CrowdStrike Reports Strong Q2 Results, Expands AI Capabilities Amid Cybersecurity Boom

We're upgrading CrowdStrike despite a post-earnings stock drop

CrowdStrike shares declined Wednesday evening despite the cybersecurity firm reporting a clean beat across every key metric. While management raised its earnings per share outlook for the full year, the lack of an upside revenue guide as well pressured the stock in after-hours trading. Revenue in the fiscal 2026 second quarter increased 21% year over year to $1.17 billion, beating the consensus estimate of $1.15 billion, according to LSEG. Adjusted earnings per share (EPS) increased 6% to 93 cents in the three months ending July 31, beating the 83-cent estimate, LSEG data showed. Why we own it Cybersecurity is a must-have for companies in the digital age. Led by co-founder and CEO George Kurtz, CrowdStrike is one of the best there is (along with fellow Club name Palo Alto Networks ). The company specializes in endpoint protection through its AI-native platform called Falcon. Competitors: Palo Alto Networks, Fortinet , SentinelOne , Microsoft Portfolio weighting: 2.8% Most recent buy: March 10, 2025 Initiation date: Oct. 16, 2024 Bottom line CrowdStrike put together a great quarter. In addition to revenue and adjusted EPS beats, the company posted record second-quarter net-new annual recurring revenue (ARR) of $221 million, which was approximately $19 million more than the consensus estimate. Net-new ARR growth was an acceleration that happened a quarter ahead of the expected schedule. Management expects growth to pick up even more during the back half of the company's fiscal year. In simple terms, net-new ARR is a way to show how fast a company's recurring revenue base is growing. It's a great way to measure the health of a subscription-based company, and CrowdStrike management believes ARR is the best leading indicator of the business. The only blemish to the quarter was the underwhelming revenue guide for the third quarter and full fiscal year. CrowdStrike trades at a premium multiple, so we're not shocked to see the stock get scrutinized in extended trading. Some of the miss may be due to conservatism, but what's really happening here is a deviation of about $10 million to $15 million per quarter tied to the company's customer commitment packages (CCP). CrowdStrike gave its customers some "freebies" to maintain high retention rates, reduce churn following the July 2024 global IT outage, but the program also resulted in significant adoption of its platform. CrowdStrike sees this $10 million to $15 million per quarter negative impact persisting through its fiscal 2026 fourth quarter before subsiding. CRWD 5Y mountain CrowdStrike 5 years Just over a year ago, CrowdStrike's botched software update caused problems for computers around the world. After an initial stock drop after the incident, the company worked really hard to keep its customers, with great success and a stock that climbed to an all-time high last month. Shares of cybersecurity companies have come off the boil in recent weeks due to Fortinet and Check Point getting hammered after reporting. Palo Alto, our other portfolio cyber stock, delivered a beat and raise last week. Those shares, which jumped on earnings, have been recovering from a terrible selloff around its $25 billion CyberArk announcement. CrowdStrike moved off its after-hours lows after management said the fiscal second quarter results increased their conviction in achieving at least 40% year-over-year net-new ARR growth for the back half of the fiscal year, which would bring its ending ARR growth to more than 22%. Revenue left more to be desired, but management's explanation of the lingering impacts from its CCP program, as well as its bullish outlook of the future, helped the stock recover some of its post-market losses. Still, shares have been volatile in after-hours trading. At one point, they traded as low as about $390, only to swing back above $400 as the earnings call progressed and eventually settled at nearly $405, or just over 4% lower from Wednesday's closing price. The move extends what's been a disappointing stretch this summer. After closing at a record high of $514 of July 3, CrowdStrike shares have dropped roughly 20% when factoring in the after-hours action. Given this fall from the highs and the after-hours drop on what we view as strong results, we are upgrading the stock to our buy-equivalent 1 rating. We kept our price target on the stock at $520. Commentary CrowdStrike's financial results were all better than expected. We mentioned the top and bottom line beat earlier, but the company also delivered total ARR growth of 20% year over year and record free cash flow for its fiscal second quarter. Behind the strong results was continued adoption of CrowdStrike's Falcon Platform through Falcon Flex. The industry is moving to this idea of a platform or a one-stop shop for all cybersecurity needs with the same company. Palo Alto is putting its effort behind a version of this, calling it platformization. CrowdStrike's Flex subscription model allows customers to consolidate their security solutions through a flexible licensing agreement. Total Flex customers now exceed 1,000 thanks to the 220 new customers added in the quarter. Those are leading to some decently sized deals with the average Flex customer representing more than $1 million of ending ARR. The Falcon Flex model allows customers to achieve a low total cost of ownership while optimizing security by letting them swap one security module for another as needed. Not only are more customers signing up to the Flex model, they are also "re-flexing" or re-upping to more security modules and consolation at a high rate, providing management with conviction in their net-new ARR outlook. On artificial intelligence, companies and organizations of all sizes will depend on CrowdStrike's best-in-class solutions even more. Bad actors are growing more sophisticated by the day, and advances in AI are introducing new threats that enterprises must defend against. "Model creation and AI development happen in the cloud and in the data center. AI adoption happens at the endpoint on the computing device itself. And AI access happens by users with human and increasingly non-human machine identities. CrowdStrike secures each of these attack surfaces," CEO and founder George Kurtz explained on the earnings call. CrowdStrike also announced this evening the acquisition of a company called Onum, which it believes will improve its next-gen SIEM capabilities. SIEM stands for security information and event management. Guidance For full-year fiscal 2026, CrowdStrike management left its revenue outlook essentially unchanged, nudging up the low end by $5 million. It now sees full-year revenue in the range of roughly $4.75 billion to $4.81 billion. However, the company raised its adjusted EPS outlook to a range of $3.60 to $3.72 from its prior outlook of $3.44 to $3.56. The new outlook is above the consensus of $3.52. For its 2026 fiscal third quarter, the current quarter going on right now, CrowdStrike's revenue guidance at the midpoint was $1.213 billion, a bit below the $1.228 billion consensus. But adjusted earnings per share are expected to be 93 cents to 95 cents, which is a beat versus the consensus of 91 cents. (Jim Cramer's Charitable Trust is long CRWD, PANW. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

