CrowdStrike Conference Call Summary Company Overview - **Company**: CrowdStrike (NasdaqGS:CRWD) - **Event**: 2025 Conference on December 03, 2025 Key Highlights Financial Performance - **Annual Recurring Revenue (ARR)**: Achieved 73% year-over-year growth, indicating strong demand across product lines [3][12] - **Free Cash Flow**: Recorded a record high, showcasing effective cash management [3][12] - **Gross Margin**: Subscription gross margin stood at 81%, reflecting operational efficiency [3][12] - **Net New ARR**: Best quarter since calendar Q4 2023, indicating robust customer acquisition [4] Acquisitions - **Recent Acquisitions**: Two companies were acquired, contributing a net new revenue of $2.8 million, which was clarified to avoid misinterpretation [6][7] - **Onum Acquisition**: Positioned as a game changer for next-gen SIEM, enhancing capabilities in data pipelining and observability [35][36] Product and Platform Strategy - **Falcon Flex**: $135 billion of ARR is now flowing through Flex contracts, which allows customers to commit to a broader range of services while enjoying flexibility [17][19] - **Next-Gen SIEM**: Close to 100% growth, with significant customer wins indicating a shift from legacy systems [24][25] - **AI Integration**: Emphasis on AI's role in security operations, with a focus on developing autonomous SOC capabilities [38][45] Market Dynamics - **Legacy Replacement Cycle**: Customers are increasingly frustrated with traditional SIEM solutions, driving demand for next-gen alternatives [24][25] - **Greenfield Opportunities**: Potential to penetrate the SIEM market at lower tiers, targeting smaller companies that require visibility into their security posture [28][29] Competitive Landscape - **AWS Partnership**: Announcement of Falcon Next-Gen SIEM as the default SIEM for AWS Security Hub, expected to open new customer opportunities [30][32] - **F5 Collaboration**: Integration with F5 appliances to enhance security offerings, attracting new customers [33][34] AI and Security - **AI Threat Landscape**: Increased concern among customers regarding AI-driven attacks, leading to elevated security budgets [39][40] - **Falcon Shield**: Significant growth in demand for Falcon Shield, which secures AI applications and SaaS environments [42][44] - **Charlotte AI**: Positive feedback on Charlotte's capabilities in improving security operations, with significant time savings in investigations [45][49] M&A Strategy - **Disciplined Approach**: CrowdStrike maintains a high bar for acquisitions, focusing on technology and team integration rather than just revenue growth [53][54] Future Outlook - **Fiscal 2027 Target**: CrowdStrike aims for 20% net new ARR growth, supported by a strong pipeline and market opportunities driven by AI [56][57] Additional Insights - **Customer Engagement**: Customers are increasingly looking for integrated solutions that reduce complexity and cost, driving the demand for CrowdStrike's platform [25][28] - **Data Control**: Owning and controlling the data fabric is seen as a competitive advantage in the evolving security landscape [37] This summary encapsulates the key points discussed during the CrowdStrike conference call, highlighting the company's strong financial performance, strategic initiatives, and market positioning.

