CrowdStrike outlines 23% ARR growth target for FY26 as AI-driven demand accelerates platform adoption
Dec. 02, 2025 8:44 PM ET
AI-Generated Earnings Calls Insights
Earnings Call Insights: CrowdStrike Holdings, Inc. (CRWD) Q3 2026
Management View - George Kurtz, CEO, opened by stating, "I'm excited to share CrowdStrike's fantastic Q3. It was a record quarter as the business continued accelerating." He highlighted record Q3 net new ARR of $265 million, representing 73% year-over-year growth, and an ending ARR of $4.92 billion, which accelerated to 23% growth year-over-year. Kurtz emphasized that "more than $1.35 billion in ending ARR from accounts that have adopted the Falcon Flex subscription model, growing more than 200% year-over-year."
- Kurtz identified AI as a major driver for the business, noting, "AI is rapidly expanding the attack surface...Every single agent expands the attack surface, necessitating protection. CrowdStrike is both the armor and intelligence layer that keeps each agentic identity secure."
- He stated, "CrowdStrike wins as the market's broadest and only single platform solution," and pointed to the Falcon Next-Gen SIEM as the foundation of the platform, now integrated with AWS in a newly expanded partnership. Kurtz also called out several large deals, including an 8-figure expansion with a European bank and a major endpoint modernization in a large government agency.
- Burt Podbere, CFO, said, "We delivered an exceptional third quarter driven by organic growth, exceeding expectations across all guided metrics." He reported record Q3 net new ARR, broad-based acceleration across cloud, Next-Gen SIEM, and Identity, and stated, "Falcon Flex continues to be a powerful driver of platform consolidation with over $1.35 billion in ending ARR from accounts that have adopted the Flex subscription model."
Outlook
- The company expects low to mid-teens sequential net new ARR growth from Q3 to Q4, with FY '26 ending ARR growth targeted at 23% year-over-year.
- At the midpoint of its net new ARR assumptions, CrowdStrike projects second half net new ARR growth of at least 50% year-over-year, which is above previous assumptions of at least 40%.
- For Q4 FY '26, total revenue guidance is $1.290 billion to $1.300 billion, and non-GAAP net income per share guidance is $1.09 to $1.11.
- For FY 2026, projected total revenue is $4.797 billion to $4.807 billion, with non-GAAP net income per share expected to be $3.70 to $3.72.
Financial Results
- Total Q3 revenue was $1.23 billion, with subscription revenue at $1.17 billion and professional services revenue at $65.5 million.
- Non-GAAP gross margin reached 78% and subscription gross margin increased to 81% of revenue.
- Non-GAAP operating income was $264.6 million, and non-GAAP net income attributable to CrowdStrike was $245.4 million or $0.96 per diluted share.
- GAAP net loss attributable to CrowdStrike was $34.0 million, including $26.2 million of costs related to a July incident and $5.6 million in acquisition-related expenses.
- Cash and cash equivalents were $4.80 billion, with record Q3 free cash flow of $295.9 million
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Q&A
- Brian Essex, JPMorgan: Asked about performance of emerging segments and seasonality post-CCP initiatives. George Kurtz responded, "Emerging products...performed fantastic. If you look at Next-Gen SIEM, it's been an all-star standout for us...as you mentioned, we'll be reporting out on those next quarter, we're very, very pleased on the results."
- Saket Kalia, Barclays: Asked about SIEM market dynamics and customer value. Kurtz explained, "We can offer disruptive pricing versus our competitors...it's a multiyear long-tail journey that feels very similar to the displacement of legacy AV."
- Matthew Hedberg, RBC: Inquired about observability expansion. Kurtz indicated CrowdStrike views it as a consolidation opportunity and said, "We have a fantastic opportunity in front of us to consolidate in those areas...it's already there, and there's certainly more that we can do."
- Gabriela Borges, Goldman Sachs: Asked about sustainability of Flex-driven NRR tailwind. Podbere stated, "The beauty of this whole program is that it's designed for customers to easily buy more...we're seeing bigger deals and longer deals."
- Daniel Ives, Wedbush: Asked how AI deployments are changing customer conversations. Kurtz replied, "It's moved from chatbots to actual doing work...Things that would take 4 days of work, we're delivering in minutes for customers."
- Fatima Boolani, Citi: Asked about AWS partnership impact on multi-cloud strategy. Kurtz said, "It doesn't preclude us from doing that. But again, I think this reinforces what a great relationship we have with AWS."
Sentiment Analysis
- Analyst sentiment was positive, with questions focusing on product growth, SIEM displacement, Flex sustainability, and AWS partnership, indicating strong interest in the company's innovation and expansion.
- Management maintained a confident tone throughout, as reflected in Kurtz's statement: "This was one of our very best quarters in company history. Acceleration is back. We're winning and we're living the company's mission of stopping breaches."
- Compared to the previous quarter, management's tone has grown more assertive about AI-driven demand and the success of large-scale partnerships, while analysts continued to probe growth sustainability and competitive differentiation.
Quarter-over-Quarter Comparison
- Guidance language was elevated this quarter, with net new ARR growth assumptions for the second half raised to at least 50% year-over-year compared to the previous quarter's 40%.
- Strategic focus continues on platform consolidation, Flex subscription adoption, and AI-driven product expansion, but this quarter saw more emphasis on the AWS partnership and SIEM market disruption.
- Analysts' questions shifted more toward the impact and sustainability of Flex, vertical expansion, and new partnership opportunities, whereas last quarter focused more on ARR acceleration and competitive positioning.
- Management's confidence increased, calling out "record Q3 with highlights" and reiterating, "AI represents our largest opportunity and demand driver yet."
Risks and Concerns
- Management referenced $26.2 million in costs related to a July incident, indicating ongoing exposure to operational risks.
- Kurtz noted the "rapidly expanding risk profile" with AI and agentic identities, suggesting continued vigilance is needed as the attack surface grows.
- Analysts raised questions about sustainability of Flex-driven growth, competitive pricing pressure, and partnership dynamics, which management addressed by emphasizing their platform and consolidation advantages.
Final Takeaway
CrowdStrike's Q3 results showcased accelerating growth in net new ARR, robust adoption of its Flex licensing model, and strengthened strategic partnerships, particularly with AWS. Management projects continued momentum into Q4 and FY 2026, underpinned by AI-fueled demand for integrated security solutions, broad-based platform adoption, and an expanding ecosystem. The company maintains high confidence in its ability to deliver profitable growth, while ongoing operational vigilance and competitive positioning remain key priorities.
Read the full Earnings Call Transcript
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