CrowdStrike’s CRWD Falcon Flex subscription-based model is turning out to be the driver of its annual recurring revenue (ARR) expansion. During the first quarter of fiscal 2026, CrowdStrike added $774 million of total Falcon Flex account value, bringing the total deal value of accounts that have adopted Falcon Flex to $3.2 billion.
CrowdStrike achieved the $3.2 billion deal value milestone within two years since its launch, and represents a robust growth of 31% sequentially and more than six times year over year. At the end of the first quarter, more than 820 customer accounts have adopted the Falcon Flex model.
The robust growth in Falcon Flex’s customer adoption and deal value is driving CrowdStrike’s total ARR. The company ended the first quarter with $4.44 billion in ARR, up 22% on a year-over-year basis.
During the first quarter of fiscal 2026, CrowdStrike brought in $194 million in net new ARR, which management attributed to Flex as being the key driver of growth. Re-Flex transactions, where customers have fully deployed their initial Flex contract and have returned for a new deal, are becoming increasingly prevalent. CrowdStrike disclosed 39 such examples in the first quarter.
As Flex gains further traction and re-Flexes rise, CrowdStrike appears well-positioned to achieve its longer-term goal of $10 billion in ARR. If current trends hold, Falcon Flex may well be the game-changer that redefines the company’s revenue growth trajectory.
How CRWD’s ARR Growth Stacks Up Against Rivals
Competitors like Palo Alto Networks PANW and SentinelOne S are also gaining ground through platform expansion and artificial intelligence (AI) innovation.
Palo Alto Networks ended the third quarter of fiscal 2025 with $5.09 billion in Next-Generation Security (NGS) ARR, representing a year-over-year increase of 34%. The robust growth reflects increased customer adoption of Palo Alto Networks’ advanced cybersecurity offerings, including its AI-driven XSIAM platform, which saw ARR growth of more than 200% year over year.
Though comparatively a small competitor, SentinelOne’s ARR is also growing rapidly with reaching $948 million at the end of the first quarter of fiscal 2026. This represents year-over-year growth of 24%, fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.
CRWD’s Price Performance, Valuation and Estimates
Shares of CrowdStrike have gained 33.9% year to date compared with the Zacks Security industry’s growth of 19.4%.
CRWD YTD Price Performance Chart
Image Source: Zacks Investment Research
From a valuation standpoint, CRWD trades at a forward price-to-sales ratio of 22.31, above the industry’s 14.47.
CRWD Forward 12 Month P/S Valuation Chart
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CrowdStrike’s fiscal 2026 earnings is pegged at $3.44 per share, unchanged over 30 days, which implies a 12.4% drop year over year. The consensus mark for fiscal 2027 has also remained unchanged over the past 60 days at $4.55 per share, indicating a year-over-year increase of 32.2%.
Image Source: Zacks Investment Research
CRWD stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
