CrowdStrike(US:CRWD)2025-12-02 23:02Financial 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]