Summary
CrowdStrike closed the second quarter of fiscal 2027 with total revenue of $1.47 billion, up 25.8% from $1.17 billion in the prior-year quarter. Revenue for the six months ended July 31, 2026 was $2.86 billion, up 25.7%. Annual recurring revenue reached $5.84 billion as of July 31, 2026, up 25% year over year, and net new ARR of $332.8 million set a company record. That compares with $221.1 million of net new ARR in the prior-year quarter. The release credits 51% year-over-year growth in net new ARR, and management raised the full-year fiscal 2027 net new ARR growth outlook by 630 basis points to 34% at the midpoint. Falcon Flex accounts accounted for more than $2.29 billion of ending ARR, up 101% year over year, and dollar-based net retention improved sequentially. Module adoption widened too, with 51% of subscription customers running six or more modules, 35% running seven or more and 26% running eight or more.
Profitability improved on every reported line. Gross profit was $1.10 billion, up 27.5%, and gross margin of 74.6% rose 1.0 percentage point. The operating loss narrowed to $33.2 million from $105.5 million a year earlier, and the operating margin improved to negative 2.3% from negative 9.0%. Net income attributable to CrowdStrike was $5.3 million, a swing to a profit from a loss of $70.2 million in the prior-year quarter, and diluted EPS was $0.01 against a loss of $0.07. The six-month picture shows the same turn: net income of $33.1 million versus a loss of $174.4 million, and diluted EPS of $0.03 versus a loss of $0.17. Non-GAAP income from operations was $371.6 million compared with $255.0 million, and non-GAAP diluted EPS was $0.31 against $0.23. The gap between GAAP and non-GAAP results stays wide because stock-based compensation and related employer payroll taxes are the largest reconciling items.
Cash generation was the strongest part of the quarter. Operating cash flow was $530.3 million, up 59.3%, and $1.12 billion for the six months, up 56.4%. Free cash flow, a non-GAAP measure, was $377.4 million against $283.6 million a year earlier, a 26% free cash flow margin. Capital expenditures rose 308.0% to $124.4 million. Deferred revenue of $4.84 billion was up 26.3%, and remaining performance obligations of $10.70 billion were up 48.6%. Backlog stood at roughly $5.9 billion. Cash and cash equivalents were $5.01 billion at July 31, 2026, and the accumulated deficit was $1.2 billion.
Guidance for the third quarter of fiscal 2027, which ends October 31, 2026, calls for exit ARR of $6,184.4 million to $6,188.4 million, non-GAAP income from operations of $372.7 million to $375.9 million, non-GAAP net income attributable to CrowdStrike of $325.4 million to $327.9 million, and non-GAAP diluted earnings per share of $0.31. For the full fiscal year 2027, the company guided to ARR of $6,603.0 million to $6,611.9 million, non-GAAP income from operations of $1,497.2 million to $1,508.4 million, non-GAAP net income attributable to CrowdStrike of $1,302.7 million to $1,311.6 million, and non-GAAP diluted earnings per share of $1.25 to $1.26. All of those targets exclude stock-based compensation and other items, and the company said it has not provided the most directly comparable GAAP measures because certain items sit outside its control or cannot be reasonably predicted.
