CRWD's Next-Gen SIEM ARR Hits $430M: Will it Fuel Growth Momentum?

CrowdStrike CRWD is seeing strong momentum in its Next Generation (Next-Gen) Security Information and Event Management (SIEM) as part of its mission to protect enterprises against evolving cyber threats. In the second quarter of fiscal 2026, SIEM annual recurring revenue (ARR) grew more than 95% year over year, reaching over $430 million. 

In the second quarter, management noted that customers are moving away from legacy SIEM tools because of high costs and data limitations. This is where CrowdStrike’s Next-Gen SIEM comes into play. Next-Gen SIEM is cloud-based, integrated into the Falcon platform, and also priced differently, where customers do not pay for data generated inside Falcon, but only for third-party data ingested. This model is helping CrowdStrike win large replacement deals, including a recent seven-figure legacy SIEM displacement at a Global 2000 communications company.

To strengthen SIEM further, CrowdStrike announced the purchase of Onum, a data pipeline platform. Onum is designed to speed up data processing, cut storage costs, and enable faster detection. CrowdStrike aims to combine Onum with Falcon Next-Gen SIEM to give its customers better control of their data while reducing response times.

The above factors show how the solution is gaining robust traction, as testified by its 95% year-over-year annual recurring revenue (ARR) growth in the second quarter of fiscal 2026. This was way higher than the company’s overall second-quarter ARR growth of 20%. If current trends hold, CrowdStrike’s Next-Gen SIEM may play a key role in helping the company reach its long-term goal of $10 billion ARR.  

How Competitors Fare Against CRWD

Competitors like Palo Alto Networks PANW and SentinelOne S 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.

Though comparatively a small competitor, SentinelOne posted second-quarter fiscal 2026 year-over-year growth of 24% in its ARR. The growth was 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 23.9% year to date compared with the Security industry’s growth of 10.2%.

CRWD YTD Price Return Performance

From a valuation standpoint, CrowdStrike trades at a forward price-to-sales ratio of 19.68X, way higher than the industry’s average of 12.22X.

CRWD Forward 12-Month P/S Ratio

The Zacks Consensus Estimate for CrowdStrike’s fiscal 2026 earnings implies a year-over-year decline of 9.9%, while for fiscal 2027 earnings indicates year-over-year growth of 33.4%. The estimates for fiscal 2026 and 2027 have both been revised upward over the past seven days.

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

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

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