Financial Data and Key Metrics Changes - Record Q3 net new ARR of $265 million, growing 73% year-over-year, exceeding expectations by over 10% [6][31] - Ending ARR reached $4.92 billion, accelerating to 23% growth year-over-year [6][31] - Record Q3 free cash flow of $296 million, representing 24% of revenue [7][31] - All-time record operating income of $265 million, or 21% of revenue, marking the second consecutive quarter of record operating income [7][31] - Total revenue grew 22% year-over-year to $1.23 billion, with subscription revenue growing 21% to $1.17 billion [35][31] Business Line Data and Key Metrics Changes - Broad-based ending ARR acceleration across cloud, next-gen identity, and next-gen SIEM, along with acceleration in the endpoint business [7][31] - Falcon Flex subscription model contributed over $1.35 billion in ending ARR, growing more than 200% year-over-year [7][33] - Falcon Shield had a record net new ARR quarter, growing nearly 50% sequentially [16][31] Market Data and Key Metrics Changes - Geographic revenue mix consisted of approximately 67% from the U.S. and 33% from international markets, with both U.S. and APAC revenue growth accelerating year-over-year [35][31] - The cloud security market is maturing, with customers realizing the need for active defense within their cloud environments [17][31] Company Strategy and Development Direction - CrowdStrike positions itself as the operating system for cybersecurity in the agentic era, emphasizing the need for a single platform to manage cybersecurity effectively [10][11] - The company is focused on consolidating its offerings through the Falcon platform, which integrates various security solutions to lower total cost of ownership for customers [33][31] - The acquisition of Onum and Pangea is aimed at enhancing the platform's capabilities and customer experience [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand environment driven by AI adoption and the need for robust cybersecurity solutions [29][31] - The company anticipates continued growth in net new ARR, projecting at least 50% year-over-year growth in the second half of FY26 [37][31] - Management highlighted the importance of cybersecurity as a necessity in the evolving digital landscape, reinforcing CrowdStrike's critical role [7][29] Other Important Information - The company reported a GAAP net loss of $34 million, which included costs associated with a prior incident and acquisition-related expenses [36][31] - Cash and cash equivalents stood at $4.80 billion, with record cash flow from operations of $397.5 million [36][31] Q&A Session Summary Question: Insights on emerging segments and seasonality of net new ARR - Management noted that emerging products like Next-Gen SIEM and Identity performed exceptionally well, with strong customer adoption [44] Question: Value captured in SIEM displacements - Management indicated that customers are seeking better outcomes and lower costs, allowing CrowdStrike to offer competitive pricing and grow wallet share [47] Question: Further push into observability - Management acknowledged the opportunity for consolidation in observability, leveraging existing technology and customer data [51] Question: Dynamics of Flex licensing and its impact on NRR - Management emphasized that Flex licensing is designed for continuous growth, making it easier for customers to buy more over time [56] Question: AI's impact on customer conversations - Management highlighted that CrowdStrike's AI capabilities differentiate it from competitors, enabling faster and more effective security solutions [61]

Financial Data and Key Metrics Changes - Record Q3 net new ARR of $265 million, growing 73% year over year, exceeding expectations by over 10% [6][32] - Ending ARR reached $4.92 billion, accelerating to 23% growth year over year [6][32] - Record Q3 free cash flow of $296 million, representing 24% of revenue [7][32] - All-time record operating income of $265 million, or 21% of revenue, marking the second consecutive quarter of record operating income [7][32] - Non-GAAP net income attributable to CrowdStrike was a record $245.4 million, or $0.96 on a diluted per-share basis [37][41] Business Line Data and Key Metrics Changes - Broad-based ending ARR acceleration across cloud, next-gen identity, and next-gen SIEM, along with acceleration in the endpoint business [7][33] - Falcon Flex subscription model contributed over $1.35 billion in ending ARR, growing more than 200% year over year [7][34] - Falcon Shield had a record net new ARR quarter, growing nearly 50% sequentially [16][34] - Next-Gen SIEM achieved record net new ARR, reflecting strong customer adoption and performance [12][33] Market Data and Key Metrics Changes - Geographic revenue mix consisted of approximately 67% from the U.S. and 33% from international markets, with both U.S. and APAC year-over-year revenue growth accelerating compared to Q2 [36] - The cloud security market is maturing, with customers realizing the need for active defense within their cloud environments [17] Company Strategy and Development Direction - CrowdStrike positions itself as the operating system for cybersecurity in the agentic era, emphasizing the need for a single platform solution [10][11] - The company is focused on consolidating security needs and lowering total cost of ownership for customers, resulting in higher retention rates and increased module adoption [35] - The partnership with AWS enhances CrowdStrike's market position, providing native access to Falcon Next-Gen SIEM for AWS customers [14][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand environment and robust pipeline entering Q4, anticipating continued profitable growth [36][38] - The AI-driven demand environment is seen as a significant opportunity, with AI adoption necessitating enhanced cybersecurity measures [29][30] - Management highlighted the importance of cybersecurity as a constant necessity amid technological transformations [30] Other Important Information - The company achieved record cash flow from operations of $397.5 million [37] - Non-GAAP gross margin was reported at 78%, with subscription gross margin increasing to 81% [36] - The company expects total revenue for Q4 FY26 to be in the range of $1.290-$1.300 billion, reflecting a year-over-year growth rate of 22%-23% [40] Q&A Session Summary Question: Insights on emerging segments and seasonality for net new ARR - Management noted that emerging products like Next-Gen SIEM and Identity performed well, with strong customer adoption and consolidation on the platform [46] Question: Value captured in SIM market displacements - Management indicated that customers are seeking better outcomes and lower costs, with CrowdStrike's existing EDR data providing a competitive advantage [50] Question: Further push into observability - Management views observability as a consolidation opportunity, leveraging existing technology and data collection capabilities [55] Question: Dynamics of Flex licensing and its sustainability - Management emphasized that Flex licensing is designed for continuous net ARR growth, making it easier for customers to buy more over time [62] Question: Impact of AI on customer conversations - Management highlighted that CrowdStrike's AI capabilities differentiate it from competitors, with AI agents embedded in the platform delivering significant value [66] Question: Key products driving growth impact for next year - Management identified Next-Gen SIEM, cloud, and Falcon Shield as key products with significant growth potential [72]

