Q4 2025 CrowdStrike Holdings Inc Earnings Call

Unknown Executive: Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, we will conduct a question-and-answer session. Please be advised that today's conference is being recorded.

At this time all participants are in a listen only mode.

After the Speakers' presentation, we will conduct a question and answer session.

Please be advised that today's conference is being recorded.

Maria Riley: I would now like to hand the call over to Maria Riley, Vice President of Investor Relations. Maria, please go ahead.

Maria Riley: I would now like to hand, the call over to Maria Riley Vice President of Investor Relations. Mario. Please go ahead.

Maria Riley: Good afternoon, and thank you for your participation today. With me on the call are George Kurtz, Chief Executive Officer and Founder of Crowdstrike, and Burt Podbere, Chief Financial Officer.

Maria, please go ahead.

Speaker Change: Good afternoon, and thank you for your participation today. With me on the caller, George Kurtz, Chief Executive Officer, and Founder of Crowdstrike, and Burt Podbere Chief Financial Officer.

Maria Riley: Before we get started, I would like to note that certain statements made during this conference call that are not historical facts, including those regarding our future plans, objectives, growth, including projections, and expected performance, including our outlook for the first quarter and fiscal year 2026, and any assumptions for fiscal periods beyond that, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our outlook only as is the date of this call. While we believe any forward-looking statements we make are reasonable, actual results could differ materially because the statements are based on current expectations and are subject to risk notion.

Speaker Change: Before we get started, I would like to note that certain statements made during this conference call that are not historical facts [inaudible]

Speaker Change: including those regarding our future plans, objectives, growth, including projections, and expected performance, including our outlook for the first quarter in fiscal year, 2026.

Speaker Change: and any assumptions for fiscal periods beyond that are forward-looking statements within the meaning of the private securities litigation or form act of 1995. These forward-looking statements represent our outlook only as is the date of this call.

Speaker Change: While we believe in the forward-looking statements we make are reasonable, actual results could differ materially because the statements are based on current expectations and are subject to risk and uncertainty.

Maria Riley: We do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements. whether as a result of new information, future events, or otherwise.

Speaker Change: We do not undertake and expressly display any obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise [inaudible]

Maria Riley: Further information on these and other factors that could affect the company's financial results is included in the filings we make with the SEC from time to time, including the section titled Risk Factors in the Company's Quarterly and Annual Report.

Speaker Change: Further information on these and other factors that could affect the company's financial results is included in the filings we make with the SEC from time to time, including the section titled Risk Factors in the company's quarterly and annual reports.

Maria Riley: Additionally, unless otherwise stated, excluding revenue, all financial measures disclosed on this call will be non-GAAP. A discussion of why we use non-GAAP financial measures and a reconciliation schedule showing GAAP versus non-GAAP results is currently available in our earnings press release, which may be found on our investor relations website at ir.crowdstrike.com or on our Form 8K filed with the SEC today.

Speaker Change: Additionally, unless otherwise stated, excluding revenue, all financial measures disclosed on this call will be non-GAAP [inaudible]

Speaker Change: A discussion of why we use non-GAAP financial measures and the reconciliation schedule showing gap versus non-GAAP results is currently available in our earnings press release, which may be found on our investor relations website at ir.crowdstrike.com or on our form 8k filed with the SEC today.

George Kurtz: With that, I will now turn the call over to George. Thank you, Maria. And thank you all for joining us today for our Q4 2025 earnings call.

George Kurtz: With that I will now turn the call over to George.

George Kurtz: Thank you, Maria, and thank you all for joining us today for our Q4 2025 earnings call. I'm extremely proud of the engagement we've had with customers, partners, prospects in the market, navigating a year that tested Crowdstrike [inaudible]

George Kurtz: I'm extremely proud of the engagement we've had with customers, partners, prospects in the market navigating year that tested Crowdstrike. Q4 showcases the fruits of our labors, giving a strong conviction in our AI-native single platform, excellent execution, and accelerating market opportunity. Q4 and FY 2025 highlights include Q4 net new ARR of $224 million, well ahead of our expectations, closing FY 2025 at $4.24 billion in ending ARR. FY25 ending AR for cloud security, identity protection, and next gen sim of over 1.3 billion dollars growing nearly 50% year over year. Growth saw a retention of 97% as customers remain firmly committed to the Falcon platform.

George Kurtz: Q4 showcases the fruits of our labors, giving me strong conviction in our AI-native single platform, excellent execution, and accelerating market opportunity.

George Kurtz: Q4, net new ARR of $224 million, well ahead of our expectations, closing FY 2025 at $4.24 billion in ending ARR.

George Kurtz: FY25, ending ARR for Cloud Security, Identity Protection, and Next Shenzhen, of over $1.3 billion, growing nearly 50% year over year.

George Kurtz: Gross Dollar Retention of 97% as customers remain firmly committed to the Falcon platform

George Kurtz: Q4 free cash flow of $240 million and for the full year we delivered free cash flow of $1.07 billion or 27% of revenue setting a new record and for the first time exceeding $1 billion in annual free cash flow. Crowdstrike is the first cybersecurity ISV to cross $1 billion in deal value on AWS Marketplace in a single calendar year, setting a new standard for ecosystem execution. And record and accelerating FY25 total contract value of $6 billion, the first and only pure play software cybersecurity company reported to achieve this metric, which increased 40% year-on-year, showcasing the scale and commitment of customers' long-term cybersecurity consolidation on the Falcon platform.

Q4, free cashflow of $240 million. $240 million.

George Kurtz: And for the full year, we delivered free cashflow of $1.07 billion, or 27% of revenue, sending a new record, and for the first time exceeding $1 billion in annual free cash flow.

George Kurtz: Crowdstrike is the first cybersecurity ISV to cross $1 billion in deal value on AWS marketplace in a single calendar year, sending a new standard for ecosystem execution. .

Record and Accelerating FY25 Total Contract Value of $6 billion $6 billion.

The first and only pure play software cybersecurity company. [inaudible]

George Kurtz: reported to achieve this metric, which increased 40% year-on-year, showcasing the scale and commitment of customers' long-term cybersecurity consolidation on the Falcon platform.

George Kurtz: Everyone loves a comeback story, and that's exactly what we've started experiencing in Q4 as we've closed out the year. The results tell our story. One, we've never been closer to our customers and partners with market leading customer satisfaction level.

George Kurtz: Everyone loves to come back story and that's exactly what we've started experiencing in Q4 as we've closed out the year. The results tell our story.

George Kurtz: One, we've never been closer to our customers and partners with market leading customer satisfaction levels [inaudible]

George Kurtz: 2. We're playing best-in-class defense as well as offense with our FalconFlex subscription model.

George Kurtz: We're playing best in class defense as well as offense with our Falcon Flex subscription model [inaudible]

George Kurtz: And 3. Our innovation engine hasn't missed a beat. The Falcon platform has never been more market competitive, whether that's winning new logos or in third-party analyst research. We find ourselves placed at the epicenter of a rapidly evolving demand environment. A new administration, a new wave of technology, and a new threat landscape necessitate all businesses to evolve their cybersecurity programs. Consolidation, cost reduction, and automation are now the accepted enterprise and federal priority. These priorities are accelerating the shift from ineffective, narrow, or duplicative point products.

And three [inaudible]

Our innovation engine hasn't missed a beat.

George Kurtz: The Falcon Platform has never been more market competitive, whether that's winning new logos or a third party analyst research.

George Kurtz: We find ourselves placed at the epicenter of a rapidly evolving demand environment. A new administration, a new wave of technology, and a new threat landscape necessitate all businesses to evolve their cybersecurity programs.

George Kurtz: Consolidation, cost reduction, and automation are now the accepted enterprise and federal priorities.

Speaker Change: These priorities are accelerating the shift from ineffective, narrow or duplicative point products. I'd like to share AI-specific trends on the broader demand environment and how these trends relate to Crowdstrike. I'd like to share AI-specific trends on the broader demand environment and how these trends relate to Crowdstrike.

George Kurtz: I'd like to share AI-specific trends on the broader demand environment and how these trends relate to Crowdstrike. First, AI experimentation is just starting to evolve into AI outcomes. Second, we're in the midst of a rapidly accelerating geopolitical AI arms race. And third, winning the AI war requires the very best data and battle-tested innovation. Commenting on the shift from AI experimentation to AI outcome. We're still in the early but rapidly evolving innings of the AI revolution. Businesses and governments across the globe are looking for their AI investments to yield both improved efficiencies and novel output. At Crowdstrike, we're requiring every team and function to leverage the power of AI.

Speaker Change: First, AI experimentation is just starting to evolve into AI outcomes. [inaudible]

Speaker Change: Second, we're in the midst of a rapidly accelerating geopolitical AI arm brace, and third, winning the AI war requires the very best data and battle tested innovation engine

Commenting on the shift from AI experimentation to AI outcomes.

Speaker Change: We're still in the early but rapidly evolving innings of the AI revolution.

Speaker Change: Businesses and governments across the globe are looking for their AI investments to yield both improved efficiencies and novel outputs.

George Kurtz: Crowdstrike, we're requiring every team and function to leverage the power of AI. We expect these investments to play critical, top and bottom line roles on our path to $10 billion in ARR.

George Kurtz: We expect these investments to play critical, top and bottom line roles on our path to $10 billion in ARR. In the broader market, businesses are equally grappling with how to secure their environments in this AI age.

George Kurtz: In the broader market, businesses are equally grappling with how to secure their environments in this AIH Here's my take on what this means [inaudible]

George Kurtz: Here's my take on what this means. First, more AI everywhere means more data, more access, and more processes, services, and products requiring cybersecurity. The locales of AI adoption are either in cloud workloads or data centers, or even on edge devices, all of which we are market leaders in securing with AI native technology that stops the breed. Second, more access to more third-party and in-house agentic applications and services requires rethinking identity and data protection. Who is accessing data and where is it traveling matters more now than ever before. And third, securing AI starts a broader enterprise data discussion.

George Kurtz: First, more AI everywhere, it means more data, more access, and more processes, services, and products requiring cybersecurity.

George Kurtz: The locales of AI adoption are either in cloud workloads or data centers or even on edge devices, all of which we are market leaders in securing with AI native technology that stops the breach.

George Kurtz: Second, more access to more third-party and in-house agentic applications and services requires rethinking identity and data protection. Who is accessing data and where is it traveling? Matters more now than ever before.

And third, securing AI starts a broader enterprise data discussion.

George Kurtz: I'm seeing CISOs, CIOs, and CEOs going to the drawing board to reinvent their technology stack with AI-powered platforms of record for their next decade and beyond, and for security, it's even more pressing. For our customers, Falcon has quickly become their AI native SOC. Charlotte, our generative AI security analyst, is a SOC analyst's best friend and already driving tangible AI outcomes. Charlotte AI Detection Triage accelerates SOC operations and threat response time. Across more than 100 Q4 Charlotte AI deals, customers are seeing outcomes. Sharing feedback like what we've received. from a European financial services firm, which stated Charlotte AI has been very useful for us.

