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CrowdStrike

CRWD · NASDAQ

Software · Cybersecurity & Endpoint Protection

Q2 FY2027 Earnings · Wednesday, August 26Next Earnings: Q3 FY27 · ~December 2026
Trading Now
$215.76+ 0.37%

Since the Report + 14.0%

Close on Report DayAug 26

$189.18▲ 11.0%Report-Day Move

Market Cap(Today)
≈ $220 B
1Y Return(At Report)
+ 81%
P/E($1.10 · Trailing 12M)
196.1
PEG(company guidance 2027)
5.67
Net Margin(Trailing 12M)
1.1%
85/ 100
VerdictBUY

CrowdStrike posted $1.47 billion in fiscal second-quarter revenue, but the real story was net new ARR jumping 51% year over year to a record $332.8 million — the strongest growth momentum since the 2024 outage. After management raised its full-year outlook, the stock climbed 11% in after-hours trading. The question from here is whether that momentum holds, and how much of it a roughly 170x earnings multiple has already priced in.

Avg. Analyst Target (53)$210.54▲ 11% Upside

  • Revenue (Q2)

    $1.47B

    ▲ 26% YoY · 0.1% Above Estimate

  • Adjusted EPS

    $0.31

    Estimate $0.30 · 3.9% Beat

  • Net New ARR

    $332.8M

    ▲ 51% YoY · Record

  • Annual Recurring Revenue

    $5.84B

    ▲ 25% YoY

  • Free Cash Flow

    $377.4M

    25.6% of Revenue

  • After-Hours Reaction

    ▲ 11%

    After Hours · Record Quarter

Quarterly Revenue ($ Billion)

ReportedCompany Guidance

  • 1.17

  • 1.23

  • 1.31

  • 1.39

  • 1.47

  • 1.523–1.529

  • Q2 26
  • Q3 26
  • Q4 26
  • Q1 27
  • Q2 27
  • Q3 27E
Net New ARR
▲ $332.8MRecord · 51% YoY
Falcon Flex ARR
▲ $2.29B101% YoY Growth
Module Adoption (6+)
51%Half of Customers

Q3 FY27 Company Guidance

Guidance Range
  • Full-Year Revenue (FY27)5.991 – 6.011 billion

    Midpoint $6.00B · Above Prior GuideRevised Up ▲

  • Q3 Revenue1.523 – 1.529 billion

    Midpoint $1.53B · ▲ 3.8% QoQ~24% YoY Growth ▲

  • Full-Year Adjusted EPS1.25 – 1.26 $

    Post-Split · FY26 Actual $0.93Revised Up ▲

  • Net New ARR Growth34%

    Midpoint · ▲ 6.3 pts vs Prior TargetRevised Up ▲

The blue band is the company's low–high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. Axis is ±0.5% around the midpoint.

Non-GAAP Operating Margin
~25%
Full-Year Operating Income
$1.50B
Diluted Share Count
~1.04B
From the CEOGeorge KurtzFounder & CEO
“Q2 was the best quarter in CrowdStrike's history. Delivering record Falcon Flex results, record net new ARR, and accelerating growth — the Falcon is soaring.”
  • Best quarter in history
  • Record net new ARR
  • AI-security inflection

Summary

In its fiscal second quarter ended July 31, 2026, CrowdStrike lifted revenue to $1.47 billion, up 26% year over year and just 0.1% ahead of the $1.469 billion consensus. The real strength was in the recurring line: annual recurring revenue (ARR) reached $5.84 billion, up 25%, and net new ARR added in the quarter hit a record $332.8 million, up 51% year over year. ARR from the flexible Falcon Flex licensing package topped $2.29 billion and grew 101%, while the share of customers using six or more modules rose to 51%. Adjusted EPS of $0.31 beat the $0.30 estimate by 3.9%, but GAAP net income was just $5.3 million ($0.01 per share). Free cash flow was $377.4 million, or 25.6% of revenue.

Although the print beat across the board, this time the reaction was to the upside: shares jumped 11% in after-hours trading. The reason came down to a single line — reaccelerating net new ARR. Growth had slowed after the July 2024 global outage; this quarter's 51% net new ARR gain was the clearest sign yet that the shadow has passed. Management put that into the guide too, raising the full-year revenue target to $5.99–6.01 billion and lifting the net new ARR growth target by 630 basis points to 34% at the midpoint. On the call, the framing was an inflection where enterprise AI adoption forces security spending — the 'Mythos moment.' The stock had also fallen roughly 6% into the print, so a low bar amplified the move.

We score the quarter 85 out of 100 — a grade for the earnings, not the stock. Revenue, earnings and especially net new ARR all beat, the outlook was revised up, and growth reaccelerated; the picture is strong. Two caveats pull it down: first, GAAP profitability remains near zero because stock-based compensation pushes the operating margin negative (-2%). Second, valuation: the stock trades at roughly 170x trailing adjusted earnings, and the 11% after-hours pop largely closed the limited upside to the average analyst target. In short, the quarter is excellent; the concern is the price, not the quarter.

