Growth Slowing, Losses Widening

CrowdStrike Holdings, Inc. · FY2026, the year to January 2026 · Currency note: CrowdStrike reports in US dollars and the model holds per-share figures in cents — a share price of 21,002 is $210.02, earnings per share of -16.20 is -$0.162, and 93.2c is $0.932.

CrowdStrike is a cybersecurity company specialising in security verticals and cloud workload security operations, and threats to AI and IT infrastructure.

In plain English: a security vertical is a distinct product line within security — protecting laptops and servers, protecting identities and logins, monitoring threats — each sold separately but running off the same platform. A cloud workload is any application or process running on rented infrastructure rather than on a machine the customer owns, so securing it means watching software that the customer cannot physically touch.

Revenue rose 21.7% to $4,812m. Total expenses were $4,939m against that turnover, which is the operating loss of $293m — the largest in the company's history in absolute terms, and a step back from the near break-even of 2024.

Below the operating line, the picture changes shape. Pre-tax profit (profit before the tax bill, often shortened to PBT) was positive in 2024 and 2025 because of interest income on the cash pile. Last year it was negative again, at -$127m. At the post-tax level — after tax, the bottom line that belongs to shareholders — only 2024 was a profitable year.

FY2026 versus FY2025

Revenue has gone from $874m to $4.8bn in five years, but the growth rate has fallen every single year, from 81.6% to 21.7%.

The company, looking all the way back through the 2021 figures, has always lost money except for one year, in 2024, when it made a post-tax profit of $73m. Last year it hit a very high level of loss, a post-tax loss of $161m — five losses out of six years, and last year's loss was the second largest.

Shares in issue increased as well, from 991.5m to 1,013.5m, up 2.2% in the year and up 25% since 2021. More shares divide the same earnings into smaller slices, which is why the per-share figures below fall faster than the headline profit numbers.

Six-year record, FY2021–FY2026

Two things, and they pull in opposite directions.

• The growth is real but it is shrinking. In 2022 they hit 66% revenue growth, 2023 they hit 54%, 2024 they hit 36%, 2025 29.4%, and last year 21.7%. They are still growing very rapidly. But that growth is shrinking.
• The losses are not a cost of sales problem. The gross margin — what is left of each sales dollar after the direct cost of delivering the service — has held at roughly 74% to 75% throughout. The money goes elsewhere: total expenses of $4,939m against turnover of $4,812m.

And then the figure that does most of the damage to the bull case. Even the adjusted earnings per share, which strip out share-based compensation and are the figures the market tends to quote, went backwards last year, from 98.2c to 93.2c, after rising every year to 2025.

The tear sheet as run uses the reported EPS of -16.2c and the minimum 0.01% growth rate, which produces a negative valuation and a -100.6% value opportunity; that is the mechanical output of a loss-making company and not very informative. The table below is reproduced from the tear sheet unchanged, and the working I actually used is set out beneath it.

Here is that working. If I plug in a totally arbitrary 200 cents per share profit with a 25% growth rate — and I want to highlight that these figures are pretty make-believe, a bit over double their adjusted earnings — we would still come out well below the current share price. Last year, if we ignore their reported earnings per share and just use their adjusted earnings per share, they still hit 93.2 cents per share.

For reference, the company's own guidance for the current year to January 2027 is for non-GAAP net income per diluted share of $4.78 to $4.90 on the pre-split count, which is roughly 120c to 123c per share after the split, on revenue of $5.87bn to $5.93bn, or 22% to 23% growth. So even taking management's adjusted number for the year ahead, it is still around 40% short of the 200c I have used, and the growth rate is not 25%.

With this high level of growth in earnings per share, we would still come out at a valuation of 4,800, against a current share price of 21,002, which would be a -77.1% value opportunity. As a result, I don't think it's worth us looking into the company further.

VALUATION SNAPSHOT

Override case — the working I actually used

• Growth keeps decelerating: 81.6%, 66.0%, 54.4%, 36.3%, 29.4%, 21.7%. Management's own guidance for the year to January 2027 is 22% to 23% growth, so the deceleration is expected to flatten rather than reverse.
• The operating loss is widening, not narrowing: -$19m in 2024, -$116m in 2025, -$293m last year. The near break-even of 2024 has not been repeated.
• The adjusted number has turned too: adjusted EPS fell from 98.2c to 93.2c after rising every year to 2025. If the figures the market tends to quote stop rising, the case for the price gets harder to make.
• Continuing dilution: shares in issue up 2.2% in the year and up 25% since 2021, so each share owns a smaller fraction of whatever profit eventually arrives.
• Interest income is doing the heavy lifting below the operating line: pre-tax profit was positive in 2024 and 2025 because of interest income on the cash pile, not because the operating business made money.
• Risk that the Pass is wrong: the formula is a formula. It values a loss-making company at a negative number, and even the generous override caps out at 4,800c. If the market is right and the earnings power is far larger than anything in this six-year record, the Pass costs the upside. The risk factor on this name is 20% and the probability is 50%.

• Reported profit, not adjusted profit: a year of genuine post-tax profit at the reported level, so the model has a positive EPS to work with rather than the -16.2c it has now.
• The operating loss reversing: total expenses coming back below turnover, after last year's $4,939m against $4,812m.
• Growth stabilising rather than sliding: the decelerating run of 81.6% to 21.7% flattening out, or the current-year 22% to 23% guidance being beaten.
• Adjusted EPS resuming its rise: a recovery from 93.2c back above the 98.2c peak, rather than a second year backwards.
• Earnings anywhere near the implied figure: the price needs around 875c of earnings per share on my multiple. Nothing short of a step change in that direction closes a -77.1% gap on generous assumptions.