CrowdStrike
CRWD · NasdaqA $162.5M net loss sat beside $1.31B of free cash flow
Customers pay at the start of their subscriptions, so CrowdStrike generated free cash flow equal to 27.2% of revenue while reporting an operating loss of $293.3M.
FY2026, the fiscal year to Jan 31, 2026 · 10-K filed Mar 5, 2026
- Operating margin
- -6.1%
- Net income
- -$162.5M
- Free cash flow
- $1.3B
Largest source of revenue: Subscription, 94.9% of the total.
Where CrowdStrike's money goes
- 01
A $162.5M net loss sat beside $1.31B of free cash flow
Customers pay at the start of their subscriptions, so CrowdStrike generated free cash flow equal to 27.2% of revenue while reporting an operating loss of $293.3M.
Why it matters
Operating cash flow was $1.61B, 33.5% of revenue, and free cash flow was $1.31B, 27.2% of revenue, after capital spending of $302.1M. Free cash flow rose from $1.13B a year earlier, while the net loss attributable to CrowdStrike widened to $162.5M from $15.2M. The filing names stock-based compensation, the amortization of deferred contract acquisition costs and the increase in deferred revenue as the main items between the loss and the cash.1
The pattern is not new. Operating income was negative in every year from FY2019 to FY2026, while free cash flow turned positive in FY2020, at $19.7M, and reached $1.13B in FY2025 and $1.31B in FY2026. The filing says customers are generally invoiced at the start of the subscription term, and revenue is then recognized evenly over that term.1
AnalysisAnalysis: the cash figure leaves out one cost. Stock-based compensation is paid in shares, not cash, so it lowers reported profit but not cash flow; its cost shows up in the share count instead, and the weighted average basic share count rose to 250.6M from 244.8M. Upfront billing also means the cash figure depends on renewals continuing on similar terms.
- 02
Overhead, not selling, drove most of the wider operating loss
General and administrative costs rose 39.3%, against revenue growth of 21.7%, and supplied 1.76 of the 2.86-point rise in operating expenses as a share of revenue.
Why it matters
Total operating expenses rose 26.2% to $3.89B, or 80.8% of revenue, up 2.86 points, while revenue rose 21.7%. General and administrative expense, up 39.3% to $670.3M, added 1.76 points, or 61.5% of that rise. Research and development added 1.57 points, and sales and marketing fell 0.47 points to 38.1% of revenue. The operating margin moved to -6.1% from -2.9% a year earlier.1
The filing names expenses tied to the sensor outage and related matters as the largest single driver of the general and administrative increase, followed by stock-based compensation, consulting, and charges under a restructuring it calls the Strategic Plan. It expects legal, professional and other expenses associated with the outage to continue in future periods.1
AnalysisAnalysis: the selling engine itself grew more efficient, since sales and marketing rose 20.2%, slower than revenue. The wider loss came mainly from overhead tied to one event and from engineering spend, so how far the loss narrows depends on whether outage costs fade and whether research spending grows slower than revenue.
- 03
Interest on cash offset two-thirds of the operating loss
Interest income of $195.0M, 4.05% of revenue, covered 66.5% of the $293.3M operating loss, leaving a pretax loss of $127.0M.
Why it matters
Interest income was $195.0M against $196.2M a year earlier, down 0.61%, which the filing attributes to lower market rates partly offset by higher cash balances. Interest expense was $28.0M. After these items the pretax result was a $127.0M loss, against $58.6M of income a year earlier, when interest income was larger than the operating loss of $116.4M.1
Taxes widened the loss further. The provision for income taxes was $34.2M on a pretax loss, adding 26.9% to it; the filing says it keeps a full valuation allowance on its U.S. deferred tax assets and pays foreign income and withholding taxes. A year earlier the $71.1M provision was 121.4% of pretax income, which turned a pretax profit into a net loss.1
AnalysisAnalysis: two-thirds of the operating loss is offset by a return on cash rather than by the business itself. That cushion moves with interest rates, which the company does not control, and with the size of the cash balance, which acquisitions paid in cash draw down.
