Cybersecurity company CrowdStrike (NASDAQ: CRWD) met Wall Street’s revenue expectations in Q1 CY2025, with sales up 19.8% year on year to $1.10 billion. On the other hand, next quarter’s revenue guidance of $1.15 billion was less impressive, coming in 1% below analysts’ estimates. Its non-GAAP profit of $0.73 per share was 10.6% above analysts’ consensus estimates.
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CrowdStrike (CRWD) Q1 CY2025 Highlights:
- Revenue: $1.10 billion vs analyst estimates of $1.11 billion (19.8% year-on-year growth, in line)
- Adjusted EPS: $0.73 vs analyst estimates of $0.66 (10.6% beat)
- Adjusted Operating Income: $201.1 million vs analyst estimates of $177.9 million (18.2% margin, 13.1% beat)
- The company reconfirmed its revenue guidance for the full year of $4.77 billion at the midpoint
- Adjusted EPS guidance for the full year is $3.50 at the midpoint, beating analyst estimates by 1.3%
- Operating Margin: -11.3%, down from 0.8% in the same quarter last year
- Free Cash Flow Margin: 25.3%, up from 22.7% in the previous quarter
- Annual Recurring Revenue: $4.4 billion at quarter end, up 20.7% year on year
- Market Capitalization: $119.3 billion
“We started the fiscal year with record Q1 large deal and MSSP momentum alongside sustained 97% gross retention and consistently strong net retention as the market consolidates on Falcon as its cybersecurity platform of choice for the agentic AI era,” said George Kurtz, Founder and CEO.
Company Overview
Founded by George Kurtz, the former CTO of the antivirus company McAfee, CrowdStrike (NASDAQ: CRWD) provides cybersecurity software that protects companies from breaches and helps them detect and respond to cyber attacks.
Sales Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, CrowdStrike’s sales grew at an exceptional 36.2% compounded annual growth rate over the last three years. Its growth surpassed the average software company and shows its offerings resonate with customers, a great starting point for our analysis.
This quarter, CrowdStrike’s year-on-year revenue growth was 19.8%, and its $1.10 billion of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 19.1% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 21.6% over the next 12 months, a deceleration versus the last three years. Still, this projection is commendable and indicates the market sees success for its products and services.
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Annual Recurring Revenue
While reported revenue for a software company can include low-margin items like implementation fees, annual recurring revenue (ARR) is a sum of the next 12 months of contracted revenue purely from software subscriptions, or the high-margin, predictable revenue streams that make SaaS businesses so valuable.
CrowdStrike’s ARR punched in at $4.4 billion in Q1, and over the last four quarters, its growth was impressive as it averaged 25.9% year-on-year increases. This performance aligned with its total sales growth and shows that customers are willing to take multi-year bets on the company’s technology. Its growth also makes CrowdStrike a more predictable business, a tailwind for its valuation as investors typically prefer businesses with recurring revenue. 
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.
CrowdStrike is quite efficient at acquiring new customers, and its CAC payback period checked in at 33.2 months this quarter. The company’s rapid recovery of its customer acquisition costs indicates it has a strong brand reputation, giving it more resources pursue new product initiatives while maintaining the flexibility to increase its sales and marketing investments. 
Key Takeaways from CrowdStrike’s Q1 Results
It was great to see CrowdStrike beat convincingly on operating profit this quarter. Looking ahead, guidance was solid. The company’s EPS guidance for next quarter topped analysts’ expectations, and its full-year EPS guidance slightly exceeded Wall Street’s estimates as well. On the other hand, its revenue guidance for next quarter slightly missed and its full-year revenue guidance was just in line with Wall Street’s estimates. Overall, this was a mixed quarter and not enough for the high expectations around the stock (as evidenced by the 52-week high right before reporting and a 40+% stock price appreciation year-to-date before the print). The stock traded down 6.2% to $458.72 immediately following the results.
So do we think CrowdStrike is an attractive buy at the current price? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.
