CrowdStrike projects at least 40% net new ARR growth in back half FY26 driven by AI and platform adoption

Earnings Call Insights: CrowdStrike Holdings (CRWD) Q2 2026

MANAGEMENT VIEW

* CEO George R. Kurtz indicated "the key theme was reacceleration," highlighting the company's early return to year-over-year net new ARR growth, a quarter ahead of prior expectations. He attributed this to "AI-necessitated demand for the Falcon platform and stellar execution across the business."
* Kurtz detailed record Q2 net new ARR of $221 million and ending ARR of $4.66 billion, both growing more than 20% year-over-year, and noted "record Q2 free cash flow of $284 million or 24% of revenue" as well as "record operating income of $255 million or 22% of revenue."
* He emphasized the adoption of cloud, Next-Gen Identity, and Next-Gen SIEM platform solutions, now with over $1.56 billion in ending ARR and growing more than 40% year-over-year. Kurtz also stated, "we surpassed the 1,000 Falcon Flex customer milestone with the average Flex customer representing more than $1 million of ending ARR."
* The CEO announced the intent to acquire Onum, describing it as a "leading data pipeline platform" with "5x more events per second than its nearest competitor" and the capability to "reduce data storage costs by 50%."
* Kurtz commented on the company's position in AI security, stating, "We secure where AI happens. Enterprises are quickly realizing AI security is not a network problem."
* CFO Burt W. Podbere said, "We delivered a strong second quarter, exceeding expectations across all guided metrics. We achieved record Q2 net new ARR of $221 million and net new ARR reacceleration a quarter ahead of our expectations, growing ending ARR to $4.66 billion, up 20% over last year."

OUTLOOK

* Podbere guided for Q3 FY26 total revenue in the range of $1,208.0 million to $1,218.0 million, expecting non-GAAP income from operations of $256.0 million to $262.0 million, and diluted non-GAAP net income per share of approximately $0.93 to $0.95.
* Full fiscal year 2026 total revenue is expected to be between $4,749.5 million and $4,805.5 million, with non-GAAP net income per share between $3.60 and $3.72.
* Podbere stated, "our guidance now assumes back half net new ARR will grow at least 40% versus last year," and "ending ARR growth for FY '26 to be more than 22%."
* Management noted the impact of partner programs, with an expected $10 million to $15 million per quarter separation between ARR and subscription revenue through Q4.

FINANCIAL RESULTS

* Total revenue reached $1.17 billion, growing 21% year-over-year, while subscription revenue grew 20% to $1.10 billion, and professional services revenue was a record $66 million.
* Total non-GAAP gross margin was 78%, and non-GAAP subscription gross margin was 80% of revenue.
* Non-GAAP operating income was a record $255 million, with an operating margin of 22%.
* Non-GAAP net income attributable to CrowdStrike was a record $237.4 million or $0.93 on a diluted per share basis.
* Cash and cash equivalents were $4.97 billion at quarter end, with record Q2 cash flow from operations of $332.8 million and record Q2 free cash flow of $283.6 million.
* GAAP net loss attributable to CrowdStrike was $77.7 million, including $35.7 million of expenses for outage and related matters and $38.4 million of strategic plan-related charges.

Q&A

* Andrew James Nowinski, Wells Fargo: Asked about the partner rebate program's impact on revenue guidance. Podbere responded that ARR is the key indicator and partner program impacts are reflected in guidance, with the impact expected to subside in Q4.
* Matthew George Hedberg, RBC: Inquired about success in identity and PAM in light of industry deals. Kurtz explained their early move in identity, stating, "customers are demanding alternatives to legacy solutions."
* Saket Kalia, Barclays: Asked how customer care packages and Flex affect net retention. Kurtz stated a "95-plus percent" renewal rate for modules and confidence in CCP packages rolling into renewals, emphasizing Flex's role in customer retention.
* Brian Lee Essex, JPMorgan: Questioned the Onum acquisition's effect on SIEM. Kurtz described Onum as "really going to supercharge our Next-Gen SIEM business," highlighting disruptive pricing.
* Gabriela Borges, Goldman Sachs: Asked about EDR and Flex contracts. Kurtz said, "the modern SOC is built on EDR and... Next-Gen SIEM," emphasizing continued innovation and service overlay.
* Joseph Anthony Gallo, Jefferies: Sought an update on the cloud security competitive environment. Kurtz noted cloud security is "still in the early days" and CrowdStrike is one of the largest providers by revenue.
* Tal Liani, BofA: Challenged sustainability of ARR growth. Podbere cited consolidation, AI, and Flex adoption as drivers, while Kurtz emphasized customer feedback and demand for consolidation.

SENTIMENT ANALYSIS

* Analysts pressed on sustainability of growth, partner program impacts, and competitive positioning, with a slightly positive tone but probing for clarity on guidance and structural changes.
* Management maintained a confident and assertive tone during both prepared remarks and Q&A, frequently using phrases like "we feel confident," "we're very pleased," and "we've got great certifications."
* Compared to the previous quarter, management showed increased confidence, especially regarding net new ARR acceleration and the Flex model’s impact.

QUARTER-OVER-QUARTER COMPARISON

* Guidance language shifted from "improving sequential net new ARR growth" to explicit projection of "at least 40%" net new ARR growth in the back half of FY26.
* Strategic focus expanded with the Onum acquisition, deeper AI integration, and broader platform adoption, compared to last quarter's emphasis on Flex adoption and SIEM/identity momentum.
* Analysts continued to focus on Flex, revenue recognition, and competitive environment, but questions were more forward-looking regarding growth sustainability and structural organization.
* Key metrics improved, including higher net new ARR, operating income, and free cash flow compared to Q1.
* Management’s tone was more optimistic, citing accelerated ARR growth and record-breaking performance, while analysts remained cautiously optimistic.

RISKS AND CONCERNS

* Management acknowledged continued expenses related to outages and strategic plan charges, impacting GAAP net loss.
* The impact of partner programs and rebates was discussed, with management noting these effects would subside by Q4.
* Analysts expressed concerns about sustainability of ARR growth, divergence between ARR and revenue, and competitive threats in identity and cloud.
* Podbere highlighted that "ARR is the best leading indicator of our business," and emphasized retention rates and continued investment in platform innovation as mitigation strategies.

FINAL TAKEAWAY

CrowdStrike's Q2 2026 call emphasized an accelerated growth trajectory with record net new ARR and operating results, supported by robust adoption of the Falcon platform and strategic initiatives including the acquisition of Onum. Management projected at least 40% year-over-year growth in net new ARR for the back half of the fiscal year, reinforced by strong customer retention, expanding platform adoption, and AI-driven demand. The company addressed both ongoing risks from partner program impacts and competitive pressures, while maintaining a confident outlook for sustained growth and platform leadership in cybersecurity.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/crwd/earnings/transcripts]

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* CrowdStrike Holdings, Inc. (CRWD) Q2 2026 Earnings Call Transcript [https://seekingalpha.com/article/4817299-crowdstrike-holdings-inc-crwd-q2-2026-earnings-call-transcript]
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* CrowdStrike Q2 earnings on deck: What to expect [https://seekingalpha.com/news/4489235-crowdstrike-q2-earnings-on-deck-what-to-expect]