George Kurtz: I'm seeing CISOs, CIOs and CEOs going to the drawing board to reinvent their technology stack with AI-powered platforms of record for their next decade and beyond. And for security, it's even more pressing. [inaudible]

George Kurtz: For a customer, Falcon has quickly become their AI native SOC. Charlotte, our generative AI security analyst, is a SOC analyst's best friend in already driving tangible AI outcomes.

George Kurtz: Charlotte AI Detection Triage accelerates sock operations and threat response times

George Kurtz: Across more than 100 Q4 Charlotte AI deals, customers are seeing outcomes, sharing feedback like what we've received.

Speaker Change: From a European financial services firm which stated, Charlotte AI has been very useful for us. It's done summarization of activity on host and users in 10 to 15 seconds, which would have taken us 20 to 30 minutes to do manually.

George Kurtz: It's done summarization of activity on hosts and users in 10 to 15 seconds, which would have taken us 20 to 30 minutes to do manually.

George Kurtz: Returning to my second point on the geopolitical AI arms race. Our threat intelligence practice sees nation-state cybercraft proliferation at all-time new highs. A new wave of nationalism and threat actors is creating adversary stockpiling akin to the Cold War era. In our recently released Annual Global Threat Report, we expose China Nexus adversaries escalating state-sponsored cyber operations. by 150%, with targeted attacks in financial services, media, manufacturing, and industrial sectors soaring up to 300%. And with tools such as DeepSeek making AI access easier and cheaper, the pace and prevalence of adversarial AI adoption is only accelerating. It is in this intensifying threat landscape that Crowdstrike and our threat intelligence expertise shine.

Speaker Change: Returning to my second point on the geopolitical AI arms race, our threat intelligence practice sees nation-state cybercraft proliferation at all time new highs [inaudible]

Speaker Change: A new wave of nationalism and threat actors is creating adversary stockpiling akin to the Cold War era.

Speaker Change: In our recently released annual Global Threat Report, we expose China Nexus adversaries escalating state-sponsored cyber operations [inaudible]

Speaker Change: by 150% with targeted attacks and financial services, media, manufacturing and industrial sectors soaring up to 300%.

Speaker Change: And with tools such as deep seek making AI access easier and cheaper, the pace and prevalence of adversary of AI adoption is only accelerating.

Speaker Change: It is in this intensifying threat landscape that CrowdStrike and our threat intelligence expertise shines.

George Kurtz: Q4 was our largest threat intelligence quarter in company history. Governments and enterprises increasingly turn to Crowdstrike, especially in a competitive environment where M&A activity has subsumed many existing threat intelligence vendors. were the market's leading threat intelligence authority, discovering and naming the adversaries to unite cyber defenders in stopping. The democratization of destruction, AI in the hands of more adversaries, intensifies the market need for Crowdstrike.

Speaker Change: Q4 was our largest threat intelligence quarter in company history. Governments and enterprises increasingly turn to Crowdstrike, especially in a competitive environment where M&A activity has subsumed many existing threat intelligence vendors.

Speaker Change: where the markets leading through intelligence authority, discovering and naming the adversaries to unite cyber defenders in stopping them.

Speaker Change: The democratization of destruction, AI in the hands of more adversaries, intensifies the market need for CrowdStrike.

George Kurtz: And lastly, my third point, Crowdstrike is manufacturing the instruments to win the AI war. We have the innovation engine and the security data to fuel it. Finally, in this AI fuel demand environment, the point product vendors and those that have failed to deliver open and native single platforms increasingly fall short. Crowdstrike is cybersecurity's AI-native sock. Our greatest asset is our role as the creator of cybersecurity's richest data. We've curated this data set with millions of Falcon Complete Analyst Annotations. making threat data contextualized and actionable. No one else has. Our data is liquid gold for creating new agentic models for continuously improving protection.

Speaker Change: And lastly, my third point. Crowdstrike is manufacturing the instruments to win the AI war. We have the innovation engine and the security data to fuel it. [inaudible]

Speaker Change: Finally, in this AI fuel demand environment, the point product vendors and those that have failed to deliver open and native single platforms increasingly fall short [inaudible]

Crowdstrike is Cybersecurity's AI native sock

Speaker Change: Our greatest asset is our role as the creator of cybersecurity's richest data. We've curated this data set with millions of Falcon-complete analyst annotations making threat data contextualized and actionable. No one else has this.

Speaker Change: Our data is liquid gold for creating new agentic models for continuously improving protection.

George Kurtz: Falcon is purpose-built to win the AI war with market-leading protection. As the first call for organizations large and small to stop the breach, we see where others fall short. We saw an uptick in incident response engagements in Q4. Thematically, these organizations were using a next gen EDR vendors technology, where we saw one of our strongest competitive displacement quarters in a logistic software vendor, a national packaging and marketing firm, and security software provider, to name a few. Falcon's efficacy and rapid ease of deployment is why Crowdstrike is the first call to stop. We've also innovated in devising the most effective model for customers to adopt the Falcon platform, FalconFlex.

Speaker Change: Falcon is purpose-built to win the AI war with market-leading protection. As the first call for organizations large and small to stop the breach, we see where others fall short. We saw an uptick in the incident response, engagement, and Q4.

Speaker Change: Thematically, these organizations were using a next-gen EDR vendor's technology, where we saw one of our strongest competitive displacement quarters in a logistics software vendor, a national packaging and marketing firm, and security software provider to name a few. [inaudible]

Speaker Change: Falcon's efficacy and rapid ease of deployment is why Crowdstrike is the first call to stop the breach.

Speaker Change: We've also innovated in devising the most effective model for customers to adopt the Falcon Platform, Falcon Flex. Falcon Flex is a subscription model that enables customers to adopt the modules they want across their subscription term.

George Kurtz: FalconFlex is a subscription model that enables customers to adopt the modules they want across their subscription term. This model deeply resonates with prospects and customers as well as our ecosystem partners. Following the Summers incident, we worked with impacted customers to offer them customer commitment packages, CCP's, largely in the form of additional product and FalconFlex subscriptions. The CCP program was a FalconFlex accelerant. In Q3, we shared accounts that adopted the FalconFlex model representing more than $1.3 billion of total deal value. In Q4 alone, we added over a billion dollars of total account flex deal value. were the accounts that adopted FalconFlex soaring to $2.5 billion in total deal value, growing 80% quarter over quarter and growing more than 10 times year over year.

Speaker Change: This model deeply resonates with prospects and customers, as well as our ecosystem partners.

Speaker Change: Following the summer's incident, we worked with impacted customers to offer them customer commitment packages, CCP's, largely in the form of additional product and Falcon Flex subscriptions. The CCP program was a Falcon Flex accelerant

Speaker Change: In Q3 we shared accounts that adopted the Falcon Flaps model representing more than $1.3 billion of total deal value.

Speaker Change: In Q4 alone, we added over a billion dollars of total account flex deal value. [inaudible]

Speaker Change: With accounts that adopted Falcon Flex soaring to $2.5 billion in total deal value, growing 80% quarter-over-quarter and growing more than 10 times year-over-year [inaudible]

George Kurtz: Our ability to close FalconFlex deals at size and scale shows customers' long-term commitment to CrowdStrike and was a key contributor to our TCV acceleration. This commitment is supported by ACTION, deploying more Falcon modules and consolidating on the platform. With more than 60% of FalconFlex deal value already deployed by customers to date, we are pleased with the deployment stats. FalconFlex is a game changer, accelerating module adoption and making it easier and faster than ever before to consolidate on Falcon.

Speaker Change: Our ability to close Falcon Flex deals at size and scale shows customers long-term commitment to Crowdstrike and was a key contributor to our TCV acceleration.

Speaker Change: This commitment is supported by action, deploying more Falcon modules and consolidating on the platform With more than 60% of Falcon Flex deal value already deployed by customers to date, we are pleased with the deployment stats [inaudible]

Speaker Change: Falcon Flex is a game changer, accelerating module adoption and making it easier and faster than ever before to consolidate on Falcon.

George Kurtz: With the summer now several quarters behind us, we're ending our Customer Commitment Package program. The CCP program was an excellent proactive measure, which not only built our relationship with impacted customers, but also resulted in significant platform adoption. This uptake gives me confidence in our second half net new ARR reacceleration as products are deployed, one-time discounts drop off, and contracts are upsized and renewed.

Speaker Change: With the summer now, several quarters behind us were ending our customer commitment package program. The CCP program was an excellent proactive measure which not only built our relationship with impacted customers but also resulted in significant platform adoption. [inaudible]

Speaker Change: This update gives me confidence in our second half net new ARR re-acceleration as products are deployed one time discount drop-off and contracts are upsized and renewed

George Kurtz: And one of the biggest beneficiaries of FalconFlex is the accelerated adoption of our rapidly emerging platform solution. In the past, we've discussed three core solutions, cloud, identity, and next-gen SIEM. This quarter, I'd also like to provide an update on our exposure management business, which is displacing legacy vulnerability management products and has swiftly become a meaningful contributor to the business with line of sight to $300 million in ARR. starting with cloud. Our cloud security business delivered a strong Q4, growing more than 45% with ending ARR more than $600 million. The cloud is central to the AI revolution, providing the core infrastructure to enable enterprises to harness the power of AI across their businesses.

Speaker Change: And one of the biggest beneficiaries of FalconFlex is the accelerated adoption of our rapidly emerging platform solutions.

Speaker Change: In the past, we've discussed three core solutions, Cloud Identity Innexion Sim [inaudible]

Speaker Change: This quarter I'd also like to provide an update on our exposure management business which is displacing legacy vulnerability management products and has swiftly become a meaningful contributor to the business with line of sight to $300 million in ARR

Starting with Klaus.

Speaker Change: Our cloud security business delivered a strong Q4, growing more than 45% with ending air are more than $600 million.

Speaker Change: The cloud is central to the AI revolution providing the core infrastructure to enable enterprises to harness the power of AI across their businesses.

George Kurtz: Cloud security has never been more important. We're seeing two core trends emerge in the cloud security market. First, the core mechanism for protecting the cloud is runtime protection, where Crowdstrike is uniquely positioned to deliver the best and most comprehensive workload protection in the industry. We are the cloud runtime security vendor. While others are trying to catch up, Crowdstrike has delivered frictionless CWP for years, battle tested to stop cloud. And second, the market for cloud security is rapidly consolidating, with customers looking for an integrated end-to-end platform, where the sum of the parts is greater than the individual piece.

Cloud security has never been more important. [inaudible]

Speaker Change: We're seeing two core trends emerge in the cloud security market.

First,

Speaker Change: The core mechanism for protecting the Cloud is runtime protection, where Crowdstrike is uniquely positioned to deliver the best and most comprehensive workload protection in the industry. We are the Cloud runtime security vendor. While others are trying to catch up, Crowdstrike has delivered frictionless...

CWP for years, battle tested to stop cloud breaches. [inaudible]

Speaker Change: And second, the Market for Cloud Security is rapidly consolidating with customers looking for an integrated end-to-end platform where the sum of the parts is greater than the individual pieces [inaudible]

George Kurtz: This is the promise on which Falcon Cloud Security delivers. By securing the entirety of the AI infrastructure from workload to LLM, Crowdstrike is enabling enterprises to harness the power of AI securely. A key win in the quarter was an eight-figure FalconFlex transaction for a major global financial services holding company, where we displaced a network security vendor's multi-platform cloud office. Crowdstrike Financial Services made it even easier to go all in with Falcon, committing to a large multi-year deal. Too many consoles got in the way of seamless SOC operations. Falcon Cloud Security was far easier to manage in a single console and provided all the right security controls to stop cloud breaches.

