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What changed in CrowdStrike's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CrowdStrike's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+400 added−367 removedSource: 10-K (2025-03-10) vs 10-K (2024-03-07)

Top changes in CrowdStrike's 2025 10-K

400 paragraphs added · 367 removed · 302 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

71 edited+35 added−40 removed122 unchanged
Biggest changeThis unique data layer is powered and turned into action by three complementary graph databases (Threat Graph, Asset Graph, and Intel Graph) to put threats, adversaries, and assets into the context needed to make the rapid, informed decisions that stop breaches. • High Efficacy, Low False Positives : The vast telemetry of the Security Cloud and the best practices employed in continually training our AI models results in industry-leading efficacy rates and low false positives. • Consolidation of Siloed Products : Integrating and maintaining numerous security products creates blind spots that attackers can exploit, is costly to maintain and negatively impacts user performance.
Biggest changeThis unique data layer is powered and turned into action by three complementary graph databases (Threat Graph, Intel Graph, and Asset Graph) to put threats, adversaries, and assets into the context needed to make the rapid, informed decisions that stop breaches. • Driving AI Innovation and Security : We are a pioneer in leveraging AI to transform cybersecurity, combining AI for cybersecurity with cybersecurity for AI.
Our cloud-native platform approach gives customers a unified approach to address their most critical areas of risk seamlessly.
Our cloud-native platform gives customers a unified approach to address their most critical areas of risk seamlessly.
The Falcon Foundry no-code application development platform allows customers to quickly create their own apps to solve custom security and IT use-cases with full access to CrowdStrike’s data, threat intelligence, automation, and cloud-scale infrastructure.
Application Development : The Falcon Foundry no-code application development platform allows customers to quickly create their own apps to solve custom security and IT use-cases with full access to CrowdStrike’s data, threat intelligence, automation, and cloud-scale infrastructure.
Further evidence of our progress into these critical markets is demonstrated by virtue of fact that 25 of the 50 U.S. states have standardized on CrowdStrike’s platform at the enterprise level. • Expanding Our International Footprint. We are expanding our international operations and intend to invest globally to broaden our international footprint.
Further evidence of our progress into these critical markets is demonstrated by virtue of the fact that 25 of the 50 U.S. states have standardized on CrowdStrike’s platform at the enterprise level. • Expanding Our International Footprint. We are expanding our international operations and intend to invest globally to broaden our international footprint.
Our incident response services typically begin by deploying our lightweight agent to a customer’s endpoints or cloud workloads to provide comprehensive visibility in order to determine if an attacker is currently in the environment, what assets have been compromised, and how much damage has been done.
Our incident response services typically begin by deploying our lightweight agent to a customer’s endpoints or cloud workloads to provide visibility in order to determine if an attacker is currently in the environment, what assets have been compromised, and how much damage has been done.
Our expanding set of open APIs and the Foundry app development platform will allow customers and partners to build their own capabilities on top of the Falcon platform.
Our expanding set of open APIs and the Foundry app development platform allow customers and partners to build their own capabilities on top of the Falcon platform.
Bringing CrowdStrike to the Market We primarily sell the Falcon platform through our direct sales team that leverages our network of channel partners to maximize effectiveness and scale. We have a low friction land-and-expand sales strategy. Key elements of our growth strategy include: 11 Table of Contents • Growing Our Customer Base by Replacing Legacy and Other Endpoint Security Products.
Bringing CrowdStrike to the Market We primarily sell the Falcon platform through our direct sales team that leverages our network of channel partners to maximize effectiveness and scale. We have a low friction land-and-expand sales strategy. Key elements of our growth strategy include: • Growing Our Customer Base by Replacing Legacy and Other Endpoint Security Products.
We employ a wide range of digital programs, including search engine marketing, online and social media initiatives, and content syndication to increase traffic to our website and encourage prospective customers to sign up for a 15 Table of Contents free trial of the Falcon platform. Additionally, we engage in joint marketing activities with our channel and technology alliance partners.
We employ a wide range of digital programs, including search engine marketing, online and social media initiatives, and content syndication to increase traffic to our website and encourage prospective customers to sign up for a free trial of the Falcon platform. Additionally, we engage in joint marketing activities with our channel and technology alliance partners.
We launched the CrowdStrike Store, the first open cloud-based application PaaS for cybersecurity, which allows customers to purchase CrowdStrike products and provides an ecosystem of trusted partners and applications for our customers to choose from.
We launched the CrowdStrike Marketplace, the first open cloud-based application PaaS for cybersecurity, which allows customers to purchase CrowdStrike products and provides an ecosystem of trusted partners and applications for our customers to choose from.
ITEM 1. BUSINESS Overview Founded in 2011, CrowdStrike reinvented cybersecurity for the cloud era and transformed the way cybersecurity is delivered and experienced by customers. When we started CrowdStrike, cyberattackers had an asymmetric advantage over legacy cybersecurity products that could not keep pace with rapid changes in adversary tactics.
ITEM 1. BUSINESS Overview Founded in 2011, CrowdStrike reinvented cybersecurity for the cloud and artificial intelligence (“AI”) era and transformed the way cybersecurity is delivered and experienced by customers. When we started CrowdStrike, cyberattackers had an asymmetric advantage over legacy cybersecurity products that could not keep pace with rapid changes in adversary tactics.
For additional information, see the section titled “Risk Factors—Risks Related to Intellectual Property, Legal, and Regulatory Matters—The success of our business depends in part on our ability to protect and enforce our intellectual property rights.” 17 Table of Contents Backlog We enter into both single and multi-year subscription contracts for our solutions.
For additional information, see the section titled “Risk Factors—Risks Related to Intellectual Property, Legal, and Regulatory Matters—The success of our business depends in part on our ability to protect and enforce our intellectual property rights.” Backlog We enter into both single and multi-year subscription contracts for our solutions.
Corporate Information Our principal executive offices are located at 206 E. 9 th Street, Suite 1400, Austin, Texas 78701 and our telephone number is (888) 512-8906. We are a holding company and all of our business operations are conducted through our subsidiaries, including CrowdStrike, Inc. Our website address is www.crowdstrike.com.
Corporate Information Our principal executive offices are located at 206 E. 9th Street, Suite 1400, Austin, Texas 78701 and our telephone number is (888) 512-8906. We are a holding company and all of our business operations are conducted through our subsidiaries, including CrowdStrike, Inc. Our website address is www.crowdstrike.com.
In addition to providing valuable breach remediation to our customers, our incident response services also act as a strong lead generation engine for our Falcon platform and cloud modules. After experiencing the benefits of our platform firsthand, many of our incident response customers become subscription customers. 14 Table of Contents • Technical Assessment and Strategic Advisory Services .
In addition to providing valuable breach remediation to our customers, our incident response services also act as a strong lead generation engine for our Falcon platform and cloud modules. After experiencing the benefits of our platform firsthand, many of our incident response customers become subscription customers. • Technical Assessment and Strategic Advisory Services .
The Falcon platform collects an array of high fidelity endpoint events, such as code execution, network, file system and user activity. This information can be used for a variety of use cases beyond security, such as IT operations and vulnerability management. Management Interface.
The Falcon platform collects an array of high fidelity endpoint events, such as code execution, network, file system and user activity. This information can be used for a variety of use cases beyond security, such as IT operations and vulnerability management. 12 Table of Contents Management Interface.
We will continue to invest in customer acquisition programs, including our channel partnerships and new programs, like our free trial program of Falcon Prevent that is easily downloaded from our website and AWS Marketplace. • Further Penetrating Existing Customers.
We will continue to invest in customer acquisition programs, including our channel partnerships and new programs, like our free trial program of Falcon Prevent that is easily downloaded from our website and AWS Marketplace. 10 Table of Contents • Further Penetrating Existing Customers.
Mr. Henry previously served as a cybersecurity and national security analyst for NBC News. Since November 2021, Mr. Henry has served as a director of ShoulderUp Technology Acquisition Corp., a blank check company that completed its initial public offering in November 2021. Mr.
Mr. Henry previously served as a cybersecurity and national security analyst for NBC News. Since November 2021, Mr. Henry has served as a director of ShoulderUp Technology Acquisition Corp., a blank check company that completed its initial public offering in 19 Table of Contents November 2021. Mr.
The power of our land-and-expand strategy is evidenced by our 119% dollar-based net retention rate as of January 31, 2024. • Leveraging Our Falcon Platform to Enter New Markets. Because we leverage a single data model and open cloud architecture, we are uniquely positioned to continue innovating and rapidly deploying new cloud modules on our platform.
The power of our land-and-expand strategy is evidenced by our 112% dollar-based net retention rate as of January 31, 2025. • Leveraging Our Falcon Platform to Enter New Markets. Because we leverage a single data model and open cloud architecture, we are uniquely positioned to continue innovating and rapidly deploying new cloud modules on our platform.
Our competitors currently include the following by general category: • legacy antivirus product providers who offer a broad range of approaches and solutions including traditional signature-based antivirus protection; • alternative endpoint security providers who generally offer a mix of on-premises and cloud-hosted products that rely heavily on malware-only or application whitelisting techniques; • network security vendors who are supplementing their core perimeter-based offerings with endpoint or cloud security solutions; • cloud security vendors, including those who focus on public cloud infrastructure and services; 16 Table of Contents • identity security vendors that seek to identify and secure user accounts and related activities; and • professional service providers who offer cybersecurity response services.
Our competitors currently include the following by general category: • legacy antivirus product providers who offer a broad range of approaches and solutions including traditional signature-based antivirus protection; • alternative endpoint security providers who generally offer a mix of on-premises and cloud-hosted products that rely heavily on malware-only or application whitelisting techniques; • network security vendors who are supplementing their core perimeter-based offerings with endpoint or cloud security solutions; • cloud security vendors, including those who focus on public cloud infrastructure and services; • identity security vendors that seek to identify and secure user accounts and related activities; • professional service providers who offer cybersecurity response services; and • legacy SIEM vendors who offer a range of log management and security capabilities.
The SEC maintains a website that contains the materials we file with or furnish to the SEC at www.sec.gov. 21 Table of Contents
The SEC maintains a website that contains the materials we file with or furnish to the SEC at www.sec.gov. 20 Table of Contents
We intend to grow our international customer base by increasing our investments in our overseas operations, including adding headcount in Europe, the Middle East, Asia-Pacific, including Japan, and expanding data centers overseas. 12 Table of Contents • Extending Our Falcon Platform and Ecosystem. We designed our architecture to be open, interoperable, and highly extensible.
We intend to grow our international customer base by increasing our investments in our overseas operations, including adding headcount in Europe, the Middle East, Asia-Pacific, including Japan, and expanding data centers overseas. • Extending Our Falcon Platform and Ecosystem. We designed our architecture to be open, interoperable, and highly extensible.
This collect-once, use repeatedly approach is the reason why we have been able to deliver new cloud modules covering IT hygiene and vulnerability management quickly and enables us to continue expanding the Falcon platform rapidly in the future. 13 Table of Contents Intel Graph.
This collect-once, use repeatedly approach is the reason why we have been able to deliver new cloud modules covering IT hygiene and vulnerability management quickly and enables us to continue expanding the Falcon platform rapidly in the future. Intel Graph.
To attract high performers, we have a team dedicated to building and promoting our employer brand focused on creating a strong employer value proposition: • Competitive pay and benefits • Flexible working arrangements • Role and task diversity • Professional development opportunities • Organizational reputation and culture 18 Table of Contents We provide robust compensation and benefits programs to help meet the needs of our employees.
To attract high performers, we have a team dedicated to building and promoting our employer brand focused on creating a strong employer value proposition, which includes: • Competitive pay and benefits • Flexible working arrangements • Role and task diversity • Professional development opportunities • Organizational reputation and culture We provide robust compensation and benefits programs to help meet the needs of our employees.
We took a fundamentally different approach to solve this problem with the AI-native CrowdStrike Falcon XDR platform – the first, true, cloud-native platform built with artificial intelligence (“AI”) at the core, capable of harnessing vast amounts of security and enterprise data to deliver highly modular solutions through a single lightweight agent.
We took a fundamentally different approach to solve this problem with the AI-native CrowdStrike Falcon cybersecurity platform – the first, true, cloud-native platform built with AI at the core, capable of harnessing vast amounts of security and enterprise data to deliver highly modular solutions through a single lightweight agent.
We invest resources to develop the talent needed to remain a leader in cybersecurity. We deliver numerous training opportunities, provide rotational assignment opportunities, have expanded our focus on continuous learning and development, and implemented new methodologies to manage performance, provide feedback, and develop talent.
We invest resources to develop the talent needed to remain a leader in cybersecurity. We deliver numerous training opportunities, provide rotational assignment opportunities, have expanded our focus on continuous learning and development, and ensure we manage performance, provide feedback, and develop talent.
We compete on the basis of a number of factors, including but not limited to our: • ability to offer a unified and modular platform that enables rapid innovation, scaling, and deployment; • ability to identify security threats and prevent security breaches; • ability to integrate with other participants in the security ecosystem; • time to value, price, and total cost of ownership; • brand awareness, reputation, and trust in the provider’s services; • strength of sales, marketing, and channel partner relationships; and • customer support, incident response, and proactive services.
We compete on the basis of a number of factors, including but not limited to our: • ability to offer a unified and modular platform that enables rapid innovation, scaling, and deployment; • ability to identify security threats and prevent security breaches; • ability to integrate with other participants in the security ecosystem; • time to value, price, and total cost of ownership; • brand awareness, reputation, and trust in the provider’s services; • strength of sales, marketing, and channel partner relationships; • customer support, incident response, and proactive services; and • ability to rapidly ingest and search both first and third-party data.
Our business is not dependent on any particular end customer. Sales and Marketing Our sales and marketing organizations work together closely to drive market awareness, build a strong sales pipeline and cultivate customer relationships to drive revenue growth.
Our business is not dependent on any particular end customer. 14 Table of Contents Sales and Marketing Our sales and marketing organizations work together closely to drive market awareness, build a strong sales pipeline and cultivate customer relationships to drive revenue growth.
Podbere - Chief Financial Officer Mr. Podbere has served as our Chief Financial Officer since September 2015. From May 2014 to August 2015, Mr. Podbere served as Chief Financial Officer for OpenDNS, Inc. (acquired by Cisco in 2015), a cloud-delivered network security company, where he oversaw the finance function.
Podbere has served as our Chief Financial Officer since September 2015. From May 2014 to August 2015, Mr. Podbere served as Chief Financial Officer for OpenDNS, Inc. (acquired by Cisco in 2015), a cloud-delivered network security company, where he oversaw the finance function. From October 2011 to April 2014, he served as Chief Financial Officer for Net Optics, Inc.
Today, we offer 27 cloud modules on our Falcon platform via a SaaS subscription-based model that spans multiple large markets, including corporate endpoint and cloud workload security, managed security services, security and vulnerability management, IT operations management, identity protection, next-generation SIEM and log management, threat intelligence services, data protection, Security Orchestration, Automation and Response (“SOAR”) and AI powered workflow automation, and securing generative AI workloads.
Today, we offer 29 cloud modules on our Falcon platform via a SaaS subscription-based model that spans multiple large markets, including corporate endpoint and cloud workload security, managed security services, security and vulnerability management, IT operations management, identity protection, next-generation security information and event management (“SIEM”) and log management, threat intelligence services, data protection, SaaS security posture management, Security Orchestration, Automation and Response (“SOAR”) and AI powered workflow automation, and securing generative AI workloads.
Human Capital Resources As of January 31, 2024, we had 7,925 full-time employees. We also engage temporary employees and consultants as needed to support our operations. None of our employees in the United States are represented by a labor union or subject to a collective bargaining agreement.
Human Capital Resources As of January 31, 2025, we had 10,118 full-time employees. We also engage temporary employees and consultants as needed to support our operations. None of our employees in the United States are represented by a labor union or subject to a collective bargaining agreement.
Professional Services In addition to our Falcon platform and cloud modules, we also offer incident response, forensic investigatory, and breach recovery services; technical assessment and strategic advisory services; as well as training to assist organizations that have experienced a breach or who are assessing their security posture and ability to respond to breaches. • Incident Response, Forensics, and Recovery Services.
Professional Services In addition to our Falcon platform and cloud modules, we also offer incident response, forensic investigatory, and breach recovery services; technical assessment and strategic advisory services; Next-Gen SEIM consulting; platform deployment and operational services; as well as training and certifications to assist organizations that have experienced a breach or who are assessing their security posture and ability to respond to breaches. • Incident Response, Forensics, and Recovery Services.
Although certain of our competitors enjoy greater resources, recognition, deeper customer relationships, larger existing customer bases, or more mature intellectual property portfolios, we believe that we compete favorably with respect to these factors and that we are well positioned as a leading provider of endpoint and workload security solutions.
Although certain of our competitors enjoy greater resources, recognition, deeper customer relationships, larger existing customer bases, or more mature intellectual property portfolios, we believe that we compete favorably with respect to these factors and that we are well positioned as a leading provider of endpoint and workload security solutions. 16 Table of Contents Intellectual Property We believe that our intellectual property rights are valuable and important to our business.
He also served on the board of directors of Hewlett Packard Enterprise, an enterprise information technology company, from June 2019 to April 2023. Mr. Kurtz holds a B.S. in accounting from Seton Hall University. Mr. Kurtz also holds a CPA license from the State of New Jersey with an inactive status. 20 Table of Contents Burt W.
He also served on the board of directors of Hewlett Packard Enterprise, an enterprise information technology company, from June 2019 to April 2023. Mr. Kurtz holds a B.S. in accounting from Seton Hall University. Mr. Kurtz also holds a CPA license from the State of New Jersey with an inactive status. Burt W. Podbere - Chief Financial Officer Mr.
We have created a high performance talent model that pinpoints the top traits and qualities we look for in talent and that may already exist within the organization, then consistently use that model to develop interview questions, screen candidates, and make hiring decisions.
We have created a high-performance talent model that pinpoints the top traits and qualities we look for in talent and that may already exist within the organization, then consistently use that model to develop interview questions, screen candidates, and make hiring decisions. CrowdStrike has always been a mission-focused organization.
The key design principles of our Falcon platform include: Cloud Native Architecture. We built the Falcon platform entirely in and for the cloud, enabling collection and analysis of a massive, crowdsourced dataset from all of our customers to stop breaches. Our platform is designed to be redundant, resilient, and high-performing.
We built the Falcon platform entirely in and for the cloud, enabling collection and analysis of a massive, crowdsourced dataset from all of our customers to stop breaches. Our platform is designed to be redundant, resilient, and high-performing.
Podbere 58 Chief Financial Officer Shawn Henry 61 Chief Security Officer Michael Sentonas 50 President There is no family relationship between any of our directors or executive officers and any other director or executive officer. George Kurtz - President, Chief Executive Officer, and Director Mr.
Podbere 59 Chief Financial Officer Shawn Henry 62 Chief Security Officer Michael Sentonas 51 President There is no family relationship between any of our directors or executive officers and any other director or executive officer. George Kurtz - President, Chief Executive Officer, and Director Mr.
