CrowdStrike Q4 FY25: Fading Growth Momentum Tests a Cybersecurity Titan

CrowdStrike delivered results that, while surpassing consensus estimates, revealed a concerning slowdown in key growth metrics. The company’s trajectory shows notable deceleration compared to prior periods, compounded by cautious forward guidance that triggered a post-market stock decline. This marks a departure from the strong growth narrative that has historically defined CrowdStrike, with resilience in profitability metrics overshadowed by weakening growth momentum.

Financial Performance

• Revenue: $1.06 billion, a 25% YoY increase. Growth rate slowed down compared to 33% YoY growth in Q4 FY24, indicating weakening top-line momentum.
• Adjusted EPS: $1.03, above consensus ($0.86), supported by operational efficiency.
• ARR: $4.24 billion (+23% YoY), with $224 million in net new ARR, down from $282 million in Q4 FY24, a clear sign of softening customer acquisition and expansion.
• Profitability Metrics: Subscription Gross Margin: GAAP subscription gross margin dipped slightly to 77% from 78% in Q4 FY24.
• Q1 FY26 Guidance: Revenue of $1.10-$1.11 billion (+22-23% YoY) and adjusted EPS of $0.64-$0.66, below consensus ($0.96).

Strategic Developments

• Platform Expansion: A 33% YoY rise in $5M+ deals and over 100% growth in $10M+ transactions highlight the Falcon platform’s strength as an AI-native XDR solution with cloud, identity, and SIEM modules. While driving adoption, it hasn’t fully offset a slowdown in ARR growth, which fell to 23% YoY from 34% in Q4 FY24.
• Product Innovation: Falcon Next-Gen SIEM and Charlotte AI enhancements bolster technological leadership, targeting legacy SIEM disruption and advancing AI capabilities. However, growth acceleration remains limited by macro uncertainty, longer sales cycles, and post-outage headwinds.
• Strategic Partnerships: Collaborations with HCLTech (MDR services) and NVIDIA (GPU-accelerated cybersecurity) expand scalability and market reach, strengthening CrowdStrike’s global service offerings and AI-driven capabilities, though their immediate growth contribution remains modest.

Conclusion

CrowdStrike’s Q4 FY25 results present a compelling case for concern. Strategically, CrowdStrike retains a competitive edge, but this cannot mask the erosion of its high-growth trajectory. Price movement is likely to remain constrained until key growth metrics stabilize. A rebound in net new ARR could support upward momentum, while continued weakness in ARR growth may exert further pressure. Investors should expect volatility in the near term as upcoming quarters reveal whether current challenges are temporary or indicative of a broader trend.