This is the promise on which Falcon Cloud Security delivers.

Speaker Change: By securing the entirety of the AI infrastructure from workload to LLM, Crowdstrike is enabling enterprises to harness the power of AI securely.

Speaker Change: A key win in the quarter was an eight-figure Falcon Flex transaction for a major global financial services hold company where we displaced a network security vendor's multi-platform cloud offering

Speaker Change: Crowdstrike Financial Services made it even easier to go all in with Falcon, committing to a large multi-year deal . . . .

Speaker Change: Too many consoles got in the way of seamless stock operations. [inaudible]

Speaker Change: Falcon Cloud Security was far easier to manage in a single console and provided all the right security controls to stop cloud breaches.

George Kurtz: Moving on to our identity business, which grew to more than $370 million in ending ARR. Our identity business continues to benefit from several key trends, including the rapidly growing identity attack surface. In addition, our vision for the recently acquired Adaptive Shield business, now called Falcon Shield, secures identities everywhere, whether on-premises, in SaaS applications, or within hyperscaler infrastructure. A key identity win was a large state university hospital system that consolidated on Falcon in a seven-figure deal. The CISO secured independent budget for Falcon because of the operational superiority of our Identity Protection Module. Specifically, this university had enough of a competitor's Identity Protection bolt-on product that produced too many false positives.

Speaker Change: Moving on to our identity business, which grew to more than $370 million in ending ARR.

Speaker Change: Our identity business continues to benefit from several key trends, including the rapidly growing identity attack surface

Speaker Change: In addition, our vision for the recently acquired Adaptive Shield business, now called FalconShield, secures identities everywhere, whether on-premises, in SaaS applications, or within hyperscaler infrastructure.

Speaker Change: A key identity win was a large state university hospital system that consolidated unfalcant in a seven-figure deal . . . .

Speaker Change: The CISO secured independent budget for Falcon because of the operational superiority of our identity protection module. Specifically, this university had enough of a competitive identity protection bolt-on product that produced too many false positives. The CISO had enough of a competitive identity protection module that produced too many false positives.

George Kurtz: Moving on to our next-gen SIEM business, which grew more than 115% year-over-year, finishing the year at more than $330 million in ending ARR. Next Gen SIM is rapidly breaking out as a foundational cornerstone of the integrated Falcon platform, offering unmatched speed, scalability, and cost efficiency compared to legacy SIMs. We believe the coupling of NextGen SIM alongside our native first-party data and the agentic power of Charlotte AI gives Crowdstrike a unique advantage to continue leading the AI security revolution.

Speaker Change: Moving on to our next-gen sim business, which grew more than 115% year-over-year, finishing the year at more than $330 million in ending ARR.

Speaker Change: Next Gen Sim is rapidly breaking out as a foundational cornerstone of the integrated Falcon platform, offering unmatched speed, scalability, and cost efficiency compared to legacy Sims

Speaker Change: We believe the couple of next-gen sim alongside our native first-party data and the agentic power of Charlotte AI gives Crowdstrike a unique advantage to continue leading the AI security

George Kurtz: This is why Crowdstrike is uniquely delivering the AI sock of the future today. The key seven-figure next-gen sim win from the quarter was a major U.S. airline, which also ranks as one of the top of global airlines by passengers carried. This airline selected Crowdstrike to replace Legacy AV in the fall, and then turned to us to replace their Legacy Q radar sim. Falcon NextGen SIEMs, Ease of Use, Incident Workbench, and Ease of Data Ingestion prevailed over a network security vendor and hyperscalers. In total, our cloud identity and NextGen SIEM businesses represent more than $1.3 billion in ending ARRR, growing nearly 50% year over year.

Speaker Change: This is why Crowdstrike is uniquely delivering the AI sock of the future today.

Speaker Change: A key seven figure next year in Simwin from the quarter was a major U.S. airline which also ranks as one of the top of global airlines by passengers carried. This airline selected Crowdstrike to replace Legacy AV in the fall and then turned to us to replace their Legacy Q Radar Sim

Speaker Change: Falcon Nexian Sims, Ease of Use, Incident Workbench, and Ease of Data Ingestion, prevailed over a network security vendor and hyper-scalers sim.

Speaker Change: In total, our cloud identity, innexion synthesis, represent more than $1.3 billion in ending ARR growing nearly 50% year-over-year

George Kurtz: While each of these businesses can stand on their own, it's the combination of these technologies, when delivered together alongside the broader Falcon platform, that continues to propel Crowdstrike forward as the only true single platform on the market today.

Speaker Change: While each of these businesses can stand on their own, it's the combination of these technologies when delivered together alongside the broader Falcon platform that continues to propel Crowdstrike forward as the only true single platform on the market today.

George Kurtz: And finally, for the first time, I'm excited to discuss our exposure management business, which has quickly become a market disrupt. Crowdstrike exposure management offers both native vulnerability management for devices and applications coupled with integrated attack surface management. This enables features like attack path analysis and dramatically improved vulnerability prioritization. Our customers are already replacing legacy vulnerability management products at scale. Exposure Management Wins are easy module attaches to FalconFlex deals, and we're closing them with regularity as we consolidate out legacy vulnerability management vendors. Representative Wentz included a large digital radio station. A multinational shipping line and a large health care provider in Asia.

Speaker Change: And finally, for the first time, I'm excited to discuss our exposure management business, which has quickly become a market disruptor [inaudible]

Speaker Change: Crowdstrike exposure management offers both native vulnerability management for devices and applications coupled with integrated attack surface management. [inaudible]

Speaker Change: This enables features like attack path analysis and dramatically improved vulnerability prioritization.

Speaker Change: Our customers are already replacing legacy vulnerability management products at scale.

Speaker Change: Exposure management wins are easy module attaches to Falcon Flex deals and we're closing them with regularity as we consolidate out legacy vulnerability management vendors.

Representative Wentz included large digital radio station

Speaker Change: A multinational shipping line and a large health care provider in Asia Pacific

George Kurtz: Cybersecurity's leading partners see Crowdstrike as a generational opportunity. Our ecosystem is a key growth lever on our $10 billion ARR journey, already returning significant dividends. From a deal origination standpoint, partners source 60% of our new business in the fiscal year, validating our partner first strategy and ecosystem investment. In particular, NextGen SIM has attracted the interest of the GSI community given their experience configuring the SIMs of yesterday and the market opportunity to displace these legacy products. In addition, the FalconFlex subscription model fits the GSI selling motion with incentives for customer flex utilization. Our GSI business neared the billion-dollar milestone in FY25, growing north of 40% year-over-year.

Speaker Change: Cybersecurity's leading partners, C Crowdstrike as a generational opportunity. Our ecosystem is a growth lever on our $10 billion ARR journey, already returning significant dividends.

Speaker Change: From a deal of Regenation standpoint, partner source 60% of our new business in the fiscal year validating our partner first strategy and ecosystem investments.

Speaker Change: In particular, next and sim has attracted the interest of the GSI community given their experience configuring the sims of yesterday and the market opportunity to displace these legacy products. [inaudible]

Speaker Change: In addition, the Falcon Flex subscription model fits the GSI selling motion with incentives for customer flex utilization.

Speaker Change: RGSI Business near the billion dollar milestone in FY25, growing north of 40% year-over-year.

George Kurtz: Leading GSIs like Accenture, Deloitte, EY, HCL, Wipro, NTT, TCS, Infosys, and Cognizant are investing in their Falcon Services practice, and I expect us to see continued growth from these partners this fiscal year. Our MSSP go-to-market continues to expand at hyper-growth pace, addressing the needs of small to medium businesses who want their cybersecurity program fully managed. MSSP contributed nearly 15% of our new business in FY25. Signifying a route to market which has quickly grown and scaled over the past two years. All of our go-to-market partners benefit from our deep investment and strategic focus on cloud marketplace.

Speaker Change: Leading GSIs like Accenture, Deloitte Y, HCL, Weepro, NTT, TCS, Infosys, and Cognizant are investing in their Falcon services practice and I expect us to see continued growth from these partners this fiscal year.

Speaker Change: Our MSSP go-to-market continues to expand at hyper-growth pace addressing the needs of small to medium businesses who want their cybersecurity program fully managed.

MSSP contributed nearly 15% of our new business in FY25.

Speaker Change: signifying a route to market which has quickly grown and scaled over the past two years. [inaudible]

Speaker Change: All of our go-to-market partners benefit from our deep investment and strategic focus on cloud market places.

George Kurtz: We recently announced being the first cyber security ISV to achieve more than $1 billion in sales on the AWS marketplace in one calendar year. We also had a noteworthy year with Google Marketplace, where in our first year of partnership, we did over $150 million in deal value out of the gate. We have aligned our partner ecosystem around hyperscaler marketplaces where we see larger deal sizes and faster deal cycle times.

Speaker Change: We recently announced being the first cybersecurity ISV to achieve more than one billion in sales on the AWS Marketplace in one calendar year.

Speaker Change: We also had a noteworthy year with Google Marketplace, where in our first year partnership we did over $150 million in deal value out of the gate.

Speaker Change: We've aligned our partner ecosystem around hyper-scaler marketplaces where we see larger deal sizes and faster deal cycle times.

George Kurtz: In closing, we are cybersecurity's AI-native, agentic platform that stops the breach. Our innovation engine enables us to be a consolidating force for secure AI transformation. Our platform wins. Seven modules are each now individually over $300 million in ending ARR, demonstrating the power of our innovation in driving record adoption and Falcon's multi-act platform opportunity that continues to drive growth. And our go-to-market execution momentum is unprecedented. Businesses are speaking with their wallets, investing in Crowdstrike to secure their future. Today, including our end customers and those of our MSSPs, Crowdstrike is trusted by more than 74,000 organizations as their cybersecurity platform of choice, growing more than 30% year over year.

Speaker Change: In closing, we are Cybersecurity's AI Native Agenteic platform that stops the breach.

Speaker Change: Our innovation engine enables us to be a consolidating force for secure AI transformation.

Speaker Change: R-platform wins. Seven modules are each now individually over $300 million in ending ARR, demonstrating the power of our innovation in driving record adoption and falcons multi-act platform opportunity that continues to drive growth.

Speaker Change: And our go-to-market execution momentum is unprecedented. Businesses are speaking with their wallets, investing in CrowdStrike to secure their futures.

Speaker Change: Today, including our end customers and those of our MSSP's Crowdstrike is trusted by more than 74,000 organizations as their cyber security platform of choice growing more than 30% year over year

George Kurtz: And in Q4 alone, we've closed new records in every total deal value segment. Over 20 deals greater than $10 million, over 350 deals greater than $1 million. Over 2,300 deals greater than $100,000. And that was all in Q4. The data tells me that customers trust Crowdstrike, partners trust Crowdstrike, and the market trusts Crowdstrike.

Speaker Change: And in Q4 loan, we've closed new records in every total deal value segment.

Speaker Change: Over 20 deals greater than $10 million, over $350 deals greater than $1 million, over $2300 deals greater than $100,000 [inaudible]

And that was all in Q4.