CrowdStrike (NasdaqGS:CRWD) Q3 2026 Earnings Call December 02, 2025 05:00 PM ET Speaker1Hello, and welcome to CrowdStrike's Fiscal Third Quarter 2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, we will conduct a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the call over to Andy Nowinski, Vice President of Investor Relations and Strategic Finance. Andy, plea ...

Core Insights - CrowdStrike is rapidly expanding through strategic partnerships, with approximately 60% of new business in Q2 fiscal 2026 coming from partners, highlighting the importance of these alliances for growth [1][11] Strategic Partnerships - In September 2025, CrowdStrike expanded its partnership with NVIDIA, introducing Charlotte AI AgentWorks integrated with NVIDIA's Nemotron models, aiming to enhance security teams' capabilities in managing AI agents [2] - Collaborations with KPMG, Salesforce, and Meta were also announced. KPMG will utilize CrowdStrike's Falcon Next-Gen SIEM to modernize security systems for clients, while Salesforce integration enhances visibility and protection for AI-powered business tools [3][4] - The partnership with Meta aims to create CyberSOCEval, an open benchmark for evaluating AI model performance in real-world scenarios [4] Growth Projections - These strategic partnerships are expected to support CrowdStrike's long-term goal of achieving $10 billion in annual recurring revenue (ARR) by fiscal 2031, with Zacks Consensus Estimates indicating a year-over-year revenue increase of around 21% for fiscal 2026 and 2027 [5] Competitive Landscape - Key competitors include Palo Alto Networks and Okta, both focusing on acquisitions for platform expansion and AI innovation. Palo Alto Networks is pursuing the acquisition of CyberArk to enhance its identity-driven threat protection capabilities [6][7] - Okta completed its acquisition of Axiom Security to bolster its privileged access management tools [8] Financial Performance - CrowdStrike's shares have increased by 63.6% year-to-date, outperforming the security industry's growth of 23.8% [9] - The company trades at a forward price-to-sales ratio of 23.25X, significantly higher than the industry's average of 13.23X [13] - Zacks Consensus Estimates for fiscal 2026 earnings imply a year-over-year decline of 6.6%, while fiscal 2027 earnings are expected to grow by 29.3% [16]