We empower customers to rapidly deploy and scale industry leading technologies across endpoint detection and response (“EDR”) and Extended Detection and Response (“XDR”), Identity Threat Protection, Threat Intelligence, Exposure Management, Cloud Security, Application Security Posture Management, Next-Generation SIEM and Modern Log Management, and IT Automation from a single platform. • Reducing Agent Bloat : Our single intelligent lightweight agent enables frictionless deployment of our platform at scale, enabling customers to rapidly adopt our technology across any type of workload running on a variety of endpoints.
We empower customers to rapidly deploy and scale industry leading technologies across Endpoint Security, Identity Protection, Cloud Security, Next-Gen SIEM and Modern Log Management, Data Protection, Exposure Management, IT Automation, ITSecOps and Risk, Threat Intelligence, and SaaS Security Posture Management from a single platform. • Reducing Agent Bloat : Our single intelligent lightweight agent enables frictionless deployment of our platform at scale, enabling customers to rapidly adopt our technology across any type of workload running on a variety of endpoints.
Intellectual Property We believe that our intellectual property rights are valuable and important to our business. We rely on trademarks, patents, copyrights, trade secrets, license agreements, intellectual property assignment agreements, confidentiality procedures, non-disclosure agreements, and employee non-disclosure and invention assignment agreements to establish and protect our proprietary rights.
We rely on trademarks, patents, copyrights, trade secrets, license agreements, intellectual property assignment agreements, confidentiality procedures, non-disclosure agreements, and employee non-disclosure and invention assignment agreements to establish and protect our proprietary rights.
By consolidating and replacing legacy point products and fragmented platforms across key areas of security and IT, the Falcon platform delivers a unified, modern approach that increases capability while reducing complexity and cost – all while stopping breaches.
By consolidating and replacing legacy point products and fragmented platforms across key areas of security and IT, the Falcon platform delivers a unified, modern approach that increases capabilities, reduces complexity, and lowers costs – all while stopping breaches.
Securing Identities and Data Across the Pillars of Modern Enterprise Security As modern attacks and adversaries grow more sophisticated, CrowdStrike believes that stopping breaches in the modern era requires security that delivers unified visibility and protection across three critical areas: Endpoint and Cloud workloads, Identity Threat Protection and Data Protection.
Securing Identities and Data Across the Pillars of Modern Enterprise Security As modern attacks and adversaries grow more sophisticated, CrowdStrike believes that stopping breaches in the modern era requires security that delivers unified visibility and protection across three critical areas: Endpoint and Cloud workloads, Identity Threat Protection and Data Protection. 8 Table of Contents Approximately eighty percent of breaches today use stolen credentials and identities.
We believe the company’s success depends on our ability to attract, retain and develop employees. The skills, experience and industry knowledge of key employees significantly benefit our customers, operations and our overall company performance. Our talent sourcing is aligned to our organizational strategy to provide the expertise and skills needed to move our mission forward.
The skills, experience and industry knowledge of key employees significantly benefit our customers, operations and our overall company performance. Our talent sourcing is aligned to our organizational strategy to provide the expertise and skills needed to move our mission forward.
Our services also align to executive and board level cybersecurity training and awareness, including by helping public companies more confidently comply with public disclosure requirements relating to assessing, identifying and managing material cybersecurity risks, and reporting material cyber incidents. Our programs are designed to help organizations effectively achieve cybersecurity risk reduction objectives and to maximize investments. • Training.
Our services also align to executive and board level cybersecurity training and awareness, including by helping public companies more confidently comply with public disclosure requirements relating to assessing, identifying and managing material cybersecurity risks, and reporting material cyber incidents.
We expect backlog will change from period to period for several reasons, including the timing and duration of customer agreements, varying billing cycles of subscription agreements, and the timing and duration of customer renewals.
As of January 31, 2025, we had backlog of approximately $2.8 billion. We expect backlog will change from period to period for several reasons, including the timing and duration of customer agreements, varying billing cycles of subscription agreements, and the timing and duration of customer renewals.
Our technical staff monitors and tests our software on a regular basis, and we also make our Falcon platform available for third-party validation. We also maintain a regular release process to update and enhance our existing solutions. In addition, we engage security consulting firms to perform periodic vulnerability analysis of our solutions.
Our technical staff monitors and tests our software on a regular basis, and we also make our Falcon platform available for third-party validation. We also maintain a regular release process to update and enhance our existing solutions.
Additionally, as we look to enter into adjacent markets and expand our total addressable market, we may face new competitors. However, we do not believe any of our competitors currently have a true platform offering equivalent to the Falcon platform, which can be leveraged to win in legacy markets and define new categories.
However, we do not believe any of our competitors currently have a true platform offering equivalent to the Falcon platform, which can be leveraged to win in legacy markets and define new categories.
Our cloud-delivered modules integrate seamlessly within the Falcon platform to provide customers with a unified set of cloud-delivered technologies across EDR and XDR, Identity Threat Detection and Response Protection, Threat Intelligence, Exposure ManagementITSecOps and Risk, Cloud Security, Application Security Posture Management, IT Automation, as well as Next-Generation SIEM and Modern Log Management.
Our cloud-delivered modules integrate seamlessly within the Falcon platform to provide customers with a unified set of cloud-delivered technologies across Endpoint Security, Identity Protection, Cloud Security, Next-Gen SIEM and Modern Log Management, Data Protection, Exposure Management, IT Automation, ITSecOps and Risk, Threat Intelligence, and SaaS Security Posture Management.
We grew our international revenue from $677.7 million for fiscal 2023 to $967.5 million for fiscal 2024, representing an increase of 43%.
We grew our international revenue from $967.5 million for fiscal 2024 to $1,270.7 million for fiscal 2025, representing an increase of 31%.
Our technology alliance partnerships focus on security analytics, network and infrastructure security, threat platforms and orchestration, and automation. We launched the CrowdStrike Store, the first open cloud-based application PaaS for cybersecurity and the industry’s first unified security cloud ecosystem of trusted third-party applications.
These partner integrations deliver more secure solutions and an improved end user experience to their customers. Our technology alliance partnerships focus on security analytics, network and infrastructure security, threat platforms and orchestration, and automation. We launched the CrowdStrike Store, the first open cloud-based application PaaS for cybersecurity and the industry’s first unified security cloud ecosystem of trusted third-party applications.
Shawn Henry - Chief Security Officer Mr. Henry has served as our Chief Security Officer since March 2012. From March 2012 to October 2022, Mr. Henry also served as President of CrowdStrike Services. Mr.
Mr. Podbere is a Chartered Accountant and holds a B.A. from McGill University. Shawn Henry - Chief Security Officer Mr. Henry has served as our Chief Security Officer since March 2012. From March 2012 to October 2022, Mr. Henry also served as President of CrowdStrike Services. Mr.
Competition We primarily compete with established and emerging security product vendors. While the market for traditional endpoint and IT operations solutions has historically been intensely competitive, we believe that the architecture of our cloud-native, single agent platform fundamentally differentiates us compared to both next-gen and legacy competitors in the security industry.
While the market for traditional endpoint and IT operations solutions has historically been intensely competitive, we believe that the architecture of our cloud-native, single agent platform fundamentally differentiates us compared to both next-gen and legacy competitors in the security industry. Additionally, as we look to enter into adjacent markets and expand our total addressable market, we may face new competitors.
Managed Services • Falcon Complete—Turnkey Security Solution . Falcon Complete provides comprehensive monitoring, management, response, and remediation solutions to our customers and is designed to bring enterprise level security to companies that may lack enterprise level resources.
Falcon Complete provides a comprehensive monitoring, management, response, and remediation solution to our customers and is designed to bring enterprise level security to companies that may lack the resources or expertise to do so on their own.
Our single agent, collect once and re-use many times approach enables us to activate new modules in real time. • Elite Security Teams as a Force Multiplier: As adversaries continue to employ sophisticated malwareless attacks that exploit user credentials and identities, automation and autonomous security are no longer sufficient on their own.
Our single agent, collect once and re-use many times approach enables us to activate new modules in real time. • Elite Security Teams as a Force Multiplier : Adversaries are relentlessly innovating new forms of sophisticated attacks, bypassing traditional malware to exploit user credentials and identities.
CrowdStrike is able to natively enforce protection at the device layer, the identity layer, and the data layer, extending our bold vision for security by driving modern Defense in Depth to the enterprise.
Stopping these advanced attacks requires a holistic approach that delivers true end-to-end protection across workloads, identities, and data. CrowdStrike is able to natively enforce protection at the device layer, the identity layer, and the data layer, extending our bold vision for security by driving modern Defense in Depth to the enterprise.
Information about our Executive Officers The following table sets forth certain information with respect to our current executive officers as of March 6, 2024: Name Age Position George Kurtz 53 President, Chief Executive Officer and Director Burt W.
We provide the support and resources needed to enable people to do their best work. Information about our Executive Officers The following table sets forth certain information with respect to our current executive officers as of March 10, 2025: Name Age Position George Kurtz 54 President, Chief Executive Officer and Director Burt W.
Henry also serves on the board of directors of CLEAR, a biometric travel document verification company, and Global Cyber Alliance, a nonprofit organization dedicated to making the Internet a safer place by reducing cyber risk. Additionally, Mr. Henry serves on the advisory boards of several organizations. Mr.
Henry also serves on the board of directors of CLEAR, a technology identity company, and served on the board of Global Cyber Alliance, a nonprofit organization dedicated to reducing cyber risk, from 2015 to December 2024. Additionally, Mr. Henry serves on the advisory boards of several organizations. Mr.
OverWatch is a force multiplier that extends the capabilities and improves the productivity of our customers’ security teams. Because our world-class team can see attacks across our entire customer base, their expertise is enhanced by their constant visibility into the threat landscape.
Because our world-class team can see attacks across our entire customer base, their expertise is enhanced by their constant visibility into the threat landscape.
Unifying data from our modules and customers into a single cloud infrastructure gives us significant advantages in developing and delivering innovative AI capabilities to detect and prevent threats, as well as improving user productivity and efficiency through cutting-edge generative AI systems such as our Charlotte AI module. 8 Table of Contents CrowdStrike Falcon Platform: Our Cloud Delivered Modules Our cloud delivered modules integrate seamlessly with the Falcon platform and our single agent to provide functionality in the endpoint security, security and IT operations (including vulnerability management), and threat intelligence markets.
Unifying data from our modules and customers into a single cloud infrastructure gives us significant advantages in developing and delivering innovative AI capabilities to detect and prevent threats, as well as improving user productivity and efficiency through cutting-edge generative AI systems such as our Charlotte AI module.
Since November 2017, he has also served as Treasurer and as a board member for the CrowdStrike Foundation, a nonprofit established to support the next generation of talent and research in cybersecurity and artificial intelligence through scholarships, grants, and other activities. Mr. Podbere is a Chartered Accountant and holds a B.A. from McGill University.
(acquired by Ixia in 2013), a manufacturer of network monitoring and intelligent access solutions for physical and virtual networks. Since November 2017, he has also served as Treasurer and as a board member for the CrowdStrike Foundation, a nonprofit established to support the next generation of talent and research in cybersecurity and artificial intelligence through scholarships, grants, and other activities.
CrowdStrike currently offers proctored exam certifications through industry leading training partner Pearson Vue for its CrowdStrike Certified Falcon Administrator, CrowdStrike Certified Falcon Responder, CrowdStrike Certified Falcon Hunter, CrowdStrike Certified Cloud Specialist, and CrowdStrike Certified Identity Specialist programs. Customers Some of the world’s largest enterprises, government organizations, and high profile brands trust us to protect their business.
CrowdStrike currently offers proctored exam certifications through industry leading training partner Pearson Vue for its CrowdStrike Certified Falcon Administrator, CrowdStrike Certified Falcon Responder, CrowdStrike Certified Falcon Hunter, CrowdStrike Certified Cloud Specialist, and CrowdStrike Certified Identity Specialist programs.
Whitelisting relies in part on manually creating and maintaining a complex list of rules, burdening end users and IT organizations. This does not prevent fileless attacks from exploiting legitimate whitelisted applications, compromising the integrity of the whitelisting product.
Whitelisting relies in part on manually creating and maintaining a complex list of rules, burdening end users and IT organizations.
We also advise customers on readiness and preparation through the execution of table-top exercises, live fire exercises, red team/blue team assessments, and advanced adversary emulation exercises. These services are designed to evaluate our customers’ security profile so they can identify areas of vulnerability, secure their network, and improve their response if their defenses are breached.
All of these services are designed to evaluate our customers’ security profile so they can identify areas of vulnerability, secure their network, and improve their response if their defenses are breached.
Stopping today’s sophisticated attacks requires a combination of powerful automation and elite threat hunting.
In this evolving landscape, automation and autonomous security are no longer sufficient on their own. Stopping today’s sophisticated attacks requires a combination of powerful automation and elite threat hunting.
We engage our customers through our global customer and technical advisory boards in which we solicit feedback from our customers on a regular basis allowing us to understand their evolving needs. We have used this feedback to develop new cloud modules, such as Falcon FileVantage, and we intend to continue to develop new cloud modules based on our customer’s feedback.
We have used this feedback to develop new cloud modules, such as Falcon FileVantage, and we intend to continue to develop new cloud modules based on our customer’s feedback.
In certain countries in which we operate, we are subject to local labor law requirements which may automatically make our employees subject to industry-wide collective bargaining agreements. We have not experienced any work stoppages, and we consider our relations with our employees to be good. Attraction, Retention, and Talent Development Supporting our people is a foundational value for CrowdStrike.
In certain countries in which we operate, we are subject to local labor law requirements which may automatically make our employees subject to industry-wide collective bargaining agreements.
Partnership Ecosystem We work with a number of technology alliance partners to design go-to-market strategies that combine our platform with products or services provided by our technology alliance partners. These partner integrations deliver more secure solutions and an improved end user experience to their customers.
Partnership Ecosystem We operate a partner-first go-to-market strategy to land new logos and expand in existing accounts. We partner with a diverse set of partners. We work with a wide array of go-to-market partners in our technology alliance partners to design go-to-market strategies that combine our platform with products or services provided by our technology alliance partners.
Our research and development leadership team is located in Seattle, Washington and Sunnyvale, California. We also maintain research and development centers in Irvine, California, Minneapolis, Minnesota, Bucharest, Romania, Israel and India. We employ subject matter experts in a number of jurisdictions around the world. We plan to continue to dedicate significant resources to research and development.
In addition, we engage security consulting firms to perform periodic vulnerability analysis of our solutions. 15 Table of Contents Our research and development leadership team is located in Seattle, Washington and Sunnyvale, California. We also maintain research and development centers in Irvine, California, Minneapolis, Minnesota, Bucharest, Romania, Israel and India.
As of January 31, 2024, we had 29,000 subscription customers worldwide. Historically, we and our channel partners have primarily sold to large organizations, but have increasingly focused on selling to small and medium-sized businesses, particularly through our trial-to-pay model.
Historically, we and our channel partners have primarily sold to large organizations, but have increasingly focused on selling to small and medium-sized businesses, particularly through our trial-to-pay model. We engage our customers through our global customer and technical advisory boards in which we solicit feedback from our customers on a regular basis allowing us to understand their evolving needs.
Falcon Complete provides a comprehensive monitoring, management, response, and remediation solution to our customers and is designed to bring enterprise level security to companies that may lack enterprise level resources. 7 Table of Contents CrowdStrike Falcon OverWatch, part of CrowdStrike Counter Adversary Operations, combines world-class human intelligence from our elite security experts with the power of the Falcon platform.
CrowdStrike Falcon OverWatch, part of CrowdStrike Counter Adversary Operations, combines world-class human intelligence from our elite security experts with the power of the Falcon platform. OverWatch is a force multiplier that extends the capabilities and improves the productivity of our customers’ security teams.
We generally invoice our customers at contract signing prior to commencement of subscription period. Until such time as these amounts are invoiced, they are not recorded in deferred revenue or elsewhere in our consolidated financial statements, and are considered by us to be backlog. As of January 31, 2024, we had backlog of approximately $1.5 billion.
We generally invoice our subscription customers at the beginning of the subscription term, or in some instances, such as in multi-year arrangements, in installments. Until we have the contractual right to invoice, these contract amounts are classified as backlog. They are not recorded in deferred revenue or elsewhere in our consolidated financial statements.
Given the limitations of existing legacy and other endpoint security products, many organizations are replacing their existing legacy and other endpoint security products with our Falcon platform. We grew our subscription customer base by 5,981 customers from 23,019 at January 31, 2023, to 29,000 at January 31, 2024, representing a 26% increase.
Given the limitations of existing legacy and other endpoint security products, many organizations are replacing their existing legacy and other endpoint security products with our Falcon platform.
We had net income of $89.3 million in fiscal 2024, and net losses of $183.2 million and $234.8 million in fiscal 2023 and fiscal 2022, respectively. Technology We have designed an innovative architecture from the ground up to overcome the limitations of existing security products and deliver cloud-based solutions.
Technology We have designed an innovative architecture from the ground up to overcome the limitations of existing security products and deliver cloud-based solutions. The key design principles of our Falcon platform include: 11 Table of Contents Cloud Native Architecture.
Falcon Complete is backed by an underwritten limited warranty policy for breaches. Counter Adversary Operations • Falcon OverWatch—Threat Hunting .
Falcon Complete Next-Gen MDR is also backed by an underwritten limited warranty policy, underscoring our commitment to breach protection and customer confidence. Counter Adversary Operations : CrowdStrike’s Counter Adversary Operations include proactive threat hunting and intelligence capabilities.
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Approximately eighty percent of breaches today use stolen credentials and identities. Stopping these advanced attacks requires a holistic approach that delivers true end-to-end protection across workloads, identities, and data.
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This does not prevent fileless attacks from exploiting legitimate whitelisted applications, compromising the integrity of the whitelisting product. • The Limitations of Legacy SIEMs : Originally designed years or even decades ago for a vastly different cybersecurity landscape, legacy SIEM solutions struggle to meet the demands of modern security operations.
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Today, our modules include: Cloud Security • Falcon Cloud Workload Protection—Cloud Runtime Protection.
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These systems lack the scalability to handle today’s data volumes and adversary speed, while escalating costs make centralized data collection and retention increasingly difficult. Poor scalability contributes to siloed, disjointed SOC architectures, forcing analysts to manually correlate data across multiple consoles, diverting time and resources from threat detection and response.
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Falcon Cloud Workload Protection provides comprehensive breach protection at run-time for workload and container events and instance metadata, enabling faster and more accurate detection, response, threat hunting and investigation, and enabling customers to run and deploy secure applications with speed and confidence. • Falcon Horizon—Cloud Security Posture Management .
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Complex onboarding processes further delay time-to-value, requiring significant effort to integrate new data sources. As a result, legacy SIEMs hinder operational efficiency, limit visibility, and increase the risk of data breaches.