Speaker Change: The date it tells me that customers trust Crowdstrike, partners trust Crowdstrike, and the market trust Crowdstrike.

George Kurtz: I open with everyone loving a good comeback story. Ours was forged by the trust of our customers, the dedication of our team, and the loyalty of our partners. For that, I am truly grateful. One thing is certain, in our AI-evolving world, cybersecurity will be an increasingly essential ingredient for life in the AI era. And now, more than ever, the world needs Crowdstrike.

I open with everyone loving a good comeback story. [inaudible]

Speaker Change: RS was forged by the trust of our customers, the dedication of our team, and the loyalty of our partners. For that I am truly grateful.

Speaker Change: One thing is certain in our AI evolving world, cyber security will be an increasingly essential ingredient for life in the AI era And now more than ever the world needs Crowdstrike And now more than ever the world needs Crowdstrike holdings Crowdstrike Holdings Inc

Burt Podbere: I'll now turn the call over to Burt Podbere, Crowdstrike's CFO. Thank you, George, and good afternoon, everyone. As a quick reminder, unless otherwise noted, all numbers except revenue mentioned during my remarks today are non-GAAP. Crowdstrike delivered a strong fourth quarter and finish to the year, achieving results above our stated expectations across all guided metrics and demonstrating our ability to adapt to unexpected challenges and emerge stronger. Several key areas from our performance and outlook demonstrate the strength and resilience of our business, including first, the strength of our results demonstrates the power of our business model and sales execution, highlighted by our record total contract value reaching $6 billion in FY25, with growth accelerating to 40% year over year.

Speaker Change: I'll now turn the call over to Burt Podbere, CrowdStrike's CFO.

Thank you George and good afternoon everyone.

Speaker Change: As a quick reminder, unless otherwise noted, all numbers accept revenue mentioned during my remarks today are non-GAAP [inaudible]

Speaker Change: Crowdstrike delivered a strong fourth quarter and finished to the year, achieving results above our stated expectations across all guided metrics and demonstrating our ability to adapt to unexpected challenges and emerge stronger.

Speaker Change: Several key areas from our performance and outlook demonstrate the strength and resilience of our business.

Speaker Change: Including, first, the strength of our results demonstrates the power of our business model and sales execution highlighted by our record total contract value reaching $6 billion in FY 25 with growth accelerating to 40% year over year. [inaudible]

Burt Podbere: Second, the successful completion of our Customer Commitment Program, which accelerated platform adoption and deepened customer relations. Our success is demonstrated by FalconFlex customers adding over $1 billion in Q4 account value and our strong gross retention rate of 97%. And third, as we look ahead, our visibility is improving. We expect net new ARR reacceleration, as well as operating margin and free cash flow margin expansion in the second half of FY26. We believe this momentum will set the stage for further acceleration in FY27 over FY26 and position us well to achieve our long-term target. For the full fiscal year, we achieved 23% and 29% ending ARR and total revenue growth respectively.

Speaker Change: Second, the successful completion of our Customer Commitment Program, which accelerated platform adoption and deepened customer relationships. Thanks for watching.

Speaker Change: Our success is demonstrated by FalconFlex customers adding over $1 billion in Q4 account value and our strong gross retention rate of 97%. And third, as we look ahead, our visibility is improving.

Speaker Change: We expect net new ARR re-acceleration, as well as operating margin and free cash flow margin expansion in the second half of FY26.

Speaker Change: We believe this momentum will set the stage for further acceleration in FY27 over FY26 and position us well to achieve our long-term targets.

Speaker Change: For the full fiscal year, we achieved 23% and 29% ending ARR and total revenue growth, respectively.

Burt Podbere: Operating income grew 27% year-over-year to reach a record $837.7 million, or 21% of revenue. Net income attributable to Crowdstrike and EPS grew 31% and 27% respectively to reach a record $987.6 million, or $3.93 per diluted share. Free cash flow grew 14% year-over-year to reach a record $1.07 billion, or 27% of revenue. For the fourth quarter, we achieved net new ARR of $224 million, and ending ARR grew 23% over last year to reach $4.24 billion. Our fourth quarter results showcase the success of our go-to-market and single-platform strategy. FalconFlex momentum is increasing, accelerating platform adoption, and our strong sales execution positions us to extend our market leadership with the AI native Falcon platform.

Speaker Change: Operating income grew 27% year-over-year to reach a record $837.7 million or 21% of revenue.

Speaker Change: Net income attributable to Crowdstrike and EPS grew 31% and 27% respectively to reach a record $987.6 million or $3.93 per diluted share.

Speaker Change: Free Casulo Group 14% year-over-year to reach a record $1.07 billion or 27% of revenue.

Speaker Change: For the fourth quarter, we achieved net new ARR of $224 million and ending ARR grew 23% over last year to reach $4.24 billion.

Speaker Change: Our fourth quarter results showcase the success of our go-to-market and single-platform strategies.

Speaker Change: Falcon Flex Momentum is increasing, Accelerating Platform Adoption and our Strong Sales Execution positions us to extend our market leadership with the AI Native Falcon Platform.

Burt Podbere: Additionally, we entered the new fiscal year with a healthy pipeline as we continue to see robust demand for both prospective and existing customers. In Q4, we completed our very successful customer commitment program. We estimate that the ARR value of customer commitment packages provided in Q4 was approximately $56 million, bringing the estimated value for the fiscal year to approximately $80 million. While this exceeded our expectations in Q4 as we concluded the program, the majority of deals that closed with customer commitment packages in the quarter included additional product or flex dollars rather than extended time and professional services.

Speaker Change: Additionally, we entered the new fiscal year with a healthy pipeline as we continue to see robust demand for both prospective and existing customers.

In Q4, we completed our very successful customer commitment program.

Speaker Change: We estimate that the ARR value of customer commitment packages provided in Q4 was approximately $56 million, bringing the estimated value for the fiscal year to approximately $80 million. . . . . . . . . . . .

Speaker Change: While this exceeded our expectations in Q4 as we concluded the program, the majority of deals that close with customer commitment packages in the quarter included additional product or flexed dollars rather than extended time and professional services.

Burt Podbere: We view this as a positive for the business, as it demonstrates customers' trust in our long-term partnership and, importantly, drives bigger deals and increased levels of platform adoption as customers further consolidate onto the Falcon platform. And, as George stated, the success of the program, combined with the strong uptake of FalconFlex, gives us confidence in future net new ARR re-acceleration as products are deployed, one-time discounts expire, and contracts are upsized and renewed. This dynamic also limited the impact on Q4 revenue, which was de minimis and well below our $30 million expectation, contributing to our strong revenue beat for the quarter.

Speaker Change: We view this as a positive for the business, as it demonstrates customers trust in our long-term partnership and importantly drives bigger deals and increased levels of platform adoption as customers further consolidate onto the Falcon platform.

George Kurtz: And, as George stated, the success of the program, combined with the strong uptake of Falcon Flex, gives us confidence in future net new AirRW acceleration as products are deployed, one-time discounts expire, and contracts are upsize and renewed. [inaudible]

George Kurtz: This dynamic also limited the impact on Q4 revenue, which was diminished and well below our $30 million expectation contributing to our strong revenue beat for the quarter.

Burt Podbere: As mentioned earlier, we are seeing substantial increases in Falcon platform adoption, accelerated by our FalconFlex subscription model. In Q4, subscription customers with 6, 7, and 8 or more modules grew to 48, 32, and 21% of subscription customers respectively. Notably, customers with five or more modules reached an all-time high of 67% and on average new customers are landing with at least five modules.

George Kurtz: As mentioned earlier, we are seeing substantial increases in Falcon Platform Adoption, Accelerated by our Falcon Flex subscription model.

George Kurtz: In Q4, Subscription customers with 6, 7, and 8 or more modules grew to 48, 32, and 21% of subscription customers respectively.

George Kurtz: Notably, customers with five or more modules reached an all-time high of 67% and on average, new customers are landing with at least five modules [inaudible]

Burt Podbere: Given this new heightened level of platform adoption on a broad scale, we will discontinue the five or more minutes. Our FalconFlex program fueled an acceleration in platform adoption in FY25. With FalconFlex customers adopting more than 9 modules on average, Flex is our future. Additionally, in Q3 of FY25, we announced the launch of Crowdstrike Financial Services, or CFS, and have already closed deals worth over $140 million through the program in FY25. CFS enhances our customers' ability to do larger and longer-term deals with us. further enabling future platform adoption and strategic FalconFlex. As our growing module adoption demonstrates, customers are purchasing the Falcon platform for strategic, long term, single platform standardization and increasingly leveraging FalconFlex as the vehicle for these purchases.

George Kurtz: Given this new heightened level of platform adoption on a broad scale, we will discontinue the five or more metric.

George Kurtz: Our Falcon Flex program fueled an acceleration in platform adoption in FY25.

George Kurtz: With Falcon Flex customers adopting more than nine modules on average, Flex is our future.

George Kurtz: Additionally, in Q3 of FY25, we announced the launch of Crowdstrike Financial Services, or CFS, and have already closed deals worth over $140 million through the program in FY25.

George Kurtz: CFS enhances our customer's ability to do larger and longer-term deals with us.

Further enabling future platform adoption and strategic falcon flex deals.

George Kurtz: As our growing module adoption demonstrates, customers are purchasing the Falcon platform for strategic long-term single-platform standardization and increasingly leveraging Falcon Flex as the vehicle for these purchases.

Burt Podbere: In addition to accelerating module adoption, our strong customer relationships underpin our exceptional customer retention. Gross retention in Q4 remained high at 97% and our dollar based net retention rate was 112%, reflecting the impact of customer commitment packages. Given the size and scale of our business, we're very pleased with our net worth.

George Kurtz: In addition to accelerating module adoption, our strong customer relationships underpin our exceptional customer retention.

George Kurtz: Gross retention in Q4 remained high at 97%, and our dollar-based net retention rate was 112%, reflecting the impact of customer commitment packages.

George Kurtz: Given the size and scale of our business, we're very pleased with our net retention. [inaudible]

Burt Podbere: Moving to the P&L. Total revenue grew 25% over Q4 of last year to reach $1.06 billion ahead of our expectations. Subscription revenue reached a new milestone of over $1 billion in quarterly revenue, growing 27% year-over-year to $1.01 billion, while professional services revenue was $50.2 million. Total gross margin was 78% and subscription gross margin was over 80% of revenue, both in line with last year's Q4 performance. Total non-GAAP operating expenses in the fourth quarter were $607.8 million, compared to $448.1 million in the prior year. In Q4, we continued our disciplined approach to investing, prioritizing investments in platform innovation and resilience.

George Kurtz: Moving to the PNL, total revenue grew 25% over a Q4 of last year to reach $1.06 billion ahead of our expectations.

George Kurtz: Subscription revenue reached a new milestone of over $1 billion dollars in quarterly revenue growing 27% year-over-year to $1.01 billion while professional services revenue was $50.2 million per year-over-year to $1.01 billion dollars.

George Kurtz: Total Gross Margin was 78%, and Subscription Gross Margin was over 80% of revenue, both in line with last year's Q4 performance.

George Kurtz: Total non-GAAP operating expenses in the fourth quarter were $607.8 million compared to $448.1 million in a prior year.

