CrowdStrike Holdings, the cybersecurity powerhouse known for its endpoint protection and threat detection platform, unveiled its first-quarter fiscal 2026 earnings on Tuesday, June 3, 2025, revealing a mixed bag of results that sent ripples through the stock market and Wall Street analysts alike.
The Sunnyvale, California-based firm reported adjusted earnings per share (EPS) of 73 cents, surpassing the consensus forecast of 66 cents, yet falling short of its own previous year’s profit of 93 cents. Revenue for the quarter came in at $1.10 billion, marking a solid 20% increase from the prior year but narrowly missing the consensus estimate of $1.11 billion. This subtle shortfall, alongside cautious forward guidance, triggered a more than 6% drop in CrowdStrike’s stock during after-hours trading, despite a 2% gain during the regular session.
Investors had been riding high on CrowdStrike’s impressive 41% share price increase so far in 2025, fueled by the company’s reputation as a leader in cybersecurity and its expanding platform that monitors endpoints, web and email gateways, cloud workloads, and more. Yet, the latest report highlighted growing headwinds that are reshaping the landscape for tech firms like CrowdStrike.
One of the core metrics that investors watch closely is Annual Recurring Revenue (ARR), a key indicator of subscription-based growth. CrowdStrike’s total ARR rose 22% year-over-year to $4.44 billion, slightly above analysts’ expectations of $4.417 billion. However, net new ARR—the revenue from newly signed or renewed contracts—declined by 8.5% to $194 million compared to the previous year, though it still topped consensus estimates of $176.6 million. This dip reflects customers’ increased bargaining power amid economic pressures, as many seek price concessions when renewing contracts to offset business disruptions.
Indeed, the company attributed some of its revenue softness to broader macroeconomic challenges. Higher interest rates and persistent inflation have prompted many clients to pull back on technology spending, according to CrowdStrike’s earnings release. Yet, paradoxically, the need for robust cybersecurity has never been greater, with rising threats and ransomware attacks continuing to plague organizations worldwide.
Looking ahead, CrowdStrike’s guidance for the current quarter ending in July 2025 projected adjusted EPS of 83 cents at the midpoint, slightly above analyst estimates of 81 cents. However, the company forecasted revenue between $1.145 billion and $1.152 billion, shy of the $1.159 billion analysts had anticipated. This cautious outlook contributed to the stock’s after-hours decline.
Adding to the company’s challenges is ongoing litigation stemming from a significant IT outage in July 2024, caused by a software upgrade. Delta Air Lines filed claims alleging negligence and computer trespass, which a Georgia Fulton County Superior Court judge allowed to proceed in mid-May 2025, while dismissing allegations of intentional misrepresentation and fraud. This legal cloud adds complexity to CrowdStrike’s operational environment.
Despite these hurdles, CrowdStrike remains a key player in a fiercely competitive market that includes rivals such as Palo Alto Networks, SentinelOne, Microsoft, and Fortinet. The company continues to expand its cybersecurity platform, aiming to provide comprehensive threat detection across multiple vectors.
In May 2025, the company announced a workforce reduction of 5%, reflecting an adjustment to the slowing growth environment and the need to streamline operations. Nonetheless, the stock has still surged 43% this year, demonstrating investor confidence in its long-term prospects.
Wall Street’s analysts remain broadly optimistic, with a consensus rating of Strong Buy based on 33 Buy, four Hold, and one Sell recommendation over the past three months. However, the average price target of $443.63 suggests a potential downside of about 9.23% from current levels, indicating some caution following the recent earnings report.
Other tech companies also made headlines on June 3, 2025. Hewlett Packard Enterprise outperformed expectations with second-quarter adjusted earnings of 38 cents per share on revenue of $7.63 billion, prompting a 3% rise in its shares. Guidewire Software, serving property and casualty insurers, jumped over 8% after reporting better-than-expected third-quarter earnings and revenue. Meanwhile, Asana’s shares slipped about 6% following a tepid outlook. Wells Fargo saw a 2% gain after the Federal Reserve lifted asset cap restrictions imposed in 2018, and HealthEquity raised its full-year guidance, boosting its shares by 4%.
Returning to CrowdStrike, the company’s ability to navigate economic headwinds, legal challenges, and intensifying competition will be critical. As cybersecurity threats evolve and become more sophisticated, demand for advanced protection solutions remains robust, though customers’ spending behavior is clearly more cautious amid inflationary pressures.
With a solid foundation in subscription revenue and a growing platform that spans endpoint security to cloud workloads, CrowdStrike is well-positioned to adapt. Yet, as the latest earnings reveal, the path forward requires balancing growth ambitions with market realities.
As Reinhardt Krause, a technology reporter covering artificial intelligence and cybersecurity, notes, CrowdStrike’s story is emblematic of the broader tech sector’s current struggles and resilience: companies are growing, but at a tempered pace, and must contend with both external economic factors and internal operational challenges.
In the end, CrowdStrike’s journey through 2025 will be closely watched by investors, customers, and competitors alike, as it strives to maintain its leadership in a critical and rapidly changing industry.
