CrowdStrike : 1Q26 Earnings Presentation

Published: 2025-06-03 16:35:10 ET CRWD

Published on 06/03/2025 at 16:35

Q1 FY 2026

As of June 3, 2025

Financial Information

Use of Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. generally accepted accounting principles ("GAAP"), we believe non-GAAP measures used in this presentation, such as non-GAAP Gross Margins, non-GAAP Operating Expenses, and Free Cash Flow, are useful in evaluating our operating performance. We use such non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance and facilitates period-to-period comparisons of operations, as these measures eliminate the effects of certain variables unrelated to our overall operating performance. Other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. In addition, the utility of free cash flow as a measure of our financial performance and liquidity is limited as it does not represent the total increase or decrease in our cash balance for a given period.

Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business.

Please see the appendix included at the end of this presentation for a discussion of non-GAAP financial measures and a reconciliation of historical non-GAAP measures to historical GAAP measures.

Our Fiscal Year

Our fiscal year end is January 31, and our fiscal quarters end on April 30, July 31, October 31 and January 31. Our fiscal years ended January 31, 2023, 2024, 2025, 2026, 2027, 2028, 2029, 2030 and 2031 are referred to herein as fiscal 2023, 2024, 2025, 2026, 2027, 2028, 2029, 2030 and 2031, respectively.

CrowdStrike Q1 At-a-Glance:

$4.44B

Ending ARR

$194M

Net New ARR

Delivered Strong Net New ARR

$384M

Record Cash Flow from Operations

$0.73

Diluted EPS

$201M

Operating Profit

25%

$279M

Free Cash Flow s Margin

Strong Operating Profit & Cash Flow

Across 30 Modules, Our AI-Native XDR Platform Creates Opportunity

Lightweight Cloud-First AI-Native

Hardware Data Silos Friction

Cybersecurity

Generative AI

$4B

Data Protection

$5B

Threat Intelligence

$6B

Identity Protection

$10B

Observability

$15B

Cloud Security

$17B

Endpoint Security

$19B

Managed Services

$20B

Security

& IT Ops

$20B

CY25 TAM

The AI-Native Security Platform

Source: IDC and company estimates. See appendix.

Security & IT Ops

$20B

CY25 TAM

The AI-Native

Security Platform

CY29 TAM

The AI-Native Security Platform

Source: company estimates. See appendix.

The Falcon Platform: Simplifying Cybersecurity

Our Single Platform Consolidates Point Products and Lowers TCO

2025 Frost Radar : Cloud and Application Runtime Security Innovation and Growth Leader

Scored the highest of all vendors

on the Innovation Index

Recognized as the only CNAPP delivering unified, real-time protection across cloud, identity and endpoint

Report Referenced: Frost Radar : Cloud/Application Runtime Security, 2025

Customers are Embracing the Falcon Platform

48%

6+ Modules

32%

7+ Modules

22%

8+ Modules

Module Adoption Rates

Percent of Subscription Customers with Multiple Cloud Module Subscriptions. All figures are as of the quarter ended April 30, 2025. Module adoption rates exclude Falcon Go customers. See appendix for the definition of module adoption rates.

Growth at Scale

Note: Fiscal year ends January 31.

Ending ARR

In $ Millions

Net New ARR

Starting ARR

$4,436

$3,647

1Q25

1Q26

Net New ARR

In $ Millions

$212

$194

1Q25

1Q26

Subscription Revenue

In $ Millions

$872

$1,051

1Q25

1Q26

Total Revenue

In $ Millions

Subscription

Professional Services

$1,103

$921

1Q25

1Q26

Non-GAAP Profit & Free Cash Flow

Note: Fiscal year ends January 31. All financial figures are non-GAAP. See Appendix for changes in non-GAAP measures presentation, definition of metrics, and a reconciliation of each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP.