George Kurtz: In Q4, we continued our disciplined approach to investing, prioritizing investments in platform innovation and resiliency.

Burt Podbere: Our customer first mindset is central to our approach to innovation and the driving force behind the success of our single platform strategy and industry leading retention. In the fourth quarter, non-GAAP operating income grew to $217.3 million, and operating margin was 21%, well ahead of our guidance. Our investments in AI are driving significant internal efficiencies, enabling our teams to focus on high value activities across the business. In Q4, we saw strong employee adoption of AI capabilities, with average reported time savings per employee of over one full workday a month, equating to more than 24,000 work weeks saved if annualized across our entire work For more information, visit www.FEMA.gov We are also leveraging AI to automate key sales processes and streamline reporting and work.

George Kurtz: Our customer first mindset is central to our approach to innovation and the driving force behind the success of our single platform strategy and industry leading retention rates.

George Kurtz: In the fourth quarter, non-GAAP operating income grew to $217.3 million, and operating margin was 21% well ahead of our guidance

George Kurtz: Our investments in AI are driving significant internal efficiencies, enabling our teams to focus on high value activities across the business.

George Kurtz: In Q4, we saw strong employee adoption of AI capabilities with average reported time savings per employee of over one full workday a month, equating to more than 24,000 work weeks saved if analyzed across our entire workforce.

George Kurtz: We are also leveraging AI to automate key sales processes and streamline reporting and workflow.

Burt Podbere: by automating the hours of manual work involved in these tasks. We can deliver new efficiencies in the business while continuing to execute on growth initiatives. Gap net loss attributed to Crowdstrike was $92.3 million and included $49.9 million of tax expenses related to acquisitions and $21 million of incident related expenses with the remaining loss related to the ongoing impact of one-time programs for employees and one-time incentives for the sales team. Non-GAAP net income attributed to Crowdstrike grew 10% over Q4 of last year to $261.0 million, or $1.03 on a diluted per share basis, well ahead of our guidance.

George Kurtz: By automating the hours of manual work involved in these tasks, we can deliver new efficiencies in the business while continuing to execute on growth initiatives.

Gapnet Loss, Attributive of the Crowdstrike

George Kurtz: was $92.3 million and included $49.9 million of tax expenses related to acquisitions and $21 million of incident related expenses with the remaining loss related to the ongoing impact of one-time programs for employees and one-time incentives for the sales team.

George Kurtz: non-GAAP Net Income, Attributive to Crowdstrike, grew 10% over Q4 of last year, to $261.0 million, or $1.03 on a diluted per share basis, well ahead of our guidance.

Burt Podbere: Cash and cash equivalents grew to $4.32 billion. Free cash flow was $239.8 million or 23% of revenue. Incident-related expenses impacted Q4 free cash flow by approximately $22 million. The $93 million in deals financed through Crowdstrike Financial Services in Q4 had a de minimis impact to the quarter's free cash flow as expected.

Cash and Cash equivalent screw to $4.32 billion. $4.32 billion.

Free cash flow was $239.8 million, or 23% of revenue.

George Kurtz: Incident related expenses impacted Q4 free cash low by approximately $22 million. $22 million.

George Kurtz: The $93 million in deals financed through Crowdstrike financial services in Q4 had a minimum impact to the Q3 cash low as expected.

Burt Podbere: Moving to our Outlook and modeling notes. The fundamentals of our business remain strong, and we remain committed to our long-term target model. We are encouraged by first best in class customer retention rates and the success of our concluded customer commitment program. Second, continued strong and rapid adoption of FalconFlex, which is accelerating module adoption rates, helping drive deeper strategic relationships with our customers and positioning us for long-term growth. And third, a robust demand environment across multiple large and growing markets, including next gen SIM, where we are in the early stages of disrupting a large legacy market, and newer markets, such as a gentic AI for cybersecurity, where our unique data advantage positions us as the natural innovation and category lead Visibility is improving as we move further from the sun.

Moving to our Outlook and Modeling Notes

George Kurtz: The fundamentals of our business remain strong and we remain committed to our long-term target model. Thank you very much for your time.

George Kurtz: We are encouraged by first best-in-class customer retention rates and the success of our Concluded Customer Commitment Program.

George Kurtz: Second, continued strong and rapid adoption of Falcon Flex, which is accelerating module adoption rates, helping drive deeper strategic relationships with our customers and positioning us for long-term growth . . . .

George Kurtz: And third, a robust demand environment across multiple large and growing markets, including next-gen SIM, where we are in the early stages of disrupting a large legacy market and newer markets, such as a Genetic AI for Cybersecurity, where our unique data advantage positions us as the natural innovation and category leader.

Visibility is improving as we move further from the Sun.

Burt Podbere: While we do not guide to net new ARR, our assumptions include a typical Q4 to Q1 seasonal decline of approximately 21% to 23% quarter over quarter. The net new ARR acceleration we expect in the second half of FY26 sets the foundation for further acceleration in FY27 over FY26 as we scale the business to our goal of $10 billion of ending ARR by FY31. It also sets the stage for operating and free cash flow margin improvement in the back half of the year, particularly in Q4. Our operating margin guidance reflects the upfront investments we're making in key areas of the business, which we expect to yield clear ROI by the back half of FY26, fueling our growth and innovation.

George Kurtz: While we do not guide to net new ARR, our assumptions include a typical Q4 to Q1 seasonal decline of approximately 21 to 23% quarter over quarter. [inaudible]

George Kurtz: The Net New ARR Acceleration we expect in the second half of FY26 sets the foundation for further acceleration in FY27 over FY26 as we scale the business to our goal of $10 billion of ending ARR by FY31.

George Kurtz: It also sets the stage for operating and three cash low margin improvement in the back half of the year, particularly in Q4

George Kurtz: Our operating margin guidance reflects the upfront investments we're making in key areas of the business which we expect to yield clear ROI by the back half of FY26 fueling our growth and innovation.

Burt Podbere: The high end of our guidance implies a fiscal year 2026 non-GAAP operating margin of approximately 21%, and we plan to return to GAAP profitability in Q4. Looking beyond this year, we plan to deliver 23% non-GAAP operating margin in FY27, as we quickly ramp to our target non-GAAP operating model by fiscal 2029, which includes a free cash flow margin target between 34 and 38%. Please note, in Q1 of FY26, we expect cash impacts of approximately $73 million for outage-related costs, including incremental sales compensation, as well as $43 million due to the impact of flexible payment terms provided under Customer Commitment Packages for deals closed in the back half of FY25.

George Kurtz: The high end of our guidance implies a fiscal year 2026 non-GAAP operating margin of approximately 21% and we plan to return to gap profitability in Q4.

George Kurtz: Looking beyond this year, we plan to deliver 23% non-GAAP operating margin in FY27.

George Kurtz: as we quickly ramp to our target non-GAAP operating model by fiscal 2029, which includes a free cash flow margin target between 34 and 38 percent.

George Kurtz: Please note, in Q1 of FY26, we expect cash impacts of approximately $73 million for outage-related costs.

George Kurtz: Including incremental sales compensation, as well as $43 million due to the impact of flexible payment terms provided under customer commitment packages for deals closed in the back half of FY25

Burt Podbere: We expect to exit fiscal year 2026 with Q4 free cash flow margin at approximately 27% and to return to 30% or more free cash flow margin on an annual basis in FY27.

George Kurtz: We expect to exit fiscal year 2026 with Q4 free cash flow margin at approximately 27% and to return to 30% or more free cash flow margin on an annual basis in FY27.

Burt Podbere: Moving to our guide. For the first quarter of FY 2026, we expect total revenue to be in the range of $1,100.6 to $1,106.4 million, reflecting a year-over-year growth rate of approximately 20%. We expect non-GAAP income from operations to be in the range of $173.1 to $180.0 million and non-GAAP net income attributed with Crowdstrike to be in the range of $162.1 to $167.5 million. We expect diluted non-gap net income per share attributable to Crowdstrike to be approximately 64 to 66 cents, utilizing a weighted average share count of approximately 254 million shares on a diluted basis. and a 22.5% non-GAAP effective tax rate, which is a 19 cent impact to EPS at the mid-term.

Moving to our guidance

George Kurtz: For the first quarter of FY2026, we expect total revenue to be in the range of 1,100.6 to 1,106.4 million dollars reflecting a year-over-year growth rate of approximately 20 percent.

George Kurtz: We expect non-GAAP income from operations to be in the range of 173.1 to 180.0 million dollars and non-GAAP net income attributed with Crowdstrike to be in the range of 162.1 to 167.5 million dollars

George Kurtz: We expect diluted non-GAAP net income per share attributable to Crowdstrike to be approximately 64 to 66 cents utilizing a weighted average share count of approximately 254 million shares on a diluted basis.

George Kurtz: and a 22.5% non-GAAP effective tax rate, which is a 19 cent impact to EPS at the midpoint.

Burt Podbere: For the full fiscal year 2026, we currently expect total revenue to be in the range of $4,743.5 to $4,805.5 million, reflecting a growth rate of 20 to 22% over the prior fiscal year. Non-GAAP income from operations is expected to be between $944.2 and $985.1 million. We expect fiscal 2026 non-GAAP net income attributable to Crowdstrike to be between $851.2 and $883.0 million. Utilizing approximately 256 million weighted average shares on a diluted basis and a 22.5% non-gap effective tax rate, which is a 98 cent impact to EPS at the midpoint, we expect non-gap net income per share attributable to Crowdstrike to be in the range of $3.33 to $3.45.

George Kurtz: For the full fiscal year 2026, we currently expect total revenue to be in the range of 4,743.5 to 4,805.5 million dollars, reflecting growth rate of 20 to 22% over the prior fiscal year.

George Kurtz: non-GAAP income from operations is expected to be between $944.2 and $985.1 million $9.1 million. $9.1 million.

George Kurtz: We expect fiscal 2026 non-GAAP net income attributable to CrowdStrike to be between $851.2 and $883.0 million.

George Kurtz: Utilizing approximately 256 million weighted average shares on a diluted basis and a 22.5% non-GAAP effective tax rate which is a 98 cent impact to EPS at the midpoint

George Kurtz: We expect non-GAAP net income per share, a tribunal to Crowdstrike to be in the range of $3.33 to $3.45 [inaudible]

Burt Podbere: Please refer to our earnings release and earnings presentation for additional details regarding our changes in presentation of non-GAAP measures related to tax and presentation and additional modeling notes.

George Kurtz: Please refer to our earnings release and earnings presentation for additional details regarding our changes in presentation of non-GAAP measures related to tax and presentation and additional modeling notes.

Unknown Executive: George and I will now take your questions. Operator, we're now ready for questions. Thank you.

George and I will now take your questions.

Operator, we are now ready for questions. Let's begin.

Unknown Executive: If you would like to ask a question, please click on the raise hand button, which can be found on the bar on the bottom of the zoom window. You may remove yourself from the queue at any time by lowering your hand. When it is your turn, you will hear your name called and receive a message on your screen notifying you that you may unmute yourself.

