Summary
CrowdStrike's fiscal 2025 third quarter, ended October 31, 2024, mixed top-line scale with a sharp GAAP profitability swing. Total revenue reached $1.01 billion, up 28.5% from the prior-year quarter. Revenue for the first nine months was $2.90 billion, up 31.0% from the prior-year period. Annual recurring revenue hit $4.02 billion, up 27% year over year, with $153.0 million of net new ARR added in the quarter. ARR year-over-year growth was 27%, compared with 35% in the prior-year period. Dollar-based net retention was 115%. Module adoption reached 66% for five or more modules, 47% for six or more, 31% for seven or more, and 20% for eight or more. The company crossed the $1 billion quarterly revenue mark.
GAAP results turned negative. Gross profit was $755.09 million, up 27.8% from the prior-year quarter. Loss from operations was $55.72 million, compared with income of $3.16 million in the prior-year quarter. Net loss attributable to CrowdStrike was $16.82 million, compared with income of $26.66 million. Diluted EPS was -$0.07, compared with $0.11. Gross margin was 74.7%, down 0.4 percentage points, and operating margin was -5.5%, down 5.9 percentage points. Non-GAAP income from operations was $194.9 million, compared with $175.7 million. Non-GAAP net income attributable to CrowdStrike was $234.3 million, compared with $199.2 million. Non-GAAP diluted EPS was $0.93, compared with $0.82. The GAAP loss reflected July 19 Incident related costs and heavier stock-based compensation, while non-GAAP results exclude those items.
Cash generation remained solid. Operating cash flow was $326.1 million, up 19.2% from the prior-year quarter. Free cash flow, a non-GAAP measure, was $230.6 million, compared with $239.0 million. Year-to-date operating cash flow was $1.04 billion, up 26.5%. Capital expenditures were $78.70 million, up 270.1%, reflecting a step-up in investment. Deferred revenue was $3.20 billion, up 25.7%. Remaining performance obligations were $5.40 billion, up 45.9%. The company also reported backlog of approximately $2.2 billion as of October 31, 2024. The company said a substantial portion of revenue in each period is attributable to the recognition of deferred revenue from subscriptions entered into during previous periods.
Management issued guidance for the fiscal fourth quarter of 2025 and for the full fiscal year 2025. For the quarter, it guided non-GAAP income from operations to $184.0 million to $189.0 million and non-GAAP net income per diluted share to $0.84 to $0.86. For the full fiscal year, it guided non-GAAP income from operations to $804.4 million to $809.4 million and non-GAAP net income per diluted share to $3.74 to $3.76. The company also provided revenue guidance for the quarter and the year, and it stated that a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is not available without unreasonable effort. The July 19 Incident remains the central risk. CrowdStrike faces lawsuits, claims, and inquiries, and management expects continued legal and professional services costs. Sales cycles have been longer, and customer commitment packages have led to increased contraction and lower upsell dollar values. In the third quarter, CrowdStrike excluded approximately $26.0 million from ARR after a federal distributor provided notice of intent to exercise transferability rights. Management warned that churn and related pressure on key metrics may appear in future periods because contracts typically run twelve months or longer. The company also closed the acquisition of Adaptive Shield for $213.8 million in cash, net of $13.8 million of cash acquired, adding SaaS security capabilities. Management cited competition, execution challenges, and macroeconomic uncertainty as additional risks.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.01B | $963.9M | +4.8% | $786.0M | +28.5% |
| Gross profit | $755.1M | $726.5M | +3.9% | $591.0M | +27.8% |
| Gross margin | 74.8% | 75.4% | -0.6 pp | 75.2% | -0.4 pp |
| Research & development | $275.6M | $250.9M | +9.8% | $196.1M | +40.6% |
| Sales & marketing | $408.3M | $355.5M | +14.9% | $286.2M | +42.7% |
| General & administrative | $126.9M | $106.4M | +19.3% | $105.6M | +20.2% |
| Total operating expenses | $810.8M | $712.8M | +13.7% | $587.8M | +37.9% |
| Operating income (loss) | -$55.7M | $13.7M | -508.0% | $3.2M | -1861.7% |
| Operating margin | -5.5% | 1.4% | -6.9 pp | 0.4% | -5.9 pp |
| Net income (loss) | -$16.8M | $46.7M | -136.0% | $26.7M | -163.1% |
| Net margin | -1.7% | 4.8% | -6.5 pp | 3.4% | -5.0 pp |
| Diluted EPS | -$0.07 | $0.19 | -$0.26 | $0.11 | -$0.18 |
| Net retention rate | 115.0% | — | — | — | — |
Risks
The July 19 Incident, a faulty Falcon content configuration update that crashed certain Windows systems, has harmed and is expected to continue to harm business, sales, customer and partner relations, reputation, and financial condition. CrowdStrike has incurred significant remediation, customer relations, legal, and other costs, and some customers have deferred or terminated purchases while competitors have aggressively targeted its customers and partners.
