Core Viewpoint - The U.S. Department of Justice and the SEC are conducting an in-depth investigation into CrowdStrike, focusing on a suspicious $32 million transaction with distributor Carahsoft Technology Corp, which involves an order related to the IRS that raises broader financial scrutiny [1][2]. Group 1: Investigation Details - The investigation centers on a transaction completed in the last quarter of fiscal year 2023, where CrowdStrike provided cybersecurity software for the IRS, despite the IRS never actually purchasing or receiving the products [1]. - Investigators have questioned former employees about the transaction process, the knowledge of CrowdStrike's leadership, and whether employees had concerns about other transactions, indicating a broader scope of inquiry than previously known [1][2]. - The investigation has expanded to include inquiries about other transactions, including a separate $1 million deal involving the IRS and several million-dollar transactions with the Department of Health and Human Services and the Department of Energy [2]. Group 2: Financial Implications - The $32 million transaction is crucial for CrowdStrike, as excluding this revenue could result in key financial metrics for Q4 2023 falling below Wall Street expectations [2]. - In November of the previous year, CrowdStrike unexpectedly deducted $26 million from its annual recurring revenue, with the CFO providing a vague explanation that has intensified doubts about the transaction's legitimacy [2]. - Internal employee concerns have been raised regarding the company's practice of "channel stuffing," which may violate the Sarbanes-Oxley Act's requirements for financial accuracy [2]. Group 3: Company Responses - A spokesperson for CrowdStrike has repeatedly emphasized adherence to transaction accounting principles but has declined to disclose specific details about the transaction [3]. - Carahsoft has not responded to requests for comments regarding the investigation [3].

Group 1 - CrowdStrike plans to lay off 500 employees, approximately 5% of its total workforce, as part of a strategy to focus on AI technology development [1][2] - CEO George Kurtz emphasized that AI is a cornerstone of the company's operations, enhancing recruitment, product development, and customer service [1] - The company reaffirmed its revenue expectations for the fiscal year ending in January and plans to continue hiring in key strategic areas [1] Group 2 - CrowdStrike aims to achieve an annual revenue target of $10 billion and is expanding its marketing and customer success teams [2] - The company reported a 25% revenue growth to $1.06 billion, but has recorded net losses for two consecutive quarters [2] - The layoff plan is expected to incur costs between $36 million and $53 million, and the layoffs will be completed by the end of the second quarter of the fiscal year [2]

About this content About Oliver Haill Oliver has been writing about companies and markets since the early 2000s, cutting his teeth as a financial journalist at Growth Company Investor with a focusing on AIM companies and small caps, before a few years later becoming a section editor and then head of research. He joined Proactive after a couple of years freelancing, where he worked for the Financial Times Group, ITV, Press Association, Reuters sports desk, the London Olympic News Service, Rugby World Cup ...

Group 1 - CrowdStrike announced a layoff of 5% of its global workforce, approximately 500 employees, as part of a strategic plan to enhance operational efficiency [1] - The company aims to achieve $10 billion in Annual Recurring Revenue and plans to hire in key strategic areas throughout its fiscal year ending January 31, 2026 [1] - CEO George Kurtz emphasized that these changes will enable the company to operate more efficiently and maintain its leadership in cybersecurity [1] Group 2 - CrowdStrike gained prominence in 2016 for investigating the Democratic National Committee hack, attributing it to the Russian government [2] - The company faced negative publicity in the previous summer due to a faulty software update that affected 8.5 million Windows devices globally, causing significant outages and disruptions across various sectors [2]

Core Viewpoint - CrowdStrike plans to lay off nearly 500 employees, approximately 5% of its global workforce, as part of a strategic initiative to significantly enhance operational efficiency while continuing to hire in key strategic areas [1][2] Group 1: Strategic Plan and Financial Performance - The company announced a strategic plan aimed at advancing operational transformation to significantly improve operational efficiency [1] - CrowdStrike aims to achieve an annual recurring revenue (ARR) target of $10 billion [1] - The financial performance for the first quarter of fiscal year 2026 is expected to align with or exceed the guidance provided in the fourth quarter results announced on March 4 [1] - The company reaffirmed its performance guidance for fiscal year 2026 [1] Group 2: Costs Associated with Layoffs - The estimated costs related to the strategic plan are projected to be between $36 million and $53 million, with approximately $7 million expected to be recognized in the first quarter of fiscal year 2026 [1] - The majority of the remaining costs will be incurred in the second quarter of fiscal year 2026 [1] - These costs primarily include future cash expenditures for severance, employee benefits, and related expenses, estimated between $19 million and $26 million, as well as stock-based non-cash compensation expenses estimated between $10 million and $20 million [1]

