CrowdStrike Holdings, Inc.
CRWD · Nasdaq
Next quarter
Expected to report Dec 1, 2026 — estimated from last year’s reporting date.
Consensus is $0.00 EPS for Oct 2026 across 11 estimates, ranging -$0.01 to $0.01.
CRWD Jul 2026
- 80.00%
- +20.50%
- $0.05
- $0.01
- —
- $1.47B
Reported results
- $1.47B
- 74.57%
- -$33.23M
- -2.26%
- $5.31M
- $0.01
Highlights
- ARR acceleration: Net new ARR reached a quarterly record of $332.8 million, up 51% year over year, lifting ending ARR 25% to $5.84 billion.
- Guidance raised: CrowdStrike increased its fiscal 2027 net new ARR growth outlook by 630 basis points to 34% at the midpoint.
- Falcon Flex adoption: Ending ARR from customers using Falcon Flex exceeded $2.29 billion, up 101% year over year.
- Revenue growth: Second-quarter revenue rose 26% year over year to $1.47 billion, including subscription revenue of $1.40 billion, up 27%; revenue increased from $1.39 billion in Q1.
- GAAP EPS miss: Diluted GAAP EPS was $0.01 versus consensus of $0.05, an 80% shortfall, although non-GAAP diluted EPS was $0.31 versus $0.23 a year ago.
- Improved operating leverage: GAAP operating loss narrowed to $33.2 million from $105.5 million a year ago, while non-GAAP operating income rose to $371.6 million from $255.0 million.
- Cash generation: Operating cash flow reached a Q2 record of $530.3 million and free cash flow reached $377.4 million, up from $332.8 million and $283.6 million, respectively, a year ago.
- Platform expansion: Module adoption reached 51% for six or more modules, 35% for seven or more, and 26% for eight or more modules.
- Acquisition spending: CrowdStrike spent $881.4 million on the SGNL and Seraphic acquisitions in the first half and agreed to acquire XM Cyber technology assets for expected consideration of $145.0 million plus additional shares.
Analysis
CrowdStrike’s second quarter was defined by stronger underlying demand and cash generation, but not by GAAP earnings. Revenue of $1.47 billion increased 26% year over year and about 6% sequentially from $1.39 billion, while subscription revenue grew 27% to $1.40 billion. The company added a record $332.8 million of net new ARR, accelerating year-over-year growth to 51%, and raised its fiscal 2027 net new ARR growth target to 34% at the midpoint. Against that operating momentum, diluted GAAP EPS of $0.01 missed the $0.05 consensus estimate by 80%; the prior quarter produced $0.11 and the year-ago quarter a $0.07 loss.
The print also showed continued progress toward profitable scale. GAAP operating loss narrowed to $33.2 million from $105.5 million a year ago, broadly similar to the $30.6 million loss in Q1, while non-GAAP operating margin expanded to 25% from 22%. Operating cash flow rose 59% year over year to $530.3 million and free cash flow increased 33% to $377.4 million. However, stock-based compensation was $399.0 million in the quarter, helping explain the wide gap between GAAP and non-GAAP earnings. Falcon Flex ending ARR more than doubled to $2.29 billion, and module adoption continued to rise, supporting the company’s platform-consolidation strategy.
ARR and Falcon Flex
CrowdStrike’s leading indicator was the strongest part of the quarter. Ending ARR reached $5.84 billion, up 25% year over year, with $332.8 million of net new ARR added during the quarter. Management said the result included a record contribution from new logos and improved dollar-based gross and net retention, although it did not disclose the retention rates in the supplied materials. Falcon Flex continued to scale rapidly: ending ARR from Flex accounts exceeded $2.29 billion, up 101% year over year.
- Platform expansion: Among subscription customers excluding Falcon Go, 51% had adopted at least six modules, 35% at least seven, and 26% at least eight as of July 31.