CrowdStrike faces securities litigation, derivative litigation, and putative consumer class actions related to the July 19 Incident, plus inquiries from governmental authorities that may seek undertakings, injunctive relief, consent decrees, or penalties. Insurance may not cover all costs, claims, and liabilities.
MD&A states that following the July 19 Incident CrowdStrike has experienced delays in creating sales opportunities and longer sales cycles, including delayed customer purchasing decisions, and expects sales cycles to continue to be elongated in future periods.
Customer commitment packages introduced after the July 19 Incident may include discounting, additional modules, professional services, flexible payment terms, or subscription period extensions. These packages have resulted, and are expected to continue to result, in increased contraction due to elongated subscription terms and decreased upsell dollar values, and dollar-based net retention rate was 115% as of October 31, 2024.
Subscription revenue is recognized ratably over the subscription term, and commitment packages that extend subscription periods lengthen the applicable recognition period. The filing states this has adversely affected, and is expected to continue to adversely affect, CrowdStrike's results of operations.
CrowdStrike faces intense competition, and the filing notes 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. Many competitors have greater financial, technical, marketing, sales, and other resources.
Deteriorating general economic conditions, geopolitical environment, volatility in banking and financial services, inflation, and interest rate policies have in the past and may in the future cause customers to delay or cut security and IT operations spending. This may decrease revenue, reduce sales, lengthen sales cycles, increase churn, and lead to more flexible customer payment terms.
For Q3 FY2025, operating income was -$55.7 million, down from $3.2 million in Q3 FY2024, and net income was -$16.8 million, down from $26.7 million in Q3 FY2024. CrowdStrike had an accumulated deficit of $1.0 billion as of October 31, 2024, and expects operating expenses to increase in the future.
Headcount grew from 4,965 employees as of January 31, 2022, to 9,666 employees as of October 31, 2024. If CrowdStrike fails to manage growth effectively, its ability to operate the Falcon platform, maintain compliance, and address competitive challenges could be impaired.
CrowdStrike is highly dependent on CEO George Kurtz and other key personnel, and employees work on an at-will basis. Competition for cybersecurity engineers, sales professionals, and incident response personnel is intense, and stock price volatility or vesting equity awards could affect retention.
The vast majority of Falcon platform sales flow through channel partners. Loss of a substantial number of channel partners or technology alliance partners, or failure to recruit additional partners, could adversely affect results of operations.
The revolving facility and the indenture governing the Senior Notes contain restrictive covenants and cross-default provisions. A breach could result in an event of default, acceleration of indebtedness, and limited ability to borrow or refinance.
Through the Falcon Funds, CrowdStrike invests in early to late stage private companies and may not realize a return on those equity investments. Many such companies generate net losses, depend on later financing, and valuations are complex due to lack of readily available market data.
SaaS KPIs
All quarters →Free Cash Flow Margin
Non-GAAP Operating Margin
Net New ARR
Free Cash Flow
Annual Recurring Revenue (ARR)
Non-GAAP Subscription Gross Margin
Backlog
Dollar-Based Net Retention Rate
Module Adoption Rate (6+ modules)
Module Adoption Rate (7+ modules)
Module Adoption Rate (5+ modules)
Module Adoption Rate (8+ modules)
Summary, forecast, risks and KPIs are extracted from CrowdStrike Holdings, Inc.'s SEC filings for Q3 FY2025 (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.