George Kurtz: Thank you. If you would like to ask a question, please click on the raise hand button which can be found in the bar on the bottom of the Zoom window. You may remove yourself from the queue at any time by lowering your hand. When it is your turn, you will hear your name called and receive a message on your screen, notifying you that you may unmute yourself. In the interest of time, participants will be limited to one question. Thank you very much. Thank you.

Unknown Executive: In the interest of time, participants will be limited to one question.

Saket Kalia: Our first question will come from Saket Kalia with Barclays. Please unmute your line. Okay, great. Hey, good afternoon, folks. Thanks for taking my question here and nice finish to the year. Thank you, sir.

Speaker Change: Our first question will come from Saket Kalia with Barclays. Please unmute your line.

Saket Kalia: Okay, great. Hey, good afternoon, folks. Thanks for taking my question here and nice finish to the year.

George Kurtz: Sure, George, maybe maybe for you, you know, we heard on the call that that FalconFlex is the future. I was wondering if you could just talk a little bit about how FalconFlex is driving better value for customers. And any examples you have of maybe how current customers are growing their existing spending with CrowdStrike through FalconFlex? Sure. Thanks, Saket. And as we've talked about for some time, FalconFlex was really born out of customer demand, wanting to consolidate more with CrowdStrike and wanted to create a flexible way to procure more modules. So when we think about FalconFlex, again, it opens the entire product catalog up to our customers, and then they can add new modules without necessarily going through a procurement cycle.

Thank you, Fatima [inaudible]

Saket Kalia: George, maybe for you, we heard on the call that Falcon Flex is the future . . .

Speaker Change: I was wondering if you could just talk a little bit about how Falcon Flex is driving better value for customers and any examples you have maybe how current customers are growing their existing spending with Crowdstrike through Falcon Flex

Speaker Change: Sure, thanks, Saket, and as we've talked about for some time, Falcon Flex was really born out of customer demand wanting to consolidate more with Crowdstrike and wanted to create a flexible way to procure more modules.

Speaker Change: So when we think about Falcon Flex, again, it opens the entire product catalog up to our customers and then they can add new modules without necessarily going through a procurement cycle. They commit, the more they commit, the better the discounts and they couldn't basically use that very seamlessly in their environment. And so,

George Kurtz: They commit. The more they commit, the better the discounts, and they can basically use that very seamlessly in their environment.

George Kurtz: So let me just give you one example. Last quarter, we had a large transportation company where we consolidated three vendors, cloud, sim, and multiple endpoint vendors, and we moved them to a flex. And in this particular case, a large enterprise, we increased the ARR by 67%. And that's just one of many examples that we've seen. And in general, what we're finding is that customers are, as we go through the demand plan, they're ahead of schedule in their demand plan in consuming the flex, which is a great stat for us. And we called out some of those in the earning script.

Speaker Change: Let me just give you one example last quarter with a large transportation company where we consolidate [inaudible]

Speaker Change: And we move them to a flex, and in this particular case, large enterprise, we increase the ARR by 67%. And that's just one of many examples that we've seen.

Speaker Change: And in general, what we're finding is that customers are, as we go through the demand plan, they're ahead of schedule in their demand plan in consuming the flex.

Speaker Change: which is a great stat for us, and we called out some of those in the already script. So, excited about Falconflex, and it's our really market leading way to engage with customers as we go forward.

George Kurtz: So excited about FalconFlex, and it's our really market-leading way to engage with customers as we go forward.

Unknown Executive: We are ready for our next question. Our next question will come from Brian Essex with J.P. Morgan.

We are ready for our next question.

Speaker Change: Our next question will come from Brian Essex with JP Morgan. Please unmute your line.

Brian Essex: Please unmute your line. Okay, hopefully you can hear me. Thank you for taking the question.

Brian Essex: Okay, hopefully you can hear me. Thank you for taking the question. I guess I wanted to talk about emerging products. And if I look at the growth rate, it seems as though Cloud Identity decelerated a faster rate than log scale. Is that a function of the incentives and how? I don't know.

George Kurtz: I guess I want to talk about emerging products. And if I look at the growth rate, it seems as though cloud and identity decelerated at a faster rate than log scale. Is that a function of the incentives and how customers may have spent it in cloud and identity as opposed to log scale, which may have more ingestion costs associated with it? Just maybe give a little bit of color on how your customers are consuming those to understand the sustainability of those emerging segments. Thank you. Yeah, good question. So, just recently, as you may have seen in our threat report, we talked about identity and how critical it is to customers.

Brian Essex: Customers may spend it in cloud and identity as opposed to log scale, which may have more ingestion costs associated with it just maybe give a little bit of color on how your customer are consuming those you understand the sustainability of those emerging segments thank you.

Brian Essex: Yeah, good question, so I just recently, as you may have seen in our threat report, we talked about identity and how critical it is to customers since 2019 as an example, 40% of the attacks were identity-based.

George Kurtz: Since 2019, as an example, 40% of the attacks were identity-based or non-malware-based. And in the current report, 79% are non-malware-based. A lot of it is around identity. So, what we've seen as part of the CCP package is that identity and cloud have been a big driver of what people have been taking, because they know it's so critical for their protection going forward. So, you know, when we look at that, and as we talked about the back half of the year, CCP sort of elements will be burning off and obviously it's it's a great opportunity to be able to renew What they're already using and how we're ready protecting them.

or non-malware based and in the current report.

Brian Essex: 79% are non-malware-based. A lot of it is around identity. So what we've seen as part of the CCP packages is that identity in front of been a big driver of what people have been taking. [inaudible]

Brian Essex: because they know it's so critical for their protection going forward. So, you know, when we look at that and as we talked about the back half of the year...

Brian Essex: C.E.P. sort of elements will be burning off and obviously it's a great opportunity to be able to renew what they're already using and how we're already protecting them. So, we veered as a net positive and see the customer base.

Gabriela Borges: So what we view it as a net positive and seeding the customer base We're ready for our next question, please. Our next question will come from Gabriela Borges with Goldman Sachs. Please unmute your line. Hi, good afternoon. Thank you, Burt.

We're ready for our next question, please.

Speaker Change: Our next question will come from Gabriela Borges with Goldman Sachs. Please meet your line.

Burt Podbere: I wanted to ask you a little bit about how you thought about guidance for the year, because we had the pause in the external demand gen around the July time frame. We had the enterprise sales cycles pushing out by, I think you said, 15 percent. Maybe just talk us through how did you think about the puts and takes to the back half of the year as some of those dynamics reversed? And then to Brian's earlier question, you also have the CCP contracts renewing. Maybe just walk us through how you thought about some of those dynamics.

Hi, good afternoon. Thank you.

Speaker Change: Kurt, I wanted to ask you a little bit about how you thought about guidance for the year, because...

Speaker Change: We had the pause in the external demand gen around the July time frame. We had the enterprise health cycles pushing out by, I think you said, 15% You may just talk us through how did you think about the puts and takes the back off of the year and some of those dynamics were recent and then to Brian's earlier questions.

Speaker Change: You'll also have the CCP contracts renewing. Maybe just walk us through how you thought about some of the dynamics. Thank you . . .

Burt Podbere: Thank you. Yeah, sure, Gabriella, thanks for that. So, you know, I think George touched on some of it already, with respect to, you know, the CCP programs, the one time incentives with respect to those, you know, coming due in the back half of next year, because that's confidence that we're going to be able to have, you know, take advantage of the opportunity to upsell, you know, and our customers, they're already using it, they're already loving it, it's going to be easy for them to renew. And of course, as we continue to think about new products that we're coming to market with, it's a great discussion to have, we've already gone through, as George said, the demand plan, we're ahead of the demand plan in terms of where customers are at in terms of, in terms of drawing down from their flex pools.

Speaker Change: Yeah, sure, Gabriela, thanks for that. So, I think George touched on some of it already with respect to the CCP programs, the one-time incentives with respect to those.

Speaker Change: You know, coming to you in the back after next year because that's confidence that we're going to be able to have, you know, think advantage of the opportunity to upsell, you know, and our customers. They're already using it. They're already loving it. It's going to be easy for them to renew. And of course, as we continue to think about new products that we're coming to market with, it's a great discussion to have. We've already gone through as George said, the demand plan. We're ahead of the demand plan in terms of where customers are at in terms of in terms of drawing down from their flex pools. We're ahead of the demand plan. We're ahead of the demand plan. We're ahead of the demand plan.

Burt Podbere: So this gives us excitement about our ability to actually go and have that reacceleration in the back half. And I think that it really, really talks to not only the emerging products that we, you know, that we've had great success in, but even, you know, the rest of our products, we have 29 modules to sell to our customers, we have this opportunity to upsell them to take out costs, and show the value of CrowdStrike. That's why we get excited about the reacceleration of net new ARR in the back half.

Speaker Change: So this gets us excitement about our ability to actually go and have that re-acceleration in the back half. And I think that it really talks to not only the emerging products that we've had great success in, but even the rest of our products. We have 29 modules to sell to our customers.

Speaker Change: We have this opportunity to upsell them to take out costs and show the value of Crowdstrike. That's why we get excited about the re-acceleration of net new ARR backup.

Unknown Executive: And we'll move to our next question. Our next question will come from Tal Liani with CFA.

And we'll move to our next edition, please.

Speaker Change: Our next question will come from Tal Liani with TV.

Tal Liani: One moment, please. Call your line is now open. Please feel free to unmute. There you go. Thank you.

by one moment, please.

Speaker Change: Tal, your line is now open, please give it one minute. [inaudible]

Tal Liani: Um, I have two questions, so I'll choose one. Um, contribution from existing customers. If I look at your GRR and NRR and I calculate contribution from existing customers versus new customers, your performance on new customers is very consistent. You're growing between 10 to 11% a year from new customers. But the growth from existing customers had gone down, which means there's some there is a decline in the growth in upselling existing customers. So you started the year when Q1 is 21% growth coming from existing customers, and you ended the year with 15%. And every quarter it goes down.

Here you go. Thank you.

Um...

Speaker Change: I have two questions, so I'll choose one. Contribution from existing customers. If I look at your GRR and NRR and I calculate contribution from existing customers versus new customers, your performance on new customers is very consistent. You're growing between 10 to 11% a year from new customers.

Speaker Change: But the growth from existing customers had gone down, which means there is a decline in the growth in upselling to existing customers. So you started the year when Q1 is 21% growth coming from existing customers and you ended the year with 15% and every quarter it goes down. [inaudible]

Burt Podbere: Can you talk about your ability to take NRR back up, which is the function of sales to existing customers or upsell to existing customers? Sure, Tal, thanks. So, you know, there's a few dynamics that are impacting, obviously, dollar-based hypertension, obviously, you know, our CCP had an impact. But remember, you know, DVNR is a noisy metric for us. You know, as you know, we don't manage to it in any given quarter, we can land bigger, longer deals, which does put pressure on our dollar-based hypertension. George talked about what Flex does to that environment. Flex gives us the opportunity to enter into larger, longer deals, which could impact DVNR.

Speaker Change: Can you talk about your ability to take NRR back up, which is the function of sales to existing customers or upsell to existing customers? Thanks

Sure, Tal, thanks, so...

Speaker Change: You know, there's a few dynamics that are impacting, obviously, dollar-based hypertension, obviously, you know, our CCP had an impact.

