Morningstar

CrowdStrike Earnings: A Diverse Portfolio of Security Products Continues to Power Growth

While Crowdstrike raised its full-year guidance, its third-quarter guidance was below the street’s top-line outlook, spurring a selloff.

The logo of Crowdstrike photographed from the screen of a laptop.
Karl-Josef Hildenbrand/picture alliance via Getty
Securities in This Article
CrowdStrike Holdings Inc Class A
(CRWD)

Key Morningstar Metrics for CrowdStrike Holdings

What We Thought of CrowdStrike Holdings’ Earnings

CrowdStrike Holdings CRWD reported strong second-quarter results, which included sales growth of 21% and adjusted operating margins of 22%. The firm’s annual recurring revenue grew 20% to $4.66 billion, while its net new ARR (a measure of new business) came in at $221 million.

Why it matters: In a security market marked by increasing vendor consolidation, CrowdStrike has been a material beneficiary as customers continue to adopt more of its modules to meet a wide array of security needs.

  • To capture share in markets beyond its core endpoint security space, CrowdStrike has developed solutions in security operations, identity, and cloud security, with all three areas showing strength, with a combined ARR topping $1.56 billion in the quarter, up 44% year over year.
  • Similar to Palo Alto and Zscaler, CrowdStrike has also been offering customers bundling discounts to encourage more spending on its solutions. We believe these discounts, coupled with an improved security posture due to consolidation, are particularly attractive given the ongoing macrouncertainty.

The bottom line: We maintain our $330 fair value estimate for narrow-moat CrowdStrike, with the firm’s quarterly results and updated guidance aligning with our model. Despite shares trading down after hours, we continue to view them as slightly overvalued.

  • We believe the firm’s after-hours price drop was largely due to inflated near-term expectations baked into the stock going into the earnings report. While the firm raised its full-year guidance, its third-quarter guidance was below the street’s top-line outlook, spurring the selloff.

Coming up: CrowdStrike’s updated guidance for fiscal 2026 includes sales of $4.78 billion and adjusted margins of 21%, up $3 million and in line with prior guidance, both at the midpoint of guidance. We see these targets as achievable and model a slight upside to both targets in our model.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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