CrowdStrike Q1 FY2026 slides: revenue growth strong at 22%, margins contract

CrowdStrike Holdings, Inc. (NASDAQ:CRWD) presented its Q1 FY2026 financial results on June 3, 2025, highlighting continued strong revenue growth while showing some margin compression compared to the prior year.

Quarterly Performance Highlights

CrowdStrike reported solid financial results for the first quarter of fiscal year 2026, with annual recurring revenue (ARR) reaching $4.44 billion, representing a 22% year-over-year increase. The company generated $194 million in net new ARR during the quarter.

As shown in the following summary of key performance metrics:

Total (EPA:TTEF) revenue grew to $1.103 billion, up from $921 million in Q1 FY2025, while subscription revenue increased to $1.051 billion from $872 million in the same period last year. The company also reported record cash flow from operations of $384 million.

Despite the strong top-line growth, CrowdStrike’s profitability metrics showed some contraction. Non-GAAP operating income was $201 million (18% margin), down from $213 million (23% margin) in Q1 FY2025. Similarly, non-GAAP diluted earnings per share decreased to $0.73 from $0.79 in the prior year period, and free cash flow margin declined to 25% from 35%.

The following chart illustrates CrowdStrike’s growth trajectory across key financial metrics:

Platform Adoption & Strategic Initiatives

CrowdStrike’s Flex (NASDAQ:FLEX) model continues to drive platform adoption, with accounts that have adopted Flex now representing more than $3.2 billion in total deal value. During Q1, the company added $774 million in total Flex account value, a 124% year-over-year increase. The average Flex customer deal size exceeds $1 million, and existing Flex contracts have already deployed more than 75% of their committed value.

The company’s module adoption rates remain strong, with 48% of subscription customers using six or more modules, 32% using seven or more, and 22% using eight or more.

As illustrated in the following module adoption visualization:

CrowdStrike’s AI-native security platform is positioned to address a total addressable market (TAM) of $116 billion in calendar year 2025, with projections showing expansion to $250 billion by 2029. This growth reflects increasing demand across multiple security domains, including endpoint security, cloud security, identity protection, and managed services.

The company’s expanding market opportunity is visualized in the following TAM comparison:

Financial Analysis & Guidance

For Q2 FY2026, CrowdStrike provided guidance for total revenue between $1.144 billion and $1.152 billion, with non-GAAP operating income expected to range from $226.9 million to $233.1 million. Non-GAAP diluted EPS is projected to be between $0.82 and $0.84.

For the full fiscal year 2026, the company expects total revenue between $4.744 billion and $4.806 billion, non-GAAP operating income between $970.8 million and $1.010 billion, and non-GAAP diluted EPS between $3.44 and $3.56.

The detailed financial guidance is presented in the following table:

CrowdStrike also outlined its target operating model, which aims for subscription gross margins of 82-85%, operating margins of 28-32%, and free cash flow margins of 34-38% on a full-year basis.

Competitive Industry Position

CrowdStrike continues to position its Falcon platform as a comprehensive security solution that consolidates point products and lowers total cost of ownership. The company competes across multiple security domains, including cloud security, identity protection, SIEM, threat intelligence, data protection, endpoint security, and exposure management.

The following visualization illustrates how the Falcon platform is positioned against competitors across these security domains:

The company’s leadership in cloud security was recently recognized in the 2025 Frost Radar™ report for Cloud and Application Runtime Security, where CrowdStrike scored highest among all vendors on the Innovation Index. The report identified CrowdStrike as the only Cloud-Native Application Protection Platform (CNAPP) delivering unified, real-time protection across cloud, identity, and endpoint.

As shown in the Frost Radar visualization:

Forward-Looking Statements

CrowdStrike’s AI-native XDR platform continues to be a key differentiator in the market. The company’s platform architecture integrates AI capabilities, including machine learning, behavioral AI, and custom large language models (LLMs), with a comprehensive set of security modules.

The following illustration highlights the architecture of CrowdStrike’s AI-native platform:

Looking ahead, CrowdStrike emphasized several key takeaways from Q1 that will drive future growth. These include the acceleration of platform adoption through the Flex model, strong performance in Next-Gen SIEM with over 100% year-over-year ARR growth, 113% year-over-year growth in deals exceeding $10 million, and increasing partner engagement with 60% of Q1 deal value sourced by partners.

CrowdStrike’s stock closed at $479.17 on June 3, 2025, up 2% for the day, and traded slightly higher in after-hours at $481. The stock has been trading between a 52-week range of $200.81 and $491.20, indicating strong investor confidence in the company’s growth trajectory despite the margin compression seen in the latest quarterly results.

Full presentation:

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