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CrowdStrike Holdings, Inc. (CRWD)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY26 delivered solid top-line growth and a decisive EPS beat: revenue $1.10B (+20% YoY) vs Street ~$1.105B (slight miss), non-GAAP diluted EPS $0.73 vs Street ~$0.66, driven by strong Falcon Flex momentum, record operating cash flow, and disciplined execution .
  • Management authorized a $1.0B share repurchase, signaling confidence in accelerating net new ARR in the back half and durable margin expansion; CFO introduced Q2 and FY26 guidance above prior non-GAAP profitability targets .
  • ARR reached $4.44B (+22% YoY) with $193.8M net new ARR; cash from operations hit a record $384.1M and FCF $279.4M, though July 19 Incident-related costs weighed on GAAP results and FCF margin .
  • Catalysts: buyback authorization, “Flex” re-flex dynamics, early signs of reacceleration (Q2 guidance), and expanding AI-first platform narrative (Charlotte AI, next-gen SIEM, cloud, identity), plus high-profile Microsoft threat actor mapping collaboration and partner milestones .

What Went Well and What Went Wrong

What Went Well

  • Strong EPS beat and cash generation: non-GAAP diluted EPS $0.73; record cash from operations $384.1M and FCF $279.4M, reflecting operating leverage despite upfront investments .
  • Falcon Flex momentum and platform consolidation: total Flex account value surpassed $3.2B (6x YoY), >820 accounts, with 39% re-flex rate; CEO: “Flex… accelerates platform transformations, unlocking adoption and spend” .
  • AI-first strategy and next-gen SIEM traction: Charlotte AI agentic workflows and SIEM displacing legacy incumbents; “Next-Gen SIEM delivered triple-digit ending ARR growth” and customers praised speed/value .

What Went Wrong

  • Slight revenue miss vs consensus and GAAP loss due to incident costs and strategic charges: revenue $1.103B vs Street ~$1.105B; GAAP net loss -$110.2M including ~$39.7M July 19 Incident-related costs and $6.6M strategic charges .
  • Subscription/professional services gross margin compression YoY: GAAP subscription GM 77% (vs 78% LY); GAAP prof. services GM 11% (vs 28% LY), reflecting investments and mix .
  • Temporary divergence between ARR and recognized revenue: CFO cited CCP-related partner amortization impact (~$11M in Q1; $10–$15M per quarter through FY26 Q3), which pressured subscription revenue recognition .

Financial Results

Income Statement and Margins (YoY and sequential trajectory)

MetricQ3 FY25Q4 FY25Q1 FY26
Total Revenue ($USD Millions)$1,010.2 $1,058.5 $1,103.4
Subscription Revenue ($USD Millions)$962.7 $1,008.3 $1,050.8
Professional Services Revenue ($USD Millions)$47.4 $50.2 $52.7
GAAP Diluted EPS ($)($0.07) ($0.37) ($0.44)
Non-GAAP Diluted EPS ($)$0.93 $1.03 $0.73
Total GAAP Gross Margin (%)75% 75% 74%
Subscription GAAP Gross Margin (%)78% 77% 77%
Subscription Non-GAAP Gross Margin (%)80% 80% 80%
Non-GAAP Operating Income ($USD Millions)$194.9 $217.3 $201.1
Non-GAAP Operating Margin (%)19% 21% 18%
Cash from Operations ($USD Millions)$326.1 $345.7 $384.1
Free Cash Flow ($USD Millions)$230.6 $239.8 $279.4
Free Cash Flow Margin (%)23% 23% 25%

Segment/Revenue Mix

MetricQ3 FY25Q4 FY25Q1 FY26
Subscription Revenue ($USD Millions)$962.7 $1,008.3 $1,050.8
Professional Services Revenue ($USD Millions)$47.4 $50.2 $52.7
Subscription GM (GAAP) (%)78% 77% 77%
Professional Services GM (GAAP) (%)18% 12% 11%

