To The Moon

With $CrowdStrike Holdings, Inc.(CRWD)$ is set to report earnings on Tuesday, December 2, 2025 (after market close), the focus is shifting from "recovery" (post-July 2024 outage) to "re-acceleration." The company has largely operationally put the outage behind it, but the legal overhang—specifically the Delta Air Lines lawsuit—remains a headline risk.

Revenue Estimate: ~$1.21 Billion (~20% YoY growth)

Non-GAAP EPS Estimate: ~$0.94

Implied Move: The options market is pricing in an ~8.5% move (approx. ±$40/share) by Friday, Dec 5.

CrowdStrike Fiscal Q2 2026 Earnings: The "Re-acceleration" Quarter

The Fiscal Q2 2026 earnings reported on 27 August 2025 (reflecting the quarter ended 31 July 2025) were a pivotal "prove it" moment for CrowdStrike, marking roughly one year since the July 2024 outage. The report confirmed that while the operational recovery is complete, the financial cleanup (accounting for discounts and credits) continues to create noise in the headline numbers.

Summary: The "Beat" vs. The "Hangover"

CrowdStrike delivered a strong operational beat, declaring that business "re-acceleration" had arrived a quarter earlier than expected. However, the stock reaction was tempered by cautious Q3 revenue guidance, illustrating that the financial "tail" of the outage (via customer credits) is still dragging on recognized revenue, even as sales velocity returns to normal.

Key Operational Highlights

Net New ARR Acceleration: The most critical metric for investors was the $221M in Net New ARR. This proved that the "deal pause" from late 2024 had fully dissipated. Management noted this acceleration happened "a quarter ahead of schedule."

Falcon Flex Success: The new flexible licensing model (introduced post-outage to retain customers) has become a massive growth driver. Over 1,000 customers have adopted Flex, with "Re-Flex" (renewals/expansions of Flex deals) generating a 50% uplift in deal value.

Module Adoption: The stickiness of the platform remains high. 48% of customers now use 6+ modules, proving that the outage did not trigger a mass exodus to competitors like $Palo Alto Networks(PANW)$ or $SentinelOne, Inc(S)$.

The Lesson from Guidance: "ARR is Truth, Revenue is Lag"

The primary lesson for investors from the Q2 FY26 guidance—and the subsequent stock volatility—is the decoupling of Sales Health (ARR) from Accounting Revenue.

The "Disconnect": Despite record sales (ARR), CrowdStrike provided light revenue guidance for Q3 FY26 ($1.208B–$1.218B vs. consensus $1.228B).

The Cause: The "Customer Commitment Packages" (CCPs)—the credits and discounts issued to apologize for the July 2024 outage—are contra-revenue items. They reduce reported revenue and margins for the duration of the contracts (1–3 years), even though the customer is technically "growing" their usage.

The Takeaway:

• Ignore the Revenue Miss: The revenue "miss" in guidance is artificial; it is the accounting cost of the apology, not a sign of slowing demand.

• Watch Net New ARR: As long as Net New ARR is accelerating (>$220M/quarter), the business is healthy. The revenue growth will eventually catch up as the discount periods burn off (mostly by FY2027).

The Q2 FY26 report confirmed that CrowdStrike is "out of the penalty box" with customers but still "in the penalty box" with accountants. The lesson is to trade the ARR growth, not the revenue headwinds. For the upcoming Q3 report (Dec 2, 2025), the primary "buy" signal will be if Net New ARR can sustain this momentum (>$225M) without relying too heavily on aggressive discounting.

Key Metrics to Watch

Beyond the headline revenue and EPS beats, the health of CrowdStrike’s business will be judged on these four specific internals:

Net New ARR (Annual Recurring Revenue)

Why it matters: This is the purest measure of sales momentum. In Q2, CrowdStrike added ~$221M in Net New ARR.

The Benchmark: Investors want to see if the "deal delays" from earlier in the year have truly cleared. A number above $225M would signal that sales cycles have normalized and customers are ignoring the reputational noise from the 2024 outage.

Falcon Flex Adoption

Why it matters: This is CrowdStrike’s new flexible licensing model (allows customers to "use what they need" without rigid module counts).

What to watch: Look for the Total Contract Value (TCV) of Flex deals. Management previously noted deal sizes were expanding (often 2x-3x) when customers switched to Flex. Continued growth here proves they can upsell existing clients despite high market penetration.

"Module" Attach Rates (Platform Adoption)

The Context: CrowdStrike’s bull case relies on customers using 5, 6, or 7+ modules (e.g., Identity, Cloud, SIEM) rather than just Endpoint protection.

Next-Gen SIEM: Specifically, watch for updates on LogScale (Next-Gen SIEM). This is their fastest-growing segment intended to displace Splunk/Cisco. Growth >80% YoY here is the target.