Removed
Falcon Horizon delivers unified visibility, threat detection, and continuous monitoring and compliance for multi-cloud environments. Falcon Horizon automates the process to detect cloud related misconfigurations, vulnerabilities, and identity-based risks, providing step-by-step remediation and giving developers guardrails to avoid costly mistakes.
Added
The Falcon platform’s AI-native architecture uses advanced models and the power of the Security Cloud to detect and stop breaches, while innovations like Charlotte AI represent a significant advancement in agentic AI—delivering autonomous security decisions within customer-defined guardrails to triage detections, reduce noise, and accelerate response.
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Horizon also integrates with modern continuous integration/continuous delivery developer pipelines, with capabilities such as infrastructure as code scanning and container image assessment to shift secure design further left. • Bionic, a CrowdStrike company—Application Security Posture Management. Through our acquisition of Bionic, a pioneer of ASPM, we have further extended our capabilities in securing and providing cloud native applications.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese provisions include: • our dual class common stock structure, which provides our holders of Class B common stock with the ability to significantly influence the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of our outstanding Class A and Class B common stock; • a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders, which prohibition will take effect on the first date on which the number of outstanding shares of our Class B common stock represents less than 10% of the aggregate number of outstanding shares of our Class A common stock and our Class B common stock, taken together as a single class; 47 Table of Contents • the requirement that a special meeting of stockholders may be called only by the chairperson of our board of directors, chief executive officer or by the board of directors acting pursuant to a resolution adopted by a majority of our board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • certain amendments to our amended and restated certificate of incorporation require the approval of two-thirds of the then-outstanding voting power of our capital stock; and • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Biggest changeThese provisions include: • a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by the chairperson of our board of directors, chief executive officer or by the board of directors acting pursuant to a resolution adopted by a majority of our board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • certain amendments to our amended and restated certificate of incorporation require the approval of two-thirds of the then-outstanding voting power of our capital stock; and 48 Table of Contents • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Interruptions or failures in our service delivery could result in a cyberattack or other security threat to one of our customers during such periods of interruption or failure. Additionally, interruptions or failures in our service could cause customers to terminate their subscriptions with us, adversely affect our renewal rates, and harm our ability to attract new customers.
Interruptions or failures in our service delivery could result in a cyberattack or other security threat to us or to one of our customers during such periods of interruption or failure. Additionally, interruptions or failures in our service could cause customers to terminate their subscriptions with us, adversely affect our renewal rates, and harm our ability to attract new customers.
Our business is subject to regulation by various federal, state, local and foreign governmental agencies, including agencies responsible for monitoring and enforcing data protection, data privacy and data security laws and regulations, employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, anti-bribery laws, import and export controls, federal securities laws and tax laws and regulations.
Our business is subject to regulation by various federal, state, local and foreign governmental agencies, including agencies responsible for monitoring and enforcing data privacy and security laws and regulations, employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, anti-bribery laws, import and export controls, federal securities laws and tax laws and regulations.
Bribery Act 2010, or Bribery Act, violations of which could lead to significant fines, penalties, and collateral consequences for our company; • heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements; • the uncertainty of protection for intellectual property rights in some countries; • general economic and political conditions in these foreign markets; • foreign exchange controls or tax regulations that might prevent us from repatriating cash earned outside the United States; • political and economic instability in some countries; • double taxation of our international earnings and potentially adverse tax consequences due to changes in the tax laws of the United States or the foreign jurisdictions in which we operate; • unexpected costs for the localization of our services, including translation into foreign languages and adaptation for local practices and regulatory requirements (including, but not limited to data localization requirements); • requirements to comply with foreign privacy, data protection, and information security laws and regulations and the risks and costs of noncompliance; 33 Table of Contents • greater difficulty in identifying, attracting and retaining local qualified personnel, and the costs and expenses associated with such activities; • greater difficulty identifying qualified channel partners and maintaining successful relationships with such partners; • differing employment practices and labor relations issues; and • difficulties in managing and staffing international offices and increased travel, infrastructure, and legal compliance costs associated with multiple international locations.
Bribery Act 2010, or Bribery Act, violations of which could lead to significant fines, penalties, and collateral consequences for our company; • heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements; • the uncertainty of protection for intellectual property rights in some countries; • general economic and political conditions in these foreign markets; • foreign exchange controls or tax regulations that might prevent us from repatriating cash earned outside the United States; • political and economic instability in some countries; • double taxation of our international earnings and potentially adverse tax consequences due to changes in the tax laws of the United States or the foreign jurisdictions in which we operate; • unexpected costs for the localization of our services, including translation into foreign languages and adaptation for local practices and regulatory requirements (including, but not limited to data localization requirements); • requirements to comply with foreign privacy, data protection, and information security laws and regulations and the risks and costs of noncompliance; • greater difficulty in identifying, attracting and retaining local qualified personnel, and the costs and expenses associated with such activities; • greater difficulty identifying qualified channel partners and maintaining successful relationships with such partners; • differing employment practices and labor relations issues; and 34 Table of Contents • difficulties in managing and staffing international offices and increased travel, infrastructure, and legal compliance costs associated with multiple international locations.
Responding to any infringement or noncompliance claim by an open source vendor, regardless of its validity, discovering certain open source software code in our Falcon platform, or a finding that we have breached the terms of an open source software license, could harm our business, results of operations and financial condition, by, among other things: 42 Table of Contents • resulting in time-consuming and costly litigation; • diverting management’s time and attention from developing our business; • requiring us to pay monetary damages or enter into royalty and licensing agreements that we would not normally find acceptable; • causing delays in the deployment of our Falcon platform or service offerings to our customers; • requiring us to stop offering certain services or features of our Falcon platform; • requiring us to redesign certain components of our Falcon platform using alternative non-infringing or non-open source technology, which could require significant effort and expense; • requiring us to disclose our software source code and the detailed program commands for our software; and • requiring us to satisfy indemnification obligations to our customers.
Responding to any infringement or noncompliance claim by an open source vendor, regardless of its validity, discovering certain open source software code in our Falcon platform, or a finding that we have breached the terms of an open source software license, could harm our business, results of operations and financial condition, by, among other things: • resulting in time-consuming and costly litigation; • diverting management’s time and attention from developing our business; • requiring us to pay monetary damages or enter into royalty and licensing agreements that we would not normally find acceptable; • causing delays in the deployment of our Falcon platform or service offerings to our customers; • requiring us to stop offering certain services or features of our Falcon platform; 43 Table of Contents • requiring us to redesign certain components of our Falcon platform using alternative non-infringing or non-open source technology, which could require significant effort and expense; • requiring us to disclose our software source code and the detailed program commands for our software; and • requiring us to satisfy indemnification obligations to our customers.
Even if there is significant demand for cloud-based security solutions like ours, if our competitors include functionality that is, or is perceived to be, equivalent to or better than ours in legacy products that are already generally accepted as necessary components of an organization’s IT security architecture, we may have difficulty increasing the market penetration of our platform.
Even if there is significant demand for cloud-based security solutions like ours, if our competitors include functionality that is, or is perceived to be, equivalent to or better than ours in legacy products that are already generally accepted as necessary components of an organization’s IT security architecture, we may have difficulty increasing the market penetration of our solutions.
Federal Risk and Authorization Management Program, or FedRAMP, such certification is costly to maintain and if we lose our certification it would restrict our ability to sell to government customers; • government product requirements are often technically complex and assessors may require us to make costly changes to our products to meet such requirements without any assurance that such changes will generate a sale; 34 Table of Contents • government demand and payment for our Falcon platform may be impacted by public sector budgetary cycles and funding authorizations, with funding reductions or delays in the government appropriations or procurement processes adversely affecting public sector demand for our Falcon platform, including as a result of abrupt events such as war, incidents of terrorism, natural disasters, and public health concerns or epidemics; • government attitudes towards us as a company, our platform or the capabilities that we offer as a viable software solution may change, and reduce interest in our products and services as acceptable solutions; • changes in the political environment, including before or after a change to the leadership within the government administration, can create uncertainty or changes in policy or priorities and reduce available funding for our products and services; • third parties may compete intensely with us on pending, new or existing contracts with government products, which can also lead to appeals, disputes, or litigation relating to government procurement, including but not limited to bid protests by unsuccessful bidders on potential or actual awards of contracts to us or our partners by the government; • even if we are awarded a sale, the terms of such contracts may be unusually burdensome; • governments routinely investigate and audit government contractors’ administrative processes, and any unfavorable audit could result in the government refusing to continue buying our Falcon platform, which would adversely impact our revenue and results of operations, or institute fines or civil or criminal liability if the audit were to uncover improper or illegal activities; and • governments may require certain products to be manufactured, hosted, or accessed solely in their country or in other relatively high-cost manufacturing locations, and we may not manufacture all products in locations that meet these requirements, affecting our ability to sell these products to governmental agencies.
Federal Risk and Authorization Management Program, or FedRAMP, such certification is costly to maintain and if we lose our certification it would restrict our ability to sell to government customers; • government product requirements are often technically complex and assessors may require us to make costly changes to our products to meet such requirements without any assurance that such changes will generate a sale or improve the efficacy of our products; • government demand and payment for our Falcon platform may be impacted by public sector budgetary cycles and funding authorizations, with funding reductions or delays in the government appropriations or procurement processes adversely affecting public sector demand for our Falcon platform, including as a result of abrupt events such as war, incidents of terrorism, natural disasters, and public health concerns or epidemics; • government attitudes towards us as a company, our platform or the capabilities that we offer as a viable software solution may change, and reduce interest in our products and services as acceptable solutions; • changes in the political environment, including before or after a change to the leadership within the government administration, can create uncertainty or changes in policy or priorities and reduce available funding for our products and services; 35 Table of Contents • third parties may compete intensely with us on pending, new or existing contracts with government products, which can also lead to appeals, disputes, or litigation relating to government procurement, including but not limited to bid protests by unsuccessful bidders on potential or actual awards of contracts to us or our partners by the government; • even if we are awarded a sale, the terms of such contracts may be unusually burdensome; • governments routinely investigate and audit government contractors’ administrative processes, and any unfavorable audit could result in the government refusing to continue buying our Falcon platform, which would adversely impact our revenue and results of operations, or institute fines or civil or criminal liability if the audit were to uncover improper or illegal activities; and • governments may require certain products to be manufactured, hosted, or accessed solely in their country or in other relatively high-cost manufacturing locations, and we may not manufacture all products in locations that meet these requirements, affecting our ability to sell these products to governmental agencies.
The market price of our Class A common stock depends on a number of factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operating performance. These fluctuations could cause you to lose all or part of your investment in our Class A common stock.
The market price of our common stock depends on a number of factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operating performance. These fluctuations could cause you to lose all or part of your investment in our common stock.
The use of AI presents emerging ethical and social issues, and if we enable or offer solutions that draw scrutiny or controversy due to their perceived or actual impact on customers or on society as a whole, we may experience brand or reputational harm, competitive harm, and/or legal liability.
Further, the use of AI presents emerging ethical and social issues, and if we enable or offer solutions that draw scrutiny or controversy due to their perceived or actual impact on customers or on society as a whole, we may experience brand or reputational harm, competitive harm, and/or legal liability.
Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of industry or financial analysts and investors, resulting in a decline in the market price of our Class A common stock.
Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of industry or financial analysts and investors, resulting in a decline in the market price of our common stock.
As part of our business strategy, we have in the past and expect to continue to make investments in and/or acquire complementary companies, services or technologies. Our ability as an organization to acquire and integrate other companies, services or technologies in a successful manner in the future is not guaranteed.
As part of our business strategy, we have in the past made and expect to continue to make investments in and/or acquire complementary companies, services or technologies. Our ability as an organization to acquire and integrate other companies, services or technologies in a successful manner in the future is not guaranteed.
Noncompliance by us, our employees, representatives, contractors, channel partners, agents, intermediaries, or other third parties with applicable regulations or requirements could subject us to: • investigations, enforcement actions and sanctions; • mandatory changes to our Falcon platform; • disgorgement of profits, fines and damages; • civil and criminal penalties or injunctions; • claims for damages by our customers or channel partners; 40 Table of Contents • termination of contracts; • loss of intellectual property rights; • loss of our license to do business in the jurisdictions in which we operate; and • temporary or permanent debarment from sales to government organizations.
Noncompliance by us, our employees, representatives, contractors, channel partners, agents, intermediaries, or other third parties with applicable regulations or requirements could subject us to: • investigations, enforcement actions and sanctions; • mandatory changes to our Falcon platform; • disgorgement of profits, fines and damages; • civil and criminal penalties or injunctions; • claims for damages by our customers or channel partners; • termination of contracts; • loss of intellectual property rights; • loss of our license to do business in the jurisdictions in which we operate; or 41 Table of Contents • temporary or permanent debarment from sales to government organizations.
In addition, our tax obligations and effective tax rates could be adversely affected, among other things, by (i) changes in the relevant tax, accounting and other laws, regulations, principles and interpretations, including increases in corporate tax rates and greater taxation of international income and changes relating to income tax nexus, (ii) recognizing tax losses or lower than anticipated earnings in jurisdictions where we have lower statutory 52 Table of Contents rates and higher than anticipated earnings in jurisdictions where we have higher statutory rates, (iii) changes in foreign currency exchange rates, or (iv) changes in the valuation of our deferred tax assets and liabilities.
In addition, our tax obligations and effective tax rates could be adversely affected, among other things, by (i) changes in the relevant tax, accounting and other laws, regulations, principles and interpretations, including increases in corporate tax rates and greater taxation of international income and changes relating to income tax nexus, (ii) recognizing tax losses or lower than anticipated earnings in jurisdictions where we have lower statutory 53 Table of Contents rates and higher than anticipated earnings in jurisdictions where we have higher statutory rates, (iii) changes in foreign currency exchange rates, or (iv) changes in the valuation of our deferred tax assets and liabilities.
Factors that could cause fluctuations in the market price of our Class A common stock include the following: • actual or anticipated changes or fluctuations in our results of operations; • the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; • announcements by us or our competitors of new products or services or new or terminated significant contracts, commercial relationships or capital commitments; • industry or financial analyst or investor reaction to our press releases, other public announcements and filings with the SEC; • rumors and market speculation involving us or other companies in our industry; • price and volume fluctuations in the overall stock market from time to time; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • failure of industry or financial analysts to maintain coverage of us, changes in financial estimates by any analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally; • litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • developments or disputes concerning our intellectual property rights or our solutions, or third-party proprietary rights; • announced or completed acquisitions of businesses or technologies by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • any major changes in our management or our board of directors, particularly with respect to Mr.
Factors that could cause fluctuations in the market price of our common stock include the following: • actual or anticipated changes or fluctuations in our results of operations; • the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; • announcements by us or our competitors of new products or services or new or terminated significant contracts, commercial relationships or capital commitments; • industry or financial analyst or investor reaction to our press releases, other public announcements and filings with the SEC; • rumors and market speculation involving us or other companies in our industry; • price and volume fluctuations in the overall stock market from time to time; 46 Table of Contents • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • failure of industry or financial analysts to maintain coverage of us, changes in financial estimates by any analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally; • litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • developments or disputes concerning our intellectual property rights or our solutions, or third-party proprietary rights; • announced or completed acquisitions of businesses or technologies by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • any major changes in our management or our board of directors, particularly with respect to Mr.
If we are unable to assert that our internal control over financial reporting is effective, or if, when required, our independent registered public accounting firm is unable to express an opinion on the effectiveness of our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the price of our Class A common stock to decline.
If we are unable to assert that our internal control over financial reporting is effective, or if, when required, our independent registered public accounting firm is unable to express an opinion on the effectiveness of our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the price of our common stock to decline.
In such an event, the market price of our Class A common stock could decline, and you could lose all or part of your investment. Summary of Risk Factors Our business is subject to numerous risks and uncertainties, any one of which could materially adversely affect our business, results of operations, financial condition, and growth prospects.
In such an event, the market price of our Class A common stock, or “common stock,” could decline, and you could lose all or part of your investment. Summary of Risk Factors Our business is subject to numerous risks and uncertainties, any one of which could materially adversely affect our business, results of operations, financial condition, and growth prospects.
Additionally, we may not be able to borrow money from other lenders to enable us to refinance our indebtedness. 50 Table of Contents General Risk Factors If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
Additionally, we may not be able to borrow money from other lenders to enable us to refinance our indebtedness. 51 Table of Contents General Risk Factors If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
Although we generally have limitation of liability provisions in our terms and conditions of sale, these provisions do not cover our indemnification obligations and they may not fully or effectively protect us from claims as a result of federal, state, or local laws or ordinances, or unfavorable judicial decisions in the United States or other countries.
Although we generally have limitation of liability provisions in our terms and conditions of sale, these provisions may not cover all of our indemnification obligations and they may not fully or effectively protect us from claims as a result of federal, state, or local laws or ordinances, or unfavorable judicial decisions in the United States or other countries.
Additionally, our ability to pay dividends is limited by restrictions on our ability to pay dividends or make distributions under the terms of our credit facility. Accordingly, investors must rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.
Additionally, our ability to pay dividends is limited by restrictions on our ability to pay dividends or make distributions under the terms of our credit facility. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.
To the extent that any of the above should result in delays or cancellations of customer orders, delays in the manufacture, deployment or shipment of our products, or delays in the rendering of our services, our business, financial condition and results of operations would be adversely affected. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 55 Table of Contents
To the extent that any of the above should result in delays or cancellations of customer orders, delays in the manufacture, deployment or shipment of our products, or delays in the rendering of our services, our business, financial condition and results of operations would be adversely affected. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 56 Table of Contents
Many larger organizations have more complex networks and require higher levels of support than smaller customers and we offer premium services for these customers. Failure to maintain high-quality customer support could have a material adverse effect on our business, results of operations, and financial condition.
Many of our larger organizational customers have more complex networks and require higher levels of support than smaller customers and we offer premium services for these customers. Failure to maintain high-quality customer support could have a material adverse effect on our business, results of operations, and financial condition.
In addition, the stock market in general, and the market for technology companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors may seriously affect the market price of our Class A common stock, regardless of our actual operating performance.
In addition, the stock market in general, and the market for technology companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors may seriously affect the market price of our common stock, regardless of our actual operating performance.
Certain provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove members of our board of directors or current management, and may adversely affect the market price of our Class A common stock.
Certain provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove members of our board of directors or current management, and may adversely affect the market price of our common stock.
If we engage in additional debt financing, the holders of such debt would have priority over the holders of our Class A common stock, and we may be required to accept terms that further restrict our operations or our ability to incur additional indebtedness or to take other actions that would otherwise be in the interests of the debt holders.
If we engage in additional debt financing, the holders of such debt would have priority over the holders of our common stock, and we may be required to accept terms that further restrict our operations or our ability to incur additional indebtedness or to take other actions that would otherwise be in the interests of the debt holders.
This volatility could be material to our results in any given quarter and may cause our stock price to decline. 54 Table of Contents Expectations of our performance relating to environmental, social and governance factors may impose additional costs and expose us to new risks.