KPIs and Balance Sheet

KPIQ3 FY25Q4 FY25Q1 FY26
Ending ARR ($USD Billions)$4.02 $4.24 $4.44
Net New ARR ($USD Millions)$153.0 $224.3 $193.8
Gross Retention (%)>97% 97% 97%
Module Adoption (≥6 / ≥7 / ≥8 modules) (%)47 / 31 / 20 48 / 32 / 21 48 / 32 / 22
Cash & Cash Equivalents ($USD Billions)$4.26 $4.32 $4.61

Versus Wall Street Consensus (Q1 FY26 Actual vs Estimates)

MetricConsensus*Actual
Revenue ($USD Millions)1,105.3*1,103.4
EPS (Normalized) ($)0.660*0.73

Values retrieved from S&P Global*

Guidance Changes

MetricPeriodPrevious Guidance (as of Q4 FY25, 3/4/25)Current Guidance (as of Q1 FY26, 6/3/25)Change
Total Revenue ($USD Millions)FY26$4,743.5–$4,805.5 $4,743.5–$4,805.5 Maintained
Non-GAAP Income from Operations ($USD Millions)FY26$944.2–$985.1 $970.8–$1,010.8 Raised
Non-GAAP Net Income ($USD Millions)FY26$851.2–$883.0 $878.7–$909.7 Raised
Non-GAAP Diluted EPS ($)FY26$3.33–$3.45 $3.44–$3.56 Raised
Weighted Avg Diluted Shares (Millions)FY26256 256 Maintained
Non-GAAP Tax Rate (%)FY2622.5% 22.5% Maintained
Total Revenue ($USD Millions)Q2 FY26—$1,144.7–$1,151.6 New
Non-GAAP Income from Operations ($USD Millions)Q2 FY26—$226.9–$233.1 New
Non-GAAP Net Income ($USD Millions)Q2 FY26—$209.1–$213.8 New
Non-GAAP Diluted EPS ($)Q2 FY26—$0.82–$0.84 New
Weighted Avg Diluted Shares (Millions)Q2 FY26—255 New
Non-GAAP Tax Rate (%)Q2 FY26—22.5% New

Earnings Call Themes & Trends

TopicQ3 FY25 (Q-2)Q4 FY25 (Q-1)Q1 FY26 (Current)Trend
Falcon Flex adoption & re-flex dynamicsCustomer commitment packages embraced; consolidation narrative; module adoption rising Over $1B in-quarter Flex deal value; 97% gross retention >$3.2B total Flex value; 39% re-flex rate; accelerating ARR Strengthening
Next-Gen SIEM displacementNamed IDC “Major Player” (SIEM) Continued SIEM innovation momentum Triple-digit ARR growth; displacing Splunk/QRadar; large wins Accelerating
AI/Agentic AI & Charlotte AIExpanded offerings; innovation showcased at Fal.Con Charlotte AI Detection Triage GA; 310% ROI TEI on identity Agentic workflows; autonomous triage; AI-native SOC narrative Broadening
Cloud/Identity/Exposure MgmtCNAPP leadership; identity partnerships Identity Protection for Entra ID; cloud partnerships Strong cloud ARR acceleration; Privileged Access GA; Exposure Mgmt replaces legacy VM Improving
ARR vs Revenue recognitionJuly incident headwinds mentioned Non-GAAP tax rate methodology change CCP partner amortization creates ~$11M revenue impact; $10–$15M per quarter Clarified; temporary
MSSP/Partner ecosystemMarketplace expansion; partner programs AWS $1B marketplace sales; partner awards MSSP ~15% of Q1 deal value; GuidePoint >$1B cumulative sales Scaling
Regulatory/legal——DOJ/SEC information requests re ARR/revenue, July incident Watch item