CrowdStrike shares dip as strong second quarter results offset by cautious outlook - SiliconANGLE

CrowdStrike shares dip as strong second quarter results offset by cautious outlook Shares in CrowdStrike Holdings Inc. were down more than 2% in late trading today after the cybersecurity company reported earnings and revenue beats in its fiscal 2026 second quarter but fell short of expectations with its third quarter outlook. For the quarter that ended on July 31, CrowdStrike reported adjusted earnings per share of 93 cents, up from 88 cents in the second quarter of the previous fiscal year, on revenue of $1.17 billion, up 21% year-over-year. Both figures were ahead of the 83 cents per share and revenue of $1.15 billion expected by analysts. As of the end of the quarter, CrowdStrike had $4.66 billion in annual recurring revenue, up 20% year-over-year. Net cash from operations came in at $332.8 million, up from $326.6 million in the second quarter of the previous fiscal year and the company was sitting on a record $4.97 billion in cash and cash equivalents as of July 31. Business highlights in the quarter included CrowdStrike's May integration of the Falcon platform with Nvidia Enterprise AI Factory, bringing enterprise-grade protection directly into artificial intelligence infrastructure and model workflows. This was followed in June by an expansion of Falcon Cloud Security, where CrowdStrike partnered with Nvidia to deliver full lifecycle protection for large language models through integrations with Nvidia NIM microservices and NeMo Guardrails Safety, extending Falcon's reach from AI model build phases through runtime deployment. June 16 saw the launch of Falcon for AWS Security Incident Response at the annual AWS re:Inforce 2025 conference. The AI-powered offering, available via AWS Marketplace, accelerates detection and containment of incidents in AWS environments, reducing cost and response times for customers. Later in the same month, CrowdStrike announced enhancements for Falcon Exposure Management with AI-driven features such as Asset Criticality scoring and Client-Side Attack Path Analysis. In July, CrowdStrike introduced agentic-AI security tools to the AWS Marketplace, including falcon-mcp, a Model Context Protocol server connecting AI agents to Falcon telemetry and a new AI Red Team Services offering to proactively test AI defenses. CrowdStrike rounded out the quarter with enhancements to Falcon Cloud Runtime Security that included stronger container-escape prevention and expanded protections for Kubernetes and Docker workloads. "As AI transforms the enterprise, CrowdStrike enables organizations to confidently embrace their AI future from development to deployment, from cloud to endpoint and from human to agent," said George Kurtz, founder and chief executive officer of CrowdStrike, in the company's earnings release. For its fiscal 2026 third quarter, CrowdStrike expects adjusted earnings per share of 93 cents to 95 cents on revenue of $1.208 billion to $1.218 billion. The earnings outlook was ahead of the 91 cents per share expected by analysts, but the revenue outlook fell short of an expected $1.23 billion. For the full year, the company expects adjusted earnings per share of $3.60 to $3.72 on revenue of $4.76 billion to $4.8 billion. The earnings outlook was ahead of an expected $3.51 per share, while revenue at the midpoint was in line with an expected $4.78 billion. Daniel Bernard, chief business officer of CrowdStrike, spoke with theCUBE, SiliconANGLE Media's livestreaming studio, in July, where he discussed how the company sees cybersecurity innovation "hitting warp speed" with agentic AI.