Speaker Change: But remember, you know, DVNR is a noisy metric for us, you know, as you know, we don't manage to it. In any given quarter, we can land bigger, longer deals, which does put pressure on our dollar based on retention. [inaudible]

Speaker Change: George talked about what Flex does to that environment. Flex gives us the opportunity to enter into a larger, longer deals which could impact the B&R, but that's a good thing for us.

Burt Podbere: But that's a good thing for us. We want customers to engage with us with bigger deals, longer deals. That's exciting. Conversely, we now have a bigger base to sell into. We have this opportunity to go after more logos. So, you know, in any given quarter, we're going to get different dynamics and different pressures. But I think the good news is we've got a lot of room with respect to new logos, and we've got this ever-expanding base where we can sell into an upsell and cross-sell. So that's how I look at that.

Speaker Change: We want customers to engage with us with bigger deals, longer deals, that's exciting. Conversely, we now have a bigger base to sell into.

Speaker Change: We have this opportunity to go out there more logos. So on any given quarter, we're going to get different dynamics and different pressures but I think the good news is we've got a lot of room with respect to new logos and we've got this ever-expanding base where we can sell into an upside-down crossover. So that's how we look at that dynamic. [inaudible]

Joel Fishbein: And we are ready for the next question. Our next question will come from Joel Fishbein with Truist Securities. Please go ahead. Thanks for taking the question. Hey, George, thanks for the color around AI and AI strategy in Charlotte. Would just love to get a little bit more color around pricing and competitive environment around the AI security. That'd be really helpful. Thank you.

And we are ready for the next question.

Speaker Change: Our next question will come from Joel Fishbein with Truth Securities. Please go ahead. Thanks for taking the question. Hey George, thanks for the color around AI and AI strategy in Charlotte. Would just love to get a little bit more color around pricing and competitive environment around the AI security. That'd be really helpful. Thanks for joining us today. Thanks for joining us today.

George Kurtz: So, I mean, when you look at Charlotte AI and what we've been able to do from an agentic AI perspective, we talked about some of the efficiencies in terms of hours saved, we've talked about taking a level one analyst, turning it into a level three. And with FalconFlex, we have a lot of attach of Charlotte in these deals. And we continue to wire it into our workflows, which is a key part of being agentic. So I think overall, we're getting feedback from customers, they like it, they're using it. And one of the interesting facts that has come out since we released this is that we certainly geared it towards that level one analyst, but we're actually finding that the level three analysts are using it even more because they understand how to prompt it and get information out of it.

John DiFucci,

Speaker Change: Thank you. So, yeah, I mean, when you look at Charlotte AI and what we've been able to do from an agenda.

Speaker Change: AI perspective. We talked about some of the efficiencies in terms of our save. We've talked about taking a level one analyst turning into a level three. And with Falcon Flex, we have a lot of a catch of Charlotte in these deals. And we continue to wire it into our workflows, which is a key part of being agentic. [inaudible]

Speaker Change: So I think overall we're getting feedback from customers, they like it, they're using it [inaudible]

Speaker Change: And one of the interesting facts that has come out since we released this is that we certainly geared it towards that level one analyst, but

Speaker Change: We're actually finding that the level three analysts are using it even more because they understand how to prompt it and get information out of it.

George Kurtz: So overall, it's, I think, been very encouraging, the uptake, and certainly it continues to perform and save our customers a tremendous amount of time and effort. So we'll have updates on Charlotte, but full steam ahead. And as you and I have talked about in the past, it's still early innings in this agentic world, and we continue to lead the way.

Speaker Change: Overall, it's I think been very encouraging the uptake, and certainly it continues to perform and...

Shave our customers a tremendous amount of time and effort, so...

We'll have updates on Charlotte, but...

Speaker Change: full steam ahead. As you and I have talked about in the past, it's still early innings in this agentic world, and we continue to lead the way.

Matthew Hedberg: And we're ready for the next question. Our next question will come from Matt Hedberg with RBC. Please unmute your line. Great, thanks for taking my questions, guys. George, for you, you know, exposure management is near and dear to your heart. And you could sense the enthusiasm with some of your early wins. I'm just curious to put a finer point on that. Are we talking about full like network endpoint replacements there?

And we're ready for the next question.

Speaker Change: Our next question will come from Matt Hedberg with RBC. Please unmute your line.

Great, thanks for taking my questions guys.

Speaker Change: George, for you, you know, exposure management is near and dear to your heart. And you could sense the enthusiasm with some of your early wins. I'm just curious to put a finer point on that. Are we talking about full like network and point replacements there? Just want to make sure that I understand like the composition of your platform versus some of the pure place. [inaudible]

George Kurtz: I just want to make sure that I understand like the composition of your platform versus some of the peer placed Yes, we are. When we look at our technology there, whether it's exposure management, vulnerability management is an element of exposure management. We've done some acquisitions, we've had some capabilities for a while, particularly on the agent side. And we have released the ability to actually scan over the network, which was a missing element that we didn't have in the past. So that really allows for fuller replacements in a competitive environment. And, you know, customers have been asking for it.

Speaker Change: Yes, we are. When we look at our technology there, whether it's exposure management, vulnerability management is an element of exposure management. We've done some acquisitions, we've had some capabilities for a while, particularly on the agent side.

Speaker Change: And we have released the ability to actually scan over the network, which was a missing element that we didn't have in the past. So...

Speaker Change: That really allows for full of replacements in a competitive environment, and our customers have been asking for it. We focus on the agent first, of course that's where strength is.

George Kurtz: We focus on the agent first, of course, that's where we, you know, where our strength is. And now with the ability to scan, it really has unlocked the potential to replace a lot of the competitive products in that market. So we remain excited. It's fully integrated. It leverages, you know, the full base of data that we have in our AI and workflow infrastructure. And we'll continue to give you updates on it because we think it's a real added element to the repertoire of the modules that we have. And we're proud to tell you about the success.

Speaker Change: And now with the ability to scan, it really has unlocked the potential to replace a lot of the competitive products in that market. So we remain excited. It's fully integrated. It leverages the full base of data that we have in our AI and workflow infrastructure. And we'll continue to give you updates on it because we think it's a real...

Speaker Change: added element to the repertoire of the modules that we have, and we're proud to tell you about the success.

Andrew Nowinski: And we're ready for the next question. Our next question will come from Andrew Nowinski with Wells Fargo. Please go ahead. Great, thank you. And congrats on a on a really strong recovery quarter here. I, I'd like to just dig a little bit deeper on your net new ARR. If you could just clarify how much the adaptive shield acquisition contributed this quarter in Q4. And then if you know, if you add back the 56 million you talked about in CCP, it looks like net new ARR is still down about 1% year over year. But but gross retention was unchanged.

and we're ready for the next question.

Speaker Change: Our next question will come from Andrew Nowinski with Wells Fargo. Please go ahead

Andrew Nowinski: Great, thank you and congrats on a really strong recovery quarter here. I'd like to just dig a little bit deeper on your net new ARR.

Andrew Nowinski: If you could just clarify how much the adaptive shield acquisition contributed this quarter in Q4 and then if, you know, if you add back the 56 million you talked about in CCP

Andrew Nowinski: Um, you know, so it doesn't look like churn increased at all. I'm just, I'm wondering if you think customers might still be holding back on spending as a reason why net new is still down 1%. Thanks.

Speaker Change: You know, so it doesn't look like churn increased at all. I'm just I'm wondering if you think customers might still be holding back on spending as a reason why net new is still down 1% thanks. [inaudible]

Burt Podbere: Hey, Andrew. So let me take the churn and contraction question first. So basically, for us, what we saw for CCP, any churn and contraction with respect to CCP was really de minimis, there was not much there at all. And with respect to churn and contraction overall, it was really in line with what we've been seeing, there's been no anomalous behavior with respect to churn and contraction. So we're actually really excited about where we're headed with respect to Net New AR and certainly with the reacceleration in the back half. You know, with respect to with respect to Adaptive Shields, it was a very small number with respect to ARR.

Hey Andrew, so let me...

Andrew Nowinski: I'll take the turn of contraction question first, so basically for us [inaudible]

Andrew Nowinski: What we saw for CCP, any turn in contraction with respect to CCP was really divinimous. There was not much there at all. And with respect to turn in contraction overall, it was really in line with what we've been seeing. There's been no anomalous behavior with respect to turn in contraction. [inaudible]

Andrew Nowinski: So we're actually really excited about where we're headed with respect in any way our and certainly with the re-acceleration in the back half.

Speaker Change: You know, with respect to adaptive shields, it was a very small number with respect to ARR, so it's a diminished from our perspective. But when you think about the opportunity, that's a very different story, and I'll turn it over to George to talk about the opportunity with that fish.

Burt Podbere: So it's de minimis from our perspective. But when you think about the opportunity, that's a very different story.

George Kurtz: And I'll turn it over to George to talk about the opportunity with Adaptive Shields. Yeah, this is one where customers are really excited. The day it was announced, all of our Flex customers asked when they can have it. And, you know, 20 days later, it was part of their rate card. So we've seen amazing adoption of it in the early days here. Obviously, we'll continue to give you updates, but it's a fantastic technology and something that's really needed in the environment today.

George Kurtz: Yeah, this is one where our customers are really excited. The day it was announced, all of our Flex customers asked when they can have it and

George Kurtz: You know, 20 days later it was part of the rate card, so we've seen an amazing adoption of it in the early days here. Obviously we'll continue to give you updates, but it's a fantastic technology and something that's really needed in the environment today.

Fatima Boolani: And we're ready for our next question. Our next question will come from the line of Fatima Boolani with Citi. Please go ahead. Good afternoon. Thank you for taking my question. George, you referenced the staggering in period deal value that you have contracted for, for FalconFlex specifically. I specifically wanted to ask you about the FalconFlex dollars that you have given in kind to some of your CCP customers. And I wanted to get an understanding of how quickly they're burning through those in kind Flex dollars that you've given them, such that it is triggering earlier renewal, earlier upsell events.

and we're ready for our next question.

Speaker Change: Our next question will come from the line of Fatima Boolani with the city. Please go ahead

Fatima Boulani: Good afternoon. Thank you for taking my question. George, you referenced the staggering in Imperial Deal value that you would contracted for Falcon Flex specifically. I specifically wanted to ask you about the Falcon Flex dollars that you have given in kind to some of your CCP customers, and I wanted to get an understanding of how quickly they're burning through those in kind flex dollars that you've given them such that it is triggering earlier renewal.

George Kurtz: And if that was a contributing factor to how robust the in quarter deal value was for FalconFlex. Thank you. Sure. Well, what we've seen as we've moved to FalconFlex and certainly CCP is just leveraging the licensing model of FalconFlex to provide some value back to our customers.

Fatima Boulani: earlier upsell events, and if that was a contributing factor to how robust the encoder deal value was for a thousand likes, thank you.

Fatima Boulani: Well, what we've seen as we've moved to Falcon Flex and certainly CCP is just leveraging the licensing model of Falcon Flex to provide some value back to our customers. But as Bert and I talked about the back half of the year, we certainly look towards that as

Burt Podbere: But as Burt and I have talked about the back half of the year, we certainly look towards that as where those FalconFlex CCP dollars would burn off. A lot of our sellers now, again, are focused not just selling new modules, but demand planning with our customers. And we're seeing the demand plans be ahead of schedule. So that's a good thing. And obviously, the more they consume within a shorter period of time, the better for us. And obviously, we want to be there to provide value in any of the modules we have or some of the newer ones like Shield.