Sources
- 1.CrowdStrike 10-K for the period to 2026-01-31 (the filing), Mar 5, 2026, read Nov 2, 2026
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Growth, profit and margin
Revenue went from $118.8M in FY2018 to $4.8B in FY2026, the operating margin from -110.7% to -6.1%, over 8 years.
- Revenue$4.8B
- Operating income-$293.3M
- Operating margin-6.1%
- Period
- FY2026
- Revenue
- $4.8B
- Operating income
- -$293.3M
- Operating margin
- -6.1%
- Net income
- -$162.5M
- Free cash flow
- $1.3B
Does the profit turn into cash?
FY2026: free cash flow of $1.3B against net income of -$162.5M.
- Operating cash flow$1.6B
- Capital expenditure$302.1M
- Free cash flow$1.3B
- Net income-$162.5M
Capital expenditure is drawn below the axis as cash out. Cash conversion is operating cash flow over net income, shown in the tooltip for years with a profit.
Financial data and sources
How the revenue mix has shifted
Each breakdown the filing reports, as shares of revenue, for every period it restates.
Consolidated Statements of Operations. The filing restates this breakdown for 3 periods.
Click a member to isolate it across the years shown.
The figures
Margins, cash and growth for the period, each with what it was computed from.
Where revenue comes from
Every breakdown the filing reports for the period, with each item's share.
Revenue streams
| Subscription | $4.6B | 94.9% |
| Professional services | $247.3M | 5.1% |
Geographic markets
| Europe, Middle East, and Africa | $782.7M | 16.3% |
| Asia Pacific | $495.7M | 10.3% |
| Other | $317.0M | 6.6% |
These items do not sum to total revenue; the filing states them beside it. Source10-K, us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax, as reported in the 10-K filed 2026-03-05
What it costs
The cost lines beneath operating income, each as a share of revenue, then the operating result.
Costs are reported by function: what it cost to make what was sold, then the expenses of selling, developing and administering.
| Cost line | FY2026 | Of revenue | Source |
|---|---|---|---|
| Total cost of revenue | $1.2B | 25.3% | Source10-K, us-gaap:CostOfGoodsAndServicesSold, as reported in the 10-K filed 2026-03-05 |
| Loss from operations | -$293.3M | -6.1% | Source10-K, us-gaap:OperatingIncomeLoss, as reported in the 10-K filed 2026-03-05 |
The statements, as filed
The income statement, cash flow statement and balance sheet in the company's own order and words. Every line links to the filing.
Income statement24 lines, as presented in the 10-K
Cash flow statement55 lines, as presented in the 10-K
Balance sheet34 lines, as presented in the 10-K
About this data
- Source
- CrowdStrike 10-K, accession 0001535527-26-000010, filed Mar 5, 2026, read on Nov 2, 2026.
- History
- From the SEC's XBRL company facts, the value from the latest filing that stated each period.
- Reading
- Paragraphs marked Analysis are CXProWealth's reading; everything else is the filing's own numbers and words, or a cited source.
- Version
- methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-02
What holds CrowdStrike's model up, and what could bend it
Competitive edge
One installed sensor carries every module sold after it
Each added module reads data the installed sensor already collects, and serving all subscriptions cost 22.3% of subscription revenue.
The detail
The filing describes a single lightweight sensor per device that collects data once and reuses it across modules, so new modules can be activated without a new install. It attributes subscription revenue growth of 21.4%, to $4.56B, to new customers and to "the sale of additional sensors and modules to existing customers."1
Subscription cost of revenue was $1.02B, 22.3% of subscription revenue, mostly cloud hosting, data center depreciation, internal software and support staff. The filing reports subscription gross margin as flat from the prior year.1
AnalysisAnalysis: the advantage lies in the second sale. A customer who already runs the sensor can add a module through a contract change, which is cheaper to sell and to serve than a new install, and harder for a rival to dislodge once several modules share one agent.
Breach response work feeds the subscription business
Professional services cost 82.1% of the revenue they bring in, but the filing calls incident response a lead generation engine for subscriptions.