The July 19 Incident remains the biggest known overhang. CrowdStrike is still subject to lawsuits, claims and inquiries tied to it, expects to keep incurring significant legal and professional services costs, and said the episode has delayed customer purchasing decisions and lengthened sales cycles. Customer commitment packages introduced after the incident have produced increased contraction and lower upsell values. Management also flagged competition, rapid growth, acquisition integration and macroeconomic conditions among the factors that could move results. The company spent $881.4 million on the Seraphic and SGNL acquisitions, net of cash, in the first half, and agreed in July 2026 to buy the technology assets of XM Cyber for expected consideration of $145.0 million, with a close targeted for the second half of fiscal 2027. Non-cancelable purchase commitments totaled $4.1 billion at quarter end, with another $2.9 billion committed after July 31, 2026, and long-term debt was $746.2 million. Headcount was 11,706 full-time employees.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2027 | Q1 FY2027 | QoQ | Q2 FY2026 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.47B | $1.39B | +6.2% | $1.17B | +25.8% |
| Gross profit | $1.10B | $1.04B | +5.1% | $858.7M | +27.7% |
| Gross margin | 74.6% | 75.3% | -0.7 pp | 73.5% | +1.1 pp |
| Research & development | $444.2M | $408.3M | +8.8% | $346.7M | +28.1% |
| Sales & marketing | $510.0M | $488.7M | +4.4% | $447.0M | +14.1% |
| General & administrative | $176.0M | $177.0M | -0.6% | $178.0M | -1.1% |
| Total operating expenses | $1.13B | $1.07B | +5.2% | $971.6M | +16.3% |
| Operating income (loss) | -$33.2M | -$30.6M | -8.6% | -$113.0M | +70.6% |
| Operating margin | -2.3% | -2.2% | -0.0 pp | -9.7% | +7.4 pp |
| Net income (loss) | $5.3M | $46.0M | -88.5% | -$77.6M | +106.8% |
| Net margin | 0.4% | 3.3% | -3.0 pp | -6.6% | +7.0 pp |
| Diluted EPS | $0.01 | $0.11 | -$0.10 | -$0.31 | +$0.32 |
Risks
The July 19, 2024 Falcon sensor content update caused Windows system crashes, and the filing states the incident has harmed and is expected to continue to harm sales, customer and partner relations, reputation, and financial condition. Certain existing or prospective customers deferred or decided against purchases, terminated or chose not to renew contracts, and competitors have aggressively targeted those customers and partners.
CrowdStrike faces securities litigation, derivative litigation, consumer class actions, governmental inquiries, and indemnification claims tied to the July 19 Incident. The filing says these matters are resulting and expected to result in significant costs, diversion of management attention, and possible undertakings, injunctive relief, consent decrees, or penalties.
Customer commitment packages following the July 19 Incident have included discounting, additional modules, professional services, flexible payment terms, and subscription period extensions. MD&A states these packages have resulted and are expected to continue to result in increased contraction due to elongated subscription terms and decreased upsell dollar values.
MD&A reports delays in creating sales opportunities and longer sales cycles, including delays in customer purchasing decisions, following the July 19 Incident, and says sales cycles may be elongated in future periods. Because customers typically sign contracts with terms over one year, customer churn and corresponding impacts may occur in future periods.
The risk factors state that market conditions are changing rapidly due to technological advancements including AI, and competitors may more successfully incorporate AI into their products, gain or leverage superior access to certain AI technologies, and achieve higher market acceptance of their AI solutions.
Competitive pricing pressure may reduce gross profits if CrowdStrike cannot maintain pricing due to competitors lowering prices, bundling competing products, or promotional programs. The filing notes the cybersecurity market remains very competitive and competition may further increase in the future.
CrowdStrike depends on key technical, sales, and management personnel, including CEO George Kurtz, and faces intense competition for cybersecurity and cloud software talent. The filing also notes the Strategic Plan could negatively affect its ability to recruit and retain skilled personnel.
CrowdStrike relies on third-party data centers, primarily Amazon Web Services, and its own colocation data centers to host and operate the Falcon platform. Service interruptions, capacity constraints, or failures of redundancy or disaster recovery could harm customer trust and cause subscription terminations or reduced renewal rates.
International customers were 35% of total revenue for the six months ended July 31, 2026, and international expansion carries risks including tariffs and trade restrictions, data localization and digital sovereignty requirements, foreign tax changes, and geopolitical instability. The filing states these risks could limit future growth.
MD&A shows business acquisitions net of cash acquired related to Seraphic and SGNL in the six months ended July 31, 2026, and a pending XM Cyber asset acquisition. The filing warns acquisitions may divert management attention, disrupt the business, dilute stockholders, and lead to unanticipated liabilities or write-offs.
SaaS KPIs
All quarters →Free Cash Flow Margin
Non-GAAP Operating Margin
Net New ARR
Free Cash Flow
Annual Recurring Revenue (ARR)
Backlog
Summary, forecast, risks and KPIs are extracted from CrowdStrike Holdings, Inc.'s SEC filings for Q2 FY2027 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.