CrowdStrike Stock Is Sliding Today: What's Going On? - CrowdStrike Holdings (NASDAQ:CRWD)

CrowdStrike Holdings Inc CRWD shares are trading lower Thursday after the company reported second-quarter results and issued soft revenue guidance for the third quarter. Multiple analysts lowered price targets following the print. What Happened: Cybersecurity company CrowdStrike beat analyst estimates on the top and bottom lines in the second quarter, reporting revenue of $1.17 billion versus estimates of $1.15 billion, and adjusted earnings per share of 93 cents versus estimates of 83 cents. Subscription revenue grew 21% year-over-year and annual recurring revenue increased 20% year-over-year after the company added $221.1 million of net new ARR in the quarter. CrowdStrike generated $283.6 million of free cash flow and ended the period with $4.97 billion in cash and cash equivalents. CrowdStrike guided for third- quarter revenue of $1.208 billion to $1.218 billion versus estimates of $1.228 billion, and adjusted earnings per share of 93 cents to 95 cents versus estimates of 91 cents. The company also raised its full-year earnings guidance and narrowed its full-year revenue outlook. "As AI transforms the enterprise, CrowdStrike enables organizations to confidently embrace their AI future from development to deployment, from cloud to endpoint, and from human to agent," said George Kurtz, founder and CEO of CrowdStrike. CrowdStrike announced plans to acquire real-time telemetry pipeline management company Onum. Terms of the deal were not disclosed, but the company said the deal is expected to evolve Falcon Next-Gen SIEM into the definitive data foundation for agentic security and IT operations. Analyst Changes: Several analyst firms lowered price targets on CrowdStrike following the company's quarterly results. Needham analyst Mike Cikos maintained a Buy and lowered the price target from $530 to $475. Rosenblatt analyst Catharine Trebnick maintained a Buy and lowered the price target from $515 to $490. Evercore ISI Group analyst Peter Levine maintained an In-Line rating and lowered the price target from $425 to $405. WestPark Capital analyst Casey Ryan reiterated CrowdStrike with a Hold rating. Cantor Fitzgerald analyst Jonathan Ruykhaver reiterated an Overweight and maintained a price target of $475. CRWD Price Action: CrowdStrike shares initially fell to around $390 in Wednesday's after-hours session before bouncing back. The stock was down 2.74% at $411.01 at the time of publication Thursday, according to Benzinga Pro. Read Next: Jim Cramer Says Rigetti May Have A 'Home Run' Opportunity -- But It's Speculative Photo: Bluestork/Shutterstock.com CRWDCrowdStrike Holdings Inc$407.00-3.69%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum83.38Growth27.44QualityN/AValue8.54Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

CrowdStrike Analysts Emphasize Long-Term Strength Of Cybersecurity Platform - CrowdStrike Holdings (NASDAQ:CRWD)