Subscription Gross Profit

In $ Millions

$841

$703

1Q25

1Q26

% margin

81%

80%

Operating Income

In $ Millions

$213

$201

1Q25

1Q26

% margin

23%

18%

Diluted Earnings Per Share

$0.79

$0.73

1Q25

1Q26

Free Cash Flow

In $ Millions

$322

$279

1Q25

1Q26

% margin

35%

25%

Key Takeaways

$4.44B

$194M

Subscription revenue $1.1B

Q1 Results

Ending ARR

+22% YoY

80% subscription gross margin

Net New ARR

$279M free cash flow

Flex Driving

Platform

Adoption

Accounts that have adopted the Flex model now represent

>$3.2B

of total deal value

$774M

Q1 total Flex account value added

+124% YoY

Avg Flex customer deal size

>$1M

Existing Flex contracts

already deployed

>75%

Flex customers returning to us for a re-Flex

Trusted

Cybersecurity

Flex accelerates platform adoption, driving consolidation and partner success

Our AI-powered solutions and innovations are winning

Next-Gen SIEM Ending ARR grew

>100%

113% YoY growth in deals >$10M

60% of Q1 deal value sourced by partners

Platform of Choice Uniquely positioned to protect workloads,

identities, and infrastructure for the AI age

YoY

>15% of Q1 deal value from MSSP channel

Note: All figures as of Q1. All financial figures except subscription revenue are non-GAAP unless otherwise specified. See Appendix for definition of metrics and a reconciliation of each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP.

Module adoption rates exclude Falcon Go customers. See appendix for the definition of module adoption rates.

Q2 FY2026 Full Year FY2026

Total revenue $1,144.7 - $1,151.6M $4,743.5 - $4,805.5M

Non-GAAP income from operations $226.9 - $233.1M $970.8 - $1,010.8M

Non-GAAP net income attributable to CrowdStrike

$209.1 - $213.8M $878.7 - $909.7M

Guidance

Non-GAAP net income per share attributable to CrowdStrike common stockholders, diluted

Weighted average shares used in computing non-GAAP net income per share attributable to common stockholders, diluted

$0.82 - $0.84 $3.44 - $3.56

255M 256M

Non-GAAP tax rate 22.5% 22.5%

CrowdStrike is providing the above guidance for the second quarter of fiscal 2026 (ending July 31, 2025) and full fiscal year 2026 (ending January 31, 2026). Guidance for non-GAAP financial measures excludes stock-based compensation expense and related employer payroll taxes, amortization expense of acquired intangible assets (including purchased patents), amortization of debt issuance costs and discount, mark-to-market adjustments on deferred compensation liabilities, legal reserve and settlement charges or benefits, costs (recoveries) associated with the July 19 Incident and related matters, net, strategic plan related charges, losses (gains) and other income from strategic investments, acquisition-related expenses (credits), net, and losses (gains) from deferred compensation assets, and is adjusted for its long-term non-GAAP effective tax rate. The company has not provided the most directly comparable GAAP measures because certain items are out of the company's control or cannot be reasonably predicted. Accordingly, a reconciliation for non-GAAP income from operations, non-GAAP net income attributable to CrowdStrike, and non-GAAP net income per share attributable to CrowdStrike common stockholders is not available without unreasonable effort.

These statements are forward-looking and actual results may differ materially as a result of many factors. Refer to the Forward-Looking Statements safe harbor for information on the factors that could cause CrowdStrike's actual

results to differ materially from these forward-looking statements.

Non-GAAP Measures

Target % of Revenue

Target Operating Model

Subscription Gross Margin

82 - 85%

SsM

28 - 33%

RsD

15 - 20%

GsA

5 - 7%

Operating Margin

28 - 32%

Free Cash Flow Margin 34 - 38%

Note: Targets are on a full year basis. Target ranges assume consistent macroeconomic conditions and do not include the impact of potential future M&A activity.

