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CrowdStrike Holdings Inc Earnings - Analysis & Highlights for Q4 2025
Overview
PositivesNegativesOutlook
- The company expects total revenue to be in the range of $1,100.6 million to $1,106.4 million for Q1 2026, reflecting a YoY growth rate of approximately 20%.
- The company has increased its investments and platform resiliency, which it believes will be a competitive advantage when going up against competitors.
- The company finds itself placed at the epicenter of a rapidly evolving demand environment.
- The company views its 8-figure Falcon Flex transaction for a major global financial services holding company as a positive for the business, as it demonstrates customers' trust in the company's long-term partnership and drives bigger deals and increased levels of platform adoption.
- The company is the market's leading threat intelligence authority, discovering and naming the adversaries to unite cyber defenders in stopping them.
- Incident-related expenses impacted Q4 FCF by approximately $22 million.
- The company saw churn and contraction overall, which was in line with what it has been seeing.
- Non-GAAP net income attributable to CrowdStrike is expected to be in the range of $3.33 to $3.45, utilizing approximately 256 million weighted average shares on a diluted basis and a 22.5% non-GAAP effective tax rate.
- Net new ARR reacceleration, operating margin, and FCF margin expansion are expected in H2 2026.
- Total revenue for Q1 2026 is expected to be in the range of $1,100.6 million to $1,106.4 million, reflecting a YoY growth rate of approximately 20%.
- Fiscal 2026 non-GAAP net income attributable to CrowdStrike is expected to be between $851.2 million and $883.0 million.
- Operating margin and FCF margin are expected to expand in H2 2026.
Q&A Highlights from CrowdStrike Holdings Inc Earnings Call Q4 2025
- Analyst asked about the growth rate of cloud and identity compared to LogScale and if it's due to incentives or customers spending more on cloud and identity rather than LogScale.
- George P. Kurtz explained that identity and cloud have been a major driver of customer usage, with 40% of attacks being identity-based since 2019 and 79% being non-malware-based in the current report. He also mentioned that CCP packages have been a big driver of customer interest, and that the back half of the year will see a decline in CCP elements, creating an opportunity for renewal and upselling.
- George P. Kurtz explained that identity and cloud have been a major driver of customer usage, with 40% of attacks being identity-based since 2019 and 79% being non-malware-based in the current report. He also mentioned that CCP packages have been a big driver of customer interest, and that the back half of the year will see a decline in CCP elements, creating an opportunity for renewal and upselling.
- Analyst asked about the puts and takes to the back half of the year, specifically regarding the sales cycle pushout and CCP contracts renewing.
- Burt W. Podbere responded that the company is confident in its ability to take advantage of the opportunity to upsell customers, as they're already using and loving the product. He also mentioned that the company is ahead of its demand plan and that it has 29 modules to sell to customers, providing an opportunity for upselling and cost reduction. He emphasized the company's excitement about the reacceleration of net new ARR in the back half.
- Burt W. Podbere responded that the company is confident in its ability to take advantage of the opportunity to upsell customers, as they're already using and loving the product. He also mentioned that the company is ahead of its demand plan and that it has 29 modules to sell to customers, providing an opportunity for upselling and cost reduction. He emphasized the company's excitement about the reacceleration of net new ARR in the back half.
- Analyst asked about the composition of CrowdStrike's platform versus some of the pure plays in the market.
- CrowdStrike's platform includes vulnerability management and network scanning capabilities, which provide a fuller replacement for competitive products. The company has made acquisitions to enhance its capabilities and recently released the ability to scan over the network. This has unlocked the potential for fuller replacements in a competitive environment, and customers have been asking for it.
- CrowdStrike's platform includes vulnerability management and network scanning capabilities, which provide a fuller replacement for competitive products. The company has made acquisitions to enhance its capabilities and recently released the ability to scan over the network. This has unlocked the potential for fuller replacements in a competitive environment, and customers have been asking for it.
- Analyst asked about the Falcon Flex dollars that CrowdStrike has given in kind to some of its CCP customers and how quickly they're burning through those in-kind Flex dollars.
- CrowdStrike has given Falcon Flex dollars to CCP customers in kind, and these dollars are burning off quickly due to demand planning with customers. Sellers are focusing on demand planning with customers, and the demand plans are ahead of schedule. The more customers consume within a shorter period of time, the better for CrowdStrike. The company wants to provide value in any of the modules it has, including newer ones like Shield.
- CrowdStrike has given Falcon Flex dollars to CCP customers in kind, and these dollars are burning off quickly due to demand planning with customers. Sellers are focusing on demand planning with customers, and the demand plans are ahead of schedule. The more customers consume within a shorter period of time, the better for CrowdStrike. The company wants to provide value in any of the modules it has, including newer ones like Shield.
- Analyst asked about the consolidation of customers on cloud solutions, specifically in relation to workload protection and CSPM.
- George Kurtz, CEO of CrowdStrike, explained that while CSPM is a useful technology for reporting and compliance, it does not stop breaches. Workload protection, on the other hand, is CrowdStrike's specialty, and they have earned a trusted spot in running critical infrastructure on these workloads. They have seen consolidation in these areas and have expanded their CNAPP capabilities across CSPM, ASPM, and DSPM, among others. They continue to see success in cloud environments with their customers.
- George Kurtz, CEO of CrowdStrike, explained that while CSPM is a useful technology for reporting and compliance, it does not stop breaches. Workload protection, on the other hand, is CrowdStrike's specialty, and they have earned a trusted spot in running critical infrastructure on these workloads. They have seen consolidation in these areas and have expanded their CNAPP capabilities across CSPM, ASPM, and DSPM, among others. They continue to see success in cloud environments with their customers.
- Analyst asked about the company's guidance for a 20% operating profit margin in fiscal 2026.
- Burt Podbere, CFO of CrowdStrike, explained that the guidance reflects sales and marketing costs of FY 2025 CCP packages, as well as one-time upfront investments in key areas of the business. They are also investing in marketing initiatives, innovation across high-growth and emerging products, and internal use of AI tools. They expect operating margin and free cash flow margin to expand in the second half of FY 2026.
- Burt Podbere, CFO of CrowdStrike, explained that the guidance reflects sales and marketing costs of FY 2025 CCP packages, as well as one-time upfront investments in key areas of the business. They are also investing in marketing initiatives, innovation across high-growth and emerging products, and internal use of AI tools. They expect operating margin and free cash flow margin to expand in the second half of FY 2026.