Core Insights - CrowdStrike Holdings (CRWD) shares have increased by 28.3% over the past six months, outperforming the Zacks Security industry's growth of 17.4% and other peers like SentinelOne, Palo Alto Networks, and Check Point Software [1][9]. Financial Performance - CrowdStrike's revenues surpassed $1 billion for the fourth consecutive quarter in Q2 of fiscal 2026, reflecting a year-over-year growth of nearly 20.1% [5]. - The company added $221 million in net new annual recurring revenue (ARR), bringing the total ARR to $4.66 billion, which is a 20% increase from the previous year [8][9]. - In Q2, sales and non-GAAP EPS grew by 21% and 5.7% year-over-year, respectively, with management projecting at least 40% year-over-year growth in net new ARR for the second half of fiscal 2026 [10]. Subscription Model and Customer Adoption - The Falcon Flex Subscription Model has significantly contributed to CrowdStrike's revenue growth, with 48% of subscription customers adopting six or more cloud modules by the end of Q2 [6][8]. - The company has over 1,000 Falcon Flex customers, with more than 100 signing follow-on "re-Flex" deals before their contracts ended, indicating strong customer expansion [8][9]. Strategic Partnerships - CrowdStrike has formed new AI-focused partnerships with NVIDIA, Salesforce, and Meta, enhancing its long-term growth outlook [9][12]. - The integration of CrowdStrike's Falcon platform with NVIDIA's AI systems aims to secure the entire AI lifecycle, protecting over 100,000 large language models [13]. - Collaborations with KPMG, Salesforce, and Meta are expected to modernize security operations and improve detection capabilities, contributing to over 60% of new business in Q2 [15][17]. Market Position and Future Outlook - The company is well-positioned in the cybersecurity market, with a strong focus on AI-driven solutions, which are increasingly prioritized by businesses [19]. - Despite a forecasted decline in EPS for fiscal 2026, a significant recovery is anticipated in fiscal 2027 with a projected increase of 29.3% [17][18].

Core Insights - CrowdStrike is focusing on enhancing the security of AI agents through a partnership with Salesforce, which is expected to drive significant growth in the coming years [3][4]. - The company anticipates a substantial increase in revenue growth, leading to multiple analyst upgrades following its recent conference [1][2]. Group 1: Partnership and Market Opportunity - The partnership with Salesforce aims to secure AI agents and applications, marking CrowdStrike's entry into the AI security market [3][4]. - Founder and CEO George Kurtz views the opportunity to protect AI agents as a "100x" potential, with over 150 billion AI agents expected to be deployed in the long term [7]. - The target addressable market for securing AI is projected to reach $90 billion by 2030, complementing CrowdStrike's existing total addressable market (TAM) of $140 billion [8]. Group 2: Product Offerings and Security Measures - CrowdStrike's Falcon Shield will provide monitoring for misconfigurations, establish accountability between AI agents and their human creators, and disable compromised agents [5]. - The company is positioning itself to address the security needs of a rapidly growing AI landscape, which is becoming increasingly vulnerable to cyber threats [4][5].

Core Insights - CrowdStrike (CRWD) has signed a definitive agreement to acquire Pangea, aiming to enhance its AI security capabilities through the launch of AI Detection and Response (AIDR) [1][10] - AIDR will secure the entire AI lifecycle, addressing risks associated with data, models, agents, and systems, while also managing prompt injection attacks and unsafe chatbot usage [2][3][10] - The acquisition is expected to drive growth and support CrowdStrike's long-term goal of achieving $10 billion in Annual Recurring Revenue (ARR) by fiscal 2031 [4][10] Company Developments - The integration of Pangea's tools will enhance CrowdStrike's Falcon platform, providing comprehensive protection across various AI interactions [2][10] - CrowdStrike's existing offerings, such as Charlotte AI and Falcon Shield, will be complemented by the new capabilities from Pangea, covering critical layers of AI security [3][10] Competitive Landscape - Competitors like Palo Alto Networks (PANW) and Okta Inc. (OKTA) are also pursuing acquisitions to expand their platforms and innovate in AI security [5] - Palo Alto Networks is set to acquire CyberArk to strengthen its identity-driven threat protection capabilities [6] - Okta's acquisition of Axiom Security has enhanced its tools for privileged access management [7] Financial Performance - CrowdStrike's shares have increased by 44.2% year to date, outperforming the Security industry's growth of 21.2% [8] - The company trades at a forward price-to-sales ratio of 22.77X, significantly higher than the industry's average of 13.36X [11] - The Zacks Consensus Estimate indicates a year-over-year decline of 6.6% in fiscal 2026 earnings, followed by a projected growth of 29.1% in fiscal 2027 [14]

