Q4 2025 Summary
Published Mar 10, 2025, 1:15 PM UTC- CrowdStrike's AI-native platform, particularly Charlotte AI, is gaining strong traction among customers, leading to increased efficiency and competitive advantage. Customers report significant time savings and enhanced capabilities, with both level 1 and level 3 analysts benefiting from the technology.
- The company's success on AWS Marketplace, surpassing $1 billion in sales within a 12-month period, indicates strong growth potential through cloud marketplaces. CrowdStrike expects continued expansion via AWS and other marketplaces like GCP, opening new routes to market globally.
- CrowdStrike's Cloud Security ARR reached $600 million, growing 45%, with strong positioning in cloud workload protection leading to customer consolidation on their cloud solutions. Their expertise in workload protection is critical for stopping breaches and positions them well against competitors, fueling growth in cloud environments.
- Operating Margin Decrease Expected in FY '26: CrowdStrike is guiding to an operating margin of 20% in fiscal '26, down from 21% in fiscal '25, due to increased investments in sales and marketing costs of the Customer Commitment Program (CCP), upfront investments in key areas like marketing, innovation across high-growth and emerging products, and increased investments in platform resiliency. This decrease indicates lower profitability in the near term.
- Net New ARR Slightly Down Year-over-Year: After adjusting for the $56 million in CCP packages, CrowdStrike's net new Annual Recurring Revenue (ARR) is down about 1% year-over-year, suggesting that customers might still be holding back on spending or that growth is slowing. This could impact the company's ability to drive incremental sales and ARR growth.
- Deceleration in Growth of Emerging Products: The growth rate for CrowdStrike's Cloud and Identity products has decelerated at a faster rate compared to other segments like LogScale. This may indicate challenges in sustaining high growth rates in key emerging product areas, potentially affecting future revenue growth.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +25% (from $845.38M in Q4 2024 to $1,058.53M in Q4 2025) | Total Revenue increased by 25%, driven primarily by strong subscription revenue growth and robust double‐digit increases across geographic regions (e.g., U.S., EMEA, Asia Pacific, and Other exhibiting approximately 24–31% increases) that built on prior period strengths. |
Subscription Revenue | Not separately quantified, but primary driver | Subscription revenue reached $1,008.32M, confirming its dominant role in overall revenue expansion, building on consistent customer demand and expanded module adoption compared to previous periods. |
Professional Services Revenue | Not separately quantified; contributed $50.22M | Professional services contributed a modest portion of the total revenue at $50.22M, indicating that while it supports overall performance, the primary momentum continues to come from the subscription segment. |
Geographic Revenue | Double-digit increases across regions (approx. 24–31% YoY) | Regional breakdowns show U.S. revenue at $714.42M, EMEA at $168.47M, Asia Pacific at $107.89M, and Other at $67.76M, reflecting strong expansion in all markets, building on previous period regional gains. |
Gross Profit | +23% (from $636.76M in Q4 2024 to $784.55M in Q4 2025) | Gross profit grew by 23%, largely due to the increased revenue volume and improved operating scales; however, the slightly lower growth rate relative to total revenue suggests emerging margin pressures from increased cost structures. |
Operating Performance | Shift from operating income of $29.67M in Q4 2024 to an operating loss of $(85.30)M in Q4 2025 | Operating performance deteriorated sharply as operating expenses surged by roughly 43%, with higher investments in sales & marketing, R&D, and G&A eroding the positive operating income seen in the previous period. |
Net Income | Reversal from a positive $54.94M in Q4 2024 to a loss of $(92.73)M in Q4 2025 | Net Income reversed dramatically due to the considerable rise in operating expenses and margin pressure, turning previous period profitability into a significant loss despite robust revenue and gross profit growth. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Total Revenue | Q1 FY 2026 | no prior guidance | $1,100.6 million to $1,106.4 million | no prior guidance |
Non-GAAP Income from Operations | Q1 FY 2026 | no prior guidance | $173.1 million to $180.0 million | no prior guidance |
Non-GAAP Net Income Attributable to CrowdStrike | Q1 FY 2026 | no prior guidance | $162.1 million to $167.5 million | no prior guidance |