This volatility could be material to our results in any given quarter and may cause our stock price to decline. 55 Table of Contents Expectations of our performance relating to environmental, social and governance factors may impose additional costs and expose us to new risks.
Risks Related to Ownership of Our Class A Common Stock The market price of our Class A common stock may be volatile regardless of our operating performance, and you could lose all or part of your investment. We cannot predict the prices at which our Class A common stock will trade.
Risks Related to Ownership of Our Common Stock The market price of our common stock may be volatile regardless of our operating performance, and you could lose all or part of your investment. We cannot predict the prices at which our common stock will trade.
The trading market for our Class A common stock will be influenced by the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts or the content and opinions included in their reports.
The trading market for our common stock will be influenced by the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts or the content and opinions included in their reports.
In addition, because the techniques used by computer hackers to access or sabotage networks and endpoints change frequently and generally are not recognized until launched against a target, there is a risk that an advanced attack could emerge that our cloud native security platform is unable to detect or prevent until after some of our customers are affected.
In addition, because the techniques used by computer hackers to access or sabotage networks and endpoints change frequently and generally are not recognized until launched against a target, there is a risk that an advanced attack could emerge that our cloud native security platform is unable to detect or prevent 27 Table of Contents until after some of our customers are affected.
We believe that maintaining and enhancing our CrowdStrike and Falcon brand and our reputation as a provider of high-efficacy security solutions is critical to our relationship with our existing customers, channel partners, and technology alliance partners and our ability to attract new customers and partners.
We believe that maintaining and enhancing our CrowdStrike and Falcon brands and our reputation as a provider of high-efficacy security solutions is critical to our relationship with our existing customers, channel partners, and technology alliance partners and our ability to attract new customers and partners.
Sales of substantial amounts of our Class A common stock in the public markets, or the perception that they might occur, could reduce the price that our Class A common stock might otherwise attain and may dilute your voting power and your ownership interest in us.
Sales of substantial amounts of our common stock in the public markets, or the perception that they might occur, could reduce the price that our common stock might otherwise attain and may dilute your voting power and your ownership interest in us.
As of January 31, 2024, we had $750.0 million principal amount of indebtedness outstanding (excluding intercompany indebtedness), and there is additional availability under our revolving facility of up to $750.0 million (excluding issued but undrawn letters of credit).
As of January 31, 2025, we had $750.0 million principal amount of indebtedness outstanding (excluding intercompany indebtedness), and there is additional availability under our revolving facility of up to $750.0 million (excluding issued but undrawn letters of credit).
In addition, under Sections 382 and 383 of the Internal Revenue Code, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in ownership by “5 percent shareholders” over a rolling three-year period, the corporation’s ability to use its pre-change net operating loss carryovers and other pre-change tax attributes, such as research and development credits, to offset its post-change income or taxes may be limited.
In addition, under Sections 382 and 383 of the Internal Revenue Code, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in ownership by “5 percent shareholders” over a rolling three-year period, the corporation’s ability to use its pre-change net operating loss carryovers and other pre-change tax attributes, such as R&D credits, to offset its post-change income or taxes may be limited.
We may also be unable to timely reduce our cost structure in line with a significant deterioration in sales or renewals that would adversely affect our results of operations and financial condition. 30 Table of Contents Our results of operations may fluctuate significantly, which could make our future results difficult to predict and could cause our results of operations to fall below expectations.
We may also be unable to timely reduce our cost structure in line with a significant deterioration in sales or renewals that would adversely affect our results of operations and financial condition. Our results of operations may fluctuate significantly, which could make our future results difficult to predict and could cause our results of operations to fall below expectations.
If we are not able to maintain and enhance our CrowdStrike and Falcon brand and our reputation as a provider of high-efficacy security solutions, our business and results of operations may be adversely affected.
If we are not able to maintain and enhance our CrowdStrike and Falcon brands and our reputation as a provider of high-efficacy security solutions, our business and results of operations may be adversely affected.
If our financial results fail to meet, or significantly exceed, our announced guidance or the expectations of analysts or public investors, analysts could downgrade our Class A common stock or publish unfavorable research about us.
If our financial results fail to meet, or significantly exceed, our announced guidance or the expectations of analysts or public investors, analysts could downgrade our common stock or publish unfavorable research about us.
If we are unsuccessful in collecting such taxes from our customers, we could be held liable for such costs, which may adversely affect our results of operations. If our estimates or judgments relating to our critical accounting policies prove to be incorrect or financial reporting standards or interpretations change, our results of operations could be adversely affected.
If we are unsuccessful in collecting such taxes from our customers, we could be held liable for such costs, which may adversely affect our results of operations. 54 Table of Contents If our estimates or judgments relating to our critical accounting policies prove to be incorrect or financial reporting standards or interpretations change, our results of operations could be adversely affected.
If we are unable to meet our stated service level commitments or if we suffer extended periods of poor performance or unavailability of our Falcon platform, we may be contractually obligated to provide affected customers with service credits for future subscriptions, and, in certain cases, refunds.
To the extent we are unable to meet our stated service level commitments or to the extent we suffer extended periods of poor performance or unavailability of our Falcon platform, we may be contractually obligated to provide affected customers with service credits for future subscriptions, and, in certain cases, refunds.
If we raise additional equity financing, our stockholders may experience significant dilution of their ownership interests and the market price of our Class A common stock could decline.
If we raise additional equity financing, our stockholders may experience significant dilution of their ownership interests and the market price of our common stock could decline.
Additionally, if we are unable to license technology from third parties, we may be forced to acquire or develop alternative technology, which we may be unable to do in a commercially feasible manner or at all, and may require us to use alternative technology of lower 38 Table of Contents quality or performance standards.
Additionally, if we are unable to license technology from third parties, we may be forced to acquire or develop alternative technology, which we may be unable to do in a commercially feasible manner or at all, and may require us to use alternative technology of lower quality or performance standards.
If we are unable to compete successfully, or if competing successfully requires us to take aggressive pricing or other actions, our business, financial condition, and results of operations would be adversely affected. 26 Table of Contents Competitive pricing pressure may reduce our gross profits and adversely affect our financial results.
If we are unable to compete successfully, or if competing successfully requires us to take aggressive pricing or other actions, our business, financial condition, and results of operations would be adversely affected. Competitive pricing pressure may reduce our gross profits and adversely affect our financial results.
Because we recognize revenue from subscriptions to our platform over the term of the subscription, downturns or upturns in new business will not be immediately reflected in our results of operations. We generally recognize revenue from customers ratably over the terms of their subscription, which is generally one year.
Because we recognize revenue from subscriptions to our platform over the term of the subscription, downturns or upturns in new business will not be immediately reflected in our results of operations. We generally recognize revenue from customers ratably over the terms of their subscription, which is generally one to three years.
Risks Related to Our Business and Industry We have experienced rapid growth in recent periods, and if we do not manage our future growth, our business and results of operations will be adversely affected. We have experienced rapid revenue growth in recent periods and we expect to continue to invest broadly across our organization to support our growth.
We have experienced rapid growth in recent periods, and if we do not manage our future growth, our business and results of operations will be adversely affected. We have experienced rapid revenue growth in recent periods and we expect to continue to invest broadly across our organization to support our growth.
Furthermore, if we or other SaaS security providers experience security incidents, loss or disclosure of customer data, disruptions in delivery, or other problems, the market for SaaS solutions as a whole, including our security solutions, could be negatively affected.
Furthermore, to the extent we or other SaaS security providers experience security incidents, loss or disclosure of customer data, disruptions in delivery, or other problems, the market for SaaS solutions as a whole, including our security solutions, could be negatively affected.
The technologies underlying AI and its uses are subject to a variety of laws, including intellectual property, privacy, data protection and cybersecurity, consumer protection, competition, and equal opportunity laws, and are expected to be subject to increased regulation and new laws or new applications of existing laws.
The technologies underlying AI and its uses are subject to a variety of laws and regulations, including intellectual property, privacy, data protection, cybersecurity, consumer protection, competition, and equal opportunity laws and regulations, and are expected to be subject to new laws and regulations or new applications of existing laws and regulations.
We also have incurred and expect to continue to incur significant additional legal, 23 Table of Contents accounting, and other expenses as a public company. Any failure to increase our revenue as we invest in our business or to manage our costs could prevent us from achieving or maintaining profitability or positive cash flow.
We also have incurred and expect to continue to incur significant additional legal, accounting, and other expenses as a public company. Any failure to increase our revenue as we invest in our business or to manage our costs could prevent us from achieving or maintaining profitability or positive cash flow.
Our customers have no obligation to renew their subscription for our Falcon platform after the expiration of their contractual subscription period, which is generally one year, and in the normal course of business, some customers have elected not to renew.
Our customers have no obligation to renew their subscription for our Falcon platform after the expiration of their contractual subscription period, which is generally one to three years, and in the normal course of business, some customers have elected not to renew.
We may not be able to maintain or achieve cost savings from our investments, which could harm our financial results. Our ability to maintain customer satisfaction depends in part on the quality of our customer support.
We may not be able to maintain or achieve cost savings from our investments, which could harm our financial results. 36 Table of Contents Our ability to maintain customer satisfaction depends in part on the quality of our customer support.
Furthermore, because AI technology itself is highly complex and rapidly developing, it is not possible to predict all of the legal, operational or technological risks that may arise relating to the use of AI. We provide service level commitments under some of our customer contracts.
Because AI technology itself is highly complex and rapidly developing, it is not possible to predict all of the legal, operational or technological risks that may arise relating to the use of AI. 44 Table of Contents We provide service level commitments under some of our customer contracts.
Our revolving facility and the indenture that governs our Senior Notes contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including, among other things, restrictions on our ability to: • incur additional indebtedness and guarantee indebtedness; • prepay, redeem or repurchase certain indebtedness; • sell or otherwise dispose of assets; • incur liens; 49 Table of Contents • enter into transactions with affiliates; • alter the businesses we conduct; • enter into agreements restricting our subsidiaries’ ability to pay dividends; and • consolidate, merge with, or sell all or substantially all of our assets to, another person.
Our revolving facility and the indenture that governs our Senior Notes contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including, among other things, restrictions on our ability to: • incur additional indebtedness and guarantee indebtedness; • prepay, redeem or repurchase certain indebtedness; • sell or otherwise dispose of assets; • incur liens; • enter into transactions with affiliates; • alter the businesses we conduct; • enter into agreements restricting our subsidiaries’ ability to pay dividends; and • consolidate, merge with, or sell all or substantially all of our assets to, another person. 50 Table of Contents The covenants in the indenture and supplemental indenture that govern the Senior Notes are subject to exceptions and qualifications.
Failure to effectively deliver, integrate, and manage perceptions with respect to enhancements and new solutions may erode our competitive position, significantly impair our revenue growth, and negatively impact our operating results. If we are unable to attract new customers, our future results of operations could be harmed.
Failure to effectively deliver, integrate, and manage perceptions with respect to enhancements and new solutions could erode our competitive position, significantly impair our revenue growth, and negatively impact our operating results. 24 Table of Contents If we are unable to attract new customers, our future results of operations could be harmed.
This could result in negative consequences to us, including government investigations, penalties and harm to our reputation. 41 Table of Contents We are subject to anti-corruption, anti-bribery and similar laws, and non-compliance with such laws can subject us to criminal penalties or significant fines and harm our business and reputation. We are subject to the U.S.
This could result in negative consequences to us, including government investigations, penalties and harm to our reputation. We are subject to anti-corruption, anti-bribery and similar laws, and non-compliance with such laws can subject us to criminal penalties or significant fines and harm our business and reputation. We are subject to the U.S.
For example, if we do not have sufficient rights to use the data or other material or content on which our AI technologies rely, we may incur liability through the violation of applicable laws, third-party intellectual property, privacy or other rights, or contracts to which we are a party.
Additionally, if we do not have sufficient rights to use the data or other material or content on which our AI technologies rely, we may incur liability through the violation of applicable laws or regulations, third-party intellectual property, privacy or other rights, or contracts to which we are a party.
Any failure or perceived failure by us to comply with our privacy policies, or applicable data privacy and security laws, rules, regulations, standards, certifications or contractual obligations, or any compromise of security that results in unauthorized access to, or unauthorized loss, destruction, use, modification, acquisition, disclosure, release or transfer of personal information, may result in requirements to modify or cease certain operations or practices, the expenditure of substantial costs, time and other resources, proceedings or actions against us, legal liability, governmental investigations, enforcement actions, claims, fines, judgments, awards, penalties, sanctions and costly litigation (including class actions).
Any failure or perceived failure by us or any third parties with which we do business to comply with applicable privacy policies, data privacy or security laws, rules, regulations, standards, certifications or contractual obligations, or any compromise of security that results in unauthorized access to, or unauthorized loss, destruction, use, modification, acquisition, disclosure, release, transfer or other processing of personal information, may result in requirements to modify or cease certain operations or practices, the expenditure of substantial costs, time and other resources, proceedings or actions against us, legal liability, governmental investigations, enforcement actions, claims, fines, judgments, awards, penalties, sanctions and costly litigation (including class actions).
Realization of these net operating loss and research and development credit carryforwards depends on future income, and there is a risk that our existing carryforwards could expire unused and be unavailable to offset future income tax liabilities, which could adversely affect our results of operations.
Realization of these net operating loss and R&D credit carryforwards depends on future income, and there is a risk that our existing carryforwards could expire unused and be unavailable to offset future income tax liabilities, which could adversely affect our results of operations.
Certain jurisdictions in which we do not collect such taxes may assert that such taxes are applicable, which could result in tax assessments, penalties and interest, to us or our customers for the past amounts, 53 Table of Contents and we may be required to collect such taxes in the future.
Certain jurisdictions in which we do not collect such taxes may assert that such taxes are applicable, which could result in tax assessments, penalties and interest, to us or our customers for the past amounts, and we may be required to collect such taxes in the future.
This summary is not complete, and should be read together with the entire section titled “Risk Factors” in this Annual Report on Form 10-K, as well as the other information in this Annual Report on Form 10-K and the other filings that we make with the SEC. • We have experienced rapid growth in recent periods, and if we do not manage our future growth, our business and results of operations will be adversely affected. • We have a history of losses, and while we have achieved profitability in quarterly periods, we may not be able to achieve or sustain profitability in the future. • If organizations do not adopt cloud-based SaaS-delivered endpoint security solutions, our ability to grow our business and results of operations may be adversely affected. • If we are unable to successfully enhance our existing products and services and introduce new products and services in response to rapid technological changes and market developments as well as evolving security threats, our competitive position and prospects will be harmed. • If we are unable to attract new customers, our future results of operations could be harmed. • If our customers do not renew their subscriptions for our products and add additional cloud modules to their subscriptions, our future results of operations could be harmed. • Our sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense, • We face intense competition and could lose market share to our competitors, which could adversely affect our business, financial condition, and results of operations. • If our solutions fail or are perceived to fail to detect or prevent incidents or have or are perceived to have defects, errors, or vulnerabilities, our brand and reputation would be harmed, which would adversely affect our business and results of operations. • As a cybersecurity provider, we have been, and expect to continue to be, a target of cyberattacks.
This summary is not complete, and should be read together with the entire section titled “Risk Factors” in this Annual Report on Form 10-K, as well as the other information in this Annual Report on Form 10-K and the other filings that we make with the SEC. • The July 19 Incident has had, and is expected to continue to have, an adverse effect on our business, sales, customer and partner relations, reputation, results of operations and financial condition. • We have experienced rapid growth in recent periods, and if we do not manage our future growth, our business and results of operations will be adversely affected. • We have a history of losses, and while we have achieved profitability in certain periods, including fiscal 2024, we may not be able to achieve or sustain profitability in the future. • If organizations do not adopt cloud-based SaaS-delivered endpoint security solutions, our ability to grow our business and results of operations may be adversely affected. • If we are unable to successfully enhance our existing products and services and introduce new products and services in response to rapid technological changes and market developments as well as evolving security threats, our competitive position and prospects will be harmed. • If we are unable to attract new customers, our future results of operations could be harmed. • If our customers do not renew their subscriptions for our products and add additional cloud modules to their subscriptions, our future results of operations could be harmed. • Our sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense. • We face intense competition and could lose market share to our competitors, which could adversely affect our business, financial condition, and results of operations. • If our solutions fail or are perceived to fail to detect or prevent incidents or have or are perceived to have defects, errors, or vulnerabilities, our brand and reputation would be harmed, which would adversely affect our business and results of operations. • As a cybersecurity provider, we have been, and expect to continue to be, a target of cyberattacks.
The incurrence of indebtedness would result in 51 Table of Contents increased fixed obligations and could also include covenants or other restrictions that would impede our ability to manage our operations.
The incurrence of indebtedness would result in increased fixed obligations and could also include covenants or other restrictions that would impede our ability to manage our operations.
Supply chain disruptions could delay our ability to expand or increase the capacity of our global data center network, replace defective equipment in our existing data centers and impact our operating costs. We rely on a limited number of suppliers for several components of the equipment we use to operate our cloud platform and provide services to our customers.
We rely on a limited number of suppliers for certain components of the equipment we use to operate our cloud platform. Supply chain disruptions could delay our ability to expand or increase the capacity of our global data center network, replace defective equipment in our existing data centers and impact our operating costs.
We may have to pay cash, incur debt or issue equity securities to pay for any such acquisition, each of which could adversely affect our financial condition and the market price of our Class A common stock. The sale of equity or issuance of debt to finance any such acquisitions could result in dilution to our stockholders.
We may have to pay cash, incur debt or issue equity securities to pay for any such acquisition, each of which could adversely affect our financial condition and the market price of our common stock. The sale of equity or issuance of debt to finance any 52 Table of Contents such acquisitions could result in dilution to our stockholders.
The successful promotion of our CrowdStrike and Falcon brand will depend on a number of factors, including our marketing efforts, our ability to continue to develop additional cloud modules and features for our Falcon platform, our ability to successfully differentiate our Falcon platform from competitive cloud-based or legacy security solutions and, ultimately, our ability to detect and stop breaches.
The successful promotion of our CrowdStrike and Falcon brands depends on a number of factors, including our marketing efforts, our ability to continue to develop additional cloud modules and features for our Falcon platform, our ability to successfully differentiate our Falcon platform from competitive cloud-based or legacy security solutions and, ultimately, our ability to detect and stop breaches.
Success in delivering enhancements and new solutions depends on several factors, including the timely completion, introduction and market acceptance of the enhancement or new solution, the risk that such enhancement or new solution may have quality or other defects or deficiencies, especially in the early stages of introduction, as well as our ability to seamlessly integrate all of our product and service offerings and develop adequate sales capabilities in new markets.
Success in delivering enhancements and new solutions depends on several factors, including the timely completion, introduction and market acceptance of the enhancement or new solution, the risk that such enhancement or new solution may have quality or other defects or deficiencies (such as those experienced in connection with the July 19 Incident), especially in the early stages of introduction, as well as our ability to seamlessly integrate all of our product and service offerings and develop adequate sales capabilities in new markets.