Targets for non-GAAP financial measures excludes stock-based compensation expense and related employer payroll taxes, amortization expense of acquired intangible assets (including purchased patents), amortization of debt issuance costs and discount, mark-to-market adjustments on deferred compensation liabilities, legal reserve and settlement charges or benefits, costs (recoveries) associated with the July 19 Incident and related matters, net, strategic plan related charges, losses (gains) and other income from strategic investments, acquisition-related expenses (credits), net, and losses (gains) from deferred compensation assets, and is adjusted for its long-term non-GAAP effective tax rate. The company has not provided the most directly comparable GAAP measures because certain items are out of the company's control or cannot be reasonably predicted. Accordingly, a reconciliation for non-GAAP income from operations, non-GAAP net income attributable to CrowdStrike, and non-GAAP net income per share attributable to CrowdStrike common stockholders is not available without unreasonable effort.

Appendix

Change in Non-GAAP Measures Presentation

Effective as of February 1, 2025, the beginning of our fiscal year ending January 31, 2026, CrowdStrike is presenting employer payroll taxes related to employee stock-based award transactions as part of stock-based compensation expense in the GAAP to Non-GAAP reconciliation. These payroll taxes have been excluded from CrowdStrike's non-GAAP results as they are tied to the timing and size of the vesting or exercise of the underlying stock-based awards and the price of CrowdStrike's common stock at the time of vesting or exercise, which may vary from period to period. In addition, CrowdStrike is using a long-term projected non-GAAP tax rate of 22.5% for the purpose of determining non-GAAP net income attributable to CrowdStrike and non-GAAP net income attributable to CrowdStrike per share to provide better consistency across interim reporting periods in fiscal year 2026 and beyond. Prior period amounts have been recast to reflect these changes.

Calculation of metrics

Annual Recurring Revenue (ARR).

ARR is calculated as the annualized value of our customer subscription contracts as of the measurement date, assuming any contract that expires during the next 12 months is renewed on its existing terms. To the extent that we are negotiating a renewal with a customer after the expiration of the subscription, we continue to include that revenue in ARR if we are actively in discussion with such an organization for a new subscription or renewal, or until such organization notifies us that it is not renewing its subscription.

Dollar-Based Net Retention Rate.

Our dollar-based net retention rate compares our ARR from a set of subscription customers against the same metric for those subscription customers from the prior year. Our dollar-based net retention rate reflects customer renewals, expansion, contraction and churn, and excludes revenue from our incident response and proactive services. We calculate our dollar-based net retention rate as of period end by starting with the ARR from all subscription customers as of 12 months prior to such period end, or Prior Period ARR. We then calculate the ARR from these same subscription customers as of the current period end, or Current Period ARR. Current Period ARR includes any expansion and is net of contraction or churn over the trailing 12 months but excludes revenue from new subscription customers in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at our dollar-based net retention rate.

Dollar-Based Gross Retention Rate.

We calculate our dollar-based gross retention rate as of the period end by starting with the ARR from all subscription customers as of 12 months prior to such period, or Prior Period ARR. We then deduct from the Prior Period ARR any ARR from subscription customers who are no longer customers as of the current period end, or Current Period Remaining ARR. We then divide the total Current Period Remaining ARR by the total Prior Period ARR to arrive at our dollar-based gross retention rate, which is the percentage of ARR from all subscription customers as of the year prior that is not lost to customer churn.

Gross Churn.

Our dollar-based gross churn rate is equal to 1 - Dollar-Based Gross Retention Rate.

Module Adoption Rates.

Module adoption rates are calculated by taking the total number of customers with five or more, six or more, seven or more, and eight or more modules, respectively, divided by the total number of subscription customers (excluding Falcon Go customers). Falcon Go customers are defined as customers who have subscribed with the Falcon Go bundle, a package designed for organizations with 100 endpoints or less.