[Report Overview and Filing Information](index=1&type=section&id=Report%20Overview%20and%20Filing%20Information) This section details CrowdStrike Holdings, Inc.'s Form 8-K filing, including registrant identification, securities registration on Nasdaq, and its non-emerging growth company status [Registrant and Filing Details](index=1&type=section&id=Registrant%20and%20Filing%20Details) This section identifies CrowdStrike Holdings, Inc. as the registrant, detailing its Delaware incorporation and the May 6, 2025 report date - Registrant: **CrowdStrike Holdings, Inc.**[1](index=1&type=chunk) - Date of Report (earliest event reported): **May 6, 2025**[1](index=1&type=chunk) [Securities and Emerging Growth Status](index=1&type=section&id=Securities%20and%20Emerging%20Growth%20Status) CrowdStrike's Class A common stock is listed on Nasdaq under CRWD, and the company is not classified as an emerging growth entity Securities Registered | Title of each class | Symbol(s) | Name of each exchange on which registered | | :-------------------------- | :-------- | :---------------------------------------- | | Class A common stock, $0.0005 par value | CRWD | The Nasdaq Stock Market LLC | - CrowdStrike is not an emerging growth company[3](index=3&type=chunk) [Item 2.02 - Results of Operations and Financial Condition](index=3&type=section&id=Item%202.02%20-%20Results%20of%20Operations%20and%20Financial%20Condition) This section provides CrowdStrike's financial outlook, anticipating first-quarter fiscal 2026 results to meet or exceed guidance and reaffirming full fiscal year 2026 guidance [Fiscal 2026 Financial Outlook](index=3&type=section&id=Fiscal%202026%20Financial%20Outlook) CrowdStrike expects Q1 FY2026 results to meet or exceed guidance and reaffirms its full fiscal year 2026 financial outlook - Fiscal 2026 first quarter (ended April 30, 2025) financial results are expected to be in-line with or above guidance[4](index=4&type=chunk) - Guidance for the fiscal year 2026 (ending January 31, 2026) is reaffirmed[4](index=4&type=chunk) [Item 2.05 - Costs Associated with Exit or Disposal Activities](index=3&type=section&id=Item%202.05%20-%20Costs%20Associated%20with%20Exit%20or%20Disposal%20Activities) This section details CrowdStrike's strategic plan, including a workforce reduction and associated financial charges for efficiency and growth towards a $10 billion ARR goal [Strategic Plan and Workforce Reduction](index=3&type=section&id=Strategic%20Plan%20and%20Workforce%20Reduction) CrowdStrike's strategic plan, announced May 6, 2025, aims for operational efficiency and $10 billion ARR, involving a 5% global workforce reduction - Strategic plan announced on May 6, 2025, to evolve operations for greater efficiencies and scale business[5](index=5&type=chunk) - Goal: Achieve **$10 billion** in ending ARR[5](index=5&type=chunk) - Workforce reduction: Approximately **500 positions** (**5%** of global workforce)[5](index=5&type=chunk) [Estimated Financial Charges](index=3&type=section&id=Estimated%20Financial%20Charges) Estimated charges for the strategic plan range from $36 million to $53 million, primarily for severance and stock-based compensation, excluded from non-GAAP measures Estimated Charges for Strategic Plan | Category | Estimated Amount (Millions) | | :------------------------------------- | :-------------------------- | | Total Estimated Charges | $36 - $53 | | Expected in Q1 FY2026 | ~$7 | | Primarily in Q2 FY2026 | Substantially the remainder | | Future Cash Expenditures (Severance, Benefits) | $19 - $26 | | Non-Cash Charges (Stock-based compensation) | $10 - $20 | - Charges associated with the Plan will be excluded from non-GAAP financial measures[6](index=6&type=chunk) - Actions associated with the Plan are expected to be substantially complete by the end of the second quarter of fiscal 2026[7](index=7&type=chunk) [Item 7.01 - Regulation FD Disclosure](index=3&type=section&id=Item%207.01%20-%20Regulation%20FD%20Disclosure) This section discloses a CEO note to employees and announces the Q1 FY2026 earnings release and conference call schedule [Employee Communication and Earnings Call Announcement](index=3&type=section&id=Employee%20Communication%20and%20Earnings%20Call%20Announcement) Exhibit 99.1 includes a CEO note to employees, and Q1 FY2026 financial results will be released June 3, 2025, followed by a conference call - A note from CrowdStrike's CEO to employees regarding the strategic actions is attached as Exhibit 99.1[8](index=8&type=chunk) - Q1 FY2026 financial results (ended April 30, 2025) will be released on Tuesday, June 3, 2025, after U.S. market close[9](index=9&type=chunk) - A conference call to discuss results will be held on June 3, 2025, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern time)[9](index=9&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section provides a cautionary disclaimer regarding forward-looking statements, highlighting inherent risks and uncertainties that could cause actual results to differ materially [Disclaimer and Risk Factors](index=3&type=section&id=Disclaimer%20and%20Risk%20Factors) This disclaimer warns that forward-looking statements are subject to risks and uncertainties, potentially causing actual results to differ materially - Report contains forward-looking statements regarding financial expectations, guidance, and the strategic plan[10](index=10&type=chunk) - Statements are subject to inherent risks and uncertainties; actual results could differ materially[10](index=10&type=chunk) - Risks include the plan costing more than anticipated, negative effects on recruiting/retaining skilled personnel, and business operations[10](index=10&type=chunk) [Item 9.01 - Financial Statements and Exhibits](index=4&type=section&id=Item%209.01%20-%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits accompanying the Form 8-K filing, including a CEO note to employees and the interactive data file [Exhibits List](index=4&type=section&id=Exhibits%20List) This section enumerates the exhibits filed with the Form 8-K, including the CEO's employee note and the interactive data file Exhibits Filed | Exhibit No. | Exhibit Description | | :---------- | :---------------------------------------------------------- | | 99.1 | Note to CrowdStrike employees from CrowdStrike's Chief Executive Officer, dated May 6, 2025. | | 104 | Cover Page Interactive Data File—the cover page XBRL tags are embedded within the Inline XBRL document. | [SIGNATURES](index=5&type=section&id=SIGNATURES) This section formally concludes the report, providing details of the authorized signatory and the date of signature [Authorization and Signatory](index=5&type=section&id=Authorization%20and%20Signatory) This section formally concludes the report, signed by Burt W. Podbere, Chief Financial Officer, on behalf of CrowdStrike Holdings, Inc. on May 7, 2025 - Report signed on behalf of CrowdStrike Holdings, Inc.[14](index=14&type=chunk) - Signatory: **Burt W. Podbere**, Chief Financial Officer[15](index=15&type=chunk) - Date of Signature: May 7, 2025[15](index=15&type=chunk)