If our solutions do not achieve widespread adoption or there is a reduction in demand for our solutions due to a lack of customer acceptance, technological challenges, competing products, privacy concerns, decreases in corporate spending, weakening economic conditions or otherwise, it could result in early terminations, reduced customer retention rates, or decreased revenue, any of which would adversely affect our business, results of operations, and financial results.
If our solutions do not achieve widespread adoption or there is a reduction in demand for our solutions due to a lack of customer acceptance, technological challenges, damage to our reputation including as a result of the July 19 Incident, competing products, privacy concerns, decreases in corporate spending, weakening economic conditions or otherwise, it could result in early terminations, reduced customer retention rates, or decreased revenue, any of which would adversely affect our business, results of operations, and financial results.
Our revenue, other results of operations and financial condition could be harmed if we suffer performance issues or downtime that exceeds the service level commitments under our agreements with our customers. 43 Table of Contents We are currently, and may in the future become, involved in litigation that may adversely affect us.
Our revenue, other results of operations and financial condition could be harmed to the extent we suffer performance issues or downtime that exceeds the service level commitments under our agreements with our customers. We are currently, and may in the future become, involved in litigation that may adversely affect us.
The sale and support of our products also entails the risk of product liability claims.
The sale and support of our products also entail the risk of product liability claims.
We have experienced, and expect that in the future we may experience interruptions, delays and outages in service and availability from time to time due to a variety of factors, including infrastructure changes, human or software errors, website hosting disruptions and capacity constraints. 28 Table of Contents The following factors, many of which are beyond our control, can affect the delivery, availability, and the performance of our Falcon platform: • the development and maintenance of the infrastructure of the internet; • the performance and availability of third-party providers of cloud infrastructure services, such as AWS, with the necessary speed, data capacity and security for providing reliable internet access and services; • decisions by the owners and operators of the data centers where our cloud infrastructure is deployed to terminate our contracts, discontinue services to us, shut down operations or facilities, increase prices, change service levels, limit bandwidth, declare bankruptcy or prioritize the traffic of other parties; • physical or electronic break-ins, acts of war or terrorism, human error or interference (including by disgruntled employees, former employees or contractors) and other catastrophic events; • cyberattacks, including denial of service attacks, targeted at us, our data centers, or the infrastructure of the internet; • failure by us to maintain and update our cloud infrastructure to meet our data capacity requirements; • errors, defects or performance problems in our software, including third-party software incorporated in our software; • improper deployment or configuration of our solutions; • the failure of our redundancy systems, in the event of a service disruption at one of our data centers, to provide failover to other data centers in our data center network; and • the failure of our disaster recovery and business continuity arrangements.
The following factors, many of which are beyond our control, can affect the delivery, availability, and the performance of our Falcon platform: • the development and maintenance of the infrastructure of the internet; • the performance and availability of third-party providers of cloud infrastructure services, such as AWS, with the necessary speed, data capacity and security for providing reliable internet access and services; • decisions by the owners and operators of the data centers where our cloud infrastructure is deployed to terminate our contracts, discontinue services to us, shut down operations or facilities, increase prices, change service levels, limit bandwidth, declare bankruptcy or prioritize the traffic of other parties; • physical or electronic break-ins, acts of war or terrorism, human error or interference (including by disgruntled employees, former employees or contractors) and other catastrophic events; • cyberattacks, including denial of service attacks, targeted at us, our data centers, or the infrastructure of the internet; • failure by us to maintain and update our cloud infrastructure to meet our data capacity requirements; • errors, defects or performance problems in our software, including third-party software incorporated in our software; 29 Table of Contents • improper deployment or configuration of our solutions; • the failure of our redundancy systems, in the event of a service disruption at one of our data centers, to provide failover to other data centers in our data center network; and • the failure of our disaster recovery and business continuity arrangements.
Our business would also be harmed if our customers believe that a cloud-based SaaS-delivered endpoint security solution is unreliable. While we do not consider them to have been material, we have experienced, and may in the future experience, service interruptions and other performance problems due to a variety of factors.
Our business would also be harmed if our customers believe that a cloud-based SaaS-delivered endpoint security solution is unreliable. We have experienced, and may in the future experience, service interruptions and other performance problems due to a variety of factors.
Our results of operations have varied significantly from period to period, and we expect that our results of operations will continue to vary as a result of a number of factors, many of which are outside of our control and may be difficult to predict, including: • our ability to attract new and retain existing customers; • the budgeting cycles, seasonal buying patterns, and purchasing practices of customers; • economic difficulties confronting our customers, which may impact the number of modules or endpoint deployments they are willing or able to purchase; • insolvency or credit difficulties confronting our customers, affecting their ability to purchase or pay for our solutions; • the timing and length of our sales cycles; • changes in customer or channel partner requirements or market needs; • any disruption in our relationship with channel partners; • changes in the growth rate of the cloud-based SaaS-delivered endpoint security solutions market; • the timing and success of new product and service introductions by us or our competitors or any other competitive developments, including consolidation among our customers or competitors; • decisions by organizations to purchase security solutions from larger, more established security vendors or from their primary IT equipment vendors; • changes in our pricing policies or those of our competitors; • the level of awareness of cybersecurity threats, particularly advanced cyberattacks, and the market adoption of our Falcon platform; • significant security breaches of, technical difficulties with or interruptions to, the use of our Falcon platform; • negative media coverage or publicity; • our ability to successfully expand our business domestically and internationally; • the amount and timing of operating costs (including new hires), tightening of labor markets and capital expenditures related to the expansion of our business; • extraordinary expenses such as litigation or other dispute-related settlement payments or outcomes; • increases or decreases in our expenses caused by fluctuations in foreign currency exchange rates; • future accounting pronouncements or changes in our accounting policies or practices; 31 Table of Contents • deteriorating or volatile conditions in the global economy and financial markets, including as a result of weak or negative gross domestic product growth, uncertainty or disruptions in the capital and credit markets, changing interest rates, inflation, bank failures or adverse conditions impacting financial institutions, and supply-chain disruptions; and • political events, geopolitical unrest or tension, acts of war and terrorism.
Our results of operations have varied significantly from period to period, and we expect that our results of operations will continue to vary as a result of a number of factors, many of which are outside of our control and may be difficult to predict, including: • our ability to attract new and retain existing customers; • the budgeting cycles, seasonal buying patterns, and purchasing practices of customers; 31 Table of Contents • economic difficulties confronting our customers, which may impact the number of modules or endpoint deployments they are willing or able to purchase; • insolvency or credit difficulties confronting our customers, affecting their ability to purchase or pay for our solutions, including in connection with our customer and end-user financing arrangements; • the timing and length of our sales cycles; • changes in customer or channel partner requirements or market needs; • any disruption in our relationship with channel partners; • changes in the growth rate of the cloud-based SaaS-delivered endpoint security solutions market; • the timing and success of new product and service introductions by us or our competitors or any other competitive developments, including consolidation among our customers or competitors; • decisions by organizations to purchase security solutions from larger, more established security vendors or from their primary IT equipment vendors; • changes in our pricing policies or those of our competitors; • the level of awareness of cybersecurity threats, particularly advanced cyberattacks, and the market adoption of our Falcon platform; • significant security breaches of, technical difficulties with or interruptions to, the use of our Falcon platform; • the impact to our business from the July 19 Incident; • negative media coverage or publicity; • our ability to successfully expand our business domestically and internationally; • the amount and timing of operating costs (including new hires), tightening of labor markets and capital expenditures related to the expansion of our business; • extraordinary expenses such as litigation, regulatory or other dispute-related settlement payments or outcomes; • increases or decreases in our expenses caused by fluctuations in foreign currency exchange rates; • future accounting pronouncements or changes in our accounting policies or practices; • developments relating to our valuation allowances for our deferred tax assets; • deteriorating or volatile conditions in the global economy and financial markets, including as a result of weak or negative gross domestic product growth, uncertainty or disruptions in the capital and credit markets, changing interest rates, inflation, bank failures or adverse conditions impacting financial institutions, and supply-chain disruptions; and • political events, geopolitical unrest or tension, acts of war and terrorism. 32 Table of Contents In addition, we experience seasonal fluctuations in our financial results as we typically receive a higher percentage of our annual orders from new customers, as well as renewal orders from existing customers, in the second half of the fiscal year as compared to the first half of the year due to the annual budget approval processes of many of our customers.
Economic weakness, customer financial difficulties, and constrained spending on security and IT operations may result in decreased revenue, reduced sales, an increase in multi-phase subscription start dates, shorter terms for customer subscriptions, 24 Table of Contents lengthened sales cycles, increased churn, lower demand for our products, and adversely affect our results of operations and financial conditions.
Economic weakness, customer financial difficulties, constrained spending on security and IT operations, and the impact of the July 19 Incident may result in decreased revenue, reduced sales, an increase in multi-phase subscription start dates, shorter terms for customer subscriptions, lengthened sales cycles, increased churn, lower demand for our products, and adversely affect our results of operations and financial conditions.
Our ability to compete effectively depends upon numerous factors, many of which are beyond our control, including, but not limited to: • product capabilities, including performance and reliability, of our Falcon platform, including our cloud modules, services, and features compared to those of our competitors; 25 Table of Contents • our ability, and the ability of our competitors, to improve existing products, services, and features, or to develop new ones to address evolving customer needs; • our ability to attract, retain, and motivate talented employees; • our ability to establish and maintain relationships with channel partners; • the strength of our sales and marketing efforts; and • acquisitions or consolidation within our industry, which may result in more formidable competitors.
Our ability to compete effectively depends upon numerous factors, many of which are beyond our control, including, but not limited to: • product capabilities, including performance and reliability, of our Falcon platform, including our cloud modules, services, and features compared to those of our competitors; • our ability, and the ability of our competitors, to improve existing products, services, and features, or to develop new ones to address evolving customer needs; • our ability to attract, retain, and motivate talented employees; • our ability to establish and maintain relationships with channel partners and direct customers; • the strength of our sales and marketing efforts; • the strength of our reputation and brand, including the impact to our reputation and brand as a result of the July 19 Incident; and • acquisitions or consolidation within our industry, which may result in more formidable competitors.
For example, we are required to comply with the European Union (“EU”) General Data Protection Regulation (“GDPR”) and its equivalent in the U.K. (“U.K. GDPR”), which impose stringent obligations regarding the collection, control, use, sharing, disclosure and other processing of personal data. While the GDPR and U.K.
For example, we are required to comply with the European Union (“EU”) General Data Protection Regulation (“GDPR”) and its equivalent in the U.K. (“U.K. GDPR”), which impose stringent obligations regarding the collection, control, use, sharing, disclosure and other processing of personal data and create mandatory breach notification requirements under certain circumstances. While the GDPR and U.K.
We are regularly subject to claims, suits, and government investigations and other proceedings including patent, product liability, class action, whistleblower, personal injury, property damage, labor and employment (including allegations of wage and hour violations), commercial disputes, compliance with laws and regulatory requirements and other matters, and we may become subject to additional types of claims, suits, investigations and proceedings as our business develops.
We are regularly subject to claims, suits, and government investigations and other proceedings including patent, product liability, class action, whistleblower, personal injury, property damage, labor and employment (including allegations of wage and hour violations), commercial disputes, securities litigation, compliance with laws and regulatory requirements and other matters, and we may become subject to additional types of claims, suits, investigations and proceedings as our business develops or in connection with the July 19 Incident.
Data Bridge); however, such new 39 Table of Contents adequacy decision has been challenged in EU courts, and is likely to face additional challenges.
Data Bridge); however, such new adequacy decision has been challenged in EU courts, and is likely to face additional challenges.
While we have experienced significant growth in revenue in recent periods, and have achieved profitability during quarterly periods, we cannot assure you when or whether we will reach sustained profitability.
While we have experienced significant growth in revenue in recent periods, and have achieved profitability during certain periods, including fiscal 2024, we cannot assure you when or whether we will reach sustained profitability.
GDPR remain substantially similar for the time being, the U.K. government has announced that it would seek to chart its own path on data protection and reform its relevant laws, including in ways that may differ from the GDPR.
GDPR remain substantially similar for the time being, the U.K. government has announced plans and introduced legislative proposals to chart its own path on data protection and reform its relevant laws, including in ways that may differ from the GDPR.
We may not be able to anticipate how to respond to or comply with these rapidly evolving frameworks, and we may need to expend resources to adjust our offerings in certain jurisdictions if the legal frameworks are inconsistent across jurisdictions.
We may not be able to anticipate how to respond to or comply with these rapidly evolving frameworks, and we may need to expend resources to adjust our offerings in certain jurisdictions if the legal frameworks are inconsistent across jurisdictions. The cost to comply with such frameworks could be significant and may increase our operating expenses.
We do not intend to pay dividends in the foreseeable future. As a result, your ability to achieve a return on your investment will depend on appreciation in the price of our Class A common stock. We have never declared or paid any cash dividends on our capital stock.
As a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock. We have never declared or paid any cash dividends on our capital stock.
Our indebtedness could have important consequences, including: • limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements; 48 Table of Contents • requiring a portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes; • increasing our vulnerability to adverse changes in general economic, industry and competitive conditions; and • exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under our revolving facility, are at variable rates of interest; and increasing our cost of borrowing.
Our indebtedness could have important consequences, including: • limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements; • requiring a portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes; • increasing our vulnerability to adverse changes in general economic, industry and competitive conditions; and • exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under our revolving facility, are at variable rates of interest; and increasing our cost of borrowing. 49 Table of Contents We may not be able to generate sufficient cash to service all of our indebtedness, including the notes, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
AI is the subject of ongoing review by various U.S. governmental and regulatory agencies, and various U.S. states and other foreign jurisdictions are applying, or are considering applying, their cybersecurity and data protection laws to AI or are considering general legal frameworks for AI, such as the AI Act currently being considered in the EU.
AI is the subject of ongoing review by various U.S. governmental and regulatory agencies, and various U.S. states and other foreign jurisdictions are applying, or are considering applying, their cybersecurity and data protection laws to AI or are considering general legal frameworks for AI.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, our visibility in the financial markets could decrease, which in turn could cause our stock price or trading volume to decline.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, our visibility in the financial markets could decrease, which in turn could cause our stock price or trading volume to decline. We do not intend to pay dividends in the foreseeable future.
Third parties may in the future also assert claims against our customers or channel partners, whom our standard license and other agreements obligate us to indemnify against claims that our solutions infringe the intellectual property rights of third parties.
From time to time, third parties have in the past and may in the future assert claims of infringement of intellectual property rights against us. 38 Table of Contents Third parties may in the future also assert claims against our customers or channel partners, whom our standard license and other agreements obligate us to indemnify against claims that our solutions infringe the intellectual property rights of third parties.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn fiscal 2024, we did not identify any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats or incidents or provide assurances that we have not experienced an undetected cybersecurity incident.
Biggest changeIn fiscal 2025, we did not identify any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats or incidents or provide assurances that we have not experienced an undetected cybersecurity incident.
Our cybersecurity programs are under the direction of our Chief Information Security Officer (“CISO”). Our CISO and dedicated personnel are certified and experienced 56 Table of Contents information systems security professionals and information security managers with many years of experience across a variety of technology sub-specialties.
Our cybersecurity programs are under the direction of our Chief Information Security Officer (“CISO”). Our CISO and dedicated personnel are certified and experienced 57 Table of Contents information systems security professionals and information security managers with many years of experience across a variety of technology sub-specialties.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFor information regarding legal proceedings and other claims in which we are involved, see Note 9, Commitments and Contingencies, in Part II, Item 8 of this Annual Report on Form 10-K. For any claims for which we believe a liability is both probable and reasonably estimable, we record a liability in the period for which we make this determination.
Biggest changeFor information regarding legal proceedings and other claims asserted against us, including in relation to the July 19 Incident, see Note 10, Commitments and Contingencies, in Part II, Item 8 of this Annual Report on Form 10-K.
MINE SAFETY DISCLOSURES Not applicable. 57 Table of Contents Part II
MINE SAFETY DISCLOSURES Not applicable. 58 Table of Contents Part II
There is no pending or threatened legal proceeding to which we are a party that, in our opinion, is likely to have a material adverse effect on our business and our consolidated financial statements; however, the results of litigation and claims are inherently unpredictable.
Other than as disclosed in Note 10, there is no pending or threatened legal proceeding to which we are a party that, in our opinion, is likely to have a material adverse effect on our business and our consolidated financial statements; however, the results of legal proceedings and claims are inherently unpredictable.
Added
For any claims for which we believe a liability is both probable and reasonably estimable, we record a liability in the period in which we make this determination.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStock Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of CrowdStrike Holdings, Inc. under the Securities Act or the Exchange Act. 58 Table of Contents We have presented below the cumulative total return to our stockholders between June 12, 2019 (the date our common stock commenced trading on the Nasdaq) through January 31, 2024 in comparison to the Standard & Poor’s 500 Index, Standard & Poor Information Technology Index, and the Nasdaq 100 Index.
Biggest changeIssuer Purchases of Equity Securities None. 59 Table of Contents Stock Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of CrowdStrike Holdings, Inc. under the Securities Act or the Exchange Act.
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item with respect to our equity compensation plans is incorporated by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended January 31, 2024.
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item with respect to our equity compensation plans is incorporated by reference to our Proxy Statement for the 2025 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended January 31, 2025.
There is no public market for our Class B common stock. Holders of Record As of January 31, 2024, we had 37 holders of record of our Class A common stock and 70 holders of record of our Class B common stock.
Holders of Record As of January 31, 2025, we had 95 holders of record of our Class A common stock and zero holders of record of our Class B common stock.
Recent Sales of Unregistered Equity Securities and Use of Proceeds (a) Sale of Unregistered Equity Securities None. (b) Use of Proceeds from Public Offering of Common Stock None. Issuer Purchases of Equity Securities None.
The transaction was exempt from registration under Section 4(a)(2) of the Securities Act. (b) Use of Proceeds from Public Offering of Common Stock None.
Removed
Company/ Index Base period 6/12/19 1/31/20 1/31/21 1/31/22 1/31/23 1/31/24 CrowdStrike Holdings, Inc. $ 100.00 $ 105.33 $ 372.07 $ 311.45 $ 182.59 $ 504.31 S&P 500 $ 100.00 $ 118.69 $ 139.17 $ 171.58 $ 157.48 $ 190.27 S&P Information Technology $ 100.00 $ 134.13 $ 183.94 $ 232.55 $ 196.05 $ 294.24 Nasdaq 100 $ 100.00 $ 126.96 $ 184.09 $ 214.11 $ 175.08 $ 250.05 ITEM 6. [RESERVED] 59 Table of Contents
Added
There is no public market for our Class B common stock. On December 11, 2024, all of our outstanding shares of Class B common stock automatically converted into an equal number of shares of Class A common stock pursuant to the provisions of the Amended and Restated Certificate of Incorporation.
