CrowdStrike Holdings 2026 Q1 Earnings Challenges as Net Income Declines 339.9%
Daily EarningsWednesday, Jun 4, 2025 11:23 pm ET
44min readCrowdStrike Holdings (CRWD), ranking 117th by market capitalization, reported its fiscal 2026 Q1 earnings on June 4th, 2025. The company faced a decline in net income, swinging to a net loss of $110.99 million, compared to a net income of $46.26 million in the previous year. Despite this, CrowdStrike maintained its full-year revenue guidance, projecting growth between 20% to 22%. The outlook for Q2 FY 2026 revenue was slightly below analyst expectations, yet the company raised its non-GAAP EPS guidance, indicating optimism amidst ongoing financial challenges.
Revenue
CrowdStrike Holdings achieved a total revenue of $1.10 billion in Q1 FY 2026, marking a 19.8% increase from the previous year's Q1 revenue of $921.04 million. The subscription segment was particularly strong, generating $1.05 billion, while the professional services segment added $52.67 million, contributing to the overall revenue growth.
Earnings/Net Income
CrowdStrike Holdings reported a loss of $0.44 per share in Q1 FY 2026, a significant contrast to the profit of $0.18 per share in Q1 FY 2025. This represents a 344.4% negative change in EPS, underscoring the challenging financial circumstances faced by the company.
Post-Earnings Price Action Review
The post-earnings strategy of purchasing CRWD shares after a revenue miss and holding for 30 days yielded moderate returns but involved substantial volatility. The strategy resulted in a 30.26% return but slightly underperformed the benchmark return of 26.76%. However, the risk profile was notably challenging, with a maximum drawdown of -65.86% and a Sharpe ratio of 0.13, emphasizing the necessity for robust risk management in such volatile scenarios. Investors should consider the inherent risks associated with this strategy, given the significant fluctuations in stock price and the broader market conditions.
CEO Commentary
George R. Kurtz, Co-Founder, President, CEO & Director, emphasized CrowdStrike's strong performance in Q1 FY 2026, with net new ARR of $194 million surpassing expectations. He highlighted the success of the Falcon Flex subscription model, which has driven rapid platform adoption and customer commitment, evidenced by a 97% gross retention rate. Kurtz expressed optimism in improving sequential net new ARR growth in Q2, fueled by innovation and the consolidation of point products, asserting CrowdStrike’s leading position in the cybersecurity market amid rising demand for AI-native security solutions.
Guidance
CrowdStrike anticipates total revenue for Q2 FY 2026 to range between $1,144.7 million and $1,151.6 million, reflecting 19% year-over-year growth. Non-GAAP net income is expected to be between $209.1 million to $213.8 million, translating to diluted non-GAAP EPS of approximately $0.82 to $0.84. For the full fiscal year 2026, total revenue is projected between $4,743.5 million to $4,805.5 million, indicating 20% to 22% growth compared to the previous fiscal year.
Additional News
CrowdStrike recently experienced a notable drop in stock price following its updated outlook, which fell short of Wall Street expectations, leading to a sharp decline in after-hours trading. To bolster investor confidence, the company's board approved a $1 billion share buyback program, signaling long-term value amidst workforce reductions. Furthermore, analysts remain cautious about future growth due to lingering effects from a global IT outage, which may impact contract renewals and pricing negotiations. Despite these challenges, CrowdStrike maintains a strong outlook for future growth and profitability.
Price Action
The stock price of CrowdStrike Holdings has edged up 1.28% during the latest trading day, decreased 1.76% during the most recent full trading week, and climbed 4.53% month-to-date.
Revenue
CrowdStrike Holdings achieved a total revenue of $1.10 billion in Q1 FY 2026, marking a 19.8% increase from the previous year's Q1 revenue of $921.04 million. The subscription segment was particularly strong, generating $1.05 billion, while the professional services segment added $52.67 million, contributing to the overall revenue growth.
Earnings/Net Income
CrowdStrike Holdings reported a loss of $0.44 per share in Q1 FY 2026, a significant contrast to the profit of $0.18 per share in Q1 FY 2025. This represents a 344.4% negative change in EPS, underscoring the challenging financial circumstances faced by the company.
Post-Earnings Price Action Review
The post-earnings strategy of purchasing CRWD shares after a revenue miss and holding for 30 days yielded moderate returns but involved substantial volatility. The strategy resulted in a 30.26% return but slightly underperformed the benchmark return of 26.76%. However, the risk profile was notably challenging, with a maximum drawdown of -65.86% and a Sharpe ratio of 0.13, emphasizing the necessity for robust risk management in such volatile scenarios. Investors should consider the inherent risks associated with this strategy, given the significant fluctuations in stock price and the broader market conditions.
CEO Commentary
George R. Kurtz, Co-Founder, President, CEO & Director, emphasized CrowdStrike's strong performance in Q1 FY 2026, with net new ARR of $194 million surpassing expectations. He highlighted the success of the Falcon Flex subscription model, which has driven rapid platform adoption and customer commitment, evidenced by a 97% gross retention rate. Kurtz expressed optimism in improving sequential net new ARR growth in Q2, fueled by innovation and the consolidation of point products, asserting CrowdStrike’s leading position in the cybersecurity market amid rising demand for AI-native security solutions.
Guidance
CrowdStrike anticipates total revenue for Q2 FY 2026 to range between $1,144.7 million and $1,151.6 million, reflecting 19% year-over-year growth. Non-GAAP net income is expected to be between $209.1 million to $213.8 million, translating to diluted non-GAAP EPS of approximately $0.82 to $0.84. For the full fiscal year 2026, total revenue is projected between $4,743.5 million to $4,805.5 million, indicating 20% to 22% growth compared to the previous fiscal year.
Additional News
CrowdStrike recently experienced a notable drop in stock price following its updated outlook, which fell short of Wall Street expectations, leading to a sharp decline in after-hours trading. To bolster investor confidence, the company's board approved a $1 billion share buyback program, signaling long-term value amidst workforce reductions. Furthermore, analysts remain cautious about future growth due to lingering effects from a global IT outage, which may impact contract renewals and pricing negotiations. Despite these challenges, CrowdStrike maintains a strong outlook for future growth and profitability.
Price Action
The stock price of CrowdStrike Holdings has edged up 1.28% during the latest trading day, decreased 1.76% during the most recent full trading week, and climbed 4.53% month-to-date.
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