Shares of CrowdStrike Holdings Inc., a leading cybersecurity company, took a hit on June 3, 2025, after the firm projected second-quarter revenue that fell short of Wall Street expectations. The company forecasted fiscal second-quarter revenue between $1.14 billion and $1.15 billion, slightly below the analyst consensus of $1.16 billion, causing shares to slide more than 6% in after-hours trading despite the stock having closed at a record high earlier that day.
This revenue guidance reflects a cautious outlook amid a challenging macroeconomic environment, notably weaker government and enterprise spending on cybersecurity products. According to brokerage William Blair, the U.S. federal, state, and local government contract landscape is significantly more difficult this year, with efforts to cut costs at various government levels weighing on demand. Additionally, tariffs and broader economic uncertainty continue to influence client spending patterns.
CrowdStrike’s first-quarter fiscal year 2026 results, covering the period ended April 30, 2025, showed total revenue of $1.10 billion, marking a 20% year-over-year increase and roughly in line with analyst estimates. Subscription revenue accounted for $1.05 billion of this total, also up 20% from the prior year. The company’s Annual Recurring Revenue (ARR) grew 22% year-over-year to $4.44 billion, with $194 million in net new ARR added during the quarter. These figures underscore strong underlying demand for CrowdStrike’s cloud-native cybersecurity platform despite the economic headwinds.
However, the company swung to a GAAP net loss of $110.2 million in the quarter, compared to a GAAP net income of $42.8 million in the same period last year. The loss was partly attributed to lingering costs from a widespread software outage in July 2024, which has continued to weigh on results. CrowdStrike launched an incentive program last year to retain customers affected by the outage, further impacting revenue. The GAAP net loss per share was $0.44, compared with net income per share of $0.17 in the previous year’s quarter.
On a non-GAAP basis, which excludes stock-based compensation, acquisition-related expenses, and other items, CrowdStrike reported net income of $184.7 million, or $0.73 per diluted share, down from $196.8 million, or $0.79 per share, in the year-ago quarter but still beating analyst expectations. Non-GAAP income from operations was $201.1 million, slightly below the $213.3 million reported in the first quarter of fiscal 2025.
Cash flow remained a bright spot for the cybersecurity firm. CrowdStrike generated a record $384 million in cash flow from operations and $279 million in free cash flow during the quarter. The company’s cash and cash equivalents rose to a record $4.61 billion as of April 30, 2025, reflecting strong liquidity. This financial strength underpinned the board of directors’ decision on June 3 to approve a share repurchase program of up to $1 billion, signaling confidence in the company’s long-term prospects despite short-term challenges.
CEO George Kurtz highlighted the company’s momentum and innovation in his remarks: “We started the fiscal year with record Q1 large deal and MSSP momentum alongside sustained 97% gross retention and consistently strong net retention as the market consolidates on Falcon as its cybersecurity platform of choice for the agentic AI era.” He also pointed to the rapid growth of Falcon Flex deals, which exceeded $3.2 billion in total deal value, growing more than sixfold year-over-year.
Kurtz emphasized the company’s commitment to AI-driven innovation, noting, “The scale of Falcon Flex demand and the pace of innovation across AI, next-gen SIEM, cloud, identity, and exposure management advances us towards $10 billion in ending ARR. Today’s announced share repurchase reflects our confidence in CrowdStrike’s future and unwavering mission of stopping breaches.”
Despite these strengths, CrowdStrike’s outlook for the second quarter showed caution. The company expects total revenue between $1.1447 billion and $1.1516 billion, slightly below the consensus estimate, and non-GAAP income from operations between $226.9 million and $233.1 million. Non-GAAP net income attributable to CrowdStrike is forecasted between $209.1 million and $213.8 million, with non-GAAP net income per diluted share in the range of $0.82 to $0.84.
For the full fiscal year 2026, CrowdStrike maintained its revenue guidance of $4.74 billion to $4.81 billion and raised its adjusted earnings per share estimate to between $3.44 and $3.56, marginally above Wall Street’s expectations. This suggests the company anticipates a rebound in performance in the latter half of the year.
However, the company also disclosed that second-quarter free cash flow could be impacted by approximately $29 million related to expenses from the July 2024 outage and related matters. This continues to be a drag on profitability and operational metrics.
The company’s strategic plan, announced on May 6, 2025, involves charges that will largely be incurred in the second quarter, reflecting ongoing investments and restructuring efforts. Notably, CrowdStrike announced in May it planned to cut roughly 500 jobs, or about 5% of its workforce, as part of this plan to optimize operations.
Analysts and investors are closely watching how CrowdStrike navigates a complex environment marked by rising cybersecurity threats and increasing demand for advanced solutions, but also tempered by macroeconomic pressures. The company’s ability to sustain strong ARR growth and expand its AI-driven Falcon platform will be critical.
In addition to financial results, CrowdStrike has continued to innovate and expand its product offerings. As of April 30, 2025, module adoption rates were 48% for customers using six or more modules, 32% for seven or more, and 22% for eight or more modules, reflecting deepening integration of the Falcon platform in customer environments. The company also launched new AI-powered capabilities, including Falcon Privileged Access and Charlotte AI Agentic workflows, aimed at modernizing security operations centers.
Partnerships remain a key growth driver. CrowdStrike expanded collaborations with Microsoft and Google Cloud, earning recognition such as the 2025 Google Cloud Security Partner of the Year Award for Workload Security. The company’s FedRAMP High Authorization further positions it well for government contracts despite the challenging environment.
In sum, CrowdStrike’s first-quarter fiscal 2026 results showcase strong top-line growth and robust cash generation, tempered by operational costs linked to past outages and a cautious near-term outlook. The company’s strategic initiatives and AI-driven innovation pipeline aim to fuel long-term growth, but investors are digesting the impact of macroeconomic headwinds and execution risks amid a competitive cybersecurity landscape.
