CrowdStrike Holdings Inc Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
CrowdStrike's Q2 2026 earnings call highlighted reacceleration driven by AI-necessitated demand and strong execution, with key themes including record net new ARR, Falcon platform adoption, and strategic acquisitions.
Key Financial Results
Record Q2 net new ARR of $221 million, exceeding expectations.
Ending ARR of $4.66 billion, up more than 20% year-over-year.
Record Q2 free cash flow of $284 million, representing 24% of revenue.
Record operating income of $255 million, or 22% of revenue.
Total revenue grew 21% year-over-year to $1.17 billion, exceeding guidance.
Non-GAAP net income attributable to CrowdStrike was a record $237.4 million, or $0.93 on a diluted per share basis.
Cash and cash equivalents grew to a record $4.97 billion.
Business Segment Results
Cloud, Next-Gen Identity, and Next-Gen SIEM platform solutions exceeded $1.56 billion in ending ARR, growing more than 40% year-over-year.
Falcon Next-Gen SIEM had year-over-year growth of more than 95% and ending ARR of more than $430 million.
Next-Gen Identity Protection business exceeded $435 million of ending ARR in Q2, growing more than 21% year-over-year.
Total cloud ending ARR exceeded $700 million, growing more than 35% year-over-year.
Capital Allocation
The document does not discuss specific capital allocation strategies such as dividends, share repurchases, or debt payments.
Industry Trends and Dynamics
AI's impact is palpable in cybersecurity and the broader technology market.
Organizations are embracing AI transformation.
Adversaries are using AI to democratize destruction at mass scale.
Enterprises are realizing AI security is not a network problem.
Rapid adoption of AI has placed a spotlight on the importance of securing cloud infrastructure at runtime.
Competitive Landscape
CrowdStrike was placed in the leader box for the sixth consecutive year in Gartner's latest Magic Quadrant for Endpoint Protection Platforms.
CrowdStrike's position was furthest right for completeness of vision and highest for ability to execute out of all vendors for the third year in a row.
Rising competitive win rates highlight CrowdStrike leading the way in cybersecurity.
Partners sourced over 60% of Q2 new business, highlighting the ecosystem's competitive advantage and leadership across all customer segments.
Macroeconomic Environment
The document does not specifically discuss macroeconomic factors such as inflation, tariffs, trade, recession, or business cycle.
Growth Opportunities and Strategies
AI-driven market demand and customer-driven consolidation, brought together by the Flex licensing model, drive belief in sustained growth.
CrowdStrike is securing where AI happens.
Acquisition of Onum to enhance Next-Gen SIEM capabilities.
Expansion of Next-Gen Identity Protection to non-human identities and AI agents.
Falcon Flex model is helping customers accelerate and maximize Falcon platform adoption.
Partnership with Amazon Business Prime to offer CrowdStrike Falcon Go to millions of businesses.
Financial Guidance and Outlook
Guidance now assumes back half net new ARR will grow at least 40% versus last year.
Revenue guidance includes assumptions of high-single digit sequential net new ARR growth Q2 to Q3, and at least 40% year-over-year net new ARR growth for the back half of the fiscal year, bringing ending ARR growth for FY 2026 to more than 22%.
Q3 2026 total revenue is expected to be in the range of $1,208.0 million to $1,218.0 million, reflecting a year-over-year growth rate of 20% to 21%.
Q3 non-GAAP income from operations is expected to be in the range of $256.0 million to $262.0 million.
Q3 diluted non-GAAP net income per share attributable to CrowdStrike is expected to be approximately $0.93 to $0.95.
Fiscal year 2026 total revenue is expected to be in the range of $4,749.5 million to $4,805.5 million, reflecting a growth rate of 20% to 22% over the prior fiscal year.
Fiscal 2026 non-GAAP income from operations is expected to be between $1,000.1 million and $1,040.1 million.
Fiscal 2026 non-GAAP net income per share attributable to CrowdStrike is expected to be in the range of $3.60 to $3.72.
Acquisition of Onum
CrowdStrike intends to acquire Onum, a leading data pipeline platform.
Onum delivers five times more events per second than its nearest competitor and processes data in real-time.
Onum's smart filtering reduces data storage cost by 50%.
Onum's real-time pipeline detection delivers up to 70% faster incident response with 40% less ingestion overhead.
Falcon Flex Model
Over 1,000 Falcon Flex customers.
Utilization of Flex contracts is more than 75% across the Flex customer base.
Re-Flexes are yielding a nearly 50% uplift in Flex customer ending ARR.