Full Review

Claude

Net new ARR reaccelerated.

The quarter's central story sits in one line: net new ARR — the fresh annual recurring revenue signed within the quarter — rose 51% year over year to a record $332.8 million. That figure matters because CrowdStrike's growth had visibly slowed after the July 2024 global Windows outage, with net new ARR contracting for a stretch. The 51% jump is the clearest evidence that churn has stabilized and new sales have returned. Total ARR also climbed to $5.84 billion, up 25%. What investors were really watching in this report was not the revenue line but this metric; because it cleared expectations, the stock reacted higher.

Falcon Flex doubled its ARR.

The company's flexible licensing model, Falcon Flex, lets a customer draw from a single budget pool across the platform's modules, and it was the engine of growth this quarter. ARR from accounts adopting Falcon Flex topped $2.29 billion, up 101% year over year. The model migrates customers from a single product to the platform: the share of subscribers using six or more modules reached 51%, seven or more 35%, and eight or more 26%. As module count rises, revenue per customer grows and switching to a rival gets harder — the structural underpinning behind the ARR growth.

GAAP profitability is still near zero.

As bright as the adjusted figures are, the GAAP picture is very different: net income was just $5.3 million, or $0.01 per share, and the GAAP operating margin stayed at -2%. The main driver of the gap is stock-based compensation; the company pays employees largely in shares rather than cash, a real cost excluded from adjusted earnings. Against that, non-GAAP net income was $322.9 million and the adjusted operating margin was 25%. Cash generation is strong: free cash flow of $377.4 million reached 25.6% of revenue. So the company mints cash, but accounting profit remains overshadowed by share dilution — a balance long-term investors should watch.

Management raised the full-year outlook.

CrowdStrike guided third-quarter revenue to $1.523–1.529 billion and adjusted EPS of $0.31; the midpoint implies about 3.8% sequential and roughly 24% year-over-year growth. More importantly, it raised the full-year revenue target to $5.991–6.011 billion and lifted the net new ARR growth target by 630 basis points to 34% at the midpoint. Raising the guide signals that management sees this quarter's acceleration as a durable trend, not a one-off. The full-year adjusted EPS target is $1.25–1.26 (post-split), roughly 35% above the prior year's $0.93.

Valuation prices in every good headline.

The biggest risk in this report is not in the numbers but in the price. The stock trades at roughly 170x trailing adjusted earnings, among the richest multiples in large-cap software. The 11% after-hours pop largely closed the limited upside to the analysts' average $210.54 target. At that multiple, even a strong quarter can be sold as 'not strong enough' — indeed the stock entered the print down a week. For the thesis to work, CrowdStrike has to sustain this 30%-plus ARR momentum for several more quarters; the smallest slowdown is punished sharply at this valuation.

Strengths

6
  1. Net new ARR rose 51% year over year to a record $332.8 million — the first strong reacceleration since the 2024 outage.
  2. ARR from Falcon Flex topped $2.29 billion, up 101% year over year, as platform adoption accelerates.
  3. Management raised the full-year revenue outlook to $5.99–6.01 billion and the net new ARR growth target to 34% at the midpoint.
  4. Free cash flow of $377.4 million reached 25.6% of revenue; cash generation is strong.
  5. Module adoption is deepening: 51% of customers use six or more modules, 26% use eight or more.
  6. Total ARR grew 25% to $5.84 billion, with subscription revenue up 27% supporting the top line.

Risks

6
  1. The stock trades at roughly 170x trailing adjusted earnings; the valuation demands near-flawless execution.
  2. GAAP operating margin was -2% and GAAP net income just $5.3 million; stock-based comp weighs on profit and share count.
  3. The revenue beat was razor-thin (0.1%); the growth story leans entirely on ARR and guidance.
  4. The 11% after-hours pop largely closed the upside to the average analyst target.
  5. Rivals such as Microsoft and Palo Alto Networks keep price and budget competition intense.
  6. Legal and reputational risks from the 2024 outage are not fully behind the company.

What to Watch

5
  1. December 2026 - fiscal Q3 results: a test of the $1.523–1.529 billion revenue guide and ARR momentum.
  2. Whether the 34%-at-midpoint net new ARR growth target holds in the coming quarters.
  3. Whether the acceleration in Falcon Flex and module adoption proves durable; the path of revenue per customer.
  4. Whether the enterprise-AI-drives-security thesis (management's call-day 'Mythos moment' framing) converts into tangible revenue.
  5. Whether GAAP profitability turns positive as stock-based compensation normalizes.

Upcoming Earnings

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To Understand This

Earnings Reports: What to Read, HowThe book opens once a quarter — and the market really only reads three lines.P/E and the Valuation RatiosYou can't tell whether a stock is cheap or expensive by looking at its price.