CrowdStrike Beats on Q1 Earnings, Stock Down on Revenue Miss

CrowdStrike Holdings, Inc. CRWD reported non-GAAP earnings per share of 73 cents for the first quarter of fiscal 2026, which surpassed the Zacks Consensus Estimate by 10.61% and came ahead of management’s guidance of 64-66 cents. However, the bottom line declined 7.6% on a year-over-year basis.

CRWD’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 13.18%.

Despite reporting better-than-expected first-quarter bottom-line results, shares of CrowdStrike plunged 6.5% during Tuesday’s extended trading session as revenues fell short of the consensus mark. The company’s first-quarter revenues of $1.103 billion came slightly lower than the Zacks Consensus Estimate of $1.105 billion.

Nonetheless, the top line increased 20% year over year and came within management’s guidance of $1.1006-$1.1064 billion. The strong adoption of the Falcon platform and better sales execution mainly aided top-line growth in the fiscal first quarter.

CrowdStrike Price, Consensus and EPS Surprise

CrowdStrike price-consensus-eps-surprise-chart | CrowdStrike Quote

Top-Line Details of CRWD

Subscription revenues (95.2% of the total revenues) jumped 20.5% year over year to $1.051 billion. Professional services revenues (4.8% of the total revenues) increased 7.8% year over year to $52.67 million.

As of April 30, 2025, annual recurring revenues (ARR) were $4.4 billion, up 22% year over year. The company added $193.8 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 32% and those with eight or more cloud modules represented 22% as of April 30, 2025.

CRWD’s Operating Details

CrowdStrike’s non-GAAP gross profit increased 18.5% to $857 million in the fiscal first quarter from $723.2 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 19.6% year over year to $840.8 million, while the gross margin fell 100 bps to 80% year over year. The non-GAAP professional gross profit declined 19.7% to $16.37 million, while the gross margin fell 1,100 bps to 31% on a year-over-year basis.

CrowdStrike’s total non-GAAP operating expenses increased 35.6% to $656 million from $509.9 million reported in the year-ago quarter. As a percentage of revenues, non-GAAP operating expenses increased to 56% from 55.4% in the year-ago quarter.

Non-GAAP sales and marketing (S&M) expenses jumped 25.5% year over year to $368.5 million. Non-GAAP research and development (R&D) expenses climbed 34.7% year over year to $218.22 million. Non-GAAP general and administrative (G&A) expenses increased 27.8% year over year to $69.34 million. As a percentage of revenues, S&M expenses expanded 100 bps, while R&D expanded 200 bps and G&A expenses remained flat.

The non-GAAP operating income declined 5.7% to $201.12 million. The non-GAAP operating margin for the quarter contracted 500 bps year over year to 18%.

CRWD’s Balance Sheet & Cash Flow

As of Jan. 31, 2025, cash and cash equivalents were $4.61 billion. CrowdStrike had a long-term debt of $744.36 million.

In the fiscal first quarter, CRWD generated operating and free cash flows of $384.1 million and $279.4 million, respectively.

CrowdStrike’s Q2 and FY26 Guidance

CrowdStrike initiated guidance for the fiscal second quarter. For the fiscal second quarter, CRWD anticipates revenues between $1.1447 billion and $1.1516 billion. The non-GAAP operating income is expected in the band of $226.9-$233.1 million. Non-GAAP net income is forecasted in the range of $209.1-$213.8 million. The company expects non-GAAP earnings per share in the band of 82-84 cents. The consensus mark for fiscal first-quarter revenues and non-GAAP earnings is pegged at $1.16 billion and 80 cents per share, respectively.

For fiscal 2026, CRWD expects revenues between $4.7435 billion and $4.8055 billion. The non-GAAP operating income for fiscal 2025 is projected in the band of $970.8-$1010.8 million. The company expects non-GAAP net income in the range of $878.7-$909.7 million. Non-GAAP earnings are anticipated in the band of $3.44-$3.56. The consensus mark for fiscal 2026 revenues and non-GAAP earnings is pegged at $4.78 billion and $3.44 per share, respectively. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

CRWD Zacks Rank & Stocks to Consider

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

Paylocity Holding PCTY, StoneCo STNE and Trivago TRVG are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.

PCTY, STNE and TRVG sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

PCTY shares have declined 4.3% year to date. The Zacks Consensus Estimate for PCTY’s full-year 2025 earnings is pegged at $7.01 per share, up by 5.4% over the past 30 days, indicating an increase of 6.7% from the year-ago quarter’s reported figure.

STNE shares have surged 77.7% year to date. The Zacks Consensus Estimate for STNE’s full-year 2025 earnings is pegged at $1.43 per share, up by 3.62% over the past 30 days, indicating an increase of 5.93% from the year-ago quarter’s reported figure.

TRVG shares have surged 91.8% year to date. The Zacks Consensus Estimate for TRVG’s full-year 2025 earnings per share is pegged at 10 cents, unchanged over the past 30 days, indicating a rise of 11.11% from the year-ago quarter’s reported figure.

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

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