Appendix (cont'd)

Reports used for data shown in the chart titled "CY25 TAM | The AI-Native Security Platform":

CY25 TAM:

IDC Semiannual Security Products Tracker 2023H2 Historical Release. (May 2024)

IDC Worldwide Device Vulnerability Management Forecast, 2024-2028: Fusing Multiple Exposure Sources. (June 2024)

IDC Worldwide Application Vulnerability Management Forecast, 2023-2027: Navigating the Future in Application Security. (November 2023)

IDC Worldwide SOAR and Firewall Automation Forecast, 2024-2028: Will GenAI Leave SOAR Vendors Sore?. (March 2024)

IDC Worldwide Tier 2 SOC Analytics and Cloud-Native XDR Forecast, 2022-2026: Will XDR Become the Shining Light in a Dimming Global Outlook?. (November 2022)

IDC Worldwide IT Operations Management Software Forecast, 2023-2027. (September 2023)

Gartner Emerging Tech: Adoption Growth Insights in Digital Risk Protection Services (November 2022)

IDC Worldwide Attack Surface Management and Breach and Attack Simulation Software Forecast, 2024-2028 Proactively Discovering Potential Attacks - 2024 Feb forecast. (February 2024)

IDC Worldwide Application Vulnerability Management Forecast, 2023-2027: Navigating the Future in Application Security. (November 2023)

IDC Worldwide Attack Surface Management and Breach and Attack Simulation Software Forecast, 2024-2028: Proactively Discovering Potential Attacks. (February 2024)

IDC Worldwide Network Detection and Response Forecast, 2024-2028: The Network Is Talking, Are You Listening?. (March 2024)

IDC Worldwide Client Endpoint Management Software Forecast, 2024-2028. (June 2024)

IDC MarketScape Evaluates Worldwide SD-WAN Infrastructure Vendors and Market Trends. (October 2023)

IDC Worldwide and U.S. Comprehensive Security Services Forecast, 2024-2028. (April 2024)

Company estimates

CY29 TAM:

Company estimates. Includes organic category growth, product roadmap, future initiatives and estimated cloud security opportunity.

Appendix (cont'd)

Explanation of Non-GAAP Financial Measures

Non-GAAP Subscription Gross Profit and Non-GAAP Subscription Gross Margin

We define non-GAAP subscription gross profit and non-GAAP subscription gross margin as GAAP subscription gross profit and GAAP subscription gross margin, respectively, excluding stock-based compensation expense and related employer payroll taxes, and amortization of acquired intangible assets.

Non-GAAP Income from Operations

We define non-GAAP income from operations as GAAP income (loss) from operations excluding stock-based compensation expense and related employer payroll taxes, amortization of acquired intangible assets (including purchased patents), acquisition-related expenses (credits), net, mark-to-market adjustments on deferred compensation liabilities, legal reserve and settlement charges or benefits, costs (recoveries) associated with the July 19 Incident and related matters, net, and strategic plan related charges.

Non-GAAP Net Income Attributable to CrowdStrike

We define non-GAAP net income attributable to CrowdStrike as GAAP net income (loss) attributable to CrowdStrike excluding stock-based compensation expense and related employer payroll taxes, amortization of acquired intangible assets (including purchased patents), acquisition-related expenses (credits), net, amortization of debt issuance costs and discount, mark-to-market adjustments on deferred compensation liabilities, legal reserve and settlement charges or benefits, costs (recoveries) associated with the July 19 Incident and related matters, net, strategic plan related charges, losses (gains) and other income from strategic investments, and losses (gains) from deferred compensation assets, and is adjusted for its long-term non-GAAP effective tax rate.

Non-GAAP Net Income per Share Attributable to CrowdStrike Common Stockholders, Diluted

We define non-GAAP net income per share attributable to CrowdStrike common stockholders, as non-GAAP net income attributable to CrowdStrike divided by the weighted-average

shares outstanding, which includes the dilutive effect of potentially dilutive common stock equivalents outstanding during the period.

