CrowdStrike Q2 Earnings Preview: What to Expect

CrowdStrike is set to report Q2 earnings on Wednesday after market hours. Analysts expect a 19.3% YoY revenue growth to $1.15 billion and adjusted earnings of $0.83 per share. The company met revenue expectations last quarter and has a history of beating EBITDA estimates. The cybersecurity segment has underperformed recently, with CrowdStrike down 11.2% in the last month.

CrowdStrike Holdings, Inc. (CRWD) is set to report its fiscal 2026 second-quarter earnings after the market close on Wednesday, August 27. The cybersecurity company has been a favorite on Wall Street due to the robust demand for contemporary security solutions. However, its stock has faced downward pressure following a disappointing fiscal second-quarter revenue guidance. The upcoming earnings report will be critical for CrowdStrike's stock performance, prompting investors to consider strategic actions.

Analysts expect a 19.3% year-over-year (YoY) revenue growth to $1.15 billion and adjusted earnings of $0.83 per share [2]. While CrowdStrike met revenue expectations in the previous quarter, its cybersecurity segment has underperformed recently, with the stock down 11.2% in the last month [3]. The company's revenue growth for the fiscal first quarter was 20%, reaching $1.10 billion, which was lower than the 29% YoY growth for the full fiscal year 2025 [1]. Looking ahead, CrowdStrike anticipates revenues for the second quarter between $1.14 billion and $1.15 billion, indicating a 19% YoY growth rate, which still falls short of the first-quarter growth rate [1].

Investors should also consider the impact of the company's cash generation and valuation. CrowdStrike reported free cash flow of $279.4 million in the fiscal first quarter, a decline from the $322.5 million generated in the same period last year. The company attributed this decline to $61 million in expenses incurred due to a platform outage in the previous summer [1]. Additionally, CrowdStrike's forward price-to-sales (P/S) ratio stands at 21.9 compared to 13.7 for the Security industry, indicating a high valuation [1].

New investors should be cautious before investing in CrowdStrike's stock. The company is facing pricing pressure from well-funded competitors like Microsoft Corporation (MSFT), which includes endpoint security in its Microsoft 365 E5 offering [1]. Furthermore, CrowdStrike's long-term outlook remains bright, with its annual recurring revenue (ARR) reaching a record $4.4 billion in the fiscal first quarter, marking a 22% rise from the same period last year [1]. However, reaching $10 billion in ARR by fiscal year 2031, as expected by management, would still represent a small part of the company's projected addressable market of $116 billion, showing considerable growth potential in the coming years [1].

For now, CrowdStrike has a Zacks Rank #3 (Hold) [1]. Investors should closely monitor the company's fiscal second-quarter results, as they could provide a clearer picture of its future performance and potential stock movement.

References:
[1] https://finance.yahoo.com/news/buy-hold-sell-crowdstrike-stock-190000335.html
[2] https://ca.finance.yahoo.com/news/crowdstrikes-q2-test-profitability-ai-184155308.html
[3] https://finance.yahoo.com/news/crowdstrikes-pre-q2-earnings-analysis-145500784.html