Core Viewpoint - CrowdStrike's share prices declined following a report of decelerating revenue growth and maintained full-year revenue guidance, despite a year-to-date increase of nearly 37% in stock value [1] Revenue and Growth Metrics - CrowdStrike reported a 20% increase in revenue to $1.1 billion, matching analyst expectations, with subscription revenue also rising by 20% to $1.05 billion [4] - Annual recurring revenue (ARR) grew by 22% to $4.44 billion, adding $193.8 million in new ARR during the quarter [4] - Revenue growth has been decelerating over several quarters, with Q1 FY26 showing a 20% growth compared to 35% in Q3 FY24 [6][5] Future Expectations - The company anticipates improving sequential net new ARR growth in the next quarter and accelerating ARR growth in the second half of the fiscal year, driven by strong adoption of Falcon Flex [6][8] - Falcon Flex has closed over 820 deals worth $3.2 billion in less than two years, enhancing customer adoption of CrowdStrike's modules [6][7] Financial Performance - Adjusted earnings per share (EPS) fell 8% to $0.73, exceeding the adjusted consensus of $0.63, attributed to increased spending in sales, marketing, and R&D [10] - Operating cash flow was $384.1 million, with free cash flow at $279.4 million, and the company ended the quarter with $4.61 billion in net cash and short-term investments [11] Guidance and Valuation - CrowdStrike maintained its fiscal 2026 revenue guidance of $4.74 billion to $4.81 billion, indicating a growth of 20% to 22%, while raising adjusted EPS guidance to $3.44 to $3.56 [12] - The stock trades at a forward price-to-sales multiple of just under 24 times fiscal 2026 estimates, which is considered expensive given the current growth outlook [13][14]

Group 1: Stock Splits and Market Performance - Smart investors are attracted to stock splits as they often lead to market-beating returns, with stocks that split historically outperforming the S&P 500 by 13 percentage points in the year following the announcement [1] - Over the last three years, Meta Platforms and CrowdStrike have returned 255% and 185%, respectively, making them candidates for stock splits [2] Group 2: Meta Platforms - Meta Platforms owns four of the seven most popular social media platforms, providing a competitive advantage in sourcing consumer data and targeting advertising campaigns [5] - The company reported a 16% increase in revenue to $42.3 billion, with a 3 percentage point expansion in operating margin and a 37% increase in GAAP net income to $6.43 per diluted share [6] - Meta aims to automate the entire ad creation process using AI by 2026, with Wall Street expecting earnings to grow at 18% annually over the next three years [8] Group 3: CrowdStrike - CrowdStrike is a cybersecurity leader in endpoint protection, with a platform that includes 30 modules addressing various markets, including cloud security and identity threat detection [9] - The company reported a 20% increase in revenue to $1.1 billion, although non-GAAP net income fell 8% to $0.73 per diluted share due to increased spending on go-to-market capabilities [10] - CrowdStrike's addressable market is valued at $250 billion by 2029, and Wall Street estimates adjusted earnings will grow at 13% annually through fiscal 2027 [12][13]

Financial Data and Key Metrics Changes - First quarter revenue increased by 11% year over year to $72 million, marking the third consecutive quarter of double-digit revenue growth [5][16] - Non-GAAP earnings per share rose by 60% to $0.27, indicating high leverage in the business model [5] - Cash flow from operations reached $22.4 million, compared to $21.1 million in the same period last year [21] - Total ARR increased by 9% year over year to $230 million, with Cloud ARR growing by 19% to $80 million [17][19] - Gross margin for Q1 was 82.1%, slightly up from 82% in Q1 of the previous year [18] Business Line Data and Key Metrics Changes - Cloud Security business was a major driver of success, with ARR increasing by 19% year over year [6] - The hybrid cloud security offering has become a significant competitive differentiator, contributing to strong ARR growth [8] - OEM partnerships, particularly with Cisco and Check Point, generated strong results, both growing more than 20% year over year [11] Market Data and Key Metrics Changes - Revenue from the Americas increased by 1% year over year to $27.4 million, accounting for 38% of total revenue [17] - EMEA revenue grew by 25% year over year to $28.4 million, representing 39% of total revenue [17] - APAC revenue increased by 