CrowdStrike held on to its customers, avoiding significant customer losses in the wake of its defective Falcon software update that caused a global IT network outage over the summer, the cybersecurity vendor said Tuesday during an earnings call.
“Falcon customers are staying with CrowdStrike as their trusted cybersecurity platform of choice,” CEO George Kurtz said Tuesday during the earnings call for the company’s Q3 fiscal 2025, which ended Oct. 31. “Q3 gross retention was over 97%, down less than half a percentage point.”
Q3 marked the first full quarter following the July 19 incident, which put CrowdStrike’s reputation on the line. The aftermath of one of the largest global IT outages in history prompted a quick apology and testimony on Capitol Hill. The company also promised to make a series of internal changes designed to prevent similar errors and earn back trust.
“Although true that we are a little further from the sun, we’re still kind of fighting through the incident,” CFO Burt Podbere said during the earnings call.
CrowdStrike’s revenue increased almost 29% year over year to $1 billion, yet the company swung to a net loss of $16.8 million. The loss was “primarily due to $33.9 million in expenses related to the July 19 incident,” Podbere said.
The company’s “customer commitment packages,” discounts it’s offering some customers through the second half of this year, are generating longer-term deals and increased adoption of CrowdStrike services, the company said.
Kurtz pointed to some churn in the managed security services space, but said that’s common and not indicative of the broader customer retention performance.
“I’m encouraged by the conversation that I’m having with our largest customers, and a reflection on the fact that they realize that we have the best tech in the industry, and the ability to stop breaches and drive down overall operational costs from a platform perspective,” Kurtz said.
CrowdStrike’s annual recurring revenue was up 27% year over year, but down from 35% a year prior. The company reiterated it anticipates ARR to increase in the second half of next year.