The detail
Professional services revenue was $247.3M, 5.1% of revenue, up 28.7%, at a cost of $203.0M, or 82.1% of that revenue. Services took 16.7% of total cost of revenue while bringing in 5.1% of revenue. The filing says incident response typically begins by deploying the Falcon sensor and that "many of our incident response customers become subscription customers."1
AnalysisAnalysis: the services line is priced as labor and earns little on its own. Its value is that a breached company sees the sensor at work during its worst week, which makes the subscription that can follow an easier sale.
What to watch
The sensor outage still weighs on costs and renewals
The filing names the outage as its first risk: it drove the largest rise in overhead, and concessions granted since have meant contraction and smaller upsells.
The detail
A faulty content update to the Falcon sensor crashed certain Windows systems. The company faces securities, derivative and consumer lawsuits and government inquiries, expects insurance not to cover all costs, and says it cannot yet estimate the possible loss. General and administrative expense rose 39.3% to $670.3M, with outage-related costs as the largest driver.1
Customer commitment packages offered after the outage included discounts, extra modules and longer subscription terms. The filing says they have resulted in "increased contraction, due to elongated subscription terms, and decreased upsell dollar values," and because revenue is recognized over the contract, their effect runs for the life of those contracts.1
Larger rivals can bundle security into products customers own
The filing warns that competitors with greater resources may cut prices or bundle features, which would show first in a gross margin of 74.7%.
The detail
The filing says many competitors have greater resources and broader product lines, and may build competing functionality into products customers already use, offer lower prices, or adopt AI faster. It states that competitive pricing pressure may reduce its gross profits.1
Gross margin was 74.7%, down 0.29 points, as the lower-margin services line grew faster than subscriptions. Subscription growth of 21.4% stayed close to total revenue growth of 21.7%.1
AnalysisAnalysis: pricing pressure is not yet visible in the gross margin, which held nearly flat. It would appear first as a lower subscription margin or slower subscription growth, and the outage concessions make the two harder to separate.
A security vendor's own failures cost more than most
The filing says CrowdStrike is a target of sophisticated attackers and runs on AWS and its own data centers, for customers with a low tolerance for interruptions.
The detail
As a security provider, the company says it has been targeted by bad actors, including nation-state groups, seeking to use its platform as an entry point into customers' systems. It hosts the platform on Amazon Web Services and its own colocation data centers, and says its customers have "a low tolerance for interruptions of any duration."1
AnalysisAnalysis: the outage showed how a single defect becomes years of cost through claims, concessions and longer sales cycles. In a business sold on trust, another incident would weigh on renewals of the subscriptions that make up 94.9% of revenue, more than on any one year's expenses.
Sources
- 1.CrowdStrike 10-K for the period to 2026-01-31 (the filing), Mar 5, 2026, read Nov 2, 2026
CrowdStrike, further in
Member research, then your own questions on ChatGPT.
What could change the outlook
What CrowdStrike's numbers depend on from here, read from the filing: the conditions behind this period's margins and growth, and where a change would show first.
- What has to happen for the operating loss to close
Which cost lines need to grow slower than revenue, how much of the outage expense could fade, and what the change in commission accounting does and does not change.
- How durable is cash flow that runs ahead of profit?
What the gap between free cash flow and reported losses rests on, from upfront billing to stock-based pay, and which renewal trends would change it.
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Have a question about CrowdStrike?
Explore its profit drivers, competitive edge, risks, or your own investment and business questions with CXProWealth on ChatGPT.
- How much of CrowdStrike's $1.31B free cash flow comes from upfront billing and stock-based pay rather than from profit?
- If CrowdStrike's sensor outage costs fade, how much of the rise in its general and administrative expense could reverse?
- How would lower interest rates change CrowdStrike's bottom line, given interest income offset two-thirds of its operating loss?
Business Lens describes CrowdStrike from its own filings with the SEC. It is not a view on its shares, a target, or advice to buy, sell or hold anything; figures are as filed and may be restated by the company later. The filing, the dates and the version are under the financial data above.