Latest news with #FalconFlex
Yahoo
2 days ago
- Business
- Yahoo
CrowdStrike: Higher Sales, Higher Costs
CrowdStrike topped Wall Street earnings expectations, but adjusted EPS, free cash flow, and net new recurring revenue all were lower than Q1 2025. Margin pressure and higher expenses continue as it works to keep customers on board following its summer 2024 major outage. CrowdStrike's "FalconFlex" licensing program is proving popular with customers. 10 stocks we like better than CrowdStrike › Here's our initial take on CrowdStrike's (NASDAQ: CRWD) financial report. Metric Q1 FY25 Q1 FY26 Change vs. Expectations Revenue $921 million $1.1 billion 19% Met Earnings per share $0.79 $0.73 -8% Beat Net new ARR $212 million $194 million -8% N/A Free cash flow $323 million $279 million -14% N/A Coming up on the one-year anniversary of CrowdStrike's disastrous July 2024 global outage, the cybersecurity company continues to make progress moving past the incident. CrowdStrike beat earnings per share (EPS) estimates for the quarter and matched on revenue, though earnings, free cash flow, and growth in annual recurring revenue (ARR) all were down year over year. Similar to previous quarters, CrowdStrike is showing solid growth, but the growth is coming at a higher cost than prior to the meltdown. Subscription gross margin fell 100 basis points to 77% in the quarter, and on a generally accepted accounting principles (GAAP) basis, the company reported a $110.2 million net loss. Total operating expenses climbed 36% year over year to $939 million, with sales and marketing expenses responsible for much of those gains. Still, it is clear that customers are not abandoning the cybersecurity platform. CrowdStrike said its "Falcon Flex" licensing program, a consumption-based model that allows customers to expand or swap modules as needed, is gaining traction, with total Falcon Flex deal value up more than 6x year over year. The company also announced that its board had approved a new $1 billion share-repurchase program. That should help offset stock-based compensation and help counter CrowdStrike's nearly 14% growth in shares outstanding over the past five years. CrowdStrike came into earnings with a lot of momentum, with the stock up 40% year to date. The results left investors underwhelmed, with shares trading down 7% in aftermarket trading following the release of results but ahead of the call with investors. CrowdStrike sees further growth from here. The company is forecasting fiscal 2026 second-quarter earnings of between $0.82 and $0.84 per share, ahead of the $0.81 consensus estimate, and slight sequential revenue growth of $1.14 billion to $1.15 billion. Wall Street had modeled $1.16 billion in revenue for the quarter. The company also boosted its full-year earnings per share guidance by $0.11 per share on both the top and bottom end of the range, to $3.44 to $3.56 per share. The results appear not to be enough to make investors forget about CrowdStrike's summer of 2024 misstep but also offer no indication that the franchise product is suffering. And management remains bullish on what is to come. CFO Burt Podbere, commenting on the report, said CrowdStrike remains committed to "net new ARR reacceleration and margin expansion in the second half of fiscal year 2026," fueled by Falcon Flex and the company's robust pipeline. If CrowdStrike can deliver on that goal, the stock has plenty of room to run from here. Full earnings report Investor relations page Additional coverage Before you buy stock in CrowdStrike, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and CrowdStrike wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $869,841!* Now, it's worth noting Stock Advisor's total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike. The Motley Fool has a disclosure policy. CrowdStrike: Higher Sales, Higher Costs was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
Is Falcon Flex Becoming a Game Changer for CrowdStrike's ARR Growth?