Fatima Boulani: A lot of our sellers now again are focused not on just selling new modules but demand planning with our customers

and we're seeing the demand plans be ahead of schedule.

Fatima Boulani: So that's a good thing and obviously the more they consume within a shorter period of time, the better for us and obviously we want to be there to provide value in any of the modules we have or some of the newer ones.

Burt Podbere: So any other comments on that, Burt? Yeah, look, I think we have this great opportunity in front of us. I think, remember, the one thing that really gives us more excitement about the back half that George was referring to is we still have a lot of customers, you know, to talk about Flex with, right? We have, you know, we have a subset that we've already dealt with, but we've got a, you know, a whole lot more that we can go after that are still, you know, coming up for renewal or talking to them about their demand plans.

Speaker Change: So any other comments on that, Burt? Yeah, look, I think, you know, we have this great opportunity in front of us. I think, remember, the one thing that really gives us more excitement about the back half that George was referring to, is we still have a lot of customers.

Speaker Change: You know, talk about flex width, right? We have a subset that we've already dealt with, but we've got a whole lot more that we can go after that are still coming up for renewal or talking to them about their demand plans. So we're excited about that opportunity that's in front of us.

Gregg Moskowitz: So we're excited about that opportunity that's in front of And we'll take our next question. Our next question will come from Gregg Moskowitz with Mizzouho. Please go ahead. Okay, thank you very much for taking the question. George, exceeding a billion dollars in sales through AWS Marketplace in a 12-month period. I mean, that's really stunning. And I'm not sure everyone remembers that you quote-unquote only eclipsed a billion in lifetime sales on AWS in October of 2023.

And we'll take our next question.

Speaker Change: Our next question will come from Gregg Moskowitz with Mizzouho, please go ahead [inaudible]

Greg Moskowitz: Okay, thank you very much for taking the question. George, exceeding a billion dollars in sales through AWS Marketplace in a 12-month period. I mean, that's really stunning and I'm not sure everyone remembers that you quote-unquote only eclipse the billion in lifetime sales on AWS in October of 2023. So clearly the growth rate that you're showing here is still very high, but you know, given that we're running into the law of larger numbers, it would just be helpful to get your perspective on the growth outlook for Crowdstrike [inaudible]

George Kurtz: So clearly the growth rate that you're showing here is still very high, but given that we're running into the law of larger numbers, it would just be helpful to get your perspective on the growth outlook for Crowdstrike on AWS Marketplace over the next two to three years. Thanks. Well, certainly you remember it. So thanks for calling that out. And AWS has been a tremendous partner for us. Not only do we work with them, but we work with our other partner network in conjunction with them, right. So it's important to make sure that we've got all the partners, you know, moving in the right direction.

Speaker Change: on the AWS Marketplace over the next two, three years. Thanks.

Speaker Change: Well, certainly you remember it, so thanks for calling that out. And...

Speaker Change: AWS has been a tremendous partner for us, not only do we work with them, but we work with our other partner network. He can junction with them, right? So it's important to make sure that we've got all the partners moving in the right direction. [inaudible]

George Kurtz: I only see it going up. I mean, it is the way customers want to consume. And you have to look at the cloud environments and hyperscalers right now. The larger enterprises are committing more into these marketplaces and cloud providers. And the beauty of the marketplace is that customers can use those dollars to burn down on and procure Crowdstrike. So we only see opportunity in this marketplace. And we see it certainly outside of the US. A lot of it has been focused in North America. But I think the rest of the world really opens up particularly when you look at some of the cloud environments in different nations and sovereign data requirements and things of that nature.

Speaker Change: I only sneak going up. I mean, it is the way customers want to consume, and you have to look at the cloud environments and hyperscalers right now. The larger enterprises are committing more into these marketplaces and cloud providers. [inaudible]

Speaker Change: and for your Crowdstrike. So, we only see opportunity in this marketplace. So, please.

Speaker Change: And we see it certainly outside of the US. A lot of it has been focused in North America, but I think the rest of the world really opens up particularly when you look at some of the cloud environments in different nations and sovereign data requirements and things of that nature. So we're very optimistic. Thank you.

George Kurtz: So we're very optimistic with our partner and not only AWS, right? We talked about GCP and others that have been fantastic routes to market. I think it is really one of the future ways that customers will continue to procure through Crowdstrike.

Speaker Change: with our partner and not only AWS, right? We talked about GCP and others that have been fantastic routes to market. I think it is really one of the future ways that customers will continue to procure through Crowdstrike. [inaudible]

Joseph Gallo: And we're ready for our next question. Our next question will come from Joseph Gallo with Jeffries. Please go ahead. Hey, guys, thanks for the question. It was awesome to see the 600 million of cloud ARR growing 45%. Can you just talk through that competitive landscape? Has that stabilized? One of your biggest cloud competitors noted on their earnings call that customers are gravitating towards workload protection and agent architecture. Is that something that you're seeing as well?

and we're ready for our next question.

Speaker Change: Our next question will come from Joseph Gallo with Jeffries, please go ahead.

Joseph Gallo: Hey guys, thanks for the question. It was awesome to see the 600 million of Cloud ARR growing 45%. Can you just talk through that competitive landscape? Has that stabilized? One of your biggest Cloud competitors noted on their earnings call that customers are gravitating towards workload protection in the Asian architecture? Is that something that you're seeing as well? And then, you know, given your strength and workload protection, when, if ever, do you expect customers to consolidate on a Cloud solution? Thanks. Thank you.

George Kurtz: And then, you know, given your strength and workload protection, when if ever, do you expect customers to consolidate on a cloud solution? Thanks. Yeah, I think that's absolutely right. When you look at the market, and you've got CSPM, you got workload protection, CSPM is a great technology, but it's more of a reporting and compliance as opposed to as opposed to stopping the breach. So if customers are looking to stop the breach, you're going to need a workload protection. And of course, that is our DNA. We've been working on that for the better part of a decade, and it's very well refined.

Joseph Gallo: Yeah, I think that's absolutely right. When you look at the market, and you've got GSPM, you've got workload protection. GSPM is a great technology, but it's more of a reporting and compliance as opposed to stopping the breach. [inaudible]

Joseph Gallo: If customers are looking to stop the breach, you're going to need a workload protection, and of course...

Joseph Gallo: That is our DNA. We've been working on that for the better part of a decade and it's very well refined.

George Kurtz: And we've earned a trusted spot in running in the most critical infrastructure on these workloads. So we continue to see consolidation in these areas. We certainly have expanded our CNAP capabilities across, you know, whether it's CSPM, or ASPM, or DSPM, etc. Lots of PMs in there, but we have all of those and we're routinely consolidating customer spend in that area. So we're excited about the $600 million milestone and the success that we're having in the cloud environments with our customers. Great.

Joseph Gallo: And we've earned a trusted spot in running in the most critical infrastructure on these workloads. So we continue to see consolidation in these areas.

Joseph Gallo: We certainly have expanded our CNAP capabilities across, you know, whether it's CSPM or ASPM or DSPM, etc.

Joseph Gallo: Lots of PMs in there, but we have all of those and we are routinely consolidating customers spend in that area. So we're excited about the $600 million milestone and the success that we're having in the cloud environments with our customers.

Unknown Executive: And we're ready for our last question.

Great, and we're ready for our last question please.

Patrick Colville: Our last question will come from Patrick Colville with Scotiabank. Please go ahead. Alright guys, thank you so much for taking my question. And I guess I want to ask about the bottom line. We don't have any questions on the bottom line.

Speaker Change: Our last question will come from Patrick Colville with Scotia Bank, please go ahead [inaudible]

Speaker Change: Alright guys, thank you so much for taking my question and I guess I won't ask about the bottom line and any questions on the bottom line so you know guiding to 20% operating proper margin in fiscal 26, I guess you just told us who the person takes there you know is that because of the kind of drag on the first half before the reelection in the back half and then did you stop guide but to 23% margins? I don't know, I don't know, I don't know.

Burt Podbere: So, you know, guiding to 20% operating profit margin in fiscal 26, I guess, can you just talk us through the puts and takes there? You know, is that because of the kind of drag on the first half before the reacceleration in the back half? And then did you soft guide Burt to 23% op margins in fiscal 27? So I guess, a snapback from next year.

Speaker Change: in fiscal 27, so I guess I'll start back from next year.

Burt Podbere: Yeah, thanks, Patrick. So let me start with saying that with, you know, we had a very successful CCP program, and our profitability guidance, you know, reflects some of the sales and marketing costs of FY25 CCP packages amortized over the entire year. So that's going to impact, you know, our margin. We also have some, you know, one time upfront investments in key areas of the business that we need to bolster our, you know, increasing scale. Some of those could be related to the fact that we are fully reigniting our marketing initiatives, you know, post the outage.

Speaker Change: Yeah, thanks, Patrick. So let me start with the thing that we had a very successful CCP program and our profitability guidance reflects some of the sales and marketing costs.

Speaker Change: of FY25 CCP packages to amortize over the entire year. So that's going to impact, you know, our margin. We also have some, you know, one time upfront investments in key areas of the business that we need to bolster our, you know, increasing scale. Some of those could be related to the fact that we are fully re-igniting our marketing initiative. . . . . . . . .

Burt Podbere: We've got innovation across high growth and emerging products across areas, including cloud security, identity protection, next gen SIM and AI. We also have ramping investments in our internal use of AI tools. We feel that we can get significant savings, you know, in the out periods by the investments that we're going to make today. We also have increased in our investments and our platform resiliency, which we believe will be a competitive advantage for us when we're going up against some of our competitors with respect to being not only the best in class in terms of security, but the resilience behind that as well.

Speaker Change: You know post the outage. We've got innovation across high growth and emerging products across areas including Fout Security, Identity Protection, Nexon 7-AI.

Speaker Change: We also have wrapping investments in our internal use of AI tools. We feel that we can get significant savings in the out periods by the investment that we're going to make today.

Speaker Change: We also have increased in our investments in our platform resiliency.

Speaker Change: which we believe will be a competitive advantage for us when we're going up against some of our competitors with respect to our, you know, being the best thing, not only the best in class in terms of security, but the resilience behind that as well. And then finally I want to end by saying we expect operating margin and pre-touchable margin to expand in the second half of FY26.

Burt Podbere: Then finally, I want to end by saying we expect operating margin and free cash flow margin to expand in the second half of FY20.

Unknown Executive: Thank you all for joining. I just wanted to make one reminder to please refer to our earnings presentation, which is posted on our Ambassador Relations website, and for additional modeling notes, as well as details on the changes in presentation of non-GAP measures.

Speaker Change: Thank you all for joining. Please, I just wanted to make one reminder to please refer to our earnings presentation which is posted on our investor relations website and for additional modeling notes as well as the details on the changes in presentation of non-get measures. With that, I'll turn the call over to George for closing remarks. Thank you all for joining us.

George Kurtz: With that, I'll turn the call over to George for closing remarks. Thank all of you for your time today. We appreciate your continued support and look forward to seeing you at our upcoming investor events. Have a great day.