Non-GAAP Diluted Net Income Per Share | Q1 FY 2026 | no prior guidance | $0.64 to $0.66 | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Total Revenue | Q4 2025 | $1,028.7M - $1,035.4M | $1,058.53M | Beat |
Total Revenue | FY 2025 | $3,923.8M - $3,930.5M | $3,953.62M (sum of Q1–Q4) | Beat |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Charlotte AI | Q2: Described as a generative AI SOC analyst improving efficiency and reducing manual tasks ; Q3: Emphasized for its agentic AI capabilities that automate detection triage and situational reporting | Q4: Highlighted as a “SOC analyst's best friend” with rapid summarization and broad adoption across analyst levels | Consistently positive with evolving capabilities and increasing customer adoption. |
Next-Gen SIEM | Q2: Noted for significant ARR growth (surpassing $220M) with competitive wins via cost efficiency and data integration ; Q3: Highlighted hyper-growth inflection, with strong customer wins and integration of AI elements | Q4: Emphasized strong growth (115% YoY) and key competitive wins (e.g. replacing legacy systems) | Steady momentum with consistent competitiveness and solid long-term value. |
Cloud Security ARR Expansion | Q2: Achieved over $515M in ARR with high growth rates and major enterprise wins | Q4: Reported $600M in ARR with a 45% YoY growth rate and a strong focus on runtime protection and workload security | Consistent positive growth enhanced by evolving security focus. |
Platform Consolidation | Q2: Emphasized consolidation of disparate products onto the Falcon platform through integrated modules and simplified cybersecurity | Q4: Continued focus on consolidation with strong uptake of integrated solutions, driving larger deals and increased stickiness | Sustained strategic importance with deepening customer commitment and integration benefits. |
Falcon Flex Subscription Model | Q2: Introduced as a flexible, customer-driven approach with $700M in deal value and accelerated module adoption | Q4: Reported high adoption with a total account Flex deal value reaching $2.5B and even broader module usage | Accelerating adoption and expanding deal value, reinforcing platform consolidation. |
Revenue Growth Challenges and Net New ARR Slowdown | Q2: Impact noted from the July 19 incident with extended sales cycles and introduction of customer commitment packages (CCP) impacting upsell values | Q4: Reported a slight 1% YoY decline in net new ARR (with CCP impact), continuing issues with muted upsell, though management is optimistic for future acceleration | Consistently negative near-term sentiment with ongoing challenges, though future outlook remains cautiously optimistic. |
Operating Margin Decline Due to Increased Investments | Q2: Despite increased hiring in sales, marketing, and R&D, margins improved (24%) with strong non-GAAP operating income growth | Q4: Explicitly cited cost pressures due to higher sales/marketing spend and innovation investments, leading to an operating margin decline, but expected to yield long-term benefits | Mixed trend; earlier period showed strong margins, while Q4 reflects increased cost pressure—all viewed as strategic investments. |
Emerging Product Deceleration in Cloud and Identity Protection | Q2: Featured as strong growth drivers with ARR expansion (e.g., $515M and $350M ARR achievements) | Q4: CEO acknowledged a deceleration in growth rates for Cloud and Identity Protection even as they remain critical, signaling a new concern | A shift from robust growth to emerging deceleration, marking a potential warning sign despite product importance. |
Cybersecurity Incident Impact (July 19 Incident) | Q2: Major disruption noted with delayed deals, extended sales cycles, and introduction of CCP impacting ~$60M in ARR | Q4: CCP program completed; while the incident initially caused muted upsell and slower ARR, management now expects reacceleration from earlier consumption of Falcon Flex dollars | Transitioning from an immediate negative impact to a managed recovery with optimistic future upsell prospects. |
Potential Need for Architectural Changes Due to Microsoft Kernel Access Policies | Q2: Explicitly addressed by clarifying that no architectural changes to the Falcon agent are necessary, emphasizing best-in-class architecture | Q4: Not mentioned | Risk resolved; no current negative sentiment. |
Lagging on Latest AI Trends (Agentic AI Concerns) | Q3: Addressed proactively with CEO highlighting advanced agentic AI capabilities in Charlotte AI that automate tasks and reduce response times | Q4: No concerns mentioned; focus remains on leadership in AI-driven cybersecurity and strong customer feedback | Initial concerns have been mitigated, reinforcing the company’s leadership in agentic AI. |
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Margin Outlook
Q: What's affecting operating margins and future expectations?
