A month has gone by since the last earnings report for CrowdStrike Holdings (CRWD). Shares have added about 7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CrowdStrike due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for CrowdStrike before we dive into how investors and analysts have reacted as of late.
CrowdStrike Q2 Earnings Beat Estimates, Revenues Miss
CrowdStrike reported non-GAAP earnings per share of 93 cents for the second quarter of fiscal 2026, which surpassed the Zacks Consensus Estimate by 12.1% and came ahead of management’s guidance of 82-84 cents. Moreover, the bottom line increased 5.7% on a year-over-year basis.
The company’s second-quarter revenues of $1.17 billion surpassed the Zacks Consensus Estimate of $1.15 billion. Moreover, the top line increased 21% year over year and beat management’s guidance of $1.145-$1.15 billion. The strong adoption of the Falcon platform and better sales execution mainly aided top-line growth in the fiscal second quarter.
Top-Line Details of CRWD
Subscription revenues (94.4% of the total revenues) jumped 20.1% year over year to $1.10 billion. Professional services revenues (5.6% of the total revenues) increased 44.7% year over year to $66 million.
As of July 31, 2025, annual recurring revenues (ARR) were $4.66 billion, up 20% year over year. The company added $221.1 million to its net new ARR in the reported quarter.
CrowdStrike’s subscription customers, who adopted six or more cloud modules, represented 48% of the total subscription customers; those with seven or more cloud modules accounted for 33% and those with eight or more cloud modules represented 23% as of July 31, 2025.
CRWD’s Operating Details
CrowdStrike’s non-GAAP gross profit increased 19.7% to $907.4 million in the fiscal second quarter from $758.2 million in the year-ago quarter. The non-GAAP gross margin declined 100 basis points (bps) to 78%.
The non-GAAP subscription gross profit soared 19.2% year over year to $884.7 million, while the gross margin fell 100 bps to 77% year over year. The non-GAAP professional gross profit increased 41.4% to $22.7 million, while the gross margin fell 100 bps to 34% on a year-over-year basis.
CrowdStrike’s total non-GAAP operating expenses increased 26.2% to $652.5 million from $517.2 million reported in the year-ago quarter. As a percentage of revenues, non-GAAP operating expenses increased to 55.8% from 53.7% in the year-ago quarter.
Non-GAAP sales and marketing (S&M) expenses jumped 25.9% year over year to $364.3 million. Non-GAAP research and development (R&D) expenses climbed 27.9% year over year to $217.3 million. Non-GAAP general and administrative (G&A) expenses increased 22.4% year over year to $70.9 million. As a percentage of revenues, S&M and R&D expenses expanded 100 bps, while G&A expenses remained flat.
The non-GAAP operating income increased 5.8% to $254.95 million. The non-GAAP operating margin for the quarter contracted 300 bps year over year to 22%.
CRWD’s Balance Sheet & Cash Flow
As of July 31, 2025, cash and cash equivalents were $4.97 billion. CrowdStrike had a long-term debt of $744.73 million.
In the fiscal second quarter, CrowdStrike generated operating and free cash flows of $326.6 million and $283.6 million, respectively.
CrowdStrike’s Q3 and FY26 Guidance
CrowdStrike initiated guidance for the fiscal third quarter. For the fiscal third quarter, CrowdStrike anticipates revenues between $1.208 billion and $1.218 billion. The non-GAAP operating income is expected in the band of $256-$252 million. Non-GAAP net income is forecasted in the range of $238.1-$242.8 million. The company expects non-GAAP earnings per share in the band of 93-95 cents.
For fiscal 2026, CrowdStrike now expects revenues between $4.749 billion and $4.805 billion compared with the previous guidance of $4.743-$4.805 billion. The non-GAAP operating income for fiscal 2025 is now projected in the band of $1-$1.04 billion, up from previous guidance of $970.8-$1010.8 million.
For fiscal 2026, the company now expects non-GAAP net income in the range of $922.4-$954 million, up from the prior guidance of $878.7-$909.7 million. Non-GAAP earnings per share are anticipated in the band of $3.6-$3.72, up from the prior estimate of $3.44-$3.56.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in fresh estimates.
The consensus estimate has shifted 155.09% due to these changes.
VGM Scores
Currently, CrowdStrike has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for value investors.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise CrowdStrike has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
CrowdStrike is part of the Zacks Security industry. Over the past month, Palo Alto Networks (PANW), a stock from the same industry, has gained 5.9%. The company reported its results for the quarter ended July 2025 more than a month ago.
Palo Alto reported revenues of $2.54 billion in the last reported quarter, representing a year-over-year change of +15.8%. EPS of $0.95 for the same period compares with $0.75 a year ago.
Palo Alto is expected to post earnings of $0.89 per share for the current quarter, representing a year-over-year change of +14.1%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Palo Alto has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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CrowdStrike (CRWD): Free Stock Analysis Report Palo Alto Networks, Inc. (PANW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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