CrowdStrike Holdings 2026 Q2 Earnings Sharp Net Income Drop Amid Revenue Growth

CrowdStrike Holdings reported mixed results in Q2 2026, with strong revenue growth overshadowed by a significant net loss. The company surpassed revenue expectations by 21.3%, but its earnings turned negative, marking a 266.3% decline in net income. Management provided optimistic guidance, forecasting continued revenue expansion and improved free cash flow.

CrowdStrike Holdings 2026 Q2 Earnings

CrowdStrike Holdings (CRWD) reported its fiscal 2026 Q2 earnings on August 28, 2025, with a notable revenue increase but a significant deterioration in profitability. The company’s total revenue climbed to $1.17 billion, a 21.3% year-over-year increase from $963.87 million in Q2 2025. Subscription revenue accounted for the majority of the top-line growth, reaching $1.10 billion, while professional services contributed $66.01 million. Despite the robust revenue performance, CrowdStrike swung to a net loss of $77.64 million, or $0.31 per share, a 266.3% deterioration from a net income of $46.69 million, or $0.19 per share, in the prior-year period.

Revenue

CrowdStrike’s total revenue for Q2 2026 reached $1.17 billion, reflecting a 21.3% increase compared to $963.87 million in Q2 2025. The company's subscription services remained its primary revenue driver, contributing $1.10 billion of the total, while professional services accounted for $66.01 million. The growth in subscription revenue was driven by continued demand for AI-powered security solutions and expansion in enterprise adoption.

Earnings/Net Income

CrowdStrike experienced a significant decline in profitability, reporting a net loss of $77.64 million for Q2 2026, or $0.31 per share, compared to a net income of $46.69 million, or $0.19 per share, in Q2 2025. This represents a 266.3% decline in net income and a 263.2% negative change in earnings per share. The loss was attributed to higher operating expenses and increased R&D investment, despite strong top-line growth.

Price Action

Following the earnings report, CrowdStrike’s stock price showed a mixed performance. The stock gained 7.80% during the latest trading day and 6.75% over the most recent full trading week. However, it declined 5.05% month-to-date, reflecting uncertainty around the company's profitability and market expectations for continued investment in innovation.

Post-Earnings Price Action Review

The investment strategy of buying CrowdStrike following the earnings beat and holding for 30 days resulted in a return of 25.73%, which was lower than the benchmark return of 41.33%, leading to an excess return of -15.60%. While the Sharpe ratio of 0.11 indicated a low-risk profile and the maximum drawdown was 0.00%, the stock’s high volatility—55.47%—highlighted the significant price fluctuations investors faced. The 30-day holding period limited the ability to capitalize fully on the momentum generated by the earnings report.

CEO Commentary

CEO George R. Kurtz emphasized a “reacceleration” in the business, noting that Q2 exceeded all guided metrics. He attributed the success to AI-driven demand for the Falcon platform and “stellar execution.” The company achieved record net new ARR of $221 million and ended the quarter with $4.66 billion in ARR, a 20% year-over-year increase. Kurtz highlighted the company’s strategic focus on expanding AI-native solutions such as Charlotte, an agentic SOC analyst, and Falcon Flex, which enables customer consolidation. He expressed optimism about the strong adoption of Next-Gen SIEM, Cloud Security, and Identity Protection. The acquisition of Onum to enhance data pipelines and real-time detection was also underscored, with CrowdStrike positioning itself as a foundational platform for the agentic era in AI security.

Guidance

CrowdStrike provided upbeat guidance for the remainder of the fiscal year. The company expects Q3 FY2026 revenue to range between $1.208 billion and $1.218 billion, representing 20-21% year-over-year growth. For the full fiscal year 2026, CrowdStrike projects revenue of $4.7495 billion to $4.8055 billion, or 20-22% growth. The company anticipates ending ARR growth of more than 22% for FY26, driven by at least 40% year-over-year net new ARR growth in the back half of the year. Free cash flow margin is expected to expand to over 30% by FY27.

Additional News

Among the notable non-earnings-related developments in the three weeks following the August 28, 2025 earnings report, CrowdStrike announced the acquisition of Onum, a data pipeline enhancement company, to strengthen its real-time detection capabilities. The company also expanded its AI-native solutions, including the deployment of the Charlotte agentic SOC analyst, which is expected to improve threat response times and reduce analyst workload. Additionally, CrowdStrike announced a partnership with a leading cloud infrastructure provider to enhance its Falcon Flex model, allowing customers to consolidate security operations.