CrowdStrike's CRWD Falcon Flex subscription-based model is turning out to be the driver of its annual recurring revenue (ARR) expansion. During the first quarter of fiscal 2026, CrowdStrike added $774 million of total Falcon Flex account value, bringing the total deal value of accounts that have adopted Falcon Flex to $3.2 achieved the $3.2 billion deal value milestone within two years since its launch, and represents a robust growth of 31% sequentially and more than six times year over year. At the end of the first quarter, more than 820 customer accounts have adopted the Falcon Flex robust growth in Falcon Flex's customer adoption and deal value is driving CrowdStrike's total ARR. The company ended the first quarter with $4.44 billion in ARR, up 22% on a year-over-year the first quarter of fiscal 2026, CrowdStrike brought in $194 million in net new ARR, which management attributed to Flex as being the key driver of growth. Re-Flex transactions, where customers have fully deployed their initial Flex contract and have returned for a new deal, are becoming increasingly prevalent. CrowdStrike disclosed 39 such examples in the first Flex gains further traction and re-Flexes rise, CrowdStrike appears well-positioned to achieve its longer-term goal of $10 billion in ARR. If current trends hold, Falcon Flex may well be the game-changer that redefines the company's revenue growth trajectory. Competitors like Palo Alto Networks PANW and SentinelOne S are also gaining ground through platform expansion and artificial intelligence (AI) innovation. Palo Alto Networks ended the third quarter of fiscal 2025 with $5.09 billion in Next-Generation Security (NGS) ARR, representing a year-over-year increase of 34%. The robust growth reflects increased customer adoption of Palo Alto Networks' advanced cybersecurity offerings, including its AI-driven XSIAM platform, which saw ARR growth of more than 200% year over comparatively a small competitor, SentinelOne's ARR is also growing rapidly with reaching $948 million at the end of the first quarter of fiscal 2026. This represents year-over-year growth of 24%, fueled by the rising adoption of SentinelOne's AI-first Singularity platform and Purple AI. Shares of CrowdStrike have gained 33.9% year to date compared with the Zacks Security industry's growth of 19.4%. Image Source: Zacks Investment Research From a valuation standpoint, CRWD trades at a forward price-to-sales ratio of 22.31, above the industry's 14.47. Image Source: Zacks Investment Research The Zacks Consensus Estimate for CrowdStrike's fiscal 2026 earnings is pegged at $3.44 per share, unchanged over 30 days, which implies a 12.4% drop year over year. The consensus mark for fiscal 2027 has also remained unchanged over the past 60 days at $4.55 per share, indicating a year-over-year increase of 32.2%. Image Source: Zacks Investment Research CRWD stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SentinelOne, Inc. (S) : Free Stock Analysis Report Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report CrowdStrike (CRWD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
3 days ago
- Business
- Yahoo
Palo Alto Networks Hits $5B in NGS ARR: What's Fueling the Surge?
Palo Alto Networks PANW surpassed a key milestone during the third quarter of fiscal 2025, wherein the annual recurring revenues (ARR) for its next-generation security (NGS) solutions hit the $5 billion mark. In the third quarter, NGS ARR reached $5.09 billion, representing year-over-year growth of 34%.Palo Alto Networks had 130 customers with more than $5 million in NGS ARR at the end of the third quarter, up 41% year over year. Also, the customer count with more than $10 million in NGS ARR grew 63% to 44. In the third quarter, PANW reported that AI-related ARR now stands at approximately $400 million, 2.5 times higher than the year-ago quarter. The robust growth in NGS ARR can be attributed to its flagship XSIAM platform, which is gaining traction across enterprise customers. During the third quarter, bookings for XSIAM, an artificial intelligence (AI)-powered NGS platform, approached the nearly $1 billion mark on a trailing 12-month basis. The platform now has approximately 270 customers with an average ARR per customer of more than $1 million. XSIAM ARR grew more than 200% year over year in the third quarter, all within 30 months after XSIAM was made generally available to customers. With management targeting $15 billion in ARR by fiscal 2030, AI may be more than a tailwind, it could be the engine of PANW's next phase of growth. The company forecasts that its NGS ARR will contribute approximately 60-70% of the fiscal 2023 total targeted ARR. Competitors like CrowdStrike CRWD and SentinelOne S are also gaining ground through platform expansion and AI innovation. CrowdStrike ended its first quarter of fiscal 2026 with $4.44 billion in ARR, reflecting 22% year-over-year growth. The robust increase was fueled by the growing adoption of CrowdStrike's Falcon Flex subscription a small competitor, SentinelOne's ARR is also growing rapidly with reaching $948 million at the end of the first quarter of fiscal 2026. This represents a year-over-year rise of 24% fueled by growing adoption of SentinelOne's AI-first Singularity platform and Purple AI. Shares of Palo Alto Networks have gained 6.7% year to date compared with the industry's growth of 19.4%. Image Source: Zacks Investment Research From a valuation standpoint, PANW trades at a forward price-to-sales ratio of 12.6, below the Zacks Security industry's 14.47. