Executive Summary

Strong quarter with multiple records: total revenue surpassed $1.01B (+29% Y/Y), non-GAAP EPS $0.93, ending ARR crossed $4.02B (+27% Y/Y); subscription gross margin remained 80% and non-GAAP operating margin 19% .
Broad-based execution despite July 19 incident: gross retention >97% (down <50 bps Q/Q), DBNR 115%; sales cycles extended ~15% Y/Y and net new ARR was $153M as Flex/CCP incentives muted upsell but deepened platform adoption .
Guidance raised for FY25 across revenue, operating income, non-GAAP net income and EPS; Q4 guide embeds continued CCP headwinds (~$30M impact to both net new ARR and subscription revenue) and lower FCF leverage Q/Q .
Stock reaction catalyst: broad-based beats versus prior guidance (revenue, non-GAAP EPS, operating income) plus raised FY outlook; narrative emphasizes accelerated platform consolidation via Falcon Flex and hyper-growth in Next‑Gen SIEM .

What Went Well and What Went Wrong

What Went Well
- Platform momentum and consolidation: over 150 Falcon Flex transactions in Q3 (> $600M total deal value in-quarter; Flex cohort > $1.3B cumulative), with Flex customers averaging >9 modules and driving larger, longer-duration deals .
- Resilient customer metrics: gross retention >97%, DBNR 115%; record 260+ million‑dollar-plus deals closed in Q3, indicating durable large-enterprise demand .
- Product leadership: Next‑Gen SIEM net new ARR growth accelerated >150% Y/Y at multi‑hundred‑million scale; cloud and identity portfolios expanded with Adaptive Shield (SSPM), and partnerships with Fortinet/Omnissa to strengthen endpoint‑to‑network and VDI/UEM coverage .
What Went Wrong
- July 19 incident headwinds: sales cycles +~15% Y/Y, CCP incentives muted upsell/increased contraction; GAAP net loss ($16.8M) driven by ~$33.9M incident‑related costs .
- ARR/revenue decoupling: CCP structures (e.g., extended time) create temporary divergence; management asked investors to model ARR and subscription revenue separately near term .
- Federal distributor impact: ~($26M) ARR excluded due to transferability notice; remained in revenue under GAAP recognition, adding noise to ARR trend analysis .

Financial Results

Summary Results vs prior periods

Metric	Q3 FY2024	Q1 FY2025	Q2 FY2025	Q3 FY2025
Total Revenue ($M)	$786.0	$921.0	$963.9	$1,010.2
Subscription Revenue ($M)	$733.5	$872.2	$918.3	$962.7
Prof. Services Revenue ($M)	$52.6	$48.9	$45.6	$47.4
GAAP Diluted EPS	$0.11	$0.17	$0.19	$(0.07)
Non‑GAAP Diluted EPS	$0.82	$0.93	$1.04	$0.93
Total GAAP Gross Margin (%)	75%	76%	75%	75%
Total Non‑GAAP Gross Margin (%)	78%	78%	78%	78%
Non‑GAAP Op. Income ($M)	$175.7	$198.7	$226.8	$194.9
Non‑GAAP Op. Margin (%)	22%	22%	24%	19%

Notes: Q3 FY2025 non‑GAAP EPS and operating income beat prior guidance (see Guidance vs Actuals) while GAAP EPS was impacted by July 19 incident costs .

Segment breakdown

Revenue ($M)	Q1 FY2025	Q2 FY2025	Q3 FY2025
Subscription	$872.2	$918.3	$962.7
Professional Services	$48.9	$45.6	$47.4
Total	$921.0	$963.9	$1,010.2

KPIs and cash flow

KPI	Q1 FY2025	Q2 FY2025	Q3 FY2025
Ending ARR ($B)	$3.65	$3.86	$4.02
Net New ARR ($M)	$211.7	$217.6	$153.0
Gross Retention (%)	—	—	>97%
Dollar‑Based Net Retention (%)	—	—	115%
Module Adoption ≥5/≥6/≥7/≥8 (%)	65/44/28	65/45/29	66/47/31/20
Cash from Operations ($M)	$383.2	$326.6	$326.1
Free Cash Flow ($M)	$322.5	$272.2	$230.6
FCF Margin (%)	35%	28%	23%
Cash & Equivalents ($B)	$3.70	$4.04	$4.26

Actuals vs prior guidance (for Q3 FY2025)

Metric	Prior Guidance (Q3 FY25)	Actual (Q3 FY25)	Result
Total Revenue ($M)	$979.2 – $984.7	$1,010.2	Beat
Non‑GAAP Op. Income ($M)	$166.7 – $170.8	$194.9	Beat
Non‑GAAP Net Income ($M)	$201.2 – $205.2	$234.3	Beat
Non‑GAAP Diluted EPS	$0.80 – $0.81	$0.93	Beat

