Falcon Flex Adoption to Aid CrowdStrike's Subscription Revenues in Q3

CrowdStrike Holdings, Inc. (CRWD) is set to announce its third-quarter fiscal 2026 results on Dec. 2, and expectations are high.

CrowdStrike’s third-quarter results are likely to reflect the benefits of the robust demand for its cybersecurity products amid the increasing number of cyber threat incidents across the globe. As a rising number of employees log into the enterprise's network, the vulnerabilities of cyber breaches lead to a greater need for security.

Even though the broader economy is facing headwinds, CrowdStrike is expected to deliver strong double-digit revenue growth. Demand remains robust for its Falcon Flex platform, which is driving its overall subscription revenues.

What to Expect From CrowdStrike’s Q3 Results?

CrowdStrike anticipates revenues between $1.208 billion and $1.218 billion for the third quarter of fiscal 2026. The Zacks Consensus Estimate for CrowdStrike’s fiscal third-quarter revenues is pegged at $1.21 billion, indicating year-over-year growth of 20.2%.

The Zacks Consensus Estimate of 94 cents for the company’s second-quarter non-GAAP EPS calls for a 1.1% year-over-year increase. CrowdStrike’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 14.7%.

Click here to know how CRWD’s overall fiscal third-quarter results are likely to be.

CrowdStrike Price and EPS Surprise

CrowdStrike price-eps-surprise | CrowdStrike Quote

Falcon Flex to Aid CrowdStrike’s Subscription Revenues

CrowdStrike’s Falcon Flex subscription model is expected to remain a major growth driver. During the second quarter, the company added $221 million in net new annual recurring revenues (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.

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 in the second quarter to modernize its security operations center. The firm renewed its contract 18 months before the expiration of the initial Falcon Flex subscription.

The company now has more than 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%. CrowdStrike’s robust pipeline of deals indicates that the company is ideally positioned to capitalize on this opportunity.

The growing adoption of Falcon Flex is anticipated to have boosted CrowdStrike’s subscription revenues in the to-be-reported quarter. The Zacks Consensus Estimate for CRWD’s third-quarter Subscription revenues is pegged at $1.16 billion, indicating a year-over-year increase of 20%.

CRWD’s Zacks Rank and Stocks to Consider

Currently, CrowdStrike carries a Zacks Rank #3 (Hold).

Advanced Energy Industries (AEIS), Amphenol (APH) and Logitech International (LOGI) are some better-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. Advanced Energy Industries, Amphenol and Logitech International each sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Advanced Energy Industries’ 2025 earnings has been revised upward by 10 cents to $6.23 per share over the past seven days and suggests a year-over-year increase of 67.9%. Advanced Energy Industries shares have jumped 82.6% year to date.

The Zacks Consensus Estimate for Amphenol’s 2025 earnings has moved upward by 7 cents to $3.29 per share in the past 30 days, calling for a year-over-year surge of 74.1%. Amphenol shares have soared 102.9% year to date.

The Zacks Consensus Estimate for Logitech International’s fiscal 2026 earnings has been revised upward by 2.4% to $5.61 per share in the past 30 days, suggesting a year-over-year increase of 15.9%. Logitech International shares have surged 36.9% year to date.

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

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