As the tech sector navigates a landscape of economic uncertainty and rapid innovation, cybersecurity firms are increasingly in the spotlight for their critical role in safeguarding digital assets. Amid this broader industry trend, CrowdStrike Holdings Inc. CRWD has captured investor attention with its robust financial performance and strategic growth initiatives. Shares of CrowdStrike climbed on Thursday after the company reported upbeat fiscal second-quarter results on Wednesday. Here are some analyst takeaways. Wedbush analyst Daniel Ives reiterated an Outperform rating, while reducing the price target from $575 to $525. Rosenblatt Securities analyst Catharine Trebnick maintained a Buy rating, while cutting the price target from $515 to $490. Goldman Sachs analyst Gabriela Borges reiterated a Buy rating, while slashing the price target from $530 to $492. Needham analyst Mike Cikos maintained a Buy rating, while reducing the price target from $530 to $475. Cantor Fitzgerald analyst Jonathan Ruykhaver reiterated an Overweight rating and price target of $475. Check out other analyst stock ratings. Wedbush: CrowdStrike reported total revenue of $1.168 billion, beating Street expectations of $1.150 billion, Ives said in a note. Deals valued at more than $10 million doubled year-on-year and 60% of customers with over $100,000 in annual recurring revenue (ARR) have adopted eight or more modules, "as the company continues its platform consolidation strategy," he added. Total ARR rose 20% year-on-year to $4.66 billion, slightly higher than the consensus estimate of $4.64 billion, as CrowdStrike surpassed 1,000 Falcon Flex customers during the quarter, the analyst stated. Management expects NNARR to grow 40% year-on-year in the back half of fiscal 2026, "driven by further strength in its Cloud, Identity, and SIEM product solutions which continue to gain traction along with its Charlotte AI products that saw record growth," he further wrote. Rosenblatt Securities: Although CrowdStrike delivered "a beat across the board," its stock came under pressure immediately after the earnings release due to conservative guidance, Trebnick said. Management raised their full-year revenue, operating margin and pro forma earnings outlook by slightly less than the second-quarter beat, she added. The company raised its top-line guidance at the midpoint by just $3 million and reiterating the high-end of the range, the analyst stated. Falcon Flex's adoption was "impressive," with the company adding 220 new customers, surpassing the 1,000 customer milestone, she further wrote. Goldman Sachs: CrowdStrike reported its NNARR 10% above Street expectation, its revenue 2% higher, while earnings exceeded consensus by 3%, Borges said. The company expects NNARR to accelerate 40% year-on-year in the back half of fiscal 2026, as headwinds ease from last year's outage, the analyst stated. This guidance came in higher than consensus of 28% growth, she added. "We believe the key to the stock beginning to outperform again will be the company returning to a more consistent beat and raise across NNARR, revenue and EPS," the analyst wrote. Needham: CrowdStrike reported NNARR of $221 million, surpassing consensus of around $202 million, Cikos said. Management guided to high single-digit sequential growth for the fiscal third quarter, implying NNARR to cross $230 million, which is well above Street expectations of $205 million, he added. Flex is gaining traction, and the company added 220 new customers, the analyst stated. "We believe CrowdStrike remains on course to execute against accelerating sequential Net-New ARR growth exiting FY26, as Flex becomes a growing contributor to overall business momentum," he wrote. Cantor Fitzgerald: CrowdStrike delivered "strong" quarterly results, exceeding consensus on ARR, earnings, and free cash flow, Ruykhaver said. NNARR reaccelerated a quarter earlier than expected, he added. Management maintained the high end of their full-year revenue guidance but raised the midpoint, while raising their earnings guidance to $3.60-$3.72, the analyst stated. "Overall, key performance indicators were solid, and we remain positive on the company's growing platform adoption, supported by Falcon Flex, continued innovation, and strong customer retention," he wrote. CRWD Price Action: CrowdStrike Holdings shares were up 2.34% at $432.50 at the time of publication on Thursday, up 24.52% since the start of the year. The stock is trading within its 52-week range of $242.25 to $517.97, according to Benzinga Pro data. Read More: CrowdStrike CEO Says Hackers Are 'Democratizing Destruction At Mass Scale' Using AI: Targets $10 Billion ARR Amid Soaring Demand For Cyber Defense Photo: Bluestork / Shutterstock CRWDCrowdStrike Holdings Inc$435.012.93%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum83.38Growth27.44QualityN/AValue8.54Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