Added
Recent Sales of Unregistered Equity Securities and Use of Proceeds (a) Sale of Unregistered Equity Securities On November 20, 2024, we issued approximately $22.8 million of shares of our Class A common stock, subject to service-based vesting and other conditions, to certain stockholders of Adaptive Shield in connection with our acquisition of Adaptive Shield.
Added
We have presented below the cumulative total return to our stockholders for the five years ended January 31, 2025 in comparison to the Standard & Poor’s 500 Index, Standard & Poor Information Technology Index, and the Nasdaq 100 Index.
Added
Company/ Index Base period 1/31/20 1/31/21 1/31/22 1/31/23 1/31/24 1/31/25 CrowdStrike Holdings, Inc. $ 100.00 $ 353.25 $ 295.69 $ 173.35 $ 478.80 $ 651.61 S&P 500 $ 100.00 $ 117.25 $ 144.56 $ 132.68 $ 160.30 $ 202.59 S&P Information Technology $ 100.00 $ 137.13 $ 173.37 $ 146.16 $ 219.37 $ 279.92 Nasdaq 100 $ 100.00 $ 145.00 $ 168.64 $ 137.90 $ 196.96 $ 248.82 ITEM 6. [RESERVED] 60 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

77 edited+9 added−3 removed56 unchanged
Biggest changeAs of January 31, 2024 2023 Dollar-based net retention rate 119 % 125 % 62 Table of Contents Results of Operations The following tables set forth our consolidated statements of operations for each period presented (in thousands, except percentages): Year Ended January 31, 2024 2023 2022 Revenue Subscription $ 2,870,557 $ 2,111,660 $ 1,359,537 Professional services 184,998 129,576 92,057 Total revenue 3,055,555 2,241,236 1,451,594 Cost of revenue Subscription 630,745 511,684 321,904 Professional services 124,978 89,547 61,317 Total cost of revenue 755,723 601,231 383,221 Gross profit 2,299,832 1,640,005 1,068,373 Operating expenses Sales and marketing 1,140,566 904,409 616,546 Research and development 768,497 608,364 371,283 General and administrative 392,764 317,344 223,092 Total operating expenses 2,301,827 1,830,117 1,210,921 Loss from operations (1,995) (190,112) (142,548) Interest expense (25,756) (25,319) (25,231) Interest income 148,930 52,495 3,788 Other income, net 1,638 3,053 3,968 Income (loss) before provision for income taxes 122,817 (159,883) (160,023) Provision for income taxes 32,232 22,402 72,355 Net income (loss) 90,585 (182,285) (232,378) Net income attributable to non-controlling interest 1,258 960 2,424 Net income (loss) attributable to CrowdStrike $ 89,327 $ (183,245) $ (234,802) 63 Table of Contents The following table presents the components of our consolidated statements of operations as a percentage of total revenue for the periods presented: Year Ended January 31, 2024 2023 2022 % % % Revenue Subscription 94 % 94 % 94 % Professional services 6 % 6 % 6 % Total revenue 100 % 100 % 100 % Cost of revenue Subscription 21 % 23 % 22 % Professional services 4 % 4 % 4 % Total cost of revenue 25 % 27 % 26 % Gross profit 75 % 73 % 74 % Operating expenses Sales and marketing 37 % 40 % 42 % Research and development 25 % 27 % 26 % General and administrative 13 % 14 % 15 % Total operating expenses 75 % 82 % 83 % Loss from operations — % (8) % (10) % Interest expense (1) % (1) % (2) % Interest income 5 % 2 % — % Other income, net — % — % — % Income (loss) before provision for income taxes 4 % (7) % (11) % Provision for income taxes 1 % 1 % 5 % Net income (loss) 3 % (8) % (16) % Net income attributable to non-controlling interest — % — % — % Net income (loss) attributable to CrowdStrike 3 % (8) % (16) % Comparison of Fiscal 2024 and Fiscal 2023 Revenue The following shows total revenue from subscriptions and professional services for fiscal 2024, as compared to fiscal 2023 (in thousands, except percentages): Change 2024 2023 $ % Subscription $ 2,870,557 $ 2,111,660 $ 758,897 36 % Professional services 184,998 129,576 55,422 43 % Total revenue $ 3,055,555 $ 2,241,236 $ 814,319 36 % Total revenue increased by $814.3 million, or 36%, in fiscal 2024, compared to fiscal 2023.
Biggest changeResults of Operations The following tables set forth our consolidated statements of operations for each period presented (in thousands, except percentages): Year Ended January 31, 2025 2024 2023 Revenue Subscription $ 3,761,480 $ 2,870,557 $ 2,111,660 Professional services 192,144 184,998 129,576 Total revenue 3,953,624 3,055,555 2,241,236 Cost of revenue Subscription 835,509 630,745 511,684 Professional services 155,972 124,978 89,547 Total cost of revenue 991,481 755,723 601,231 Gross profit 2,962,143 2,299,832 1,640,005 Operating expenses Sales and marketing 1,523,356 1,140,566 904,409 Research and development 1,076,901 768,497 608,364 General and administrative 482,316 392,764 317,344 Total operating expenses 3,082,573 2,301,827 1,830,117 Loss from operations (120,430) (1,995) (190,112) Interest expense (26,311) (25,756) (25,319) Interest income 196,174 148,930 52,495 Other income, net 5,101 1,638 3,053 Income (loss) before provision for income taxes 54,534 122,817 (159,883) Provision for income taxes 71,130 32,232 22,402 Net income (loss) (16,596) 90,585 (182,285) Net income attributable to non-controlling interest 2,675 1,258 960 Net income (loss) attributable to CrowdStrike $ (19,271) $ 89,327 $ (183,245) 66 Table of Contents The following table presents the components of our consolidated statements of operations as a percentage of total revenue for the periods presented: Year Ended January 31, 2025 2024 2023 % % % Revenue Subscription 95 % 94 % 94 % Professional services 5 % 6 % 6 % Total revenue 100 % 100 % 100 % Cost of revenue Subscription 21 % 21 % 23 % Professional services 4 % 4 % 4 % Total cost of revenue 25 % 25 % 27 % Gross profit 75 % 75 % 73 % Operating expenses Sales and marketing 39 % 37 % 40 % Research and development 27 % 25 % 27 % General and administrative 12 % 13 % 14 % Total operating expenses 78 % 75 % 82 % Loss from operations (3) % — % (8) % Interest expense (1) % (1) % (1) % Interest income 5 % 5 % 2 % Other income, net — % — % — % Income (loss) before provision for income taxes 1 % 4 % (7) % Provision for income taxes 2 % 1 % 1 % Net income (loss) — % 3 % (8) % Net income attributable to non-controlling interest — % — % — % Net income (loss) attributable to CrowdStrike — % 3 % (8) % Comparison of Fiscal 2025 and Fiscal 2024 Revenue The following shows total revenue from subscriptions and professional services for fiscal 2025, as compared to fiscal 2024 (in thousands, except percentages): Change 2025 2024 $ % Subscription $ 3,761,480 $ 2,870,557 $ 890,923 31 % Professional services 192,144 184,998 7,146 4 % Total revenue $ 3,953,624 $ 3,055,555 $ 898,069 29 % Total revenue increased by $898.1 million, or 29%, in fiscal 2025, compared to fiscal 2024.
The preparation of the consolidated financial statements requires our management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. See Note 1, Description of Business and Significant Accounting Policies to our consolidated financial statements included in Item 8, Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
GAAP. The preparation of the consolidated financial statements requires our management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. See Note 1, Description of Business and Significant Accounting Policies to our consolidated financial statements included in Item 8, Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
The revenue amounts presented in the summarized financial information include all of our consolidated revenue, and there is no intercompany revenue from the non-guarantor subsidiaries.
The revenue amounts presented in the summarized financial information include substantially all of our consolidated revenue, and there is no intercompany revenue from the non-guarantor subsidiaries.
Discussions of fiscal 2022 items and year-over-year comparisons between fiscal 2023 and 2022 are not included in this Form 10-K, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended January 31, 2023.
Discussions of fiscal 2023 items and year-over-year comparisons between fiscal 2024 and 2023 are not included in this Form 10-K, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended January 31, 2024.
Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. 73 Table of Contents We account for unrecognized tax benefits using a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.
Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. 74 Table of Contents We account for unrecognized tax benefits using a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.
We took a fundamentally different approach to solve this problem with the AI-native CrowdStrike Falcon XDR platform – the first, true cloud-native platform built with AI at the core, capable of harnessing vast amounts of security and enterprise data to deliver highly modular solutions through a single lightweight agent.
We took a fundamentally different approach to solve this problem with the AI-native CrowdStrike Falcon platform – the first, true cloud-native unified platform built with AI at the core, capable of harnessing vast amounts of security and enterprise data to deliver highly modular solutions through a single lightweight agent.
Recently Issued Accounting Pronouncements See Note 1, Description of Business and Significant Accounting Policies, included in Part II, Item 8 of this Annual Report on Form 10-K for more information about the impact of certain recent accounting pronouncements on our consolidated financial statements. 74 Table of Contents
Recently Issued Accounting Pronouncements See Note 1, Description of Business and Significant Accounting Policies, included in Part II, Item 8 of this Annual Report on Form 10-K for more information about the impact of certain recent accounting pronouncements on our consolidated financial statements. 75 Table of Contents
Our ability to increase revenue depends in large part on our ability to retain our existing customers and increase the ARR of their subscriptions. We focus on increasing sales to our existing customers by expanding their deployments to more endpoints and selling additional cloud modules for increased functionality.
Our ability to increase revenue depends in large part on our ability to retain our existing customers and increase the size of their subscriptions. We focus on increasing sales to our existing customers by expanding their deployments to more endpoints and selling additional cloud modules for increased functionality.
Our fiscal years ended January 31, 2024, January 31, 2023, and January 31, 2022, are referred to herein as fiscal 2024, fiscal 2023, and fiscal 2022, respectively. Overview Founded in 2011, CrowdStrike reinvented cybersecurity for the cloud era and transformed the way cybersecurity is delivered and experienced by customers.
Our fiscal years ended January 31, 2025, January 31, 2024, and January 31, 2023, are referred to herein as fiscal 2025, fiscal 2024, and fiscal 2023, respectively. Overview Founded in 2011, CrowdStrike reinvented cybersecurity for the cloud era and transformed the way cybersecurity is delivered and experienced by customers.
Interest expense consists primarily of amortization of debt issuance costs, contractual interest expense for our Senior Notes issued in January 2021, and amortization of debt issuance costs on our secured revolving credit facility. Interest Income. Interest income consists primarily of income earned on our cash, cash equivalents, and short-term investments. Other Income, Net.
Interest expense consists primarily of amortization of debt issuance costs, contractual interest expense for our Senior Notes issued in January 2021, and amortization of debt issuance costs on our secured revolving credit facility (“Revolving Facility”). Interest Income. Interest income consists primarily of income earned on our cash, cash equivalents, and short-term investments. Other Income, Net.
See Note 4, Debt, in Part II, Item 8 of this Annual Report on Form 10-K, for a brief description of the Senior Notes. We conduct our operations almost entirely through our subsidiaries.
See Note 5, Debt, in Part II, Item 8 of this Annual Report on Form 10-K, for a brief description of the Senior Notes. We conduct our operations almost entirely through our subsidiaries.
However, we anticipate sales and marketing expenses to decrease as a percentage of our total revenue over time, although our sales and marketing expenses may fluctuate as a percentage of our total revenue from period-to-period depending on the timing of these expenses. Research and Development.
However, we anticipate sales and marketing expenses to decrease as a percentage of our total revenue over time as we grow our business, although our sales and marketing expenses may fluctuate as a percentage of our total revenue from period to period depending on the timing of these expenses. Research and Development.
However, we anticipate research and development expenses to decrease as a percentage of our total revenue over time, although our research and development expenses may fluctuate as a percentage of our total revenue from period to period depending on the timing of these expenses. General and Administrative.
However, we anticipate research and development expenses to decrease as a percentage of our total revenue over time as we grow our business, although our research and development expenses may fluctuate as a percentage of our total revenue from period to period depending on the timing of these expenses. General and Administrative.
We have expanded our sales focus to include any sized organization without the need to modify our Falcon platform for small and medium sized businesses. 60 Table of Contents A substantial majority of our customers purchase subscriptions with a term of one year. Our subscriptions are generally priced on a per-endpoint and per-module basis.
We have expanded our sales focus to include any sized organization without the need to modify our Falcon platform for small and medium sized businesses. 61 Table of Contents A substantial majority of our customers purchase subscriptions with a term over one year. Our subscriptions are generally priced on a per-endpoint and per-module basis.
We expect our gross profit to increase in dollar amount and our gross margin to increase modestly over the long term, although our gross margin could fluctuate from period to period depending on the interplay of these factors. Demand for our incident response services is driven by the number of breaches experienced by non-customers.
We expect our gross profit to increase in dollar amount and our gross margin to increase modestly over the long term as we grow our business, although our gross margin could fluctuate from period to period depending on the interplay of these factors. Demand for our incident response services is driven by the number of breaches experienced by non-customers.
Also, we view our professional services solutions in the context of our larger business and as a significant lead generator for new subscriptions. Because of these factors, our services revenue and gross margin may fluctuate over time. Operating Expenses Our operating expenses consist of sales and marketing, research and development, and general administrative expenses.
Also, we view our professional services solutions in the context of our larger business and as a significant lead generator for new subscriptions. Because of these factors, our services revenue and gross margin may fluctuate over time. 64 Table of Contents Operating Expenses Our operating expenses consist of sales and marketing, research and development, and general administrative expenses.
Professional services are available through hourly rate and fixed fee contracts, one-time and ongoing engagements, and retainer-based agreements. For time and materials and retainer-based arrangements, revenue is recognized as services are performed. Fixed fee contracts account for an immaterial portion of our revenue. 67 Table of Contents Cost of Revenue Subscription Cost of Revenue.
Professional services are available through hourly rate and fixed fee contracts, one-time and ongoing engagements, and retainer-based agreements. For time and materials and retainer-based arrangements, revenue is recognized as services are performed. Fixed fee contracts account for an immaterial portion of our revenue. Cost of Revenue Subscription Cost of Revenue.
Supplemental Guarantor Financial Information Our Senior Notes are guaranteed on a senior, unsecured basis by CrowdStrike, Inc., a wholly owned subsidiary of CrowdStrike Holdings, Inc. (the “subsidiary guarantor,” and together with CrowdStrike Holdings, Inc., the “Obligor Group”). The guarantee is full and unconditional and is subject to certain conditions for release.
Supplemental Guarantor Financial Information Our Senior Notes are guaranteed on a senior, unsecured basis by CrowdStrike, Inc. and CrowdStrike Financial Services, Inc., wholly owned subsidiaries of CrowdStrike Holdings, Inc. (the “subsidiary guarantors,” and together with CrowdStrike Holdings, Inc., the “Obligor Group”). The guarantee is full and unconditional and is subject to certain conditions for release.
For each of these categories of expense, employee-related expenses are the most significant component, which include salaries, employee bonuses, sales commissions, and employer payroll tax. Operating expenses also include an allocated portion of overhead costs for facilities and IT. Sales and Marketing. Sales and marketing expenses primarily consist of employee-related expenses such as salaries, commissions, and bonuses.
For each of these categories of expense, employee-related expenses are the most significant component, which include salaries, employee bonuses, sales commissions, and employer payroll tax. Operating expenses also include an allocated portion of overhead costs for facilities and other administrative functions. Sales and Marketing. Sales and marketing expenses primarily consist of employee-related expenses such as salaries, commissions, and bonuses.
We believe our approach has defined a new category called the Security Cloud, which has the power to transform the cybersecurity industry the same way the cloud has transformed the customer relationship management, human resources, and service management industries.
We believe our approach has defined a new category called the Security Cloud, which has transformed the cybersecurity industry the same way the cloud has transformed the customer relationship management, human resources, and service management industries.
As of January 31, 2024, we had deferred revenue of $3.1 billion, of which $2.3 billion was recorded as a current liability and is expected to be recorded as revenue in the next 12 months, provided all other revenue recognition criteria have been met.
As of January 31, 2025, we had deferred revenue of $3.7 billion, of which $2.7 billion was recorded as a current liability and is expected to be recorded as revenue in the next 12 months, provided all other revenue recognition criteria have been met.
This section of this Form 10-K generally discusses fiscal 2024 and 2023 items and year-over-year comparisons between fiscal 2024 and 2023.
This section of this Form 10-K generally discusses fiscal 2025 and 2024 items and year-over-year comparisons between fiscal 2025 and 2024.
In addition, we have debt obligations related to $750.0 million aggregate principal amount of the Senior Notes due in fiscal 2030 and the interest payments associated with the Senior Notes of $22.5 million due in the next 12 months and $101.3 million due thereafter.
In addition, we have debt obligations related to $750.0 million aggregate principal amount of the Senior Notes due in fiscal 2030 and the interest payments associated with the Senior Notes of $22.5 million due in the next 12 months and $78.8 million due thereafter.
Professional services revenue includes incident response and proactive services, forensic and malware analysis, and attribution analysis. Professional services are generally sold separately from subscriptions to our Falcon platform, although customers frequently enter into a separate arrangement to purchase subscriptions to our Falcon platform at the conclusion of a professional services arrangement.
Professional services revenue includes incident response and proactive services, forensic and malware analysis, attribution analysis, operationalizing the Falcon Platform, residency program, and active defense services. Professional services are generally sold separately from subscriptions to our Falcon platform, although customers frequently enter into a separate arrangement to purchase subscriptions to our Falcon platform at the conclusion of a professional services arrangement.
We maintain a full valuation allowance on our U.S. federal and state and certain foreign deferred tax assets, including net operating loss carryforwards and tax credits, which we have determined are not realizable on a more-likely-than-not basis. We regularly evaluate the need for a valuation allowance.
We maintain a full valuation allowance on our U.S. federal and state and certain foreign deferred tax assets, including net operating loss carryforwards and tax credits, which we have determined are not realizable on a more-likely-than-not basis. We regularly evaluate the need for a valuation allowance. Net Income Attributable to Non-controlling Interest .
At dissolution, the Falcon Funds will be liquidated, and the remaining assets will be distributed to the investors based on their respective sharing percentage. Contractual Obligations and Commitments Our commitments consist of obligations under non-cancellable real estate arrangements on an undiscounted basis, of which $15.3 million is due in the next 12 months and $41.0 million is due thereafter.
At dissolution, the Falcon Funds will be liquidated, and the remaining assets will be distributed to the investors based on their respective sharing percentage. Contractual Obligations and Commitments Our commitments consist of obligations under non-cancellable real estate arrangements on an undiscounted basis, of which $14.1 million is due in the next 12 months and $35.6 million is due thereafter.
We have non-cancellable purchase commitments with various parties to purchase products and services entered in the normal course of business totaling $747.6 million as of January 31, 2024, with remaining terms in excess of 12 months. We expect to fund these obligations with cash flows from operations and cash on our balance sheet.
