Thoughts on Valuation Before Earnings Drop

Crowdstrike’s Conference call is scheduled for 5 pm E.T. Here are questions I will be focused on:

Key Analyst Questions:

• ARR vs. Revenue Gap: Net new ARR surged 73% YoY to $265M (a record), yet revenue missed. Management must explain the timing disconnect.
• Profitability Path: $69M operating loss despite $4.92B ending ARR. When will scale drive positive operating income?
• AI Product Adoption: Charlotte AI, Falcon Next-Gen Identity, and Data Protection just launched. What’s the pipeline?
• Competitive Defense: With ServiceNow acquiring Veza for AI security today, how does CRWD defend share against Palo Alto (118x P/E)?
• FY27 Guidance: 20% net new ARR growth target represents significant deceleration from 73% in Q3. What’s driving the slowdown?

Red Flags: Vague answers on revenue timing or defensive commentary about the 50%+ operating expense ratio.

Q4 FY26

Full-Year FY26

Raised ARR expectations (+50% YoY 2H target) are the biggest positive surprise. Street will treat this as evidence of sustained momentum entering FY27.

WHAT CHANGED THIS QUARTER

• ARR re-accelerated sharply — well ahead of pre-earnings “high bar.”
• Flex model adoption surpassed $1.35B ARR, confirming it is transforming deal sizes.
• Next-Gen SIEM momentum surged, supported by new AWS/EY/Kroll/KPMG partnerships.
• AI narrative strengthened — Charlotte AI FedRAMP High + agentic security rollout.
• Cash flow hit all-time highs, adding another pillar to the maturing profitability story.
• Guidance lifted, especially on ARR, which is the core driver of valuation.

“Q3 was one of our best quarters in company history… we achieved record Q3 net new ARR of $265 million, accelerating to 73% year-over-year growth… Our single platform strategy coupled with the Falcon Flex subscription model unlocks consolidation.”

CEO George Kurtz

Management is explicitly framing the quarter as a structural acceleration, not a one-off. Strength was broad, endpoint, cloud, identity, and SIEM, and Flex is positioning CRWD as the consolidation platform for enterprise security.

Solid numbers coming from Crowdstrike and the stock is up 2% plus after-hours.

• FY26 revenue raised to $4.796B–$4.807B
• Q4 EPS (non-GAAP) guided to $1.09–$1.11, above consensus
• Management raised 2H FY26 net new ARR growth outlook to ≥50%

This is one of CrowdStrike’s best ARR quarters ever. Net new ARR accelerated sharply, Flex ARR exploded, and cash flow set records. Guidance went up across the board, supporting why shares are steady-to-higher after hours.