CrowdStrike Q2 Revenue Tops $1.1 Billion | The Motley Fool

CrowdStrike(CRWD 1.17%) reported fiscal second quarter 2026 results on August 27, 2025, delivering record net new Annual Recurring Revenue (ARR) of $221 million (non-GAAP) and total revenue of $1.17 billion, both exceeding guidance (non-GAAP). The company achieved over 20% year-over-year ending ARR growth to $4.66 billion (non-GAAP), highlighted a strong reacceleration in customer demand, and announced its intent to acquire Onum to enhance next-gen Security Information and Event Management (SIEM) capabilities, as disclosed during the earnings call. Key insights below cover growth sustainability, strategic expansion in AI and identity, and the material impact of the Falcon Flex model. The fiscal year 2026 period ends on January 31, 2026. ARR for next-generation cloud, identity, and SIEM solutions climbed above $1.56 billion (non-GAAP), up more than 40% year over year, contributing to total revenue growth of 21% year over year. Falcon Flex customers surpassed 1,000, and record operating income (non-GAAP) reached $255 million, or 22% of revenue. Earlier ARR guidance had anticipated this level of acceleration in the second half of fiscal 2026, but the company achieved it a quarter ahead of plan. "Highlights included one, record Q2 net new ARR of $221 million, double-digit millions ahead of our expectations, showcasing accelerating net new ARR. Two, ending ARR of $4.66 billion, growing more than 20% year over year. Three, record Q2 free cash flow of $284 million or 24% of revenue. Four, record operating income of $255 million or 22% of revenue. Five, total revenue growth of 21% year over year, reaching $1.17 billion and exceeding the high end of our guidance. Six, cloud, next-gen identity, and next-gen SIEM platform solutions are now more than $1.56 billion in ending ARR, growing more than 40% year over year. And seven, we surpassed the 1,000 Falcon Flex customer milestone, with the average Flex customer representing more than $1 million of ending ARR." -- George Kurtz, Chief Executive Officer and Founder This performance materially validates CrowdStrike's long-term platform consolidation thesis and underscores the sustainability of strong revenue and profitability metrics (non-GAAP), even as operating scale increases. The company completed multiple product launches, reported Charlotte AI SOC adoption rising more than 85% quarter over quarter, and announced an agreement to acquire Onum, whose technology increases customer data control and accelerates SIEM adoption. Next-gen SIEM ARR jumped over 95% year over year to more than $430 million, while partner-sourced business accounted for over 60% of new wins, deepening ecosystem integration. "Today, we're incredibly excited to announce intent to acquire Onum, a leading data pipeline platform. Built on a proprietary stateless in-memory architecture, we believe ONEM is the perfect complement to next-gen SIEM. It offers unparalleled speed, scale, and efficiency in onboarding to next-gen SIEM while giving customers control of their data. Onum will bring Falcon's AI-powered detections closer to third-party data sources in the pipeline, starting analysis before data even enters the Falcon platform." -- George Kurtz, Chief Executive Officer and Founder Strategic investment in real-time data ingestion and AI-powered automations positions CrowdStrike to disrupt legacy SIEM segments and further entrench its AI-enabled security operating system, supporting durable competitive differentiation. Utilization of Falcon Flex contracts exceeded 75% across the customer base, with the rate of 'reflexes' (customers expanding early within their contract) nearly doubling to almost 10% of Flex users in just five months. Flex-associated ARR uplifts approached 50% on average, highlighting deepening customer engagement and increased multi-module adoption. "Reflexes on average are yielding a nearly 50% uplift in flex customer ending ARR illustrating the strength of the Falcon platform and the power of our game-changing licensing model. Reflex activity gives us conviction our net new ARR acceleration highlighting the difference between a one-time ELA and the recurring flex model." -- George Kurtz, Chief Executive Officer and Founder Compressing adoption timelines for new modules, and supporting higher ARR expansion, distinguishes CrowdStrike's growth path from traditional enterprise license agreements (ELA). Management guided for at least 40% year-over-year net new ARR growth in the second half of fiscal 2026, with ending ARR for fiscal 2026 expected to increase by more than 22% (non-GAAP). Fiscal third quarter 2026 revenue is forecast in the $1.208 billion-$1.218 billion range (20%-21% year over year), and full-year revenue in the $4.75 billion-$4.81 billion range (20%-22% year over year) for fiscal 2026. Free cash flow margin is expected to exceed 30% for the full year fiscal 2027, and the path to $10 billion in ending ARR by fiscal 2031 remains intact.