Free Cash Flow

Free Cash Flow is a non-GAAP financial measure that we define as net cash provided by operating activities less purchases of property and equipment, capitalized internal-use software and website development costs, purchases of deferred compensation investments, and proceeds from sale of deferred compensation investments. We monitor free cash flow as one measure of our overall business performance, which enable us to analyze our future performance without the effect s of non-cash items and allow us to better understand the cash needs of our business. While we believe that free cash flow is useful in evaluating our business, free cash flow is a non-GAAP financial measure that has limitations as an analytical tool, and free cash flow should not be considered as an alternative to, or substitute for, net cash provided by operating activities in accordance with GAAP. The utility of free cash flow as a measure of our liquidity is further limited as it does not represent the total increase or decrease in our cash balance for any given period. In addition, other companies, including companies in our industry, may calculate free cash flow differently or not at all, which reduces the usefulness of free cash flow as a tool for comparison.

GAAP INCOME

STATEMENT

CROWDSTRIKE HOLDINGS, INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

Revenue

Subscription

872 172

1,050,768

Professional services

Total revenue

921,036

1103 434

Cost of revenue Subscription

189,657

242,374

Professional services

Total cost of revenue

225,003 289,143

Gross profit Subscription

682,515

808,394

Professional services

Total gross profit

Operating expenses

Sales and marketing Research and development General and administrative

Total operating expenses

696,033

350,114

235,249

689 097

814,291

439,617

334,129

938,947

Income (loss) from operations

Interest expense

Interest income

Other income (expense), net

Income (loss) before provision for income taxes

Provision for income taxes

6,936

(6,511)

45,850

7,656

53,931

/,667

(124,656)

(6,715)

45 380

(3,896)

(89,887)

21.106

Net income (loss)

46,264

(110,993)

Net income (loss) attributable to non-controlling interest Net income (loss) attributable to CrowdStrike

Net income(loss) per share attributable to CrowdStrikecommon stockholders:

Basic Diluted

Weighted-averageshares used in computing net income (loss) per share attributable to CrowdStrikecommon stockholders:

Basic Diluted

3,444 (786)

GAAP tO Non-GAAP

Reconciliation

CROWDSTRIKE HOLDINGS, INC.

Statements of Operations: GAAP to Non-GAAP Reconciliations

(in thousands)

(unaudited)

GAAP subscription gross profit

682,515

808,394

Stock-basedcompensationexpenseand related employer payroll taxes*'*

15,235

25,997

Amortization of acquired intangible assets Non-GAAP subscription gross profit

5,045 6,377

702 795 I› 840768

GAAP subscription gross margin

Non-GAAPsubscriptiongross margin

0/jg

810/o

770/o

800+

GAAP professional services gross profit

13,518

5,897

Stock-basedcompensationexpenseand related employer payroll taxes*')

Non-GAAP professional services gross profit

6 872 10 471

I otal GAAP gross margin Total Non-GAAP gross margin

760/o

0/jg

/40/

0/jg

GAAP sales and marketing operating expenses

350,114

439,617

Stock-basedcompensationexpenseand related employer payroll taxes!'!

(55,832)

(69,822)

Amortization of acquired intangible assets

(603)

(916)

Acquisition-relatedexpenses, net

(77)

Mark-to-market adjustments ondeferredcompensationliabilities

(35)

186

Costs associated with the JuIy19 Incident and related matters, net

Non-GAAP sales and marketing operating expenses 293 644 I› 368456

GAAP research and development operating expenses

235,249

334 129

Stock-basedcompensationexpenseand related employer payroll taxes!'!

(72,746)

(115,418)

Acquisition-relatedexpenses, net

(477)

(74)

Mark-to-market adjustments ondeferredcompensationliabilities

(12)

116

Costs associated with the July 19 Incident and related matters, net

Non-GAAP research and development operating expenses 162 014 I› 218.216

GAAP general and administrativeoperating expenses

103,734

i65,201

Stock-basedcompensationexpenseand related employer payroll taxes!'!

(46,982)

(49,863)

Acquisition-relatedexpenses, net

(2,147)

(392)

Amortization of acquired intangible assets

(347)

(341)

Mark-to-market adjustments ondeferredcompensationliabilities

(13)

Costs associated with the July 19 Incident and related matters, net

(38,658)

Strategic plan related charges

(6,621)

Non-GAAPgeneraIand administrative operating expenses

54 245

I›

69.341

CROWDSTRIKE HOLDINGS, INC.