Management Commentary

  • CEO on Flex and platform consolidation: “Flex accelerates platform transformations, unlocking adoption and spend… evolving Falcon from a singular outcome sale into a multidimensional platform experience” .
  • CEO on agentic AI: “Charlotte AI… delivering autonomous expert-level triage, reasoning, and response at machine speed… we will be the protector of autonomous AI agents” .
  • CFO on ARR vs revenue divergence: “CCP-related programs… partner amortization impacts revenue… ~$11M in Q1; $10–$15M in each remaining quarter, subsiding in Q4” .
  • CEO on SIEM competition: “A big player out there is Splunk and QRadar… customers are looking for better, faster, and better value” .
  • CFO on margin trajectory: strategic realignment adds “at least 1% to next year’s non-GAAP operating margin… anticipate FY27 free cash flow margin of more than 30%” .

Q&A Highlights

  • Falcon Flex mechanics and revenue recognition: Reflex events flow into net new ARR when customers consume credits earlier than planned; Flex shifts sales to outcome-based demand planning with higher ROI and discounts .
  • ARR–revenue divergence: CCP and limited partner program amortization under ASC 606 drove ~$11M revenue impact in Q1; expected $10–$15M per quarter through Q3 FY26 .
  • Go-to-market post-incident: Sales force/partners refocused on innovation and consolidation; faster Flex burndown than anticipated .
  • SIEM displacement and competition: CrowdStrike is displacing Splunk/QRadar with materially faster queries and lower cost; built-in 10GB SIEM enables frictionless trials .
  • Regulatory update: Company received DOJ/SEC requests for information on ARR/revenue, July 19 outage; no further detail provided on the call .

Estimates Context

  • Q1 FY26 vs Street: Revenue was slightly below consensus ($1,103.4M vs ~$1,105.3M*), while EPS significantly beat ($0.73 vs ~$0.66*)—the beat supported by non-GAAP operating performance and despite incident/strategic charges .
  • Q2 FY26 guidance vs Street: Revenue $1,144.7–$1,151.6M broadly in-line with consensus ~$1,150.2M*; EPS $0.82–$0.84 in-line with ~$0.83* .
  • FY26 guidance vs Street: Revenue $4,743.5–$4,805.5M in-line with ~$4,784.99M*; non-GAAP EPS $3.44–$3.56 below Street ~$3.68*, implying potential upward revision hinges on back-half ARR reacceleration and operating leverage .

Values retrieved from S&P Global*

Key Takeaways for Investors

  • Flex-driven platform consolidation is accelerating ARR and should support sequential net new ARR growth in Q2 and back-half reacceleration; monitor re-flex activity and large-deal cadence .
  • EPS beat and raised FY26 non-GAAP profitability guidance, plus $1B buyback authorization, signal confidence in margin expansion and cash generation—constructive for near-term sentiment .
  • Revenue recognition headwind (~$10–$15M/quarter) from CCP partner amortization is temporary; watch Q4 subsiding to gauge alignment of ARR and revenue .
  • Next-Gen SIEM and Charlotte AI are key growth vectors displacing costly legacy stacks; sustained triple-digit SIEM ARR growth supports multi-year TAM expansion .
  • Incident-related costs and DOJ/SEC requests remain overhangs; track progress on remediation costs and any regulatory disclosures in future filings .
  • Street EPS for FY26 sits above company guidance; upward estimate revisions likely depend on back-half ARR acceleration and execution on realignment efficiencies .
  • Short-term: constructive setup from buyback and Q2 guide; Medium-term: platform-led consolidation across cloud/identity/exposure/SIEM and agentic AI positioning underpin the thesis.

Other Relevant Q1 FY26 Press Releases

  • Microsoft threat actor mapping collaboration (“Rosetta Stone” for cyber attribution) enhances defender clarity and cross-vendor response—supports platform credibility and ecosystem reach .
  • GuidePoint partnership surpasses $1B in sales, underscoring SIEM-led services adoption and Flex-enabled consolidation across the partner channel .