CrowdStrike Holdings (NASDAQ:CRWD) reported better-than-expected second-quarter results, though the cybersecurity firm's stock slipped over 2% in premarket trading Thursday.
The company posted adjusted earnings per share of $1.04, surpassing analyst estimates of $0.97. Revenue for the quarter reached $963.9 million, exceeding the consensus forecast of $958.32 million and marking a 32% YoY increase.
CrowdStrike's Annual Recurring Revenue (ARR) grew 32% YoY to $3.86 billion, with $217.6 million in net new ARR added during the quarter. The company's subscription revenue, which forms the bulk of its top line, rose 33% YoY to $918.3 million.
CEO George Kurtz highlighted the company's resilience, stating, "Our second quarter demonstrates the resilience of our business and platform – with LogScale Next-Gen SIEM, Identity Protection, and Cloud Security eclipsing $1 billion in combined ending ARR."
Despite the strong quarterly performance, CrowdStrike's full-year guidance came in below analyst expectations.
The company forecasts FY2025 adjusted EPS of $3.61-$3.65, below the consensus of $3.88, and revenue of $3.89-$3.9 billion, short of the $3.95 billion analyst estimate.
CrowdStrike attributed part of the guidance to an estimated $30 million subscription revenue impact in each of the remaining fiscal quarters due to customer incentives.
The company's cash position remains strong, with $4.04 billion in cash and cash equivalents as of July 31, 2024.
CrowdStrike also reported record Q2 operating cash flow of $326.6 million and free cash flow of $272.2 million.
In a post-earnings note, analysts at Piper Sandler reiterated a Buy rating on CRWD, citing "very strong" Q2 results despite a challenging period after the outage.
"More importantly, a conservative forward outlook builds in a beatable scenario and likely represents the final shoe, in our view," analysts said. "Most impressive in 2Q was the large post incident transactions highlighted in key growth areas of Cloud, Identity and SIEM."
Although there may be some negative impact, which is already adequately reflected in the numbers, the platform's value proposition remains strong, Piper Sandler's team added.
Separately, RBC Capital Markets analysts viewed the quarter as better-than-expected, but noted that the focus shifted to the outlook, which indicates some impact from the outage likely extending into the first half of FY26.
Despite this, they see several catalysts ahead, including surpassing lowered estimates, potential growth in SLED/FED in Q3, a possible Q4 budget increase, and acceleration into the second half of fiscal 2026 driven by strong renewals following customer commitment offerings.
"Overall, we think the company likely emerges stronger following the outage and believe there has been no change to the consolidation opportunity as management continues to see a path to $10B in ARR."
Senad Karaahmetovic contributed to this report.