Summary
CrowdStrike reported total revenue of $1.23 billion for the third quarter of fiscal 2026, up 22.2% from the prior-year quarter. Gross profit rose 22.7% to $926.44 million, and gross margin was 75.1%, up 0.3 percentage points. The top line accelerated even as GAAP profitability moved the other way. The company posted an operating loss of $69.44 million, a wider loss than the prior-year quarter. Net loss was $34.00 million, and diluted earnings per share was -$0.14, also a wider loss. Operating margin was -5.6%, down 0.1 percentage points. On a non-GAAP basis, income from operations reached a record $264.6 million, and non-GAAP diluted earnings per share was a record $0.96. Operating cash flow was $397.54 million, up 21.9%, while capital expenditures were $83.40 million, up 6.0%. Free cash flow was $295.9 million.
The year-to-date picture shows similar revenue momentum but more pressure on GAAP earnings. Revenue for the nine months ended October 31, 2025 was $3.51 billion, up 21.1%. Gross profit was $2.60 billion, up 19.4%. Gross margin slipped to 74.1%, down 1.1 percentage points. The operating loss widened to $307.08 million, and the net loss was $221.88 million, a swing from net income in the prior-year period. Diluted earnings per share was -$0.89, compared with positive earnings per share a year earlier. Operating margin was -8.8%, down 7.5 percentage points. Operating cash flow for the nine months was $1.11 billion, up 7.6%, and capital expenditures were $199.64 million, up 19.1%.
Operational metrics point to healthy demand. Ending annual recurring revenue was $4.92 billion as of October 31, 2025, up 23% year over year. Net new ARR was $265.3 million in the quarter, with growth accelerating to 73% year over year. The Falcon Flex subscription model reached more than $1.35 billion in ending ARR from accounts that have adopted it, growing more than 200% year over year. Module adoption rates were 49% for six or more modules, 34% for seven or more, and 24% for eight or more. Deferred revenue was $4.06 billion, up 27.1%, and remaining performance obligations were $7.90 billion, up 46.3%. Backlog stood at approximately $3.8 billion. The company had 10,410 full-time employees as of October 31, 2025. Management highlighted partnerships with AWS, EY, CoreWeave, and Kroll, and the acquisition of Pangea in AI security.
Guidance was raised. The company increased its revenue outlook for the fourth quarter of fiscal 2026, which ends January 31, 2026, and for the full fiscal year 2026, which also ends January 31, 2026. Non-GAAP income from operations is guided to $315.4 million to $319.4 million for the fourth quarter and $1,036.1 million to $1,040.1 million for the full year. Non-GAAP net income attributable to CrowdStrike is guided to $282.1 million to $286.6 million for the fourth quarter and $949.6 million to $954.0 million for the full year. Non-GAAP diluted earnings per share guidance is $1.09 to $1.11 for the fourth quarter and $3.70 to $3.72 for the full year. Both periods use a 21.0% non-GAAP tax rate. Management also lifted its second half fiscal 2026 net new ARR growth expectations to at least 50% year over year and said it remains confident in 20% net new ARR growth for fiscal 2027 from the increased fiscal 2026 expectations.
Risks remain centered on the July 19 Incident and its aftermath. CrowdStrike continues to face lawsuits, claims, and inquiries related to the incident. It expects to incur significant legal and professional services and other general and administrative expenses in future periods. The incident has contributed to delays in creating sales opportunities and longer sales cycles, including delays in customer purchasing decisions. Customer commitment packages introduced after the incident have included discounting, additional modules, professional services, flexible payment terms, and 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. The Revolving Facility matures on January 2, 2026. The company carried an accumulated deficit of $1.3 billion as of October 31, 2025. Other obligations include non-cancelable purchase commitments of $2.6 billion and unrecognized tax benefits of $62.6 million. Competition, rapid growth, and acquisition integration also remain factors.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2026 | Q2 FY2026 | QoQ | Q3 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.23B | $1.17B | +5.6% | $1.01B | +22.2% |
| Gross profit | $926.4M | $858.7M | +7.9% | $755.1M | +22.7% |
| Gross margin | 75.1% | 73.5% | +1.6 pp | 74.8% | +0.3 pp |
| Research & development | $347.6M | $346.7M | +0.3% | $275.6M | +26.1% |
| Sales & marketing | $481.0M | $447.0M | +7.6% | $408.3M | +17.8% |
| General & administrative | $167.3M | $178.0M | -6.0% | $126.9M | +31.8% |
| Total operating expenses | $995.9M | $971.6M | +2.5% | $810.8M | +22.8% |
| Operating income (loss) | -$69.4M | -$113.0M | +38.5% | -$55.7M | -24.6% |
| Operating margin | -5.6% | -9.7% | +4.0 pp | -5.5% | -0.1 pp |
| Net income (loss) | -$34.0M | -$77.6M | +56.2% | -$16.8M | -102.1% |
| Net margin | -2.8% | -6.6% | +3.9 pp | -1.7% | -1.1 pp |
| Diluted EPS | -$0.14 | -$0.31 | +$0.17 | -$0.07 | -$0.07 |
Risks
The July 19 Incident has harmed and is expected to continue harming business, sales, customer and partner relations, and reputation, with customers deferring or terminating purchases and competitors aggressively approaching customers. MD&A states the incident caused delays in creating sales opportunities and longer sales cycles, and customer commitment packages have increased contraction and decreased upsell dollar values.
CrowdStrike faces lawsuits, claims, and governmental inquiries related to the July 19 Incident, including securities, derivative, and consumer class actions, and may face undertakings, injunctive relief, consent decrees, or penalties. Insurance may not cover all costs, and additional indemnification or compensation claims may be asserted.
Sales cycles are long and unpredictable, especially for large enterprises and government entities, and uncertain economic or geopolitical conditions can add scrutiny and delays. The July 19 Incident has elongated sales cycles, and MD&A notes delays in customer purchasing decisions that may continue in future periods.
Customers have no obligation to renew and may renew for shorter terms, fewer cloud modules, fewer endpoints, or smaller contract values, and customer commitment packages have increased contraction due to elongated subscription terms. If CrowdStrike cannot maintain and expand customer relationships, results of operations may materially suffer.
The security market is intensely competitive, and competitors may more successfully incorporate AI, gain superior access to AI technologies, or achieve higher market acceptance of their AI solutions. Larger competitors with greater resources may bundle or price aggressively, pressuring revenue and gross margins.
CrowdStrike depends on key technical, sales, and management personnel, including CEO George Kurtz, and faces intense competition for cybersecurity, sales, and engineering talent. The strategic plan announced May 6, 2025 could negatively affect recruiting and retention, and equity volatility may impair retention.
CrowdStrike has a history of losses, and operating loss widened to $307.1 million for the nine months ended October 31, 2025 from $35.1 million in the prior-year period. It expects operating expenses to increase as it invests for growth, and may not achieve or sustain profitability.
SaaS KPIs
All quarters →Free Cash Flow Margin
Non-GAAP Operating Margin
Net New ARR
Free Cash Flow
Non-GAAP Subscription Gross Margin
Backlog
Module Adoption Rate (6+ modules)
Module Adoption Rate (7+ modules)
Module Adoption Rate (8+ modules)
Summary, forecast, risks and KPIs are extracted from CrowdStrike Holdings, Inc.'s SEC filings for Q3 FY2026 (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.