EPS of $-0.31 decreased by 263.2% from previous year
Gross margin of 73.5%
Net income of -77.68M
"reacceleration. We've talked about reacceleration coming in the back half of this fiscal year, and it's here now. I'm proud of CrowdStrike Holdings, Inc.'s ability to deliver reacceleration, our return to year-over-year net new ARR growth a quarter early." - George Kurtz
CrowdStrike reported a robust QQ2 2026 quarter that flooringed expectations across revenue, ARR, and profitability metrics. Total revenue reached $1.17 billion, up 21% year over year, with non-GAAP operating income of $255 million (22% operating margin) and non-GAAP net income of $237.4 million ($0.93 per diluted share). Ending ARR stood at $4.66 billion, a 20% YoY increase, driven by accelerating net new ARR of $221 million and a cloud/SIEM/identity growth trajectory that now includes NEXT-GEN offerings and a high-velocity Flex licensing model. The quarterly results were underpinned by AI-driven demand for Falcon and continued platform consolidation (six to eight modules per customer on the way to $10B ending ARR by FY31). CrowdStrike also announced its intent to acquire Onum, aiming to strengthen real-time data ingestion and pipeline capabilities for NextGen SIEM, and highlighted ONEM’s in-pipeline detection and performance advantages. Management guided for a back-half net new ARR growth of at least 40% year over year and ending ARR growth above 22% for FY2026, reinforcing confidence in sustained acceleration. The company also stressed balance sheet strength (cash and equivalents ~ $4.97B) and a longer-term path to >$30% free cash flow margin in FY27. Overall, CrowdStrike remains well-positioned at the intersection of AI-enabled security, cloud-native workloads, and identity protection, with a clear execution plan to reach a $10B ending ARR target by FY31 while expanding share in cloud security, identity, and SIEM markets.
GAAP net loss: $77.7M; includes $35.7M outage-related costs and $38.4M strategic plan charges.
Non-GAAP net income: $237.4M; Non-GAAP EPS: $0.93 (diluted).
Financial Highlights
Revenue and profitability
- Revenue: $1.16895B, up 21% YoY; QoQ growth: ~5.9% (from prior quarter data).
- Non-GAAP gross margin: 78.0%; Non-GAAP subscription gross margin: 80.0%.
- Operating expenses (non-GAAP): $652.5M (56% of revenue); non-GAAP operating income: $255.0M; non-GAAP operating margin: 22%.
- GAAP net loss: $77.7M; includes $35.7M outage-related costs and $38.4M strategic plan charges.
- Non-GAAP net income: $237.4M; Non-GAAP EPS: $0.93 (diluted).
- Tax rate: Long-term non-GAAP tax rate reduced to 21% from 22.5%, contributing ~ $0.3 benefit to diluted EPS.
Cash flow and liquidity
- Cash and cash equivalents: $4.97B.
- Operating cash flow: $332.8M; Free cash flow: $283.6M (24% of revenue).
- Free cash flow impact from outages/plan costs: ~$29M in QQ2.
ARR and product momentum
- Ending ARR: $4.66B, +20% YoY.
- Net new ARR: $221M (record QQ2).
- Cloud ARR ending: >$700M, +35% YoY.
- NextGen SIEM ARR: >$430M, +>95% YoY.
- Falcon Flex: >1,000 Flex customers; Flex utilization >75%; reflexed accounts ~10% of Flex base; reflex activity yields ~50% uplift in ending ARR per reflex.
- Module adoption among subscription customers: 6 modules (48%), 7 modules (33%), 8+ modules (23%); among >$100k ending ARR customers, 60% use 8+ modules.
- Identity security (next-gen identity protection) ending ARR >$435M, +21% YoY. PAM solution addition announced in Q1; acceleration in identity-related opportunities supported by Shield and PAM.
- Cloud security wins: 7-figure enterprise win with CNAP/CSPM adoption and single-platform ASPM integration to reduce manual work.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.17B
21.28%
5.94%
Gross Profit
858.67M
18.20%
5.45%
Operating Income
-112.98M
-927.20%
9.37%
Net Income
-77.68M
-265.22%
29.52%
EPS
-0.31
-263.16%
29.55%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key management insights from the QQ2 FY26 earnings call:
- Strategy and growth trajectory: "Reflecting on our second quarter, the key theme was reacceleration" with management signaling back-half net new ARR growth of at least 40% YoY and ending ARR growth above 22% for FY26.
- ARR and profitability milestones: George Kurtz highlighted "record Q2 net new ARR of $221 million" and Burt Podbere noted ending ARR of $4.66B (+20% YoY) and "record Q2 free cash flow of $283.6 million" as proof of the model’s profitability even as ARR scales.
- AI and NextGen SIEM excellence: NextGen SIEM had YoY growth >95% with ending ARR >$430M, underscoring AI SOC transformation and the expansion of Falcon as the operating system of cybersecurity.
- ONEM and data-driven architecture: George Kurtz announced intent to acquire Onum (ONEM) to boost data pipeline speed and efficiency; ONEM claims five times more events per second and 50% data-storage cost reduction, enabling earlier AI-driven detections.
- Charlotte and SOC automation: Charlotte and the Falcon AI stack enabled autonomous detection/response, with Charlotte growth >85% YoY in QQ2 and integration across the Falcon platform delivering faster, more automated SOC workflows.
- Cloud and ecosystem expansion: Cloud end ARR surpassed $700M (+35% YoY); partnerships (e.g., NVIDIA, Red Canary, AWS-related ecosystems) accounted for >60% of new Q2 revenue; the shift toward a single-platform approach accelerates consolidation with customers and MSSPs.
