques .
- Network security vendors: Supplement their core perimeter-based offerings with endpoint or cloud security solutions .
- Cloud security vendors: Focus on public cloud infrastructure and services .
- Identity security vendors: Seek to identify and secure user accounts and related activities .
- Professional service providers: Offer cybersecurity response services .
Recent developments and announcements about CRWD.
Financial Reporting
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Revenue and Profit Performance: CrowdStrike reported a significant milestone with its ending Annual Recurring Revenue (ARR) surpassing $4 billion, marking a 27% year-over-year growth. The company also achieved over $1 billion in total revenue for the first time, with subscription revenue growing by 31% year-over-year .
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Management’s Forward Guidance: For the fourth quarter of FY 2025, CrowdStrike expects total revenue to range between $1,028.7 million and $1,035.4 million, reflecting a 22% year-over-year growth. The non-GAAP net income is projected to be between $210.9 million and $215.8 million .
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Market Conditions and Strategic Initiatives: CrowdStrike continues to focus on AI innovation, particularly with its AI agent, Charlotte, which automates detection triage and enhances security operations. The company also highlighted its acquisition of Adaptive Shield to bolster its cloud security offerings .
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Analyst Questions and Management Responses: Analysts inquired about the competitive landscape of the Next-Gen SIEM market and the factors influencing security spending. George Kurtz, CEO, emphasized the efficiency and cost-effectiveness of CrowdStrike's solutions compared to legacy products, and the ongoing demand for robust cybersecurity in light of increasing e-crime activities .
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Customer and Market Engagement: CrowdStrike's Falcon Flex subscription model has been a key driver of platform adoption, with over 150 deals closed in the quarter. The model is designed to enhance customer retention by offering flexibility and preferred pricing for various modules .
Earnings Call
The recent earnings call transcript for CrowdStrike (CRWD) provides a comprehensive overview of the company's financial performance and strategic initiatives for the third quarter of fiscal year 2025. Here are the key points:
Overall, CrowdStrike's strategic focus on AI-driven cybersecurity solutions and its flexible subscription model are central to its growth strategy, as it continues to expand its market presence and enhance its product offerings.