We have non-cancellable purchase commitments with various parties to purchase products and services entered in the normal course of business totaling $2.7 billion as of January 31, 2025, with remaining terms in excess of 12 months. We expect to fund these obligations with cash flows from operations and cash on our balance sheet.
Professional services cost of revenue consists primarily of employee-related costs, such as salaries and bonuses, stock-based compensation expense, technology, property and equipment depreciation, and an allocated portion of facilities and administrative costs.
Professional services cost of revenue consists primarily of employee-related costs, such as salaries and bonuses, stock-based compensation expense, consulting expense, and an allocated portion of facilities and administrative costs.
ARR increased 48% year-over-year and grew to $2.6 billion as of January 31, 2023, of which $828.4 million was net new ARR added during fiscal 2023. Dollar-Based Net Retention Rate Our dollar-based net retention rate compares our ARR from a set of subscription customers against the same metric for those subscription customers from the prior year.
ARR increased 34% year-over-year and grew to $3.4 billion as of January 31, 2024, of which $875.5 million was net new ARR added during fiscal 2024. Dollar-Based Net Retention Rate Our dollar-based net retention rate compares our ARR from a set of subscription customers against the same metric for those subscription customers from the prior year.
The increase in professional services cost of revenue was primarily due to an increase in employee-related expenses of $17.2 million driven by an increase in average headcount of 27%, an increase in consulting expense of $8.8 million, an increase in stock-based compensation expense of $6.6 million, and an increase in allocated overhead costs of $3.1 million.
The increase in professional services cost of revenue was primarily due to an increase in employee-related expenses of $13.1 million driven by an 20% increase in average headcount, an increase in stock-based compensation expense of $8.8 million, an increase in allocated overhead costs of $5.0 million, an increase in consulting expense of $2.2 million, and an increase in employee benefits of $1.0 million.
The increase in interest income during fiscal 2024 compared to fiscal 2023 was driven by increases in market interest rates and an increase in our cash and cash equivalents.
The increase in interest income during fiscal 2025 compared to fiscal 2024 was driven by an increase in our cash and cash equivalents.
Liquidity and Capital Resources Our primary sources of liquidity as of January 31, 2024, consisted of: (i) $3.4 billion in cash and cash equivalents, which mainly consists of cash on hand and highly liquid investments in money market funds and U.S. Treasury bills, (ii) $99.6 million in short-term investments, which consists of U.S.
Liquidity and Capital Resources Our primary sources of liquidity as of January 31, 2025, consisted of: (i) $4.3 billion in cash and cash equivalents, which mainly consists of cash on hand and highly liquid investments in money market funds and U.S.
Subscription revenue increased by $758.9 million, or 36% in fiscal 2024, compared to fiscal 2023, which was primarily driven by a combination of the addition of new customers and the sale of additional sensors and modules to existing customers. 64 Table of Contents Professional services revenue increased by $55.4 million, or 43%, in fiscal 2024 , compared to fiscal 2023, which was primarily attributable to an increase in the number of professional service hours performed.
Subscription revenue increased by $890.9 million, or 31% in fiscal 2025, compared to fiscal 2024, which was primarily driven by a combination of the addition of new customers and the sale of additional sensors and modules to existing customers. 67 Table of Contents Professional services revenue increased by $7.1 million, or 4%, in fiscal 2025 , compared to fiscal 2024, which was primarily attributable to an increase in the number of professional service hours.
The following table sets forth our ARR as of the dates presented (dollars in thousands): As of January 31, 2024 2023 Annual recurring revenue $ 3,435,150 $ 2,559,694 Year-over-year growth 34 % 48 % 61 Table of Contents ARR increased 34% year-over-year and grew to $3.4 billion as of January 31, 2024, of which $875.5 million was net new ARR added during fiscal 2024.
The following table sets forth our ARR as of the dates presented (dollars in thousands): As of January 31, 2025 2024 Annual recurring revenue $ 4,241,838 $ 3,435,150 Year-over-year growth 23 % 34 % ARR increased 23% year-over-year and grew to $4.2 billion as of January 31, 2025, of which $806.7 million was net new ARR added during fiscal 2025.
Subscription revenue accounted for 94% of our total revenue in both fiscal 2024 and fiscal 2023. Professional services revenue accounted for 6% of our total revenue in both fiscal 2024 and fiscal 2023.
Subscription revenue accounted for 95% and 94% of our total revenue in fiscal 2025 and fiscal 2024, respectively. Professional services revenue accounted for 5% and 6% of our total revenue in fiscal 2025 and fiscal 2024, respectively.
Sales and marketing expenses also include sales commissions and any other incremental payments made upon the initial acquisition of a subscription or upsells to existing customers, which are capitalized and amortized over the estimated customer life. We also capitalize and amortize any such expenses paid for the renewal of a subscription over the term of the renewal.
Sales and marketing expenses also include the amortization of deferred contract acquisition costs, which includes commissions and any other incremental payments made upon the initial acquisition of a subscription or upsells to existing customers, which are capitalized and amortized over the estimated customer life.
Cash Flows The following table summarizes our cash flows for the periods presented (in thousands): Year Ended January 31, 2024 2023 2022 Net cash provided by operating activities $ 1,166,207 $ 941,007 $ 574,784 Net cash used in investing activities (340,650) (556,658) (564,516) Net cash provided by financing activities 93,158 77,437 72,531 Net change in cash, cash equivalents and restricted cash 920,673 460,291 78,025 Operating Activities Net cash provided by operating activities during fiscal 2024 was $1.2 billion, which resulted from net income of $90.6 million, adjusted for non-cash charges of $1.0 billion and net cash inflow of $51.5 million from changes in operating assets and liabilities.
Cash Flows The following table summarizes our cash flows for the periods presented (in thousands): Year Ended January 31, 2025 2024 2023 Net cash provided by operating activities $ 1,381,727 $ 1,166,207 $ 941,007 Net cash used in investing activities (536,588) (340,650) (556,658) Net cash provided by financing activities 107,208 93,158 77,437 Net change in cash, cash equivalents and restricted cash 947,069 920,673 460,291 Operating Activities Net cash provided by operating activities during fiscal 2025 was $1.4 billion, which resulted from net loss of $16.6 million, adjusted for non-cash charges of $1.4 billion and net cash outflow of $6.0 million from changes in operating assets and liabilities.
We expect sales and marketing expenses to increase in dollar amount as we continue to make significant investments in our sales and marketing organization to drive additional revenue, further penetrate the market, and expand our global customer base.
We also capitalize and amortize any such expenses paid for the renewal of a subscription over the term of the renewal. We expect sales and marketing expenses to increase in dollar amount as we continue to make significant investments in our sales and marketing organization to drive additional revenue, further penetrate the market, and expand our global customer base.
The increase in subscription cost of revenue was primarily due to an increase in employee-related expenses of $52.1 million driven by a 34% increase in average headcount, an increase in depreciation of data center equipment of $20.3 million, an increase in amortization of internal-use software of $15.8 million, an increase in allocated overhead costs of $12.6 million, an increase in stock-based compensation expense of $11.8 million, an increase in term-based software licenses of $5.2 million, and an increase in employee health benefits of $2.8 million.
The increase in subscription cost of revenue was primarily due to an increase in employee-related expenses of $55.6 million driven by a 28% increase in average headcount, an increase in depreciation of data center equipment of $38.4 million, an increase in stock-based compensation expense of $29.7 million, an increase in cloud hosting and related services costs of $28.5 million, an increase in allocated overhead costs of $20.3 million, an increase in amortization of internal-use software of $17.6 million, an increase in hardware maintenance costs of $5.4 million, and an increase in employee benefits of $4.2 million.
The net cash inflow from changes in operating assets and liabilities was primarily due to a $825.8 million increase in deferred revenue, a $58.9 million increase in accrued expenses and other liabilities, and a $65.2 million increase in accrued payroll and benefits, partially offset by a $298.7 million increase in deferred contract acquisition costs, a $258.1 million increase in accounts receivable, net, a $46.8 million increase in prepaid expenses and other assets, a $15.5 million decrease in accounts payable, and a $10.4 million decrease in operating lease liabilities. 70 Table of Contents Investing Activities Net cash used in investing activities during fiscal 2024 of $340.7 million was primarily due to business acquisitions, net of cash acquired, of $239.0 million, which was related to the Bionic acquisition, purchases of short-term investments of $195.6 million, purchases of property and equipment of $176.5 million, capitalized internal-use software and website development costs of $49.5 million, purchases of strategic investments of $17.2 million, purchases of intangible assets of $11.1 million, and purchases of deferred compensation investments of $2.0 million, partially offset by proceeds from maturities and sales of short-term investments of $348.3 million, and proceeds from sales of strategic investments of $2.0 million.
Net cash used in investing activities during fiscal 2024 of $340.7 million was primarily due to business acquisitions, net of cash acquired, of $239.0 million, which was related to the Bionic acquisition, purchases of short-term investments of $195.6 million, purchases of property and equipment of $176.5 million, capitalized internal-use software and website development costs of $49.5 million, purchases of strategic investments of $17.2 million, purchases of intangible assets of $11.1 million, and purchases of deferred compensation investments of $2.0 million, partially offset by proceeds from maturities and sales of short-term investments of $348.3 million, and proceeds from sales of strategic investments of $2.0 million.
Research and Development The following shows research and development expenses for fiscal 2024, as compared to fiscal 2023 (in thousands, except percentages): Change 2024 2023 $ % Research and development expenses $ 768,497 $ 608,364 $ 160,133 26 % Research and development expenses increased by $160.1 million, or 26% in fiscal 2024 , compared to fiscal 2023.
Research and Development The following shows research and development expenses for fiscal 2025, as compared to fiscal 2024 (in thousands, except percentages): Change 2025 2024 $ % Research and development expenses $ 1,076,901 $ 768,497 $ 308,404 40 % Research and development expenses increased by $308.4 million, or 40% in fiscal 2025 , compared to fiscal 2024.
Net cash provided by financing activities of $77.4 million during fiscal 2023 was primarily due to proceeds from our employee stock purchase plan of $59.4 million, $11.0 million of capital contributions from non-controlling interests, and proceeds from the exercise of stock options of $8.7 million, partially offset by the repayment of a loan acquired through Reposify of $1.6 million.
Net cash provided by financing activities of $93.2 million during fiscal 2024 was primarily due to proceeds from our employee stock purchase plan of $76.4 million, proceeds from the exercise of stock options of $8.7 million, and capital contributions from non-controlling interests of $8.1 million.
Consequently, a substantial portion of the revenue that we report in each period is attributable to the recognition of deferred revenue relating to subscriptions that we entered into during previous periods. The majority of our customers are invoiced annually in advance or multi-year in advance. Professional Services Revenue.
We generally invoice our subscription customers at the beginning of the subscription term, or in some instances, such as in multi-year arrangements, in installments. Consequently, a substantial portion of the revenue that we report in each period is attributable to the recognition of deferred revenue relating to subscriptions that we entered into during previous periods. Professional Services Revenue.
The increase in professional services gross margin was primarily due to increased utilization during fiscal 2024 compared to fiscal 2023. 65 Table of Contents Operating Expenses Sales and Marketing The following shows sales and marketing expenses for fiscal 2024, as compared to fiscal 2023 (in thousands, except percentages): Change 2024 2023 $ % Sales and marketing expenses $ 1,140,566 $ 904,409 $ 236,157 26 % Sales and marketing expenses increased by $236.2 million, or 26%, in fiscal 2024 , compared to fiscal 2023.
The decrease in professional services gross margin was primarily due to an increase in consulting expense and decreased utilization during fiscal 2025 compared to fiscal 2024. 68 Table of Contents Operating Expenses Sales and Marketing The following shows sales and marketing expenses for fiscal 2025, as compared to fiscal 2024 (in thousands, except percentages): Change 2025 2024 $ % Sales and marketing expenses $ 1,523,356 $ 1,140,566 $ 382,790 34 % Sales and marketing expenses increased by $382.8 million, or 34%, in fiscal 2025 , compared to fiscal 2024.
Provision for income taxes consists of state income taxes in the United States, foreign income taxes, and withholding taxes related to customer payments in certain foreign jurisdictions in which we conduct business.
Other income, net consists primarily of gains and losses on strategic investments and foreign currency transaction gains and losses. 65 Table of Contents Provision for Income Taxes. Provision for income taxes consists of state income taxes in the United States, foreign income taxes, and withholding taxes related to customer payments in certain foreign jurisdictions in which we conduct business.
We expect general and administrative expenses to increase in dollar amount over time. However, we anticipate general and administrative expenses to decrease as a percentage of our total revenue over time, although our general and administrative expenses may fluctuate as a percentage of our total revenue from period to period depending on the timing of these expenses. Interest Expense.
We expect general and administrative expenses to increase in dollar amount over time. We expect to incur significant legal and professional services and other expenses associated with the July 19 Incident in future periods. General and administrative expenses may fluctuate as a percentage of our total revenue from period to period depending on the timing of these expenses. Interest Expense.
The acquisition is expected to close in the first quarter of fiscal 2025. 72 Table of Contents As of January 31, 2024, our unrecognized tax benefits included $12.7 million, which were classified as long-term liabilities due to the inherent uncertainty with respect to the timing of future cash outflows associated with our unrecognized tax benefits.
As of January 31, 2025, our unrecognized tax benefits included $53.1 million, which were classified as long-term liabilities due to the inherent uncertainty with respect to the timing of future cash outflows associated with our unrecognized tax benefits.
Deferred revenue primarily consists of billed fees for our subscriptions, prior to satisfying the criteria for revenue recognition, which are subsequently recognized as revenue in accordance with our revenue recognition policy.
Therefore, a substantial source of our cash is from such prepayments, which are included on our consolidated balance sheets as deferred revenue. Deferred revenue primarily consists of billed fees for our subscriptions, prior to satisfying the criteria for revenue recognition, which are subsequently recognized as revenue in accordance with our revenue recognition policy.
This increase was primarily due to an increase in employee-related expenses of $101.8 million driven by an increase in research and development average headcount of 24%, an increase in stock-based compensation of $31.2 million, an increase in cloud hosting and related costs of $26.0 million, an increase in allocated overhead costs of $19.0 million, an increase in depreciation of data center equipment of $8.1 million, an increase in employee health benefits of $4.6 million, an increase in consulting expense of $2.2 million, and an increase in term-based software licenses of $1.5 million, partially offset by an increase in software capitalization of $18.5 million, a decrease in company events expenses of $11.0 million, and a decrease in travel expenses of $3.2 million.
This increase was primarily due to an increase in stock-based compensation expense of $131.7 million, an increase in employee-related expenses of $119.3 million driven by a 18% increase in average headcount, an increase in cloud hosting and related costs of $64.2 million, $6.8 million of expenses relating to the July 19 Incident, an increase in term-based software licenses of $6.4 million, an increase in employee benefits of $5.1 million, an increase in travel expenses of $3.2 million, and an increase in consulting expense of $1.7 million, partially offset by a decrease in allocated engineering and overhead costs of $27.5 million, an increase in software capitalization of $11.4 million, and a decrease in other labor expenses of $9.7 million.
Professional services cost of revenue increased by $35.4 million, or 40%, in fiscal 2024 , compared to fiscal 2023.
Professional services cost of revenue increased by $31.0 million, or 25%, in fiscal 2025 , compared to fiscal 2024.
General and Administrative The following shows general and administrative expenses for fiscal 2024, as compared to fiscal 2023 (in thousands, except percentages): Change 2024 2023 $ % General and administrative expenses $ 392,764 $ 317,344 $ 75,420 24 % General and administrative expenses increased by $75.4 million, or 24%, in fiscal 2024, compared to fiscal 2023.
General and Administrative The following shows general and administrative expenses for fiscal 2025, as compared to fiscal 2024 (in thousands, except percentages): Change 2025 2024 $ % General and administrative expenses $ 482,316 $ 392,764 $ 89,552 23 % General and administrative expenses increased by $89.6 million, or 23%, in fiscal 2025, compared to fiscal 2024.
The net cash inflow from changes in operating assets and liabilities was primarily due to a $696.6 million increase in deferred revenue, a $65.1 million increase in accrued payroll and benefits, a $14.6 million increase in accrued expenses and other liabilities, partially offset by a $371.6 million increase in deferred contract acquisition costs, a $217.7 million increase in accounts receivable, net, a $102.5 million increase in prepaid expenses and other assets, a $18.9 million decrease in accounts payable, and a $14.0 million decrease in operating lease liabilities.
The net cash outflow from changes in operating assets and liabilities was primarily due to a $584.5 million increase in deferred contract acquisition costs, a $274.2 million increase in accounts receivable, net, a $190.2 million increase in prepaid expenses and other assets, and a $15.7 million decrease in operating lease liabilities, partially offset by a $669.3 million increase in deferred revenue, a $218.5 million increase in accrued expenses and other liabilities, an $85.9 million increase in accrued payroll and benefits, and an $84.9 million increase in accounts payable.
The increase in general and administrative expenses was primarily due to an increase in stock-based compensation expense of $31.5 million, an increase in legal expense of $15.1 million, an increase in employee-related expenses of $15.0 million driven by an increase in general and administrative average headcount of 23%, an increase in allocated overhead costs of $3.7 million, an increase in labor and other expenses of $3.6 million, an increase in travel expenses of $2.3 million, an increase in taxes and licenses of $1.9 million, and an increase in consulting expense of $1.6 million. 66 Table of Contents Interest Expense, Interest Income and Other Income, Net The following shows interest expense, interest income, and other income, net, for fiscal 2024, as compared to fiscal 2023 (in thousands, except percentages): Change 2024 2023 $ % Interest expense $ (25,756) $ (25,319) $ (437) 2 % Interest income $ 148,930 $ 52,495 $ 96,435 184 % Other income, net $ 1,638 $ 3,053 $ (1,415) (46) % Interest expense consists primarily of amortization of debt issuance costs, contractual interest expense, accretion of debt discount for our Senior Notes issued in January 2021, and amortization of debt issuance costs on our secured revolving credit facility.
The increase in general and administrative expenses was primarily due to $31.9 million of expenses relating to the July 19 Incident, an increase in employee-related expenses of $27.2 million driven by a 19% increase in average headcount, an increase in allocated overhead costs of $6.3 million, an increase in consulting expense of $5.0 million, an increase in leased airfare costs of $4.5 million, an increase in stock-based compensation expense of $4.0 million, an increase in travel expenses of $2.3 million, an increase in company events expenses of $2.1 million, an increase in term-based software licenses of $2.1 million, an increase in taxes and licenses expenses of $2.0 million, an increase in employee related programs of $1.8 million, and an increase in other labor expenses of $1.7 million, partially offset by a decrease in legal expense of $7.5 million unrelated to the July 19 Incident. 69 Table of Contents Interest Expense, Interest Income and Other Income, Net The following shows interest expense, interest income, and other income, net, for fiscal 2025, as compared to fiscal 2024 (in thousands, except percentages): Change 2025 2024 $ % Interest expense $ (26,311) $ (25,756) $ (555) 2 % Interest income $ 196,174 $ 148,930 $ 47,244 32 % Other income, net $ 5,101 $ 1,638 $ 3,463 211 % Interest expense consists primarily of amortization of debt issuance costs, contractual interest expense, accretion of debt discount for our Senior Notes issued in January 2021, and amortization of debt issuance costs on our Revolving Facility.
