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Investing.com -- Moody’s Ratings has affirmed CrowdStrike Holdings (NASDAQ:CRWD), Inc.’s Baa3 senior unsecured rating and changed the outlook to positive from stable, citing the company’s strong competitive position in the cybersecurity market.
The rating agency expects CrowdStrike’s subscription revenue growth to accelerate from about 20% in the first half of fiscal year ending January 2026 to 23% in fiscal year 2027, with increasing profitability driving strong free cash flow growth.
While the business outages caused by CrowdStrike’s faulty content configuration update in July 2024 negatively impacted operating performance, Moody’s noted that the financial impact has been limited and the company’s competitive position remains strong.
The positive outlook also reflects expectations that CrowdStrike’s conservative financial policies will continue to support strengthening credit metrics with growing earnings.
Moody’s highlighted CrowdStrike’s leading position in the corporate endpoint security market and its well-regarded portfolio across multiple cybersecurity segments. The company maintains strong dollar-based gross retention rates (97% in the first quarter of fiscal 2026) and has $6.8 billion in remaining performance obligations, providing good revenue visibility.
The rating agency projects CrowdStrike’s revenues to grow from $4.8 billion in fiscal 2026 to $5.8 billion in fiscal 2027, with diminishing impact from the July 2024 incident and operating leverage driving margin expansion.
CrowdStrike has robust liquidity with $4.6 billion in cash and short-term investments. Moody’s expects the company to generate $1.2 billion and $1.7 billion in free cash flow in fiscal years 2026 and 2027 respectively, compared to $750 million in outstanding senior unsecured notes debt.
The company operates in highly fragmented and competitive segments of the cybersecurity market characterized by rapidly evolving technologies, but its strong financial flexibility provides capacity for investments and moderate-sized acquisitions.
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