Group 1: Alphabet (GOOGL) - Alphabet has faced challenges, including two antitrust lawsuits and competition from AI chatbots, leading to a 23% decline in stock price from its high [3][7] - Google Search advertising revenue grew by 10% year over year, and the integration of AI into Search has attracted over 1.5 billion monthly active users [4] - Google Cloud revenue increased by 28% year over year, with operating income surpassing $2.1 billion in Q1, up from $900 million a year ago, indicating strong demand [5] - Waymo, Alphabet's self-driving ride-hailing service, has expanded significantly, performing over 250,000 weekly paid rides, a fivefold increase from the previous year [6] Group 2: The Trade Desk (TTD) - The Trade Desk is positioned well in the digital advertising space, leveraging AI through its Kokai platform to optimize ad campaigns [8][9] - Despite being the worst-performing tech stock in the S&P 500 in Q1 2025, the company has a forecasted revenue growth of 17% for Q1, which could help rebuild investor confidence [10][11] - The stock has fallen over 60% since December, resulting in a price-to-earnings ratio of 68, its lowest since 2019, making it an attractive buy despite revenue growth slowdown [12] - A recent court ruling against Alphabet regarding digital advertising monopoly could provide The Trade Desk with an opportunity to expand its market share [13] Group 3: CrowdStrike Holdings (CRWD) - CrowdStrike develops AI-powered cybersecurity solutions and is less affected by trade and tariff issues, with only one-third of its revenue coming from international markets [15] - The company is not impacted by potential slowdowns in data center spending, as it focuses on cybersecurity, which remains a critical service for organizations [16] - CrowdStrike has averaged 40% revenue growth over the last three years, with a recent quarter showing a 25% growth rate, indicating continued strong performance [17][18]