Legal Reserves & "The Delta Factor"

The Update: While the July 2024 outage is operationally resolved, the legal battle with Delta Air Lines is active. Recent court rulings (Nov 2025) have allowed Delta’s negligence claims to proceed, rejecting CrowdStrike’s motion to dismiss certain parts.

What to watch: Check if CrowdStrike increases its legal contingency reserves or modifies its guidance on "professional services" margins due to legal defense costs. Any specific mention of "uncapped liability" exposure will spook the market.

CrowdStrike Holdings (CRWD) Price Target

Based on 47 analysts from Tiger Brokers app offering 12 month price targets for CrowdStrike Holdings in the last 3 months. The average price target is $522.18 with a high forecast of $706.00 and a low forecast of $185.00. The average price target represents a 2.56% change from the last price of $509.16.

Trading Opportunity: Short-Term Setup

The stock has pulled back ~8% from its November highs into this event, which often creates a cleaner setup for a "buy the news" reaction if guidance is simply "good enough."

Implied Volatility (IV) & Expected Move

Market Pricing: The options market implies a move of roughly 8.5% in either direction.

CRWD implied volatility (IV) is 48.6, which is in the 64% percentile rank. This means that 64% of the time the IV was lower in the last year than the current level. The current IV (48.6) is -4.6% below its 20 day moving average (51.0) indicating implied volatility is trending lower.

Historical Context: CrowdStrike typically moves ~7.2% on earnings. The current premium is slightly elevated, suggesting the market is nervous about the legal headlines or guidance reset.

Scenario Analysis

The "easy money" shorting the outage is gone. The setup now favors the bulls if execution remains perfect. The pullback into earnings is a positive technical signal (it lowers the bar). The biggest risk isn't the earnings number—it is the FY2027 outlook (fiscal year beginning Feb 2026) and whether legal battles will drag on margins.

Technical Analysis - Exponential Moving Average (EMA)

We saw CRWD start to make an upside after the recent decline after pullback last week, but it is still trading near the 50-day period on daily chart, we saw its peer, $Zscaler Inc.(ZS)$'s earnings can have an impact on CrowdStrike's earnings and stock performance, primarily because both companies operate within the same overall cybersecurity industry and are considered peers, although they focus on different, but complementary, market segments (zero-trust network access vs. endpoint security). 

Zscaler's financial results and future guidance are often seen as an indicator of the broader demand and spending trends in the cybersecurity market. Strong results from Zscaler generally suggest a healthy market, which bodes well for CrowdStrike.

Investors often group cybersecurity stocks together. A significant beat or miss by one company can influence investor sentiment and lead to price movements in the other, even if their specific results differ.

As we saw Zscaler's earnings performance provides key context for CrowdStrike's upcoming report, reflecting overall market health and the success of their strategic partnerships., so we might see some investors coming in for CRWD stocks ahead of its earnings on Tuesday (02 Dec), and we might want to watch the price action for CRWD.

So I think a Long Straddle option might be appropriate for CRWD earnings play.

Summary

CrowdStrike’s upcoming report is a critical test of whether the company has successfully transitioned from "recovery" to "re-acceleration" following the July 2024 outage.

The Consensus: Analysts expect Revenue of ~$1.21B (~20% YoY growth) and Non-GAAP EPS of ~$0.94. The options market is pricing in a volatile move of approximately ±8.5%.

Key Metrics to Watch:

• Net New ARR (The "True" Signal): This is the most important metric. Investors want to see Net New ARR exceed $225M. A strong number here confirms that deal delays are over and customers are ignoring reputational noise.

• Falcon Flex Adoption: Watch for updates on the new flexible licensing model. Management has noted that customers switching to Flex often increase their spend by 2x-3x. Continued growth here proves the company can upsell despite high market penetration.

• The "Revenue Lag" Nuance: Remember the lesson from Q2: Revenue is currently a lagging indicator. It is artificially suppressed by "Customer Commitment Packages" (credits/discounts issued as apologies). Do not panic if revenue guidance seems light, provided that ARR (sales momentum) is accelerating.

Risks: While operational issues are resolved, the Delta Air Lines lawsuit remains an overhang. Any mention of increasing legal reserves or uncapped liability exposure could spook the market.

Bottom Line: The setup favors the bulls if execution remains clean. The market is looking for confirmation that the sales pipeline has fully normalized, looking past the temporary accounting drag of outage credits.

Appreciate if you could share your thoughts in the comment section whether you think CRWD would be able to provide confirmation that the sales pipeline has fully normalized amidst cybersecurity sector seem to recover as seen from its peers and strategic partner.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.