CrowdStrike Holdings Inc Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
CrowdStrike's Q3 2026 earnings call highlighted record financial results, driven by the increasing importance of cybersecurity in the agentic era and the company's single platform strategy. Key growth areas include cloud security, Next-Gen SIEM, and identity protection, with a focus on AI-driven demand and platform consolidation. The company's Falcon Flex subscription model is gaining traction, and strategic partnerships, including a significant expansion with AWS, are expected to fuel future growth.
Key Financial Results
Record Q3 net new ARR of $265 million, up 73% year-over-year.
Ending ARR of $4.92 billion, accelerating to 23% growth year-over-year.
Record Q3 free cash flow of $296 million, or 24% of revenue.
All-time record operating income of $265 million, or 21% of revenue, marking the second consecutive quarter of record operating income.
Over $1.35 billion in ending ARR from Falcon Flex subscriptions, growing more than 200% year-over-year.
Total revenue grew 22% to $1.23 billion.
Subscription revenue grew 21% to $1.17 billion.
Non-GAAP gross margin was 78%, with subscription gross margin at 81%.
Non-GAAP operating income was a record $264.6 million, with a 21% operating margin.
Non-GAAP net income was a record $245.4 million, or $0.96 per share.
Cash and cash equivalents totaled $4.80 billion.
Cash flow from operations was a record $397.5 million.
Business Segment Results
Broad-based ending ARR acceleration across cloud, Next-Gen Identity, and Next-Gen SIEM.
Endpoint business accelerated due to AI-driven demand.
Next-Gen SIEM had a record net new ARR quarter.
Falcon Shield had a record net new ARR quarter, growing nearly 50% sequentially.
Cloud delivered record net new ARR.
Capital Allocation
Not explicitly discussed, but the company maintains a strong cash position to support strategic acquisitions and growth initiatives.
Industry Trends and Dynamics
AI is expanding the attack surface, necessitating increased cybersecurity measures.
The democratization of destruction, with AI-powered adversarial tradecraft becoming a reality.
The cybersecurity landscape demands a single platform for agility, efficacy, and speed in stopping breaches.
Growing customer realization that cloud posture doesn't equate to prevention, driving demand for runtime protection.
Renewed interest in endpoint security due to AI adoption and new risks associated with cloud desktops and AI browsers.
Competitive Landscape
CrowdStrike is positioned as the broadest and only single platform solution in the market.
Falcon Next-Gen SIEM is disrupting the legacy SIEM market.
Falcon Cloud Security displaces competitors like Wiz.
Kroll exclusively uses Falcon, migrating nearly 0.5 million endpoints from a point product SMB EDR.
Macroeconomic Environment
No matter how the market swings, geopolitical tensions evolve, or what technologies are in vogue, our digital society mandates cybersecurity as a necessity.
Growth Opportunities and Strategies
CrowdStrike's technology, innovation engine, and ecosystem position it as the operating system of cybersecurity for the agentic era.
Falcon Next-Gen SIEM is the foundation of the platform, turning CrowdStrike into customers' operating system for cybersecurity.
Expanded partnership with AWS, providing access to Falcon Next-Gen SIEM for millions of AWS customers.
Falcon Flex model cultivates more platform utilization, accelerating module adoption.
Partnerships with EY, Deloitte, and Wipro to standardize SIEM practices on Falcon.
MSSP partnership with Kroll, migrating nearly 0.5 million endpoints to Falcon.
Securing the world's use of AI, enabling businesses to adopt AI faster and more securely.
Financial Guidance and Outlook
Q4 FY2026 revenue is expected to be in the range of $1.290 billion to $1.300 billion, reflecting a year-over-year growth rate of 22% to 23%.
Q4 non-GAAP income from operations is expected to be in the range of $315 million to $319 million.
Q4 non-GAAP net income is expected to be in the range of $282 million to $287 million, or $1.09 to $1.11 per share.
FY2026 revenue is expected to be in the range of $4.797 billion to $4.807 billion, reflecting a growth rate of 21% to 22%.
FY2026 non-GAAP income from operations is expected to be between $1.036 billion and $1.040 billion.
FY2026 non-GAAP net income is expected to be between $950 million and $954 million, or $3.70 to $3.72 per share.
Low to mid-teen sequential net new ARR growth is expected from Q3 to Q4, bringing ending ARR growth for FY2026 to 23% year-over-year.
Second half net new ARR growth of at least 50% year-over-year is expected.
FY2027 year-over-year net new ARR growth of at least 20% is expected.
Q4 free cash flow margin is expected to be 27%.
FY2026 free cash flow margin expectation to 25%.
