CrowdStrike Beats on Q1 Earnings, Stock Down on Revenue Miss

Core Insights - CrowdStrike Holdings, Inc. (CRWD) reported non-GAAP earnings per share of 73 cents for Q1 fiscal 2026, exceeding the Zacks Consensus Estimate by 10.61% and management's guidance of 64-66 cents, although it represented a 7.6% decline year-over-year [1][12] - Despite the earnings beat, CRWD's shares fell 6.5% in extended trading due to revenues falling short of consensus expectations [2] - The company's Q1 revenues were $1.103 billion, slightly below the Zacks Consensus Estimate of $1.105 billion, but showed a 20% year-over-year increase [2][3] Revenue Breakdown - Subscription revenues, which account for 95.2% of total revenues, increased by 20.5% year-over-year to $1.051 billion [4] - Professional services revenues rose 7.8% year-over-year to $52.67 million, contributing to the overall revenue growth [4] - As of April 30, 2025, annual recurring revenues (ARR) reached $4.4 billion, up 22% year-over-year, with a net addition of $193.8 million in the reported quarter [4][12] Customer Adoption - 48% of CRWD's subscription customers adopted six or more cloud modules, while 32% used seven or more, and 22% utilized eight or more modules as of April 30, 2025 [5] Operating Performance - Non-GAAP gross profit increased 18.5% to $857 million, with a gross margin of 78%, down 100 basis points year-over-year [6] - Non-GAAP subscription gross profit rose 19.6% to $840.8 million, while the gross margin fell 100 basis points to 80% [7] - Total non-GAAP operating expenses increased 35.6% to $656 million, representing 56% of revenues, up from 55.4% in the previous year [8][9] Profitability Metrics - Non-GAAP operating income declined 5.7% to $201.12 million, with an operating margin of 18%, down 500 basis points year-over-year [10] Cash Flow and Balance Sheet - As of January 31, 2025, CRWD had cash and cash equivalents of $4.61 billion and long-term debt of $744.36 million [13] - The company generated operating cash flow of $384.1 million and free cash flow of $279.4 million in the fiscal first quarter [13] Future Guidance - For Q2 fiscal 2026, CRWD anticipates revenues between $1.1447 billion and $1.1516 billion, with non-GAAP earnings per share expected in the range of 82-84 cents [14] - For the full fiscal year 2026, the company projects revenues between $4.7435 billion and $4.8055 billion, with non-GAAP earnings anticipated in the range of $3.44-$3.56 per share [15]