CrowdStrike Holdings, Inc. (CRWD) reported third quarter results Tuesday after the close, and the market's reaction was basically a shrug. Shares traded roughly flat Wednesday before dipping slightly, despite what looked like a pretty solid quarter on paper.
The Numbers That Matter: CrowdStrike delivered adjusted earnings of 96 cents per share, topping the 94-cent consensus. Revenue came in at $1.23 billion, beating estimates of $1.21 billion. Not a bad start.
But here's where things get interesting. The company posted record net new annual recurring revenue of $265 million—a 73% jump year-over-year. Total ARR closed the quarter at $4.92 billion, up 23% from last year. Cash flow looked healthy too, with operating cash flow hitting a record $398 million and free cash flow reaching $296 million.
Management highlighted strength across the board—endpoint security, cloud security, next-gen identity solutions, and their next-gen SIEM platform all performed well. The company's Falcon Flex subscription model continues to gain traction, now representing more than $1.35 billion in ARR, up over 200% year-over-year.
Looking Ahead: For Q4, CrowdStrike expects adjusted earnings between $1.09 and $1.11 per share, slightly above the $1.08 consensus. Revenue guidance landed at $1.29 billion to $1.30 billion, right in line with analyst expectations of $1.29 billion.
The company also raised its full-year fiscal 2026 outlook. Adjusted EPS guidance moved from $3.60-$3.72 to $3.70-$3.72, compared to consensus of $3.67. Revenue guidance increased from $4.75-$4.80 billion to $4.79-$4.80 billion, versus the $4.78 billion consensus.
Wall Street Weighs In: Following the earnings release, several analysts adjusted their price targets on CrowdStrike:
- Needham analyst Mike Cikos maintained a Buy rating and lifted his price target from $535 to $575.
- JP Morgan analyst Brian Essex kept an Overweight rating and raised his target from $580 to $582.
- BMO Capital analyst Keith Bachman maintained an Outperform rating with a new price target of $555, up from $500.
- Scotiabank analyst Patrick Colville stuck with a Sector Outperform rating and increased his target from $600 to $613.
- Canaccord Genuity analyst Kingsley Crane maintained a Hold rating and raised his price target from $500 to $515.
The Bottom Line: At last check, CrowdStrike shares were trading 1.1% lower at $510.75, suggesting investors might be waiting for more evidence of sustained momentum before getting excited again.
