EPS of $-0.37 decreased by 268.2% from previous year
Gross margin of 74.1%
Net income of -92.28M
""The success of our program combined with the strong uptake of Falcon Flex gives us confidence in future net new ARR reacceleration as products are deployed, one-time discounts expire, and contracts are upsized and renewed." - Burt Podbere (CFO)" - Burt Podbere
In Q4 2025, CrowdStrike Holdings Inc (CRWD) reported revenues of $1.058 billion, demonstrating a year-over-year growth of 25% and surpassing analyst expectations. Despite facing challenges impacting profitability, including a GAAP net loss of $92.8 million driven by one-time expenses, the management expressed confidence in achieving robust growth with a record annual free cash flow of $1.07 billion. The company’s strategic initiatives, particularly the adoption of the Falcon Flex subscription model, and a strong ARR of $4.24 billion position CrowdStrike well for future growth amid evolving cybersecurity threats and market competition. Q4 features a dynamic shift towards AI-driven security solutions, underpinning CrowdStrike's competitive advantage in the market.
CrowdStrike has a strong gross dollar retention rate of 97%, indicating high customer satisfaction and commitment to its platform. The subscription revenue for Q4 topped $1 billion, representing 27% growth YoY, contributing significantly to the total revenue growth.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.06B
25.22%
4.79%
Gross Profit
784.55M
23.34%
3.90%
Operating Income
-85.30M
-374.29%
-53.08%
Net Income
-92.28M
-271.85%
-448.58%
EPS
-0.37
-268.18%
-440.15%
Key Financial Ratios
currentRatio
1.77
grossProfitMargin
74.1%
operatingProfitMargin
-8.06%
netProfitMargin
-8.72%
returnOnAssets
-1.06%
returnOnEquity
-2.81%
debtEquityRatio
0.24
operatingCashFlowPerShare
$1.4
freeCashFlowPerShare
$1.05
priceToBookRatio
29.97
priceEarningsRatio
-266.29
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management Insights:
- George Kurtz (CEO): "Our record total contract value reached $6 billion in FY 2025, with growth accelerating to 40%, highlighting our strong business model and customer commitment in uncertain times."
- Burt Podbere (CFO): "The successful completion of our customer commitment program accelerated platform adoption and deepened our customer relationships, while maintaining a gross retention rate of 97% gives us confidence in future growth."
This emphasizes CrowdStrike's focus on enhancing customer relationships through innovative subscription models and adapting services to fit evolving market needs.
"The success of our program combined with the strong uptake of Falcon Flex gives us confidence in future net new ARR reacceleration as products are deployed, one-time discounts expire, and contracts are upsized and renewed." - Burt Podbere (CFO)
— Burt Podbere
"In the evolving AI landscape, we are uniquely positioned with our market-leading Falcon platform to address complex cybersecurity demands effectively." - George Kurtz (CEO)
— George Kurtz
Forward Guidance
Looking ahead, management projected a revenue range of $1.100 billion to $1.106 billion for Q1 FY 2026, representing a growth rate of around 20%. The company expects to see net new annual recurring revenue (ARR) accelerating in the second half of FY 2026. They highlighted ambitions of reaching $10 billion in ending ARR by FY 2031, which underlines their aggressive growth trajectory. They indicated that operational improvements and AI investments would enhance cash flow and margins over time, expecting to return to GAAP profitability in Q4 2026.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
CRWD Focus
74.12%
-8.06%
-2.81%
-266.29%
SPLK
84.90%
32.60%
57.60%
15.20%
ADBE
89.00%
34.90%
11.90%
33.80%
PLTR
78.90%
1.33%
1.58%
551.58%
ZS
78.00%
-4.55%
-1.17%
-450.80%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Given the solid financial results and management's forward guidance, CrowdStrike appears poised for sustained growth amid an expanding cybersecurity market. Key strategic initiatives like the Falcon Flex subscription, coupled with significant investment in AI, indicate a forward-thinking approach aligning with industry needs. While vigilance towards market competition and profitability challenges are necessary, the overall trajectory suggests that CrowdStrike represents a compelling long-term investment opportunity for those looking to capitalize on the increasing urgency and necessity of cybersecurity solutions.
Key Investment Factors
Growth Potential
CrowdStrike is positioned well for growth in the booming cybersecurity industry, especially with the integration of AI into their services, reflecting a commitment to innovation and market-leading security solutions. The emphasis on the Falcon Flex subscription model is expected to further penetrate the existing customer base while attracting new customers.
Profitability Risk
Key risks include market competition, evolving cybersecurity threats, and reliance on the continued adoption of subscription models. Additionally, profit margins are impacted by initial costs related to new customer acquisition and operational scaling. Operational risks stemming from recent incidents and associated expense management also pose significant concerns.
Financial Position
CrowdStrike has a solid financial foundation, with $4.32 billion in cash and cash equivalents, indicating a robust liquidity position. Long-term debt remains manageable at $775 million relative to its asset base of $8.7 billion, providing room for strategic investments.
SWOT Analysis
Strengths
Strong brand recognition and reputation in the cybersecurity industry.
High customer satisfaction reflected in a 97% retention rate.
Versatile subscription models such as Falcon Flex fostering recurring revenue.
Liquidity with significant cash reserves for ongoing investments.
Weaknesses
Negative net income indicates profitability challenges during growth phases.
Dependence on ongoing customer adoption of the Falcon platform could lead to volatility if market needs change.
Opportunities
Significant demand for AI-driven security solutions as enterprises navigate evolving threats.
Growing market potential via expansion into cloud security, identity protection, and 'next-gen' SIEM programs.
Opportunity to leverage strategic partnerships to enhance customer reach and value propositions.
Threats
Deepening competition from other cybersecurity firms and potential pricing pressure.
Rapidly evolving cybersecurity threats could necessitate further investments into R&D, impacting margins.
Economic uncertainties could affect customer spending and investments in cybersecurity solutions.