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Palo Alto Networks' fiscal 2025 and 2026 earnings implies a year-over-year increase of approximately 15% and 11%, respectively. The estimates for fiscal 2025 have been revised upward in the past 30 days, while the same for fiscal 2026 has remained unchanged. Image Source: Zacks Investment Research PANW stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SentinelOne, Inc. (S) : Free Stock Analysis Report Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report CrowdStrike (CRWD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Business Insider
3 days ago
- Business
- Business Insider
CrowdStrike Stock Tumbles: Here's What Morgan Stanley Predicts Next
CrowdStrike (NASDAQ:CRWD) stock had surged more than 40% year-to-date heading into its first fiscal quarter report, with its elevated valuation setting a high bar for performance. However, the results fell short, and shares tumbled ~6% in Wednesday's trading session. Confident Investing Starts Here: Revenue climbed 19.4% year-over-year to $1.1 billion but still fell $10 million short of Wall Street's expectations. According to management, subscription revenue took an $11 million hit, largely due to hurdles tied to Customer Commitment Packages (CCP), driven by one-off customer incentives and special partner programs. These headwinds aren't going away just yet – management expects a continued drag of $10 to $15 million per quarter over the next three periods. On a brighter note, the bottom line came through: adjusted EPS landed at $0.73, outpacing the Street's forecast by $0.07. But the outlook also failed to please. For the current quarter, CrowdStrike sees revenue landing in the range between $1.145 billion and $1.152 billion, falling short of the $1.16 billion consensus estimate. According to Morgan Stanley's Keith Weiss, the biggest sticking point wasn't the miss on revenue or guidance, but rather the net new annual recurring revenue (NNARR). Despite an 11% beat versus consensus – even better than the average ~8% beat seen over the past year – the figure didn't quite meet the buy-side's elevated hopes, especially with the stock trading at a steep 50x EV/CY27 free cash flow. However, Weiss, who ranks among the top 2% of Street stock pros, believes that despite CrowdStrike being 'undeniably an expensive stock,' there's a compelling case for renewed 30%+ free cash flow growth. The company is gaining momentum as a 'leading consolidator' in the cybersecurity space, with nearly half its customers now using six or more modules and a strong uptake of Falcon Flex contracts, which have grown sixfold year-over-year. Demand remains solid, with generative AI expanding both the threat landscape and the need for advanced security tools – areas where CrowdStrike's Charlotte AI is seeing 'strong traction.' Finally, margins are trending higher, with Q1 operating margins beating expectations and management now guiding to over 30% FCF margins by fiscal 2027. All told, Weiss sees enough upside to bump his price target from $455 to $490. Still, with shares already running hot, that implies just a modest 5% upside from current levels. Weiss' rating stays an Overweight (i.e., Buy). (To watch Weiss's track record, click here) Elsewhere on the Street, the stock garners an additional 28 Buys, 8 Holds and 1 Sell, for a Moderate Buy consensus rating. However, the $471.06 average target implies the stock is currently fully valued. (See CrowdStrike stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
Yahoo
4 days ago
- Business
- Yahoo
CRWD Q1 Earnings Call: Falcon Flex Model Accelerates Adoption Amid Revenue Miss
Cybersecurity company CrowdStrike (NASDAQ:CRWD) fell short of the market's revenue expectations in Q1 CY2025, but sales rose 19.8% year on year to $1.10 billion. Its non-GAAP EPS of $0.73 per share was 10.6% above analysts' consensus estimates. Is now the time to buy CRWD? Find out in our full research report (it's free). Revenue: $1.10 billion (19.8% year-on-year growth) Adjusted EPS: $0.73 vs analyst estimates of $0.66 (10.6% beat) Adjusted Operating Income: $201.1 million vs analyst estimates of $177.9 million (18.2% margin, 13.1% beat) Revenue Guidance for Q2 CY2025 is $1.15 billion at the midpoint, below analyst estimates of $1.16 billion Adjusted EPS guidance for the full year is $3.50 at the midpoint, beating analyst estimates by 1.3% Operating Margin: -11.3%, down from 0.8% in the same quarter last year Annual Recurring Revenue: $4.44 billion at quarter end, up 21.6% year on year Billings: $1.15 billion at quarter end, up 22.4% year on year Market Capitalization: $121.7 billion CrowdStrike's first-quarter results reflected the rapid adoption of its Falcon Flex platform model, which management cited as a driver for larger, faster, and longer customer commitments. CEO George Kurtz detailed how customers are increasingly