Crowdstrike Holdings ((CRWD)) has held its Q3 earnings call. Read on for the main highlights of the call.
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CrowdStrike Holdings Shines in Strong Earnings Call
The recent earnings call for CrowdStrike Holdings reflected a very strong quarter, marked by record financial metrics, successful strategic partnerships, and robust product demand, particularly driven by AI transformations. Despite reporting a GAAP net loss and incurring incident-related expenses, these were overshadowed by significant achievements and growth in key areas.
Record Q3 Financial Performance
CrowdStrike reported a record Q3 net new Annual Recurring Revenue (ARR) of $265 million, representing a 73% year-over-year growth. The ending ARR reached $4.92 billion, accelerating to a 23% growth year over year, showcasing the company’s strong financial performance.
Strong Free Cash Flow and Operating Income
The company achieved a record Q3 free cash flow of $296 million, or 24% of revenue, and an all-time record operating income of $265 million, or 21% of revenue. These figures highlight CrowdStrike’s robust financial health and operational efficiency.
Broad-Based Product Success
CrowdStrike saw an acceleration in ARR across its cloud, next-gen identity, next-gen SIEM, and endpoint business. The Falcon Flex subscription model was particularly successful, with more than $1.35 billion in ending ARR, growing over 200% year over year.
Successful Strategic Partnerships and Expansions
The company expanded its partnerships with AWS and F5, enabling Falcon NextGen SIEM integration. Notable deals were also made with large European banks and Fortune 500 companies, further strengthening its market position.
AI-Driven Product Demand
There was increased demand for cybersecurity solutions driven by AI transformations. CrowdStrike’s identity and cloud security solutions performed strongly, indicating a growing market need for advanced cybersecurity measures.
GAAP Net Loss
CrowdStrike reported a GAAP net loss of $34 million, which included $26.2 million of costs associated with a July incident and $5.6 million of acquisition-related expenses. Despite this, the overall sentiment remained positive due to the company’s strong performance in other areas.
Incident-Related Costs Impact
The Q3 free cash flow was impacted by approximately $53 million due to payments for incident-related and strategic plan costs. However, the company’s strong financial performance mitigated these impacts.
Forward-Looking Guidance
Looking ahead, CrowdStrike provided robust guidance, expecting total revenue for fiscal year 2026 to range between $4.797 billion and $4.807 billion, reflecting a 21% to 22% growth over the prior fiscal year. The company anticipates a non-GAAP net income between $950 million and $954 million, with a diluted non-GAAP net income per share ranging from $3.70 to $3.72.
In conclusion, CrowdStrike Holdings’ earnings call reflected a strong quarter with record financial metrics and strategic growth. Despite some financial setbacks, the company’s robust performance and forward-looking guidance indicate a positive outlook for the future.