- Outlook: Fiscal 2027 ending ARR guidance is $6.603 billion to $6.612 billion, implying 34% net new ARR growth at the midpoint; third-quarter ending ARR guidance is $6.184 billion to $6.188 billion.
Revenue and margins
Revenue growth remained broad-based but overwhelmingly subscription-led. Subscription revenue increased $297.3 million, or 27%, to $1.40 billion, driven by new customers and additional sensors and modules sold to existing customers. Professional services revenue grew 7% to $70.6 million, and its lower growth and declining gross margin reinforced the company’s positioning of services as a subscription cross-sell channel rather than the primary growth engine.
- Gross margin: Total GAAP gross margin improved to 75% from 74% a year ago, while subscription gross margin rose to 78% from 77%; professional services gross margin fell to 10% from 15%.
- Third-quarter guide: Revenue is expected at $1.523 billion to $1.529 billion, with non-GAAP operating income of $372.7 million to $375.9 million and non-GAAP diluted EPS of $0.31.
Profitability and cash flow
The quarter showed meaningful non-GAAP operating leverage but limited GAAP profitability. GAAP operating loss narrowed by $72.2 million year over year to $33.2 million, producing a GAAP operating margin of negative 2% versus negative 9%. Non-GAAP operating income increased 46% to $371.6 million, or a 25% margin versus 22% a year ago. GAAP net income attributable to CrowdStrike was $5.3 million, compared with a $70.2 million loss a year earlier and $27.8 million of income in Q1.
- Cash conversion: Operating cash flow rose to $530.3 million from $332.8 million, while free cash flow increased to $377.4 million from $283.6 million; free cash flow margin was 26%.
- GAAP-to-adjusted gap: Stock-based compensation and related employer payroll taxes totaled $399.0 million in the quarter, compared with $276.7 million a year ago. The company also benefited from a $14.5 million net recovery associated with the July 19 Incident.
- Full-year guide: Fiscal 2027 revenue guidance is $5.991 billion to $6.011 billion, with non-GAAP operating income of $1.497 billion to $1.508 billion and non-GAAP diluted EPS of $1.25 to $1.26.
AI platform investments
Product activity centered on extending Falcon into AI, identity, cloud and exposure management. CrowdStrike introduced Continuous Identity for AI Agents, expanded AI Detection and Response across major AI gateway partners, and added AWS collaborations for AI applications and cloud workloads. It also agreed to acquire XM Cyber’s attack-path visualization and offensive-simulation technology, linking the deal to broader exposure-management capabilities.
- Completed acquisitions: SGNL, focused on continuous identity security, was acquired for $627.9 million of cash net of cash acquired plus $9.2 million of replacement equity awards. Seraphic, focused on browser runtime security, was acquired for $327.5 million of cash net of cash acquired plus $13.7 million of replacement equity awards.
- Balance-sheet impact: Goodwill increased to $2.25 billion from $1.36 billion at January 31, primarily from the SGNL and Seraphic transactions; first-half acquisition cash outflows were $881.4 million.
- XM Cyber: The pending transaction is expected to close in the second half of fiscal 2027 for $145.0 million of cash and shares, plus additional shares to be determined at closing.
July 19 Incident
The 2024 Falcon sensor incident remains a source of execution and financial uncertainty even as the quarter’s reported costs improved. CrowdStrike said the incident has contributed to delayed sales opportunities, longer sales cycles and potential future contraction because customer commitment packages may include discounts, additional modules, flexible payment terms or subscription extensions. The company continues to face Delta litigation and government requests for information concerning the incident and its reporting of revenue and ARR.
- Current-period costs: The company recorded a net recovery of $14.5 million in the quarter, compared with $35.7 million of costs a year earlier; first-half 2027 costs were $3.6 million.
- Accrual: The balance for incident-related matters was $13.1 million at July 31, down from $15.5 million at January 31 after $6.0 million of payments or cash received.
- Uncertainty: CrowdStrike said it is reasonably possible that it could incur losses from related claims and proceedings, but it cannot currently estimate a loss or range of loss.
