CRWD Q3 Deep Dive: AI Security Demand and Platform Expansion Shape Outlook

Cybersecurity platform provider CrowdStrike (NASDAQ:CRWD) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 22.2% year on year to $1.23 billion. The company expects next quarter’s revenue to be around $1.30 billion, close to analysts’ estimates. Its non-GAAP profit of $0.96 per share was 2% above analysts’ consensus estimates.

Is now the time to buy CRWD? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

CrowdStrike’s third quarter was marked by strong revenue growth and margin stability, though the market responded negatively to the results. Management attributed the quarter’s performance to accelerated adoption of its Falcon platform, driven by record net new annual recurring revenue and broad-based strength across cloud, identity, and next-generation SIEM (Security Information and Event Management) offerings. CEO George Kurtz noted that, “AI adoption is supercharging renewed interest in the endpoint as the endpoint is the epicenter of human and nonhuman interaction with AI,” underscoring the importance of endpoint security in the evolving threat landscape.

Looking forward, CrowdStrike’s guidance reflects optimism in continued customer consolidation on its single-platform approach and heightened demand for AI-driven cybersecurity solutions. Management pointed to momentum in its Falcon Flex licensing model, deeper integration with AWS, and the proliferation of AI agents as key growth drivers. CFO Burt Podbere emphasized, “Our business momentum is increasing and our all-time record pipeline entering Q4 gives us strong conviction in our ability to deliver profitable growth,” while cautioning that operational discipline and platform integration remain priorities as the company scales.

Key Insights from Management’s Remarks

Management linked the quarter’s performance to robust demand for unified security solutions, increased customer adoption of the Falcon Flex model, and expanding use cases for AI-driven security.

• Platform consolidation gains: CrowdStrike’s single-platform approach continued to resonate with customers, as organizations sought to reduce complexity and cost by consolidating security functions onto Falcon, leading to higher module adoption rates and improved retention.
• AI-driven product traction: The proliferation of AI agents—software that automates tasks and interacts with data—expanded the attack surface for organizations, prompting heightened demand for CrowdStrike’s AI-powered protection, especially at the endpoint and cloud layers.
• Next-gen SIEM momentum: The company’s next-generation SIEM solution saw strong displacement of legacy competitors, supported by recent partnerships and new features that give customers faster, more actionable insights and lower operational costs.
• Falcon Flex licensing adoption: The Falcon Flex subscription model, which allows customers to easily expand their security footprint, drove over $1.35 billion in ARR and facilitated larger, multi-year deals as clients consolidated vendors and sought a more scalable security approach.
• Strategic partnerships expand reach: Deeper integration with AWS and high-profile partnerships with firms like F5 and Kroll enabled CrowdStrike to enter new infrastructure segments and customer verticals, setting the stage for further market share gains.

Drivers of Future Performance

Looking ahead, management expects platform adoption, AI security needs, and ecosystem partnerships to shape growth and profitability.

• AI adoption fuels security demand: As more businesses integrate AI into operations, CrowdStrike anticipates rising demand for protection against new threat vectors, positioning its Falcon platform as a core defensive layer for both traditional and AI-driven workloads.
• Expansion of Flex model and modules: Management believes ongoing adoption of Falcon Flex and increased module usage will drive higher customer lifetime value, as organizations streamline vendor relationships and expand their security coverage.
• Strategic partnerships and integrations: CrowdStrike expects that alliances with cloud providers like AWS and security infrastructure partners such as F5 and Kroll will not only broaden its addressable market but also accelerate customer acquisition, particularly in previously underpenetrated verticals.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) adoption rates of the Falcon Flex licensing model and new product modules, (2) the impact and scalability of strategic partnerships with AWS, F5, and Kroll, and (3) continued growth in AI-related security demand, particularly as more organizations transition to agent-based and cloud-native environments. Execution on these fronts will serve as key indicators of CrowdStrike’s trajectory.

CrowdStrike currently trades at $500.96, down from $517 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).

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