CrowdStrike Has ‘Demonstrated Its Resilience And Trust’ With Customers: Analyst

The cybersecurity vendor added new recurring revenue during its latest quarter, which analysts called an encouraging sign in the wake of the massive IT outage caused by a CrowdStrike update in July.

CrowdStrike’s first full quarter since the widely disruptive July outage caused by its faulty update saw a number of encouraging signs about the cybersecurity giant’s future, according to equity analysts.

The company’s revenue results for the third quarter of its fiscal 2025, ended Oct. 31, surpassed Wall Street expectations and notably included an increase in annual recurring revenue (ARR). Net-new ARR grew by $153 million during the quarter, CrowdStrike disclosed.

The ARR growth is a “healthy result as the company executed well by engaging customers and taking responsibility for the recent outage,” wrote Jonathan Ho, research analyst at William Blair, in a note to investors Wednesday.

CrowdStrike also reported a near-perfect gross retention rate, which is the percentage of ARR retained from the same period a year earlier, for the quarter.

“The company is not seeing customer defections materialize, evidenced by a strong gross retention rate of 97 percent coupled with strong win rates in new business,” Ho said.

All in all, “we view this quarter’s results to be very favorable considering the headwinds the company faced,” he wrote. “While there is still uncertainty in its fiscal fourth quarter, CrowdStrike has demonstrated its resilience and trust built with customers.”

During the company’s quarterly call with analysts Tuesday, CrowdStrike co-founder and CEO George Kurtz said large customers have not switched to other vendors in the wake of the incident.

“I’m encouraged by the conversations that I’m having with our largest customers,” Kurtz said. “[It’s a] reflection of the fact that they realize we have the best tech in the industry, and [have] the ability to stop breaches and drive down their overall operational costs from a platform perspective.”

For its fiscal third quarter, CrowdStrike’s revenue climbed 29 percent to $1.01 billion, compared with the analyst consensus estimate of $983 million. The company’s stock price was down 4.5 percent to $347.99 as of this writing Wednesday morning.

‘On Track To Recover’

CrowdStrike’s significant growth in ARR and total revenue during an extremely challenging quarter represent “solid results,” wrote Shaul Eyal, a managing director and senior analyst at TD Cowen, in a note to investors Wednesday.

Eyal pointed to bright spots including CrowdStrike’s Falcon Flex subscription model, which has grown to comprise $1.3 billion in total deal value and is undoubtedly “powering Falcon platform adoption,” Eyal wrote.

Likewise, CrowdStrike’s Next-Gen SIEM (security information and event management) offering “showed surging growth” with net-new ARR of 150 percent during the quarter, he said.

Ultimately, “we believe [CrowdStrike] is on track to recover from the July 19 incident,” Eyal wrote.