CrowdStrike reports strong top-line growth and robust cash generation in Q2 FY2026, with GAAP results showing a net loss while non-GAAP results reach record levels as the company accelerates its ARR expansion and AI-enabled security initiatives.
Key numbers and highlights
– Revenue and growth
– Total revenue: $1.169 billion for the quarter ended July 31, 2025, up 21% year over year from $963.9 million.
– Subscription revenue: $1.103 billion, up 20% year over year.
– Annual Recurring Revenue (ARR) grew 20% year over year to $4.66 billion, with $221.1 million in net new ARR added in the quarter.
– Profitability (GAAP vs. non-GAAP)
– GAAP net loss attributable to CrowdStrike: $77.7 million, or $0.31 per diluted share.
– Non-GAAP net income attributable to CrowdStrike: $237.4 million, or $0.93 per diluted share (a record).
– GAAP income (loss) from operations: a loss of $113.0 million; Non-GAAP income from operations: $255.0 million (a record).
– GAAP gross margin on subscription: 77%; Non-GAAP subscription gross margin: 80%.
– Cash flow and liquidity
– Net cash provided by operating activities: $332.8 million.
– Free cash flow: $283.6 million (a quarterly record), with a free cash flow margin of 24%.
– Balance sheet and spending
– Cash and cash equivalents at period end: approximately $4.97 billion.
– Stock-based compensation and related payroll taxes continued to be a meaningful driver of non-GAAP adjustments, offset by improvements in operating leverage and higher ARR.
– Guidance and outlook
– Q3 FY26 guidance:
– Total revenue: $1.208 to $1.218 billion.
– Non-GAAP income from operations: $256.0 to $262.0 million.
– Non-GAAP net income attributable to CrowdStrike: $238.1 to $242.8 million.
– Non-GAAP net income per share (diluted): $0.93 to $0.95.
– Weighted average shares (diluted): about 257 million.
– Non-GAAP tax rate: 21.0%.
– Full-year FY26 guidance:
– Total revenue: $4.7495 to $4.8055 billion.
– Non-GAAP income from operations: $1,000.1 to $1,040.1 million.
– Non-GAAP net income attributable to CrowdStrike: $922.4 to $954.0 million.
– Non-GAAP net income per share (diluted): $3.60 to $3.72.
– Weighted average shares (diluted): about 256 million.
– Non-GAAP tax rate: 21.0%.
Leadership commentary
– Chief Financial Officer Burt Podbere said the company exceeded expectations across guided metrics, delivering 21% year-over-year total revenue growth, record Q2 cash flow from operations of about $333 million and record Q2 free cash flow of about $284 million. He emphasized confidence in continued net-new ARR acceleration for the back half of fiscal year 2026.
– Founder and Chief Executive Officer George Kurtz highlighted the momentum in net new ARR, noting more than 1,000 Flex customers and over 100 re-flexes, underscoring CrowdStrike’s leadership in cybersecurity consolidation as AI transforms enterprise operations.
Recent highlights and strategic momentum
– Module adoption rates were reported at 48%, 33%, and 23% for six or more, seven or more, and eight or more modules, respectively, as of July 31, 2025.
– CrowdStrike announced an agreement to acquire Onum Technology Inc., a pioneer in real-time telemetry pipeline management.
– Recognized as a Leader in Gartner’s 2025 Magic Quadrant for Endpoint Protection Platforms for the sixth consecutive time, and as a Leader in multiple other Gartner, IDC, and GigaOm evaluations, reflecting broad recognition of its platform.
– Launched CrowdStrike Falcon Next-Gen Identity Security, designed to protect identities across the lifecycle and environments, and introduced CrowdStrike Signal, an AI-powered detection engine.
– Expanded AI-focused offerings (AI Systems Security Assessment, AI for SecOps Readiness) and announced integrations with AWS and the OpenAI ChatGPT Enterprise Compliance API to enhance AI governance and protection.
– Introduced Falcon Cloud Security integrations with NVIDIA NIM and NeMo Safety, and announced collaboration initiatives to extend security workflows across cloud, identity, and workloads.
Operational context and non-GAAP adjustments
– Effective February 1, 2025, CrowdStrike began including employer payroll taxes related to stock-based awards in stock-based compensation for GAAP-to-non-GAAP reconciliations; the company also adopted a 21.0% long-term non-GAAP tax rate for fiscal 2026, reflecting changes from recent tax policy.
– The company provides reconciliations of GAAP to non-GAAP results, including adjustments for stock-based compensation, amortization, acquisition-related costs, and other items, to help investors gauge ongoing operating performance.
What this means for investors
– CrowdStrike is accelerating its top-line growth, expanding ARR, and generating substantial cash flow, even as GAAP net income remains negative in the near term. The non-GAAP measures show a higher level of profitability driven by operating leverage, with cash generation supporting continued investment in growth initiatives like AI-driven security capabilities and strategic acquisitions.
– The ARR expansion, large net new ARR in the quarter, and a strong roster of AI-enabled product launches position the company to sustain growth into fiscal 2026 and beyond.
– The company’s guidance suggests continued high growth in revenue and a favorable non-GAAP profitability trajectory, though investors should monitor the impact of any ramp in operating expenses tied to acquisitions and product development.
Summary takeaways
– Revenue grew by about 21% year over year to roughly $1.17 billion in Q2 FY2026.
– Free cash flow reached a quarterly record of about $284 million; cash flow from operations was about $333 million.
– ARR reached about $4.66 billion, with solid net new ARR in the quarter and notable customer expansion metrics.
– GAAP results show a quarterly net loss, while non-GAAP results show record profitability and positive cash generation.
– The company reiterated strong guidance for Q3 and full-year FY2026, supported by a broad AI-focused product roadmap and strategic acquisitions.
Optional value adds
– Watch for the Onum Technology acquisition to influence telemetry and real-time data integration across CrowdStrike’s security platform.
– The AI-driven enhancements and cloud-native, identity-centric security offerings are likely to influence competitive positioning in enterprise security as AI adoption accelerates.
– Stakeholders should keep an eye on free cash flow margins, given continued investments in growth initiatives and potential integration costs from acquisitions.
If you’d like, I can tailor this into a publish-ready post for WordPress with a concise headline, a lede paragraph, a metrics box, and a closing section highlighting guidance and strategic implications.