Core Viewpoint - Palantir's current market valuation of approximately $250 billion is questioned as potentially unsustainable given its growth rates and earnings multiples [1][2][4]. Valuation Concerns - Palantir's valuation exceeds 200 times forward earnings and nearly 100 times sales, which is not supported by its growth metrics [4]. - In comparison, Nvidia has maintained a maximum of 45 times sales and 50 times forward earnings, with a revenue growth rate peaking at 265% year over year, while Palantir's fastest growth since 2023 was only 36% [5]. Competitive Landscape - Companies like Adobe and CrowdStrike are expected to surpass Palantir in valuation within the next few years due to their more reasonable stock prices and growth potential [6]. - Adobe trades at 18 times forward earnings and 7.4 times sales, presenting an attractive investment opportunity despite concerns over generative AI competition [8]. Revenue Comparisons - Over the past 12 months, Palantir generated $2.86 billion in revenue compared to Adobe's $22 billion, indicating a significant gap that will take years for Palantir to close even with a sustained growth rate of 35% [10]. - Analysts project Palantir's growth to be 31% in 2025 and 28% in 2026, which may be overly optimistic given the current valuation [11]. CrowdStrike Analysis - CrowdStrike, a cybersecurity software provider, has similar growth rates to Palantir but is currently leading in revenue [12][14]. - CrowdStrike's valuation at 27 times sales is considered high but more reasonable compared to Palantir's, and its expected growth rate of 20% over the next two years may lead to a convergence in valuations [16][17].

Core Viewpoint - CrowdStrike Holdings Inc. is experiencing volatility in its stock price as it approaches earnings, with concerns about potential pullbacks in corporate spending impacting investor sentiment [1][2]. Company Performance - CrowdStrike has achieved solid single-digit revenue growth over the last five quarters, surpassing $1 billion in revenue for fiscal year 2025, with over 20% year-over-year growth in the last four quarters, although growth slowed by nearly 20% from the first to last quarters [4][5]. - The company is expected to generate growth in annual recurring revenue (ARR) as customers begin to retain modules from its Falcon platform that were part of compensation packages [5][8]. Market Sentiment - The stock is currently viewed as leaning towards overbought territory, with macroeconomic concerns leading investors to seek liquidity from technology stocks like CrowdStrike [2]. - Analysts have a mixed outlook on CRWD stock, with a Moderate Buy rating and a 12-month price target of $400.76, indicating a potential downside of 7.01% from the current price [7][11]. Investor Concerns - Revenue concentration is primarily on Fortune 500 companies and U.S. government clients, which may be vulnerable to cutbacks [9]. - The customer base is heavily U.S.-centric, raising concerns about potential shifts in investment preferences towards international stocks [10]. Analyst Ratings - Roth Capital initiated coverage with a Strong Buy rating and a price target of $410, which is about 3% lower than the closing price on April 28, 2025 [11]. - Despite a generally bullish sentiment, analysts suggest that a pullback may be necessary, although this could change with favorable trade developments [12].

Core Viewpoint - The cybersecurity sector, particularly companies like CrowdStrike and Palo Alto Networks, remains resilient amid broader market sell-offs driven by tariff announcements, presenting potential investment opportunities despite recent stock declines [1][3][18]. CrowdStrike - CrowdStrike's Falcon platform is gaining traction as a comprehensive cybersecurity solution, allowing businesses to customize their security needs with 29 available modules [5][7]. - The company reported $4.24 billion in annual recurring revenue (ARR) for fiscal 2025, marking a 23% increase year-over-year, with a long-term goal of reaching $10 billion in ARR by fiscal 2031, indicating a potential growth of 135% [8][9]. - CrowdStrike's stock trades at a price-to-sales (P/S) ratio of 26.7, positioning it as one of the more expensive stocks in the cybersecurity space, but long-term revenue forecasts may justify this valuation [9][10]. Palo Alto Networks - Palo Alto Networks is the largest pure-play cybersecurity company by market capitalization and revenue, offering a suite of products across cloud security, network security, and security operations [11]. - The company is integrating AI into its products, with its Cortex XSIAM platform significantly reducing manual intervention in security operations, achieving a 75% reduction in security events for one customer [12]. - Palo Alto's next-generation security (NGS) portfolio, which includes AI products, generated $4.8 billion in ARR, reflecting a 37% year-over-year growth, and the company aims to triple its NGS ARR to $15 billion by fiscal 2030 [15][16].