A: The company is guiding to a 20% operating profit margin in fiscal '26, impacted by amortized sales and marketing costs from the successful CCP program and one-time upfront investments in areas like AI and platform resiliency. They expect operating margin and free cash flow margin to expand in the second half of FY '26. -
ARR Reacceleration
Q: How do you see ARR trending in the back half of the year?
A: With CCP contracts renewing and customers ahead in their demand plans, they expect a reacceleration of net new ARR in the back half, driven by upselling existing customers with their 29 modules and seizing the opportunity to reduce customer costs while showing the value of CrowdStrike. -
Falcon Flex Impact
Q: How is Falcon Flex driving customer value and spending?
A: Falcon Flex allows customers to access the entire product catalog and add modules without procurement cycles, leading to increased spending. For example, a large transportation company increased ARR by 67% after consolidating vendors through Flex. Customers are ahead of schedule in consuming Flex, indicating strong adoption. -
Cloud ARR Growth
Q: Can you discuss cloud ARR growth and competitive landscape?
A: Cloud ARR reached $600 million, growing 45%. Customers are gravitating towards workload protection and agent architecture, areas where the company excels. They continue to see consolidation as they expand capabilities across CSPM, ASPM, and DSPM, routinely consolidating customer spend in cloud environments. -
AWS Marketplace Sales
Q: What's the growth outlook for sales through AWS Marketplace?
A: Having exceeded $1 billion in sales through AWS Marketplace in a 12-month period, they see this increasing as it's the preferred procurement method for customers. Larger enterprises are committing more to cloud marketplaces, and international expansion offers additional growth opportunities. -
Exposure Management Expansion
Q: Are you replacing competitors in exposure management?
A: Yes, with the new ability to scan over the network, they can offer fuller replacements in a competitive environment. Combined with agent capabilities, this unlocks potential to replace competitors, and the fully integrated solution leverages their AI and workflow infrastructure. -
AI Strategy: Charlotte AI
Q: Can you elaborate on your AI strategy and competitive environment?
A: Charlotte AI is enhancing efficiencies by elevating analysts from level 1 to level 3, saving customers significant time and effort. Both level 1 and level 3 analysts are adopting it enthusiastically, reinforcing their leadership in this early-stage agentic AI space. -
Emerging Products Deceleration
Q: Why did Cloud and Identity products decelerate faster than LogScale?
A: Identity and Cloud have been key drivers in the CCP package, essential for customer protection with 79% of attacks being non-malware based. As CCP elements burn off in the back half, it's an opportunity to renew existing usage, viewed as a net positive for seeding the customer base. -
Customer Spending and ARR
Q: Are customers holding back on spending, affecting net new ARR?
A: Churn and contraction related to CCP were de minimis, and overall churn was in line with expectations. Net new ARR is expected to reaccelerate in the back half. The Adaptive Shield acquisition contributed a very small amount to ARR but has significant future potential with strong early adoption. -
Net Retention Rate
Q: Can you improve net retention rates by upselling existing customers?
A: Dollar-based net retention is impacted by larger, longer deals through Flex, which may pressure the metric but is beneficial. They have a growing customer base to upsell and cross-sell, offering ample opportunity despite quarterly variations in metrics. -
Falcon Flex Burn Rate
Q: How quickly are customers using in-kind Falcon Flex dollars?
A: Customers are ahead of schedule in consuming Falcon Flex dollars, leading to earlier renewals and upsells. This robust consumption benefits the company, and there are many more customers to engage with about Flex opportunities.