CrowdStrike Holdings Inc Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Saket Kalia - Barclays - Analyst : Hey, guys. Can you hear me?

Question: Saket Kalia - Barclays - Analyst : There we go. Sorry about that. Absolutely. So George, maybe for you, lots of helpful detail. I wanted to start, sort out just zooming out a little bit. You spend a lot of time with customers. I guess the question is, what are they telling you about some of the puts and takes to security spending next year? I mean, you've got plenty of tailwinds like lower interest rates and potentially a better macro but also different policies out of the federal government. So how do you think about those factors as you maybe gauge the health of security spending next year?

Question: Saket Kalia - Barclays - Analyst : Very helpful. Thanks, guys.

Question: Hamza Fodderwala - Morgan Stanley - Analyst : Great. Can you hear me?

Question: Hamza Fodderwala - Morgan Stanley - Analyst : Good evening. Thank you so much for taking my question. Burt, maybe for you just to comment on the ARR or net new ARR seasonality that you spoke about for Q4. If I look at the last few years, last Q4, we had a pretty strong budget flush, pretty strong Q4 overall. The year before that, I think it was a bit more muted. When you speak on Q4 net new ARR seasonality this year, is that assuming that budget flush that we saw a year ago or something similar to what we saw maybe two years ago? Thank you.

Question: Brian Essex - JPMorgan - Analyst : Hi, good afternoon, and thanks for taking the question. George, great to see the durability of the growth retention rates, particularly in light of the event of July 19. Is there anything that you can call out in terms of trends that you're seeing as you're speaking with customers, both on the churn side? Like, what tend to be some of the themes of customers that are churning off? And then also on the better adoption side, what are some of the more durable factors that are leading to better adoption rates on the platform? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 26, 2024 / 10:00PM, CRWD.OQ - Q3 2025 CrowdStrike Holdings Inc Earnings Call

Question: Patrick Colville - Scotiabank GBM - Analyst : Hey, team. Thank you so much for taking my question. I guess I want to ask George. I mean, 2024 was the year of Copilots, including Charlotte AI. In your prepared remarks, George, you talked about kind of Detection Triage. I guess the topic du jour amongst the investment community is agentic AI. You didn't mention that in your prepared remarks. So I guess, how is CrowdStrike thinking about internal usage of agentic AI or possibly the ability for agentic AI to help CrowdStrike's customers? Thank you.

Question: Tal Liani - BofA Global Research - Analyst : Hello. Thank you. So Burt, I know you're cautious but your net new ARR was not bad at 150, given that we had 250 before the outage. It's -- there are some people expect it even to be negative. And I hear you now on 4Q cautious again. And the question is what are the -- how are the factors changing in 4Q? Meaning, you said that you have a big renewal quarter. Outside of the renewal or can you speak about, for example, what was your experience with renewals this past quarter? I would have thought that 4Q would be better than 3Q just because we don't have an outage in the middle, so it eliminates these 10 days or 14 days that people were kind of unclear about what's happening. So I want to understand how 4Q changes and why wouldn't 4Q be actually better than 3Q. Thanks.

Question: Joel Fishbein - Truist Securities - Analyst : Thanks for taking the question. I guess one for Burt. Burt, on the Falcon Flex, obviously, it sounded like it was ahead of your guys' expectations in terms of adoption. The one thing that I didn't get, what from you is the average deal term or duration of those deals, that would be really helpful. Really appreciate it.

Question: Gabriela Borges - Goldman Sachs - Analyst : Hi, good afternoon. Thanks for taking the question. Burt, I wanted to connect the dots here on what you're saying about Falcon Flex and the potential for reacceleration next year. Is there anything you're seeing in the Falcon Flex cohorts post July 19 versus this before July 19 in terms of average ARR increases, average deal sizes, et cetera, that would lead you to think that the conversion rates for the upsell routes on today's Falcon Flex deals could look different a year from now versus the baseline that you already have?

Question: Matt Hedberg - RBC Capital Markets - Analyst : Thanks, guys. Can you hear me okay?

Question: Matt Hedberg - RBC Capital Markets - Analyst : Yeah, great. George, a question for you. You talked about Next-Gen SIEM in the prepared remarks. It's really good to hear the growth that you're seeing there. I guess I'm wondering, what are you seeing really from a competitive perspective? I think we all are thinking that there's a good opportunity there, but just wondering about that. And then what are pushing some customers to change, I guess, is ultimately the question?

Question: Andy Nowinski - Wells Fargo Securities, LLC - Analyst : Okay, good evening. Thanks for taking the question. First off, congrats on getting through what was likely your most challenging quarter you probably had in company history. So I wanted to ask a question again on Falcon Flex. I know you booked $1.3 billion in deals and you talked about how it's supercharging the adoption of your platform. But if I'm thinking about it correctly, I would think it's also supercharging your customer retention rates because as customers deploy more modules, like you said, it seems like it makes it increasingly difficult to leave the platform. So I guess, first, am I thinking about that correctly in terms of customer retention? And are you factoring in any improvement to ARR due to Falcon Flex going forward?

Question: Gregg Moskowitz - Mizuho Securities USA - Analyst : Okay, great. Thank you very much. Your RPO growth accelerated quite strongly this quarter and your RPO bookings growth, which at least by our estimates, is greater than 60%, that appears to be the highest we've seen since fiscal 2022. Now, clearly, the customer commitment packages and Flex had a significant impact here. And so I guess with that in mind, it would just be helpful, Burt, to get your perspective on, A, how the CRPO performance was, and B, how we should generally be thinking about what these strong bookings might mean for revenue recognition and ARR when we look down the road? Thanks.

Question: John DiFucci - Guggenheim Securities LLC - Analyst : Thanks for taking my question. Burt, listen, you've always been really clear, which has, I think, been great for investors and great for the stock, too. And ARR is always and revenue have always been great, had a great connection over time. Can you -- and I know there's some small print, but I don't -- can you explain to us what's making this coupling diverge? And I don't know, hopefully, it's not a long explanation. It's probably why you haven't said it. But can you do that? Can you give us, like even if it's temporary here because I don't want to see -- my model works great for you and you're the first ones to do this. And it's really clear and you put it right out there for everybody to see. But why is that going to diverge? Why could it diverge in the short term?