consolidating security tools onto the Falcon platform, with 'reflexes'—repeat purchases—occurring much earlier than anticipated. Executive leadership pointed to significant customer wins in cloud security, identity protection, and next-generation SIEM (Security Information and Event Management), supported by strong partner and managed service provider momentum. Kurtz highlighted that customers embracing Falcon Flex were deploying more modules at a faster rate, signaling a shift in buying patterns and platform stickiness. Management's guidance for the coming quarters centers on the ongoing shift to platform consolidation and accelerated customer adoption of new modules, particularly in response to the growth of AI-driven security needs. CFO Burt Podbere said, 'We expect these investments to fuel our growth in the back half of the year and beyond as we progress toward our long-term targets.' Leadership emphasized that the Falcon Flex model, coupled with advancements in AI capabilities like Charlotte AI, positions CrowdStrike to capture expanding demand for unified security solutions. The company also expects operating margin improvement from strategic realignment and increased focus on high-growth product areas. CrowdStrike's leadership attributed first-quarter outcomes to rapid Falcon Flex adoption, broad-based product uptake, and increased enterprise demand for integrated security as organizations address expanding digital and AI-driven attack surfaces. Falcon Flex drives customer expansion: Management explained that the Falcon Flex subscription model is leading to larger, longer-term deals, with customers burning through contract capacity faster—often returning for additional purchases ("reflexes") within months. This model streamlines procurement and encourages clients to consolidate multiple cybersecurity tools onto the Falcon platform, deepening customer engagement and speeding up platform adoption. AI product integration accelerates adoption: The company highlighted the role of Charlotte AI, its agentic security analyst, in transforming Security Operations Centers (SOCs) through automation and faster threat response. Kurtz cited Charlotte AI's growing adoption as a factor in large customer expansions, particularly with next-gen SIEM and cloud security deployments. Growth in cloud, identity, and SIEM: Management reported notable acceleration in cloud security, identity protection, and next-generation SIEM product lines. These offerings are increasingly replacing legacy solutions, as customers seek unified, AI-powered security across endpoints, cloud workloads, and identities. This trend was underscored by high-profile wins in both the technology and healthcare sectors. Partner and MSSP channel momentum: CrowdStrike's partner ecosystem played a larger role this quarter, with 60% of annual deal value sourced through partners and managed security service providers (MSSPs) now accounting for over 15% of deal value. This reflects expanding reach into new customer segments and geographies. Temporary headwinds from contract programs: CFO Burt Podbere noted that recent customer and partner contract programs (like CCP) created a temporary separation between annual recurring revenue (ARR) and recognized subscription revenue. Management expects this effect to subside by year-end, with overall ARR growth reaccelerating in the second half as more customers renew and expand their Flex contracts. Looking ahead, CrowdStrike's outlook is shaped by continued platform adoption, AI-driven security needs, and operational efficiency initiatives. Platform consolidation momentum: Management anticipates that the trend of customers consolidating security tools onto the Falcon platform will continue, boosted by the rapid adoption of Falcon Flex. This is expected to drive increased annual recurring revenue and customer retention as organizations seek integrated solutions amid rising cyber threats. AI and next-gen product expansion: The company is prioritizing investments in AI-powered products like Charlotte AI, cloud security, exposure management, and next-gen SIEM. Leadership believes these areas will be key growth drivers, as enterprises increasingly require advanced automation and real-time threat detection. Operational realignment and margin focus: CrowdStrike is implementing a strategic realignment to reallocate resources toward high-growth product lines and internal automation. Management expects these changes to contribute to operating margin expansion and improved free cash flow margin, with targeted benefits materializing by next year. In future quarters, the StockStory team will monitor (1) the pace of Falcon Flex contract expansions and frequency of reflexes, (2) the adoption rate of Charlotte AI and other next-generation modules, and (3) evidence of margin improvement from realignment efforts. Additionally, we will track progress in partner and MSSP channels as indicators of broader platform reach and customer engagement. CrowdStrike currently trades at a forward price-to-sales ratio of 24.2×. Should you double down or take your chips? See for yourself in our full research report (it's free). The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
