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Core Insights - CrowdStrike's annual recurring revenue (ARR) growth has reaccelerated, marking a positive shift after two years of decline [2] - The company reported strong fiscal Q3 results, with significant increases in net new ARR and total ARR [3] Financial Performance - Net new ARR increased by 73% to $265 million, while total ARR rose by 23% to $4.92 billion [3] - Revenue grew by 22% to $1.23 billion, surpassing the consensus estimate of $1.21 billion [3] - Subscription revenue also saw a 21% increase, reaching $1.17 billion [3] Growth Trends - Year-over-year revenue and ARR growth trends have shown fluctuations, with the latest quarter indicating a rebound [4] - The company’s revenue growth rates have been declining gradually over the past quarters, but Q3 FY25 shows a stabilization [4] Strategic Initiatives - The growth is attributed to the Falcon Flex licensing model, which allows customers to access the full product portfolio while paying for modules as needed [5] - Customers using Falcon Flex ended the quarter with $1.35 billion in ARR, more than tripling year-over-year [6] - The number of customers entering new contracts for Flex credits more than doubled, indicating strong demand [6] Product Adoption - A record quarter was noted for ARR in next-gen SIEM and Cloud Security [7] - 49% of customers are utilizing six or more modules, with 24% using eight or more, reflecting increased product adoption [7] Market Position - Despite the positive growth indicators, the stock is considered to have a high valuation, suggesting a cautious approach for potential investors [8]

We came across a bullish thesis on CrowdStrike Holdings, Inc. on Business Ontology’s Substack by Lorenzo Bastianelli. In this article, we will summarize the bulls’ thesis on CRWD. CrowdStrike Holdings, Inc.'s share was trading at $509.16 as of November 28th. CRWD’s trailing and forward P/E were 401.83 and 105.26 respectively according to Yahoo Finance. Cybersecurity Underdog: Allot Rides Telco Tailwinds and SMB Momentum Den Rise/Shutterstock.com CrowdStrike Holdings, Inc. provides cybersecurity solution ...

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $75 million, representing an 8% year-over-year growth [4][12] - Non-GAAP earnings per share increased by 22% year-over-year to $0.28 [4][18] - Total ARR rose to $240 million, up 8% year-over-year [14][18] - Gross margin remained strong at 82.2%, consistent with Q3 2024 [15][18] - Operating income grew 34% year-over-year to $9.6 million [16] - Net income increased by 24% year-over-year to $12.6 million [18] Business Line Data and Key Metrics Changes - Cloud Security ARR climbed to $89 million, up from $72 million in Q3 last year, with a growth trajectory of 24% year-over-year [4][13] - Subscription revenue grew 21%, accounting for 52% of total revenue compared to 47% in the same period last year [6] - DefensePro X refresh cycle grew approximately 40% year-over-year [9] Market Data and Key Metrics Changes - Revenue in the Americas rose 28% year-over-year to $35.4 million, representing 47% of total revenue [15] - EMEA revenue decreased by 10% year-over-year to $22.8 million, accounting for 30% of total revenue [15] - APAC revenue increased by 3% year-over-year to $17.1 million, contributing 23% of total revenue [15] Company Strategy and Development Direction - The company is focused on expanding its business in cloud security, driving innovation through AI and automation, and strengthening global Go-to-Market capabilities [4][10] - The company plans to open additional cloud security centers to meet growing demand [5] - API security is identified as the third wave in the cloud security growth strategy, with significant potential for 2026 [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand environment, indicating strong momentum going into Q4 [28] - The company expects total revenue for Q4 2025 to be in the range of $78 million to $79 million [19] - Management highlighted the importance of ARR as a guiding indicator for future revenue growth [29] Other Important Information - Cash flow from operations in Q3 2025 was -$4.2 million, primarily due to an increase in accounts receivable [18] - The company ended the quarter with approximately $455 million in cash and marketable securities [19] Q&A Session Summary Question: How are operations going in North America? - Management indicated plans to ramp investments further in North America due to strong momentum and opportunities in cloud security [24] Question: What is the competitive position in the market? - Management emphasized the strength of their algorithmic-based security capabilities and fully managed services as key differentiators [25] Question: How did demand compare to Q2? - Management noted that demand remained stable and expressed encouragement regarding guidance for Q4 [28] Question: Will billing follow the same trajectory as RPO? - Management expects billing and cash collection to be stronger in Q4, anticipating