We expect that the combination of our existing cash and cash equivalents, short-term investments, cash flows from operations, and the A&R Credit Agreement will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next 12 months.
However, despite such uncertainties, we expect that the combination of our existing cash and cash equivalents, cash flows from operations, and the Revolving Facility will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next 12 months. Our Revolving Facility matures on January 2, 2026.
Our ability to fund these requirements will depend, in part, on our future cash flows, which are determined by our future operating performance and, therefore, subject to prevailing global macroeconomic conditions and financial, business, and other factors, some of which are beyond our control.
Our ability to fund these requirements will depend, in part, on our future cash flows, which are determined by our future operating performance and, therefore, subject to prevailing global macroeconomic conditions and financial, business, and other factors, some of which are beyond our control. 70 Table of Contents We have historically generated operating losses prior to fiscal 2024 and during fiscal 2025, as reflected in our accumulated deficit of $1.1 billion as of January 31, 2025.
The increase in sales and marketing expenses was primarily due to an increase in employee-related expenses of $119.9 million driven by an increase in sales and marketing average headcount of 20%, an increase in marketing programs of $45.3 million, an increase in stock-based compensation of $23.9 million, an increase in allocated overhead costs of $16.3 million, an increase in travel expenses of $6.7 million, an increase in company events expenses of $6.0 million, an increase in employee health benefits of $5.4 million, an increase in term-based software licenses of $2.6 million, an increase in taxes and licenses of $2.0 million, and an increase in marketing consulting expenses of $1.1 million.
The increase in sales and marketing expenses was primarily due to an increase in employee-related expenses of $159.0 million driven by a 14% increase in average headcount, an increase in stock-based compensation expense of $59.7 million, an increase in marketing programs of $55.5 million, an increase in allocated overhead costs of $28.4 million, $21.4 million of expenses relating to the July 19 Incident, an increase in travel expenses of $13.1 million, an increase in company events expenses of $8.6 million, an increase in employee benefits of $6.3 million, an increase in term-based software licenses of $5.4 million, an increase in cloud hosting and related costs of $4.2 million, an increase in other labor expenses of $2.8 million, and an increase in consulting expense of $2.5 million.
Subscription cost of revenue increased by $119.1 million, or 23%, in fiscal 2024 , compared to fiscal 2023.
Subscription cost of revenue increased by $204.8 million, or 32%, in fiscal 2025 , compared to fiscal 2024.
The decrease in other income, net during fiscal 2024 compared to fiscal 2023 was primarily due to a decrease in mark to market adjustments of $3.3 million on our strategic investments and an increase in net foreign currency transaction losses of $2.3 million, partially offset by an increase in gains on sales of our strategic investments of $3.9 million.
The increase in other income, net during fiscal 2025 compared to fiscal 2024 was primarily due to an increase in gains on our strategic investments of $2.4 million, a decrease in downward mark to market adjustments of $0.5 million on our strategic investments, and gains on deferred compensation assets of $0.4 million.
Our dollar-based net retention rate can fluctuate from period to period due to large customer contracts in a given period, which may reduce our dollar-based net retention rate in subsequent periods if the customer makes a larger upfront purchase and does not continue to increase the size of their purchases.
Our dollar-based net retention rate can fluctuate from period to period due to large customer contracts in a given period and incentives provided, which may reduce our dollar-based net retention rate in subsequent periods.
Research and development expenses primarily consist of employee-related expenses such as salaries and bonuses; stock-based compensation; cloud hosting and related costs; and an allocated portion of facilities and administrative expenses.
Research and development expenses primarily consist of employee-related expenses such as salaries and bonuses; stock-based compensation; cloud hosting and related costs; and an allocated portion of facilities and administrative expenses. Our cloud platform is software-driven, and our research and development teams employ software engineers in the design, and the related development, testing, certification, and support of these solutions.
Furthermore, we expect our general and administrative expenses to increase in dollar amount for the foreseeable future given the additional expenses for accounting, compliance, and investor relations as we grow as a public company. Key Metrics We monitor the following key metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions.
Furthermore, we expect our general and administrative expenses to increase in dollar amount for the foreseeable future given the additional expenses for accounting, compliance, and investor relations as we grow as a public company. July 19 Incident .
Critical Accounting Policies and Estimates Our management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements and notes to our consolidated financial statements, which were prepared in accordance with U.S. GAAP.
As of January 31, 2025, we had non-cancellable unfunded commitments from our financing arrangements totaling approximately $94.2 million. 73 Table of Contents Critical Accounting Policies and Estimates Our management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements and notes to our consolidated financial statements, which were prepared in accordance with U.S.
Net cash provided by operating activities during fiscal 2023 was $941.0 million, which resulted from a net loss of $182.3 million, adjusted for non-cash charges of $802.9 million and net cash inflow of $320.4 million from changes in operating assets and liabilities.
Net cash provided by operating activities during fiscal 2024 was $1.2 billion, which resulted from net income of $90.6 million, adjusted for non-cash charges of $1.0 billion and net cash inflow of $51.5 million from changes in operating assets and liabilities.
GAAP. 71 Table of Contents Statement of Operations Year Ended January 31, 2024 (in thousands) Revenue $ 3,055,178 Cost of revenue 795,433 Operating expenses 2,320,534 Loss from operations (60,789) Net income 35,530 Net income attributable to CrowdStrike 35,530 Balance Sheet January 31, 2024 (in thousands) Current assets (excluding current intercompany receivables from non-Guarantors) $ 4,563,521 Current intercompany receivables from non-Guarantors 24,716 Noncurrent assets (excluding noncurrent intercompany receivables from non-Guarantors) 1,605,308 Noncurrent intercompany receivables from non-Guarantors 280,426 Current liabilities 2,605,892 Noncurrent liabilities (excluding noncurrent intercompany payables to non-Guarantors) 1,586,566 Noncurrent intercompany payables to non-Guarantors — Strategic Investments In July 2019, we agreed to commit up to $10.0 million to a newly formed entity, CrowdStrike Falcon Fund LLC (the “Original Falcon Fund”) in exchange for 50% of the sharing percentage of any distribution by the Original Falcon Fund.
GAAP. 72 Table of Contents Statement of Operations Year Ended January 31, 2025 (in thousands) Revenue $ 3,948,062 Cost of revenue 1,022,627 Operating expenses 3,063,076 Loss from operations (137,641) Net loss (36,365) Net loss attributable to CrowdStrike (36,365) Balance Sheet January 31, 2025 (in thousands) Current assets (excluding current intercompany receivables from non-Guarantors) $ 5,922,562 Current intercompany receivables from non-Guarantors 49,417 Noncurrent assets (excluding noncurrent intercompany receivables from non-Guarantors) 2,316,545 Noncurrent intercompany receivables from non-Guarantors 613,732 Current liabilities (excluding current intercompany payables to non-Guarantors) 3,331,647 Current intercompany payables to non-Guarantors 31,092 Noncurrent liabilities (excluding noncurrent intercompany payables to non-Guarantors) 1,897,235 Noncurrent intercompany payables to non-Guarantors 234,643 Strategic Investments In July 2019, we agreed to commit up to $10.0 million to a newly formed entity, CrowdStrike Falcon Fund LLC (the “Original Falcon Fund”) in exchange for 50% of the sharing percentage of any distribution by the Original Falcon Fund.
Non-cash charges primarily consisted of $526.5 million in stock-based compensation expense, $170.8 million of amortization of deferred contract acquisition costs, $77.2 million of depreciation and amortization, $16.6 million of amortization for intangibles assets, $9.4 million of non-cash operating lease costs, and $2.8 million of non-cash interest expense, partially offset by a $1.8 million change in the fair value of strategic investments.
Non-cash charges primarily consisted of $865.4 million in stock-based compensation expense, $318.8 million of amortization of deferred contract acquisition costs, $188.0 million of depreciation and amortization, $26.0 million of amortization of intangibles assets, $15.3 million of non-cash operating lease costs, $3.8 million of non-cash interest expense, and $2.3 million of accretion of short-term investments purchased at a discount, partially offset by $9.9 million of deferred income taxes and $6.3 million of realized gains on strategic investments.
Due to recent profitability, a material reversal of our valuation allowance in U.S. jurisdictions in the foreseeable future is reasonably possible. Net Income Attributable to Non-controlling Interest . Net income attributable to non-controlling interest consists of the Falcon Funds’ non-controlling interest share of gains and losses and interest income from our strategic investments.
Net income attributable to non-controlling interest consists of the Falcon Funds’ non-controlling interest share of gains and losses and interest income from our strategic investments.
Cost of Revenue, Gross Profit, and Gross Margin The following shows cost of revenue related to subscriptions and professional services for fiscal 2024, as compared to fiscal 2023 (in thousands, except percentages): Change 2024 2023 $ % Subscription $ 630,745 $ 511,684 $ 119,061 23 % Professional services 124,978 89,547 35,431 40 % Total cost of revenue $ 755,723 $ 601,231 $ 154,492 26 % Total cost of revenue increased by $154.5 million, or 26%, in fiscal 2024 , compared to fiscal 2023.
Cost of Revenue, Gross Profit, and Gross Margin The following shows cost of revenue related to subscriptions and professional services for fiscal 2025, as compared to fiscal 2024 (in thousands, except percentages): Change 2025 2024 $ % Subscription $ 835,509 $ 630,745 $ 204,764 32 % Professional services 155,972 124,978 30,994 25 % Total cost of revenue $ 991,481 $ 755,723 $ 235,758 31 % Total cost of revenue increased by $235.8 million, or 31%, in fiscal 2025 , compared to fiscal 2024.
The following shows gross profit and gross margin for subscriptions and professional services for fiscal 2024, as compared to fiscal 2023 (in thousands, except percentages): Change 2024 2023 $ % Subscription gross profit $ 2,239,812 $ 1,599,976 $ 639,836 40 % Professional services gross profit 60,020 40,029 19,991 50 % Total gross profit $ 2,299,832 $ 1,640,005 $ 659,827 40 % Change 2024 2023 Subscription gross margin 78 % 76 % 2 % Professional services gross margin 32 % 31 % 1 % Total gross margin 75 % 73 % 2 % Subscription gross margin increased by 2% in fiscal 2024 , compared to fiscal 2023.
The following shows gross profit and gross margin for subscriptions and professional services for fiscal 2025, as compared to fiscal 2024 (in thousands, except percentages): Change 2025 2024 $ % Subscription gross profit $ 2,925,971 $ 2,239,812 $ 686,159 31 % Professional services gross profit 36,172 60,020 (23,848) (40) % Total gross profit $ 2,962,143 $ 2,299,832 $ 662,311 29 % Change 2025 2024 Subscription gross margin 78 % 78 % — % Professional services gross margin 19 % 32 % (13) % Total gross margin 75 % 75 % — % Subscription gross margin was flat in fiscal 2025 , compared to fiscal 2024.
Sales and marketing expenses also include stock-based compensation; expenses related to our Fal.Con customer conference and other marketing events; an allocated portion of facilities and administrative expenses; amortization of acquired intangibles; and cloud hosting and related services costs related to proof of value efforts.
Sales and marketing expenses also include stock-based compensation; expenses related to our marketing programs; and an allocated portion of facilities and administrative expenses.
Our cloud platform is software-driven, and our research and development teams employ software engineers in the design, and the related development, testing, certification, and support of these solutions. 68 Table of Contents We expect research and development expenses to increase in dollar amount as we continue to increase investments in our technology architecture and software platform.
We expect research and development expenses to increase in dollar amount as we continue to increase investments in our technology architecture and software platform.
Provision for Income Taxes The following shows the provision for income taxes for fiscal 2024, as compared to fiscal 2023 (in thousands, except percentages): Change 2024 2023 $ % Provision for income taxes $ 32,232 $ 22,402 $ 9,830 44 % The increase in provision for income taxes during fiscal 2024 compared to fiscal 2023 was primarily attributable to an increase in withholding taxes related to customer payments in certain foreign jurisdictions in which the Company conducts business.
Provision for Income Taxes The following shows the provision for income taxes for fiscal 2025, as compared to fiscal 2024 (in thousands, except percentages): Change 2025 2024 $ % Provision for income taxes $ 71,130 $ 32,232 $ 38,898 121 % The increase in provision for income taxes during fiscal 2025 compared to fiscal 2024 was primarily attributable to intercompany sales of intellectual property from acquired entities, pre-tax foreign earnings, withholding taxes related to customer payments in certain foreign jurisdictions, and change in the realizability of deferred tax assets in certain foreign jurisdictions.
Components of Our Results of Operations Revenue Subscription Revenue. Subscription revenue primarily consists of subscription fees for our Falcon platform and additional cloud modules that are supported by our cloud-based platform. Subscription revenue is driven primarily by the number of subscription customers, the number of endpoints per customer, and the number of cloud modules included in the subscription.
As of January 31, 2025 2024 Dollar-based net retention rate 112 % 119 % 63 Table of Contents Components of Our Results of Operations Revenue Subscription Revenue. Subscription revenue primarily consists of subscription fees for our Falcon platform and additional cloud modules that are supported by our cloud-based platform.
We recognize subscription revenue ratably over the term of the agreement, which is generally one to three years. Because the majority of our subscription customers are billed upfront, we have recorded significant deferred revenue.
Subscription revenue is driven primarily by the number of subscription customers, the number of endpoints per customer, and the number of cloud modules included in the subscription. We recognize subscription revenue ratably over the term of the agreement, which is generally one to three years.
Net cash used in investing activities during fiscal 2023 of $556.7 million was primarily due to purchases of investments of $250.0 million, purchases of property and equipment of $235.0 million, capitalized internal-use software and website development costs of $29.1 million, purchases of strategic investments of $21.8 million, business acquisitions, net of cash acquired, of $18.3 million, which were primarily related to the Reposify acquisition, and purchases of intangible assets of $2.3 million Financing Activities Net cash provided by financing activities of $93.2 million during fiscal 2024 was primarily due to proceeds from our employee stock purchase plan of $76.4 million, proceeds from the exercise of stock options of $8.7 million, and capital contributions from non-controlling interests of $8.1 million.
Financing Activities Net cash provided by financing activities of $107.2 million during fiscal 2025 was primarily due to proceeds from our employee stock purchase plan of $99.6 million, capital contributions from non-controlling interest holders of $8.5 million, and proceeds from the exercise of stock options of $4.0 million, partially offset by distributions to non-controlling interest holders of $4.9 million.
Treasury bills, (iii) cash we expect to generate from operations, and (iv) available capacity under our $750.0 million senior secured revolving credit facility (the “A&R Credit Agreement”).
Treasury bills, (ii) cash we expect to generate from operations, and (iii) available capacity under our $750.0 million Revolving Facility. It is not currently possible to reasonably estimate the amount of loss or range of possible loss that might result from adverse judgments, settlements, penalties, or other resolution of proceedings resulting from the July 19 Incident.
The increase in subscription gross margin was primarily due to an increase in cloud hosting efficiency during fiscal 2024 compared to fiscal 2023. Professional services gross margin increased by 1% in fiscal 2024, compared to fiscal 2023 .
Professional services gross margin decreased by 13% in fiscal 2025, compared to fiscal 2024 .
As a result, we may require additional capital resources in the future to execute strategic initiatives to grow our business. 69 Table of Contents We typically invoice our subscription customers annually in advance. Therefore, a substantial source of our cash is from such prepayments, which are included on our consolidated balance sheets as deferred revenue.
We expect to continue to make investments, particularly in sales and marketing and research and development. As a result, we may require additional capital resources in the future to execute strategic initiatives to grow our business. We generally invoice our subscription customers at the beginning of the subscription term, or in some instances, such as in multi-year arrangements, in installments.
Removed
Other income, net consists primarily of gain and losses on strategic investments, foreign currency transaction gains and losses, and gains and losses on cash and cash equivalents and short-term investments. Provision for Income Taxes.
Added
On July 19, 2024, we released a content configuration update for our Falcon sensor that resulted in system crashes for certain Windows systems (the “July 19 Incident”).
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We have historically generated operating losses prior to fiscal 2024, as reflected in our accumulated deficit of $1.1 billion as of January 31, 2024. We expect to continue to make investments, particularly in sales and marketing and research and development.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur short-term investments consist of U.S. Treasury bills and time deposits. Our investments do not have significant interest rate risk, as the yields on our investments are fixed rates. As of January 31, 2024, we had cash and cash equivalents of $3.4 billion and short-term investments of $99.6 million.
Biggest changeOur short-term investments consist of U.S. Treasury bills and time deposits. Our investments do not have significant interest rate risk, as the yields on our investments are fixed rates. As of January 31, 2025, we had cash and cash equivalents of $4.3 billion.
The effect of a hypothetical 100 basis point change in interest rates would not have had a material effect on the fair market value of our portfolio as of January 31, 2024 or January 31, 2023. We therefore do not expect our results of operations or cash flows to be materially affected by a sudden change in market interest rates.
The effect of a hypothetical 100 basis point change in interest rates would not have had a material effect on the fair market value of our portfolio as of January 31, 2025 or January 31, 2024. We therefore do not expect our results of operations or cash flows to be materially affected by a sudden change in market interest rates.
If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition, and results of operations. 75 Table of Contents
If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition, and results of operations. 76 Table of Contents
Inflation Rate Risk We do not believe that inflation had a material effect on our business, financial condition, or results of operations during the fiscal years ended January 31, 2024, January 31, 2023, or January 31, 2022.
Inflation Rate Risk We do not believe that inflation had a material effect on our business, financial condition, or results of operations during the fiscal years ended January 31, 2025, January 31, 2024, or January 31, 2023.
A hypothetical 10% adverse change in the U.S. dollar against other currencies would have resulted in an increase in operating loss of approximately $75.8 million, $55.5 million and $36.3 million for the fiscal years ended January 31, 2024, January 31, 2023 and January 31, 2022 respectively.
A hypothetical 10% adverse change in the U.S. dollar against other currencies would have resulted in an increase in operating loss of approximately $108.3 million, $75.8 million and $55.5 million for the fiscal years ended January 31, 2025, January 31, 2024 and January 31, 2023 respectively.
As of January 31, 2023, we had cash and cash equivalents of $2.5 billion and short-term investments of $250.0 million. The primary objectives of our investment activities are the preservation of capital, the fulfillment of liquidity needs, and the fiduciary control of cash and investments. We do not enter into investments for trading or speculative purposes.
As of January 31, 2024, we had cash and cash equivalents of $3.4 billion and short-term investments of $99.6 million. The primary objectives of our investment activities are the preservation of capital, the fulfillment of liquidity needs, and the fiduciary control of cash and investments. We do not enter into investments for trading or speculative purposes.