CRWD's Falcon Flex Fuels $221M Net New ARR: Can it Keep the Momentum?

CrowdStrike (CRWD) posted strong results in the second quarter of fiscal 2026. The company added a record $221 million in net new annual recurring revenue (ARR). This pushed up CrowdStrike’s total ARR to $4.66 billion, representing an increase of 20% from last year.

A big part of this growth came from Falcon Flex, CrowdStrike’s subscription model. The company now has over 1,000 Falcon Flex customers, and more than 100 have already signed follow-on “re-Flex” deals before their contracts ended. These re-Flex deals are important because they show customers are expanding faster than expected, often boosting ARR by nearly 50%.

Falcon Flex makes it easier for customers to adopt multiple modules across CrowdStrike’s platform. Many are also using Flex to replace several legacy tools, choosing to consolidate around CrowdStrike. One such example is a Fortune 500 software firm that signed an eight-figure re-Flex deal to modernize its security operations center, where the firm renewed its contract 18 months before the expiration of the initial Falcon Flex subscription.

Looking ahead, management expects at least 40% year-over-year growth in net new ARR in the second half of fiscal 2026. This outlook shows CrowdStrike’s confidence in Falcon Flex. Moreover, strong AI-driven security demand might also help CrowdStrike drive further growth, where Falcon Flex can play a key role in helping the company reach its long-term goal of $10 billion ARR. If current trends hold, Falcon Flex may as well be the game-changer that redefines the company’s revenue growth trajectory.

How Competitors Fare Against CRWD

Competitors like Palo Alto Networks (PANW) and Zscaler (ZS) are also gaining ground through platform expansion and AI innovation.

In the fourth quarter of fiscal 2025, Palo Alto Networks saw robust growth in its Next-Gen Security ARR, which increased 32% year over year. The growth was driven by increased customer adoption of PANW’s advanced cybersecurity offerings, including its AI-driven XSIAM platform, SASE and software firewalls.

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.

CRWD’s Price Performance, Valuation and Estimates

Shares of CrowdStrike have gained 29.4% year to date compared with the Security industry’s growth of 9%.

CRWD YTD Price Return Performance

From a valuation standpoint, CrowdStrike trades at a forward price-to-sales ratio of 19.63X, way higher than the industry’s average of 12.12X.

CRWD Forward 12-Month P/S Ratio

The Zacks Consensus Estimate for CrowdStrike’s fiscal 2026 earnings implies a year-over-year decline of 10.9%, while for fiscal 2027 earnings indicates year-over-year growth of 34.7%. The estimates for fiscal 2026 and 2027 have remained unchanged over 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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