CrowdStrike’s second quarter results were met with a significant negative market reaction, reflecting investor concerns despite better-than-expected revenue and adjusted profit. Management attributed the quarter’s performance to surging demand for its Falcon platform, driven by AI-related security needs and increasing customer adoption of next-generation identity and cloud protection modules. CEO George Kurtz emphasized, “Our reacceleration is driven largely by AI necessitated demand for the Falcon platform and stellar execution across the business,” pointing to robust net new ARR and high uptake of the FalconFlex model. However, management also acknowledged that strategic partner incentives and special programs introduced after last year’s outage influenced top-line results, with CFO Burt Podbere noting, “Making those investments really paid off for us.”
Is now the time to buy CRWD? Find out in our full research report (it’s free).
CrowdStrike (CRWD) Q2 CY2025 Highlights:
- Revenue: $1.17 billion vs analyst estimates of $1.15 billion (21.3% year-on-year growth, 1.7% beat)
- Adjusted EPS: $0.93 vs analyst estimates of $0.83 (12.1% beat)
- Adjusted Operating Income: $255 million vs analyst estimates of $230.8 million (21.8% margin, 10.5% beat)
- The company slightly lifted its revenue guidance for the full year to $4.78 billion at the midpoint from $4.77 billion
- Management raised its full-year Adjusted EPS guidance to $3.66 at the midpoint, a 4.6% increase
- Operating Margin: -9.7%, down from 1.4% in the same quarter last year
- Annual Recurring Revenue: $4.66 billion vs analyst estimates of $4.64 billion (20.5% year-on-year growth, in line)
- Billings: $1.23 billion at quarter end, up 24.8% year on year
- Market Capitalization: $103.8 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From CrowdStrike’s Q2 Earnings Call
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Andy Nowinski (Wells Fargo) asked about the ongoing impact of partner rebate programs on revenue guidance. CFO Burt Podbere explained that special incentives would subside over time, noting, "We expect the impact of CCP and special partner programs to subside starting in '26."
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Matt Hedberg (RBC) inquired about CrowdStrike’s identity market positioning in light of increased competition. CEO George Kurtz highlighted their early entry and integration, stating, "We've recognized identity is critical very early on."
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Brian Essex (JPMorgan) questioned the Onum acquisition’s impact on SIEM competitiveness. Kurtz described in-pipeline detection as "critical" for faster and more efficient analysis, emphasizing the disruptive pricing model.
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Gabriela Borges (Goldman Sachs) sought clarity on customer interest in EDR (endpoint detection and response) within Flex contracts. Kurtz stressed the foundational role of EDR for the platform, citing its importance for enabling other modules and AI features.
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Adam Tindle (Raymond James) asked about the scalability of net new ARR guidance and public sector opportunity. Podbere confirmed that federal deals take time but represent a growth avenue, while Kurtz discussed the need to optimize go-to-market strategy for continued scale.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) the pace of AI-native product adoption and Charlotte AI’s role in driving automation, (2) whether FalconFlex continues to accelerate customer consolidation and uplift, and (3) management’s ability to integrate recent acquisitions like Onum and deliver on next-gen SIEM growth. Additionally, trends in customer retention and the wind-down of partner incentive programs will be key markers of execution.
CrowdStrike currently trades at $413.70, down from $422.39 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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