CrowdStrike Posts 21% Gain in Fiscal Q2 | The Motley Fool

CrowdStrike (CRWD 1.17%), a leading provider of cloud-native cybersecurity solutions, reported results on August 27, 2025. The company delivered GAAP revenue of $1.17 billion, up 21% from a year ago, and net new Annual Recurring Revenue (ARR) of $221.1 million, a record for any second quarter in its history. Management projected non-GAAP EPS in the $0.82-$0.84 range. Despite posting record cash flow and year-over-year growth across key segments, the quarter also saw a GAAP operating loss, reflecting higher expenses and charges tied to strategy and a July service disruption. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2026 earnings report. CrowdStrike is known for its Falcon platform, a cloud-native cybersecurity suite that protects organizations against a wide variety of digital threats. Falcon operates through the cloud, uses artificial intelligence (AI), and collects massive amounts of data from global customers to identify and stop cyber attackers in real time. The company's business depends on subscription contracts that generate steady, recurring revenue, making it a major player in the growing software-as-a-service (SaaS) sector focused on security. Recently, the company has targeted expanded platform use, accelerating AI-powered features, and growing its number of "modules" -- individual feature sets that allow customers to customize their protection. Key success factors include the depth of platform adoption, growth in ARR, security automation to address the ongoing skills shortage in cybersecurity, international expansion, and the successful rollout of new offerings such as advanced identity protection and AI-powered detection tools. This period marked renewed growth momentum. Net new ARR hit $221.1 million, the best second-quarter addition CrowdStrike has ever posted. This was a point CEO George Kurtz underscored by noting the "exceptional" quarter and the fact that ARR acceleration came a quarter sooner than management had expected. GAAP revenue rose to $1.17 billion, above the company's guidance range of $1,144.7 million to $1,151.6 million. Subscription revenue (GAAP), the core of CrowdStrike's business, reached $1.10 billion, up 20%. Professional services -- consulting and expert-led security offerings -- grew 45% year-over-year to $66.0 million (GAAP). The company's ARR, an important measure of future recurring business, reached $4.66 billion, up 20% from a year ago, confirming that both new customer wins and cross-selling to existing customers remain solid drivers. While growth continued at a rapid pace, profit measures presented a mixed picture. Non-GAAP net income increased to $237.4 million with non-GAAP earnings per share at $0.93, both record results. Operating cash flow and free cash flow reached new highs, supporting a strong balance sheet with $4.97 billion in cash and equivalents. However, this was offset by a GAAP operating loss of $113.0 million and a net GAAP loss of $77.7 million. These losses were tied to increased stock-based compensation ($284 million, GAAP), $35.7 million in GAAP costs related to the July 19 Windows sensor outage, and $38.4 million in strategic plan charges. CrowdStrike's module adoption rose, with 48% of customers now using at least six modules, 33% adopting seven, and 23% with eight or more. These increases highlight the company's ability to deepen its relationship with existing customers, a strategic goal, as each additional module makes customers more reliant on the platform and increases revenue per account. More than 1,000 organizations now use the Falcon Flex licensing approach, and more than 100 customers underwent "reflexes" -- expanding their deployment faster than originally planned. On the product front, the period saw the launch of Falcon Next-Gen Identity Security, offering complete identity protection for humans and AI agents, and the rollout of CrowdStrike Signal, an AI-powered threat detection engine. The company also integrated its AI with platforms like OpenAI's ChatGPT Enterprise Compliance and announced the acquisition of Onum Technology, a real-time telemetry firm that will bolster Falcon's data collection and analysis capabilities. Recognition from industry analysts continued, with inclusion as a Leader in the 2025 Gartner Magic Quadrant for endpoint security for the sixth year running. Margins faced some pressure. Subscription gross margin fell a percentage point compared to last year, ending at 77% (GAAP) and 80% (non-GAAP), as investment in the platform, growth in professional services (which carry lower margins), and incident-related costs weighed on overall profitability. Professional services gross margin declined as well, down to 14% (GAAP) and 34% (non-GAAP). Despite these challenges, overall non-GAAP operating margin remained strong at 22%, though below the prior year's 25%. Material one-time events shaped the results, most prominently the July 19 incident, which led to direct costs of $35.7 million. Additionally, charges for strategic plan realignment totaled $38.4 million. Management expects these restructuring efforts to contribute to improved non-GAAP margins in future periods. There was no dividend payment or change to note for the quarter. FY2026 revenue is now projected to be between $4.75 billion and $4.81 billion, with non-GAAP EPS expected in the range of $3.60 to $3.72. For Q3 FY2026, management projects GAAP revenue of $1.208 billion to $1.218 billion, indicating continued growth in the high teens. Non-GAAP net income for Q3 FY2026 is guided to $238.1 million to $242.8 million, with EPS expected between $0.93 and $0.95. Investors should monitor several areas in coming quarters. Key points include whether net new ARR continues to accelerate, the pace at which new product modules are adopted, and normalization of the gap between ARR and revenue growth. Ongoing costs related to previous outages or restructuring, especially if legal or operational risks increase, could weigh on short-term results. Trends in gross margin -- both subscription and services -- are also important, as increased investment and product mix changes continue to affect profitability. CRWD does not currently pay a dividend.

