Live Updates
Recurring Revenue Growth
Buried in CrowdStrike’s Q2 earnings release is a stat that shows just how quickly its new Falcon Flex model is reshaping ARR growth. The company now counts 1,000+ Flex customers, and over 100 “re-flexes” — meaning enterprises are expanding contracts within just 5–9 months of signing.
That kind of early expansion is unusual in enterprise software, where renewals typically happen on multi-year cycles.
My Take on the Quarter
CrowdStrike is still a long-term ARR compounder, but near-term optics (GAAP losses, margin pressure) are feeding volatility.
Fundamentally strong, but stock action reflects a premium name with little room for GAAP missteps.
- Bullish: Record ARR, strong free cash flow, Flex adoption momentum.
- Bearish: GAAP losses, margin compression, headline optics.
- Neutral: In-line revenue guide — no big upside catalyst.
What Changed This Quarter
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ARR re-accelerated ahead of schedule.
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GAAP swing to net loss (–$78M vs. +$47M LY) overshadowed non-GAAP profitability.
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Margins compressed (non-GAAP op margin 22% vs. 25% LY).
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Costs elevated from July 2024 Windows outage and strategic charges.
Key Operating Highlights
| KPI | Q2 FY26 | YoY | Note |
|---|---|---|---|
| Net New ARR | $221M | +6% | Re-acceleration vs. last qtr |
| Ending ARR | $4.66B | +20% | On track for $10B LT target |
| Module Adoption (≥6 modules) | 48% | +2 pts | Expansion trend continues |
| Free Cash Flow | $284M | +4% | Record level |
Close down 7% after-hours
Not much upside in today’s numbers, which is pushing the stock lower. Will wait for the conference call for more color here.
| Metric | Guidance | Consensus | Change |
|---|---|---|---|
| Q3 FY26 Rev. | $1.208B–$1.218B | ~$1.21B | In-line |
| Q3 EPS (Non-GAAP) | $0.93–$0.95 | $0.94 | In-line |
| FY26 Rev. | $4.75B–$4.81B | $4.79B | In-line |
| FY26 EPS (Non-GAAP) | $3.60–$3.72 | $3.51 |  Raised |
Management Commentary
“With reacceleration a quarter ahead of our expectations, CrowdStrike delivered an exceptional Q2. Record Q2 net new ARR of $221 million, over 1,000 Flex customers, and more than 100 re-flexes highlight CrowdStrike as the leader in cybersecurity consolidation.”
CEO George Kurtz
Management emphasized Flex and re-flex adoption as the key growth lever, highlighting accelerating ARR momentum and consolidation tailwinds.
Guidance
Guidance (Q3 FY26 & FY26)
- Q3 Revenue: $1.208B–$1.218B (≈+20% YoY)
- Q3 EPS (Non-GAAP): $0.93–$0.95
- FY26 Revenue: $4.75B–$4.81B (≈+20% YoY)
- FY26 EPS (Non-GAAP): $3.60–$3.72 (vs. Street $3.51)
On the surface, this was a clean beat across revenue, EPS, ARR, and cash flow. CRWD delivered record net new ARR ($221M) and record free cash flow ($284M), while reaffirming a path to accelerating ARR growth in the back half of FY26.
So why the drop? Shares are sliding as investors digest GAAP operating loss ($113M) and elevated costs tied to July 2024’s Windows outage and strategic plan charges. While non-GAAP profitability remains solid, the headline GAAP losses and margin compression (non-GAAP op margin 22% vs. 25% last year) are tempering sentiment.
Earnings Are In and Stock Plummets
Despite a beat across the board, CRWD stock dropped 5.7% after-hours.
| Metric | Reported | Consensus | Beat/Miss |
|---|---|---|---|
| Revenue | $1.17B (+21% YoY) | $1.15B |  Beat |
| EPS (Non-GAAP) | $0.93 | $0.83 | Beat |
| Net New ARR | $221M | ~$200M est. | Beat |
| Ending ARR | $4.66B (+20% YoY) | $4.62B est. | Beat |
How CrowdStrike Performed After Recent Earnings
On average, after each earnings release over the past year, CRWD stock dropped -5.13% after 7 days of trading following the quarterly release.
| Quarter | EPS Surprise | 1-Day Move | 7-Day Move | 14-Day Move |
|---|---|---|---|---|
| Q1 2026 | +10.6% | –5.77% | –1.44% | –0.69% |
| Q4 2025 | +19.8% | –6.34% | –14.77% | –4.49% |
| Q3 2025 | +14.8% | –4.59% | +0.37% | +3.33% |
| Q2 2025 | +7.2% | +2.83% | –6.67% | +1.11% |
CrowdStrike (NASDAQ: CRWD) reports fiscal Q2 2026 earnings after the close. The cybersecurity leader is navigating a market balancing margin expansion with ARR growth acceleration. In Q1, CrowdStrike posted revenue of $1.10 billion (+20% YoY) and EPS of $0.73, but the stock dropped after results. With Falcon Flex adoption surging and Charlotte AI expanding across SOC environments, investors want proof that near-term revenue recognition headwinds won’t overshadow the company’s $10 billion ARR trajectory.
What to Expect When CrowdStrike Reports Tonight
- Revenue: $1.15 billion
- EPS (Normalized): $0.83
- FY 2026 Revenue: $4.79 billion
- FY 2026 EPS: $3.51
- FY 2027 Revenue: $5.83 billion
- FY 2027 EPS: $4.71
That implies +19% YoY sales growth, but EPS falling –20% YoY as CrowdStrike laps a strong prior-year quarter and absorbs CCP-related revenue recognition shifts.
Key Areas to Watch
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Falcon Flex & Re-Flex Momentum- $3.2B+ total Flex deal value across 820 accounts; average contract length 31 months. Re-Flexes are arriving just 5–9 months into deals, accelerating ARR expansion.
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Charlotte AI & Agentic SOC- Charlotte AI now triages detections at machine speed, reducing SOC labor needs. Expect updates on customer adoption and AI-driven productivity gains.
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Next-Gen SIEM Growth- Triple-digit ARR growth; displacing Splunk and QRadar. New Falcon Adversary OverWatch integration aims to make SOC automation turnkey.
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Cloud & Exposure Management Expansion- Cloud ARR accelerated in Q1; new AI-powered vulnerability management now displacing legacy VM vendors. This could become a multibillion-dollar TAM unlock.
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Federal & MSSP Momentum- DoD certification positions CRWD for public sector expansion; MSSP now 15% of bookings, doubling in share from two years ago.
The post Live: Where Will Crowdstrike (CRWD) Move After Tonight’s Earnings? appeared first on 24/7 Wall St..
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Author: Joel South
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