CrowdStrike (CRWD, Financial) is under pressure after issuing soft guidance for Q1 and FY26. The cybersecurity company is still grappling with the aftermath of last July's outage that affected millions of Windows systems globally. To mitigate financial impact, CRWD introduced a "customer commitment package program" offering one-time discounts, which is expected to hinder annual recurring revenue (ARR), particularly in the first half of the year.

CRWD is also set to increase investments in marketing and AI infrastructure, with higher taxes further impacting profitability. These factors have led the company to project Q1 and FY26 EPS below expectations.

• In 4Q25, CRWD performed well, surpassing EPS and revenue estimates as subscription revenue exceeded $1.0 billion for the first time, rising 27% year-over-year to $1.01 billion.
• The company reported strong interest in its Cloud Security, Identity Security, and LogScale NextGen SIEM products, with ARR growth of 45%, 20%, and 115%, respectively. Customers are increasingly consolidating their cybersecurity needs onto CRWD's Falcon platform, with module adoption rates climbing to 32% and 21% for seven or more and eight or more modules, respectively.
• ARR exceeded expectations, increasing by 23% to $4.24 billion. However, net new ARR fell 20% to $224.3 million due to the customer commitment package promotion. For Q1, CRWD anticipates a typical seasonal decline of 21-23% in net new ARR.
• While CRWD expects net new ARR growth to pick up in the latter half of FY26, driving momentum into FY27, it chose not to provide FY26 ARR guidance. This decision may unsettle investors concerned about the potential non-renewal of contracts by customers currently on the customer commitment package.

The key takeaway is that CRWD continues to face uncertainties related to the outage, and with growing concerns about economic growth, worries about contract renewals are intensifying.