• Net New ARR (Annual Recurring Revenue): $224 million in Q4, ending FY 2025 at $4.24 billion.
• Cloud Security, Identity Protection, and Next-Gen SIEM ARR: Over $1.3 billion, growing nearly 15% year over year.
• Gross Dollar Retention: 97%.
• Free Cash Flow: $240 million in Q4; $1.07 billion for the full year, or 27% of revenue.
• Total Contract Value: $6 billion, increased 40% year over year.
• Revenue: $1.06 billion in Q4, with subscription revenue over $1 billion.
• Operating Income: $837.7 million for FY 2025, or 21% of revenue.
• Net Income: Non-GAAP net income of $261.0 million in Q4, or $1.03 per diluted share.
• Cash and Cash Equivalents: $4.32 billion.
• Subscription Gross Margin: Over 80% of revenue.
• Operating Margin: 21% in Q4.
• Customer Growth: Trusted by more than 74,000 organizations, growing more than 30% year-over-year.
• Guidance for FY 2026 Revenue: $4,743.5 million to $4,805.5 million, reflecting a growth rate of 20% to 22%.
• Guidance for FY 2026 Non-GAAP Net Income: $851.2 million to $883.0 million.

• Warning! GuruFocus has detected 2 Warning Sign with CRWD.

Release Date: March 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• CrowdStrike Holdings Inc (NASDAQ:CRWD) reported a Q4 net new ARR of $224 million, surpassing expectations and closing FY 2025 with $4.24 billion in ending ARR.
• The company achieved a record free cash flow of $1.07 billion for the fiscal year, representing 27% of revenue.
• CrowdStrike Holdings Inc (NASDAQ:CRWD) became the first cybersecurity ISV to cross $1 billion in deal value on AWS Marketplace in a single calendar year.
• The Falcon Flex subscription model has been a significant success, with accounts adopting Falcon Flex reaching $2.5 billion in total deal value, growing 80% quarter over quarter.
• The company's cloud security business grew over 45% in Q4, with ending ARR surpassing $600 million, highlighting strong demand for its cloud security solutions.

Negative Points

• Despite strong performance, the net new ARR was down about 1% year over year, indicating some challenges in maintaining growth momentum.
• The company faced a GAAP net loss of $92.3 million in Q4, impacted by tax expenses related to acquisitions and incident-related expenses.
• There is a noted decline in growth from existing customers, with upselling to existing customers decreasing from 21% growth in Q1 to 15% by year-end.
• The company anticipates cash impacts of approximately $73 million for outage-related costs in Q1 of FY26, affecting short-term financial performance.
• Operating margin guidance for FY26 reflects upfront investments and amortized costs from the Customer Commitment Program, which may pressure margins in the near term.

Q & A Highlights

Q: How is Falcon Flex driving better value for customers, and can you provide examples of how current customers are growing their spending with CrowdStrike through Falcon Flex? A: George Kurtz, CEO, explained that Falcon Flex was developed in response to customer demand for more consolidation with CrowdStrike. It allows customers to access the entire product catalog and add new modules without a procurement cycle. For example, a large transportation company consolidated three vendors into Falcon Flex, increasing their ARR by 67%. Customers are ahead of schedule in their demand plans, indicating strong adoption of Falcon Flex.

Q: Can you discuss the growth rates of emerging products like Cloud and Identity, and how customers are consuming these products? A: George Kurtz, CEO, noted that Identity and Cloud have been significant drivers of customer adoption, especially as part of the Customer Commitment Program (CCP). These products are critical for protection, and as CCP elements phase out, there is an opportunity to renew and expand usage, which is seen as a positive development.

Q: How did you approach guidance for the year, considering factors like the pause in external demand generation and enterprise sales cycles? A: Burt Podbere, CFO, explained that the guidance considers the conclusion of the CCP program and the opportunity to upsell customers who are already using and benefiting from CrowdStrike's products. The company is optimistic about reacceleration in the second half of the year, driven by strong customer relationships and new product offerings.

Q: Can you provide more details on the pricing and competitive environment for AI security, particularly regarding Charlotte AI? A: George Kurtz, CEO, highlighted that Charlotte AI is integrated into workflows and is being adopted by customers, including level three analysts who find it particularly useful. The AI capabilities are saving customers time and effort, and the company is committed to leading in the Agentic AI space.

Q: What is the growth outlook for CrowdStrike on AWS Marketplace over the next two to three years? A: George Kurtz, CEO, expressed optimism about continued growth on AWS Marketplace, noting that it is a preferred procurement method for customers. The company sees opportunities for expansion outside North America and in various cloud environments, which will drive further growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.