Statements of Operations: GAAP to Non-GAAP Reconciliations(continued)

(in thousands, except per share data)

(unaudited)

GAAP to Non-GAAP Reconciliation (Cont'd)

GAAP diluted net income (loss) per share attributable to CrowdStrike common stockholders

Stock-basedcompensationexpenseand related employer payroll taxes!" Amortization of acquired intangible assets

Acquisition-relatedexpenses, net

0.79

002

0.01

(0.44)

0.17

1.07

003

Amortization of debt issuance costs and discount

Mark-to-market adjustments on deferred compensation liabilities Costs associated with the JuIy19 Incident and related matters, net Strategic plan related charges

Losses (gains) and other income from strategic investments attributable to CrowdStrike

Income tax adjustments***

(0.01)

(0.20)

0.16

0.03

(0.13)

Other!'!

Non-GAAPdiIutednet income per share attributable to CrowdStrikecommon stockholders

Weighted-averageshares used to calculate Non-GAAP diluted net income per share attributable to CrowdStrike common stockholders

Effective February 1, 2025, employer payroll taxes related to employee stock-based award transactions are included as part of stock-based compensation expense. These payroll taxes are excluded as they are tied to the timing and size of the vesting or exercise of the underlying stock-based awards and the price of our common stock at the time of vesting or exercise, which may vary from period to period independent of the operating performance of our business. Prior periods have been recast to reflect this change.

Effective February 1, 2025, we are using a long-term projected non-GAAP tax rate of 22.5% for the purpose of determining non-GAAP net income attributable to CrowdStrike and non-GAAP net income attributable to CrowdStrike per share to provide better consistency across interim

reporting periods in fiscal 2026 and beyond. Given the significant growth of the company's business and non-GAAP operating income, we believe this change is necessary to better reflect the performance of our business. Prior period have been recast to reflect this change

4. For periods in which we had diluted non-GAAP net income per share attributable to CrowdStrike common stockholders, the sum of the impact of individual reconciling items may not total to diluted Non-GAAP net income per share attributable to CrowdStrike common stockholders because of rounding differences.

Free Cash

Flow

Reconciliation

CROWDSTRIKE HOLDINGS, INC.

Freecash flow reconciliation (lnthousands,exceptpercentages)

(unaudited)

Q1FY25 Q1FY26

Free cash flow reconciliation

GAAP net cash provided by operating activities

383,228

384,107

Purchases of property and equipment

(49,683)

(85,751)

Capitalized internal-use software and website development costs

(10,479)

(17,437)

Purchases of deferred compensation investments

(609)

(1,459)

Proceeds from sale of deferred compensation investments Free cash flow

(45)

322 457 I› 279 415

Free cash flow margin

Additional

Supplemental

Disclosure

Metrics

Q1FY25

Q1FY26

Annual recurring revenue

3,646,881

4,435,596

Year-over-year growth

22%

Remaining performance obligations (in billions)

4.7

6.8

Revenue by geographic regions:

United States

630,026

741,852

Europe, Middle East, and Africa

i41,612

176,442

Asia Pacific

93,462

i12,827

Other

55,936

72,313

CROWDSTRIKE HOLDINGS, INC.

AdditionalMetrics

(In thousands, except percentages and remaining performance obligations)

(unaudited)

Total revenue 9210 6 110 4 4

Geographic breakdown of total revenue: United States

Europe, Middle East, and Africa Asia Pacific

Other Total

68%

15%

10%

100%

67%

16%

10%

100%

Non-GAAP operating expenses

Non-GAAP operating expenses as a percentage of revenue

509.903

550/0

656.013

59%

Disclaimer

Crowdstrike Holdings Inc. published this content on June 03, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on June 03, 2025 at 20:34 UTC.