- Guidance and execution: The company reiterated confidence in 40% YoY net new ARR growth in H2 and a broader long-term path to 10B ending ARR, with free cash flow margin targeting >27% in Q4 and >30% for FY27, indicating an emphasis on profitable growth alongside growth acceleration.
reacceleration. We've talked about reacceleration coming in the back half of this fiscal year, and it's here now. I'm proud of CrowdStrike Holdings, Inc.'s ability to deliver reacceleration, our return to year-over-year net new ARR growth a quarter early.
— George Kurtz
ONEM will bring Falcon's AI-powered detections closer to third-party data sources in the pipeline, starting analysis before data even enters the Falcon platform. ONEM delivers five times more events per second than its nearest competitor and processes data in real-time.
— George Kurtz
Forward Guidance
Management guidance highlights material expectations for back-half acceleration and ARR expansion:
- Revenue guidance for FY2026: $4.7495B to $4.8055B (approximately 20% YoY growth).
- Non-GAAP operating income: $1.001B to $1.0401B; Non-GAAP net income: $922.4M to $954M; Non-GAAP diluted EPS: $3.60 to $3.72; tax rate assumed at 21%.
- Q3 guidance: Revenue $1.208B to $1.218B (about 20% YoY), with back-half net new ARR growth at least 40% YoY; professional services revenue expected to be more variable given Q2 performance.
- ARR dynamics: The company separated $10–$15M per quarter of ARR-to-subscription revenue through Q4 due to CCP-related partner programs; this impact is expected to subside in 2026.
- Free cash flow: Exiting the year with a free cash flow margin of 27% in Q4 and expanding to >30% for FY27.
Overall, the guidance reflects continued AI-driven demand for Falcon, ongoing consolidation via Falcon Flex, and a rational path to a multi-year ARR growth trajectory, albeit with contingencies around partner programs and the evolution of the AI security market. Investors should monitor progress on Onum/ONEM integration, the pace of reflex-driven ARR expansion, and the competitive landscape in cloud security and identity protection as the year progresses.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
CRWD Focus
73.46%
N/A
N/A
N/A
SPLK
76.70%
-7.52%
1.62%
-71.28%
ADBE
87.90%
35.50%
10.60%
31.74%
PLTR
81.00%
15.50%
3.31%
107.65%
ZS
77.10%
-6.20%
-0.48%
-1,007.65%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Positive long-term outlook underpinned by a defensible data moat, AI-driven demand, and platform-driven consolidation. CrowdStrike is progressing toward its ARR targets with strong gross margins and substantial free cash flow, suggesting a durable roadmap for profitability as growth accelerates. The ONEM acquisition and ongoing Charlotte integration are likely to enhance data throughput, SIEM capabilities, and autonomous security outcomes, supporting continued net new ARR acceleration. Investors should monitor: (1) the pace and sustainability of reflex-driven ARR expansion, (2) ONEM integration milestones and customer adoption, (3) the evolution of NextGen SIEM and Cloud Security ARR, and (4) potential macro or competitive headwinds that could affect enterprise security budgets. Given the current trajectory, CrowdStrike remains a compelling long-duration growth story in the cybersecurity software space, with a clear path toward the $10B ending ARR objective by FY31 and continued expansion in AI-enabled security verticals.
Key Investment Factors
Growth Potential
Strong growth potential from AI-native Falcon platform expansion, FalconFlex licensing, reflex-driven ARR acceleration, and high-demand NextGen SIEM, with cloud security and identity protection as primary accelerants. Ending ARR goal of $10B by FY31 remains the aspirational target supported by expanding module adoption (6-8 modules per customer) and large enterprise wins (e.g., >$10M CC deals, 1,000+ Flex customers). ONEM data pipeline integration and Charlotte-driven SOC automation enhance the platform moat and enable earlier, higher-fidelity detections.
Profitability Risk
Key risks include reliance on continued AI demand and enterprise AI security spend, potential volatility from CCP/partner programs deceleration, execution risk in ONEM integration and reflex-driven upsell cycles, competitive pressure from large incumbents and aggregators, and macroeconomic sensitivity affecting large enterprise cybersecurity budgets.
Financial Position
Very strong liquidity and cash generation with ~$4.97B in cash and cash equivalents. QQ2 FCF of $283.6M (24% of revenue) demonstrates unit economics support for sustained growth; non-GAAP gross margin at 80% for subscription revenue and 78% overall; maintained high operating efficiency with non-GAAP operating margin at 22%. The balance sheet supports strategic M&A and ongoing investments in platform expansion.
SWOT Analysis
Strengths
Leading AI-native cybersecurity platform with Falcon as the operating system of security
Strong ARR growth drivers: net new ARR, reflex-based expansions, and robust end ARR
High customer stickiness via Falcon Flex and module consolidation (6-8 modules per customer common)
Best-in-class non-GAAP gross margins (80% subscription) and strong FCF generation
Strategic data-positive advantages: Charlotte AI, Onum/ONEM pipeline, and Expandable NextGen SIEM
Weaknesses
GAAP net loss in QQ2 due to outage-related costs and strategic plan charges
Reliance on partner programs (CCP) whose timing and impact may modulate near-term guidance
Significant exposure to large enterprise deals, which can introduce deal timing risk
Opportunities
Cloud security leadership with continued migration from CSPM to runtime protections
Identity security expansion (Shield, PAM, and next-gen identity protection for NHIs/Ai agents)
NextGen SIEM market expansion aided by ONEM data pipeline to reduce data movement and cost
Ecosystem partnerships (NVIDIA, Red Canary, AWS) to accelerate new customer acquisition
Threats
Intense competitive dynamics and potential M&A activity in the security software space
Macro softness or budget cuts affecting large enterprise cybersecurity investments
Execution risk in integrating ONEM and scaling reflex-driven ARR across a broader customer base