a return to positive cash flow from operations [31]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $75 million, representing an 8% year-over-year growth [4][12] - Non-GAAP earnings per share increased by 22% year-over-year to $0.28 [4][18] - Gross margin remained strong at 82.2%, consistent with Q3 2024 [15][16] - Operating income grew 34% year-over-year to $9.6 million [16] - Net income rose 24% year-over-year to $12.6 million [18] Business Line Data and Key Metrics Changes - Cloud Security ARR increased to $89 million, up from $72 million in Q3 last year, reflecting a 24% year-over-year growth [4][13] - Subscription revenue grew by 21%, accounting for 52% of total revenue compared to 47% in the same period last year [6] - DefensePro X refresh cycle grew approximately 40% year-over-year [9] Market Data and Key Metrics Changes - Revenue in the Americas rose 28% year-over-year to $35.4 million, representing 47% of total revenue [15] - EMEA revenue decreased by 10% year-over-year to $22.8 million, accounting for 30% of total revenue [15] - APAC revenue increased by 3% year-over-year to $17.1 million, contributing 23% of total revenue [15] Company Strategy and Development Direction - The company is focused on expanding its business in cloud security, driving innovation through AI and automation, and strengthening global go-to-market capabilities [4][10] - The company plans to open three additional cloud security centers in Q4 2025, bringing the total to eight for the year [5] - The company aims to enhance its competitive edge through algorithmic-based security solutions and fully managed services [24][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand environment, indicating strong growth potential in Q4 2025 [27][28] - The company expects total revenue for Q4 2025 to be in the range of $78 million to $79 million [19] - Management highlighted the importance of ARR as a guiding indicator for future revenue growth [28] Other Important Information - Cash flow from operations in Q3 2025 was negative $4.2 million, primarily due to an increase in accounts receivable [18] - The company ended the quarter with approximately $455 million in cash and marketable securities [19] Q&A Session Summary Question: How are operations going now, and are there any areas for reorganization? - Management indicated satisfaction with North America's progress but plans to increase investments further to capture growth opportunities [23] Question: How would you describe your competitive position in the market? - Management emphasized the strength of their algorithmic-based security capabilities and fully managed services as key competitive advantages [24] Question: Can you discuss the demand environment in the quarter? - Management noted that demand remained stable compared to previous quarters, with strong visibility into Q4 [27][28] Question: Will billings follow the same trajectory as RPO? - Management expects billing and cash collection to be stronger in Q4, anticipating a return to positive cash flow from operations [30] Question: Are larger competitors focusing on other areas presenting an opportunity for customer acquisition? - Management confirmed that competitors broadening their offerings allows the company to focus on application and API security, presenting significant growth opportunities [34]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $75 million, representing an 8% year-over-year growth [4][13] - Non-GAAP earnings per share increased by 22% year-over-year to $0.28 [4][21] - Gross margin remained strong at 82.2%, consistent with Q3 2024 [17] - Operating income grew 34% year-over-year to $9.6 million [18] - Net income rose 24% year-over-year to $12.6 million [21] - Cash flow from operations was negative $4.2 million, a decline from positive $14.7 million in the same quarter last year [21] Business Line Data and Key Metrics Changes - Cloud Security ARR climbed to $89 million, up from $72 million in Q3 last year, with a growth rate of 24% year-over-year [4][14] - Subscription revenue grew 21%, accounting for 52% of total revenue compared to 47% in the same period last year [6] - DefensePro X refresh cycle grew approximately 40% year-over-year [10] Market Data and Key Metrics Changes - Revenue in the Americas rose 28% year-over-year to $35.4 million, representing 47% of total revenue [17] - EMEA revenue decreased by 10% year-over-year to $22.8 million, accounting for 30% of total revenue [17] - APAC revenue increased by 3% year-over-year to $17.1 million, contributing 23% of total revenue [17] Company Strategy and Development Direction - The company is focused on expanding its business in cloud security, driving innovation through AI and automation, and strengthening global go-to-market capabilities [4][11] - The transition to a recurring cloud-first business model is seen as a cornerstone for long-term growth [14] - The company plans to open three additional cloud security centers in Q4 2025, bringing the total to eight for the year [5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand environment, indicating strong visibility for Q4 2025 [30][31] - The company expects total revenue for Q4 2025 to be in the range of $78 million to $79 million [22] - Management highlighted the importance of ARR as a guiding indicator for future revenue growth [30] Other Important Information - The company was recognized as a leader in the 2025 SPARK Matrix for Web Application Firewall and Bot Management [8] - The effective tax rate for the quarter was 15.5%, expected to remain stable in the coming quarter [21] Q&A Session Summary Question: How are operations going now, and are there plans for reorganization? - Management indicated satisfaction with current operations in North America but plans to ramp investments further due to growth potential [26] Question: How would you describe your competitive position in the market? - The company emphasized its algorithmic-based security capabilities and fully managed service as key competitive advantages [27] Question: Can you discuss the demand environment in the quarter? - Management noted that demand remained stable compared to previous quarters, with strong visibility for Q4 [30][31] Question: Will billings follow the same trajectory as RPO? - Management expects billing and cash collection to be stronger in Q4, anticipating a return to positive cash flow from operations [33] Question: How does the competitive landscape present opportunities? - The company sees opportunities as larger competitors broaden their offerings, allowing it to focus on application and API security [36] Question: What is the status of AI capabilities in the company's offerings? - AI is currently being used to enhance security capabilities, with ongoing developments in SOC X to improve customer security [39]

Core Insights - The article discusses the top cloud trends expected to shape the industry by 2026, emphasizing the necessity of hybrid and multi-cloud strategies, cloud-native development, AI integration, and other emerging technologies. Group 1: Hybrid and Multi-Cloud Strategies - By 2026, 75% of organizations are projected to adopt hybrid or multi-cloud strategies, enhancing flexibility, scalability, and risk mitigation [1][2] - These strategies help avoid vendor lock-in and optimize workloads across various environments [1] Group 2: Cloud-Native Development and Microservices - By 2026, 90% of global organizations are expected to embrace cloud-native development, which promotes modular and scalable application structures [3] - Microservices enable rapid innovation and deployment, allowing businesses to scale applications based on demand without system disruption [4] Group 3: AI-Powered Cloud Services - The integration of AI with cloud computing is anticipated to grow by 25% annually by 2026, driven by advancements in machine learning and data analytics [5] - Organizations aim to leverage AI for enhanced customer experiences and operational efficiency [5][6] Group 4: Serverless Computing - The serverless computing market is projected to reach $21.1 billion by 2026, with a compound annual growth rate of 22% [7] - This model simplifies deployment and reduces operational complexity, allowing developers to focus on application development [8] Group 5: Edge Computing - The edge computing market is expected to be valued at $43 billion by 2026, facilitating data processing closer to its source [9] - This trend is crucial for industries requiring low-latency responses, such as manufacturing and healthcare [9] Group 6: Cloud Security and Zero Trust Architectures - The shift to Zero Trust security models is expected to dominate cloud security strategies by 2026, addressing sophisticated cyber threats [10] - Investing in cloud-native security solutions will be a top priority for businesses [10] Group 7: Quantum Cloud Services - Quantum cloud services are anticipated to significantly impact the industry by 2026, allowing organizations to access quantum computing power remotely [11] - Major companies are developing quantum cloud platforms for various industries [11][12] Group 8: Sustainable Cloud and Green Computing - Green cloud computing is projected to increase by 40% over the next decade, driven by consumer demand for environmentally-friendly practices [14] - Companies are focusing on using renewable energy sources to reduce their carbon footprints [14] Group 9: Cloud Integration and Interoperability - Advanced cloud interoperability platforms will be essential for integrating various cloud solutions and legacy systems by 2026 [15] - Seamless integration is crucial for digital transformation and maximizing cloud investments [16] Group 10: Cloud-Enabled Automation and DevOps - Cloud-enabled automation and DevOps practices will reshape IT operations, improving productivity and reducing human error [17] - Organizations will benefit from tools that facilitate continuous integration and delivery, leading to quicker time-to-market [18]

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]