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue ($M)	FY2025	$3,890.0 – $3,902.2	$3,923.8 – $3,930.5	Raised
Non‑GAAP Income from Operations ($M)	FY2025	$774.7 – $783.9	$804.4 – $809.4	Raised
Non‑GAAP Net Income ($M)	FY2025	$908.8 – $918.0	$937.5 – $942.6	Raised
Non‑GAAP Diluted EPS	FY2025	$3.61 – $3.65	$3.74 – $3.76	Raised
Diluted Shares (M)	FY2025	252	251	Lower
Total Revenue ($M)	Q4 FY2025	—	$1,028.7 – $1,035.4	New
Non‑GAAP Income from Operations ($M)	Q4 FY2025	—	$184.0 – $189.0	New
Non‑GAAP Net Income ($M)	Q4 FY2025	—	$210.9 – $215.8	New
Non‑GAAP Diluted EPS	Q4 FY2025	—	$0.84 – $0.86	New
CCP Impact Commentary	Q4 FY2025	—	Approx. $30M impact to net new ARR and subscription revenue	Headwind maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 FY25 / Q1 FY25)	Current Period (Q3 FY25)	Trend
Falcon Flex / Consolidation	Flex model introduced and gaining traction; consolidation a key theme	>150 Flex deals in Q3; >$600M deal value in-quarter; cohort >$1.3B; larger/longer deals; CFOs engaged via CFS	Accelerating
AI & Charlotte AI	Platform AI emphasis; SIEM to power AI-native SOC	Agentic AI capabilities (triage, investigator); record triple-digit growth for Charlotte AI	Strengthening
Next‑Gen SIEM	Launch GA; ecosystem expansion	Net new ARR growth >150% Y/Y at multi‑hundred‑million scale; 2,000+ customers; cost/performance differentiation	Hyper‑growth
Cloud & Identity	ASPM/Cloud Sec expansion; partnerships (AWS/Google)	Acquired Adaptive Shield (SSPM); end‑to‑end runtime/code/SaaS; Entra ID support	Broadening
July 19 Incident Impact	Q2: incident disclosed; early costs	Sales cycles +~15%; CCP headwinds; GAAP costs $33.9M; FY Q4 FCF pressured	Headwind but easing
Retention/DBNR	Strong trajectory pre‑incident	Gross retention >97%; DBNR 115%	Resilient

Management Commentary

“Ending ARR surpassed $4 billion… Q3 revenue surpassed $1 billion… free cash flow of $231 million or 23% of revenue” — George Kurtz, CEO .
“We closed more than 150 Falcon Flex transactions… more than $600 million in total deal value. Accounts that have adopted the Falcon Flex model now represent more than $1.3 billion of total deal value.” — George Kurtz .
“Sales cycles increased by approximately 15% year-over-year… Q3 dollar-based gross retention rate of over 97%… dollar-based net retention rate of 115%.” — Burt Podbere, CFO .
“We are maintaining our estimated impact of approximately $30 million to both net new ARR and subscription revenue in Q4 from our customer commitment packages.” — Burt Podbere .
“Falcon Next‑Gen SIEM… net new ARR growth accelerating to over 150% year‑over‑year at multi‑hundred‑million‑dollar scale.” — George Kurtz .

Q&A Highlights

ARR seasonality and visibility: Management cautioned Q4 net new ARR seasonality vs models, citing extended cycles, CCP deployment choices, and limited visibility; reiterated ~$30M Q4 CCP impact to both net new ARR and subscription revenue .
ARR vs revenue divergence: CCP structures (e.g., extended time) drive a more immediate ARR impact than revenue; divergence is temporary per management .
Flex deal duration/size: Flex deals are “slightly longer” with larger average value; Flex customers average >9 modules, increasing stickiness and future upsell potential .
Competitive position: Next‑Gen SIEM displacing legacy/hyperscaler SIEMs on cost/performance; identity expansions including Entra ID support; strong large‑deal activity (260+ $1M+ deals) .
Federal distributor impact: ARR reduced by ~$26M from a distributor exercising transferability rights; revenue unaffected under GAAP .

Estimates Context

S&P Global consensus for Q3 FY2025 (revenue, EPS, EBITDA) was unavailable due to data access limits at the time of this analysis. As a result, comparisons are shown versus the company’s prior guidance rather than Wall Street consensus [S&P Global data unavailable].
Modeling notes per management: decouple ARR and subscription revenue near term due to CCP dynamics; be mindful of historical Q3→Q4 seasonality when updating models .

Key Takeaways for Investors

Platform-led beat and guide-up: Broad beats versus prior guidance and raised FY25 outlook support the consolidation thesis and multi‑product cross‑sell durability .
Near-term optics vs long-term value: CCP/Flex deepen customer commitment but temporarily pressure net new ARR, FCF linearity, and ARR/revenue coupling; management frames these as transitional .
SIEM as a second growth engine: Next‑Gen SIEM’s hyper‑growth and displacement wins expand TAM beyond endpoint/EDR, diversified by identity and cloud adjacencies (Adaptive Shield) .
Resilient core metrics: Gross retention >97% and DBNR 115% post‑incident point to sustained product-market fit and stickiness; record high-value deal activity underscores enterprise trust .
Watch Q4 FCF and sales cycles: Management flagged more pronounced July 19 impact on Q4 FCF and continued elongated cycles; CCP impact (~$30M) sustained in Q4 guide .
Strategic partnerships as accelerants: Fortinet (firewalls) and Omnissa (VDI/UEM) broaden distribution and use cases, aiding consolidation and partner‑sourced pipeline (nearly 70% of new subscription business in Q3) .
Medium‑term setup: Management targets net new ARR reacceleration in back half of FY2026 as Flex cohorts convert and macro/incident effects recede .

Appendix: Additional Data Points

Subscription gross margin steady at 80% non‑GAAP across Q3 FY24–Q3 FY25; total non‑GAAP gross margin stable at 78% .
Q3 FY25 free cash flow $230.6M (23% margin) vs $239.0M (30%) in Q3 FY24, impacted by incident‑related effects and planned investments .
Q4 FY25 outlook includes ~~$0.01–$0.02 non‑GAAP EPS headwind from Adaptive Shield; additional GAAP tax expense (~~$58M) related to prior acquisitions .

Sources: CRWD Q3 FY2025 8‑K press release and exhibits –; Q3 FY2025 earnings call transcript –; Q2 FY2025 8‑K –; Q1 FY2025 8‑K –; Fortinet partnership press release –; Omnissa partnership press release –.

CrowdStrike Holdings, Inc. (CRWD)·Q3 2025 Earnings Summary