Will Platform Strategy Keep Driving CrowdStrike's Subscription Growth?

CrowdStrike CRWD is seeing strong momentum from its platform strategy, which is playing a key role in driving subscription revenue growth. In the first quarter of fiscal 2026, subscription revenues grew 20% year over year to $1.05 billion, making up 95% of total revenues. 

This growth is fueled by the rising adoption of Falcon Flex, CrowdStrike’s subscription model designed to accelerate multi-module deployment and platform standardization. By the end of the first quarter, more than 820 customer accounts had adopted Falcon Flex. Total account deal value reached $3.2 billion within two years of launch, up 31% sequentially and over six times year over year. 

This trend supports strong multi-module adoption. At the end of the first quarter, module adoption rates were 48% for customers who were using six or more modules, 32% for seven or more, while 22% customers adopted eight or more modules. This shows that the platform approach is helping customers simplify their security tools and expand spending with CrowdStrike.

For instance, a Fortune 100 technology company grew its initial $12 million three-year Endpoint Detection and Response contract to a five-year $100 million-plus Falcon Flex agreement covering multiple modules. Another customer, a global healthcare provider, expanded with Falcon Identity Protection as part of an eight-figure deal using Charlotte AI and Next-Gen Security Information and Event Management. 

These trends suggest that platform consolidation, accelerated by Falcon Flex and strong multi-module adoption, is a major factor behind CrowdStrike’s subscription revenue growth. Management expects these drivers to remain crucial to its growth strategy in the coming quarters. The Zacks Consensus Estimate indicates subscription revenues to soar by 21.2% year over year to $4.56 billion in fiscal 2026.

How Competitors Fare Against CRWD

Competitors like Zscaler ZS and SentinelOne S are also gaining ground through platform expansion and artificial intelligence innovation. 

Zscaler ended its third quarter of fiscal 2025 with $2.9 billion in ARR, reflecting 23% year-over-year growth. The robust growth was driven by Z-Flex and rapid traction across Zscaler’s three strategic growth pillars, which include Zero Trust Everywhere, Data Security Everywhere and Agentic Operations.

Though comparatively a small competitor, SentinelOne’s ARR is also growing rapidly with reaching $948 million at the end of the first quarter of fiscal 2026. This represents year-over-year growth of 24%, fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.

CRWD’s Price Performance, Valuation and Estimates

Shares of CrowdStrike have gained 39.2% year to date compared with the Security industry’s growth of 17.1%.

CRWD YTD Price Return Performance

From a valuation standpoint, CrowdStrike trades at a forward price-to-sales ratio of 22.64X, way higher than the industry’s average of 14.01X.

CRWD Forward 12-Month P/S Ratio

The Zacks Consensus Estimate for CRWD’s fiscal 2026 earnings implies a year-over-year decline of 10.94%, while for fiscal 2027 earnings implies year-over-year growth of 34.68%. The estimates for fiscal 2026 and 2027 have been revised upward in the past 60 days.

CrowdStrike currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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