This Super Software Stock Is Up 1,100% Since Its 2019 IPO, but Its Momentum Is Stalling. What Should Investors Do From Here? | The Motley Fool

CrowdStrike uses artificial intelligence (AI) to create some of the world's best cybersecurity software. CrowdStrike (CRWD -4.18%) is one of the fastest-growing vendors in the cybersecurity industry, thanks to its all-in-one Falcon platform, which makes it easy for enterprises to protect all of their critical assets. Its stock has soared more than 1,100% since going public in 2019. After losing its momentum for the past several weeks, CrowdStrike released a very strong set of financial results for its fiscal 2026 second quarter (ended July 31) on Aug. 27. Shares have begun to bounce back with CrowdStrike's business firing on all cylinders. However, its sky-high valuation might put a ceiling on the stock, which is still down 18% from its all-time high. Should investors buy this dip, or is further downside on the way? Many cybersecurity vendors specialize in a single area, whether it's vulnerability management or identity protection. With Falcon, businesses can streamline their cybersecurity stack and consolidate all of their spending in one platform because it features 30 different modules (products) that protect cloud networks, employee identities, endpoints (computers and devices), and more. Not every employee can be a cybersecurity expert, so Falcon uses artificial intelligence (AI) to automate everything from threat detection to incident response. This means the platform operates seamlessly in the background with little human intervention required. However, CrowdStrike also developed the Charlotte AI virtual assistant to help businesses get to the bottom of breaches quickly when necessary, which is saving managers an average of 40 hours per week, according to the company. Businesses are also turning to Falcon to help them deploy AI software safely. Since it already defends cloud networks and endpoints, which are where AI models are typically deployed and accessed, it's an ideal solution. CrowdStrike generated $1.17 billion in revenue during its fiscal 2026 second quarter, which was above management's forecast of $1.15 billion. It was an increase of 21% year over year, which marked an acceleration from the 20% growth the company delivered in the first quarter. This was a welcome development after a years-long streak of decelerating growth. The strong Q2 result was partly attributable to CrowdStrike's relatively new Falcon Flex subscription option, which allows businesses to shift their annual contracted spending between different modules as their needs change. Over 1,000 customers are already on Flex plans, which is impressive considering it was only launched in 2023. Furthermore, 100 of those customers "re-flexed" during Q2, meaning they exhausted their budgets and came back for more. Importantly, Flex encourages customers to try more modules, which ultimately drives more spending. CrowdStrike also made progress on the bottom line last quarter. It generated $237 million in adjusted (non-GAAP) net income, which translated to earnings of $0.93 per share. That was above management's guidance of $0.83 per share. The main reason CrowdStrike stock has trended lower over the last couple of months is its sky-high valuation. It's trading at a price-to-sales (P/S) ratio of 25.3, making it by far the most expensive pure-play cybersecurity stock in the industry. In fact, CrowdStrike is trading at a whopping 54% premium to Palo Alto Networks, which is the company's biggest rival in the all-in-one, AI-powered cybersecurity space. Unless CrowdStrike regularly delivers spectacular quarterly results that top the market's expectations, it's going to be very hard for the stock to deliver sustainable upside from this level in the short term. However, there is certainly a path to further upside over the long run. The company is aiming to achieve $10 billion in annual recurring revenue (ARR) by fiscal 2031, more than doubling from the $4.66 billion in ARR it reported at the end of Q2. If that forecast comes to fruition, CrowdStrike stock is probably a bargain today for investors who are willing to hold it for the next five or more years. Moreover, the company values its total addressable market at $116 billion today, and it expects that number to more than double to $250 billion over the next four years. Therefore, even with $10 billion in ARR, CrowdStrike will have only scratched the surface of its opportunity. Investors who are looking for quick gains over the next 12 months or so should probably steer clear of this stock, but those willing to hold it long term could still see market-beating returns.