7% year over year to $16.3 million, contributing 23% of total revenue [18] Company Strategy and Development Direction - The growth strategy focuses on three pillars: winning significant market share in cloud security, leading through AI innovation and automation, and enhancing the go-to-market footprint [6] - Plans to expand cloud security infrastructure include new service centers in Peru, India, and Kenya, with a total of over 50 centers worldwide [7] - Increased investments in sales, marketing, and R&D are planned to support cloud security business scaling and AI-driven innovation [12][19] Management's Comments on Operating Environment and Future Outlook - Management did not observe any noticeable changes in customer buying behavior despite macroeconomic conditions [25] - The leadership team is expected to enhance productivity without causing disruption, as major changes were implemented in previous quarters [29] - The company is confident in its ability to grow and gain market share, particularly in the U.S. market [13][29] Other Important Information - The tax rate for Q1 was 15.5%, slightly up from 15.3% in the same period last year [20] - The company expects minimal impact from recently announced tariffs and is proactively adjusting its supply chain [21] Q&A Session Summary Question: Did you see any changes in buying behavior from your customers? How was April? - Management reported no noticeable changes in buying behavior and indicated that conditions remained stable [25] Question: Can you elaborate on changes in the U.S. market and if that is accounted for in the Q2 guidance? - Management stated that major changes were already implemented, and they expect increased productivity from the leadership team without disruption [29]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 increased by 11% year over year to $72 million, marking the third consecutive quarter of double-digit revenue growth [4][16] - Non-GAAP earnings per share rose by 60% to $0.27, indicating high leverage in the business model [4] - Cash flow from operations reached $22.4 million, compared to $21.1 million in the same period last year [22] - Net income increased by 73% year over year to $11.8 million [21] Business Line Data and Key Metrics Changes - Cloud Security ARR grew by 19% year over year to $80 million, driven by a significant increase in new cloud application security bookings [5][17] - Total ARR increased by 9% year over year to $230 million, with recurring revenues now accounting for 82% of total revenue [17] Market Data and Key Metrics Changes - Revenue from the Americas increased by 1% year over year to $27.4 million, accounting for 38% of total revenue [17] - EMEA revenue grew by 25% year over year to $28.4 million, representing 39% of total revenue [18] - APAC revenue increased by 7% year over year to $16.3 million, contributing 23% of total revenue [19] Company Strategy and Development Direction - The company aims to win significant market share in cloud security, lead through AI innovation and automation, and enhance its go-to-market footprint [5][14] - Plans to expand cloud security infrastructure include new service centers in Peru, India, and Kenya, with a total of over 50 cloud security service centers worldwide [6][14] - The company is focusing on increasing investments in sales, marketing, and R&D to support growth in cloud security and AI-driven innovation [12][20] Management's Comments on Operating Environment and Future Outlook - Management noted no significant changes in customer buying behavior and expects stable conditions moving into Q2 2025 [25][26] - The leadership team is confident in their ability to drive productivity and growth, with no anticipated disruptions from recent changes [28][29] - The company expects total revenue for Q2 2025 to be in the range of $73 million to $74 million [23] Other Important Information - Gross margin for Q1 2025 was 82.1%, a slight increase from the previous year [19] - The company is proactively adjusting its supply chain in response to recently announced tariffs, expecting minimal impact on operations [22] Q&A Session Summary Question: Did you see any changes in buying behavior from your customers? How was April? - Management indicated no noticeable changes in buying behavior and that conditions remained stable [25][26] Question: Is there any major change in process needed in the US market, and is that accounted for in the Q2 guidance? - Management confirmed that major changes were already implemented and productivity is expected to ramp up without disruption [27][29]