Industry Overview - The cybersecurity industry focuses on integrated protection against evolving security threats while simplifying IT security infrastructure [1] - The rise of artificial intelligence (AI), IoT devices, and increased digitization has heightened vulnerabilities, necessitating advanced security solutions [2] Company Highlights CrowdStrike Holdings Inc. (CRWD) - CrowdStrike has seen a record addition of $221 million in net new annual recurring revenues (ARR), bringing total ARR to $4.66 billion, a 20% increase from last year [5][11] - The growth is significantly driven by the Falcon Flex subscription model, with over 1,000 customers and many signing follow-on "re-Flex" deals, boosting ARR by nearly 50% [6] - The company is expanding its focus on securing AI usage, launching new capabilities to cover AI agents and introducing the Signal AI detection engine [9][10] F5 Inc. (FFIV) - F5 is experiencing strong software growth, particularly in public cloud and security offerings, benefiting from the demand for application security in multi-cloud environments [12] - The company has made six acquisitions in the past five years to enhance its network security capabilities and market share [13] - F5 has an expected revenue and earnings growth rate of 3.9% and 4%, respectively, for the next year [15] Qualys Inc. (QLYS) - Qualys is capitalizing on the demand for cloud-based cybersecurity solutions, maintaining a balanced customer mix across enterprises, SMBs, and government entities [16] - The company has made strategic acquisitions, including Blue Hexagon, to enhance its threat detection and response capabilities [17] - Qualys has expected revenue and earnings growth rates of 8.1% and 4.4%, respectively, for the current year [18] Palantir Technologies Inc. (PLTR) - Palantir reported over $1 billion in revenue for the first time, driven by its AI platform expansion beyond government contracts [19][20] - The company has increased its full-year revenue guidance to between $4.142 billion and $4.150 billion, reflecting strong growth prospects [22] - Palantir has expected revenue and earnings growth rates of 45.6% and 58.5%, respectively, for the current year [22] SailPoint Inc. (SAIL) - SailPoint offers unified identity security solutions through its Identity Security Cloud and IdentityIQ [23] - The company has an expected revenue growth rate of 22.2% and earnings growth rate of over 100% for the current year [24]

Core Insights - CrowdStrike is focusing on identity security as a significant growth opportunity, with its identity products generating $435 million in annual recurring revenue (ARR) in Q2 fiscal 2026, reflecting a year-over-year growth of approximately 21% [1][9] Identity Security Focus - The launch of Falcon Next-Gen Identity Security in August 2025 has enhanced CrowdStrike's identity security offerings, providing protection for various identities across multiple platforms [2] - This new product integrates initial access prevention, privileged access management (PAM), identity threat detection and response (ITDR), and SaaS identity protection into a single platform, aiming to simplify security processes for customers [2] - The demand for identity security is rapidly increasing as attackers utilize stolen credentials and AI agents, prompting CrowdStrike to address these vulnerabilities with a unified platform [2] Growth Potential - With consistent ARR growth and early customer acquisitions, identity security is positioned to become a key growth driver for CrowdStrike as it targets a $10 billion ARR goal [3] - The Zacks Consensus Estimate for CrowdStrike's fiscal 2026 revenues is projected at $4.78 billion, indicating a year-over-year increase of 20.9% [3] Competitive Landscape - Key competitors in the identity security space include CyberArk and Okta, both of which are enhancing their offerings with AI capabilities [4][5][6] - CyberArk is recognized as a leader in identity security and is integrating AI into its platform to secure a wide range of identities [5] - Okta is known for its identity and access management solutions and is incorporating AI-driven tools for automated risk detection [6] Financial Performance - CrowdStrike's shares have increased by 29.9% year to date, outperforming the security industry's growth of 12.6% [7] - The company trades at a forward price-to-sales ratio of 20.65X, significantly higher than the industry's average of 12.44X [10] - The Zacks Consensus Estimate for CrowdStrike's fiscal 2026 earnings suggests a year-over-year decline of 6.6%, while fiscal 2027 earnings are expected to grow by 29% [13]