CrowdStrike

Components and weights we consider: switching costs 30 percent, data network effects 30 percent, intangible assets 20 percent, cost advantage 10 percent, efficient scale 10 percent.

Switching costs 85/100: endpoint agents, response playbooks, SOC workflows and multi‑module contracts make rip‑and‑replace painful at enterprise scale; the July 2024 incident showed switching is possible but rare given recovery frictions.

Data network effects 80/100: the Falcon Threat Graph, Falcon Complete and OverWatch provide a compounding data and human‑in‑the‑loop advantage that powers Charlotte AI and agentic workflows. Intangibles 78/100: a six‑time Leader in Gartner’s EPP MQ reinforces brand and trust, partly offset by outage optics.

Cost advantage 65/100: scale helps, but Microsoft’s bundle undermines pure price power and can compress deal ASPs in bake‑offs. Efficient scale 60/100: security is large with room for several scaled winners; CrowdStrike benefits from partner ecosystems and consolidation but not a natural monopoly.

On balance, the weighted moat score is 78, reflecting multiple reinforcing moats that are strong yet not impervious.

Evidence of pricing power includes stable ~80 percent subscription gross margins, sustained multi‑module expansion and Flex‑driven consolidation deals. However, post‑outage customer‑commitment incentives and cash payments indicate near‑term price and revenue concessions.

Competition from Microsoft bundling and Palo Alto’s platformization keeps list‑price hikes in check. We see pricing leverage via cross‑sell and platform breadth rather than unit price increases.

CrowdStrike’s model is highly recurring, with subscription revenue around 95 percent of total and ARR at 4.66 billion dollars in Q2 FY26. Gross retention runs near 97 percent and dollar‑based net retention was cited at about 112 percent in Q4 FY25 commentary.

TTM revenue across Q3 FY25 to Q2 FY26 approximates 4.34 billion dollars, with TTM free cash flow around 1.03 billion dollars, providing visibility. Macro budget cycles and competitive bake‑offs inject some variability, but the base remains resilient and diversified across regions and verticals.

As of July 31, 2025, cash and cash equivalents were about 4.97 billion dollars versus 750 million dollars of 3.00 percent senior notes due 2029, leaving material net cash and ample liquidity.

TTM free cash flow is roughly 1.03 billion dollars, and the company generated a record 284 million dollars of FCF in Q2 FY26. There is no reliance on the revolver, and free cash flow comfortably covers interest and strategic investments. GAAP losses stem largely from stock‑based compensation rather than economic weakness.

Management prioritizes organic R&D and selective M&A to deepen the platform. The planned Onum acquisition improves data plumbing for next‑gen SIEM. Fiscal 2026 includes a 1 billion dollar repurchase authorization, likely to offset dilution.

SBC remains elevated (e.g., about 284 million dollars in Q2 FY26 and 556 million dollars in the first half), which depresses GAAP profitability and requires scrutiny. Capex is modest relative to scale. Overall, a solid but not flawless record given SBC and the need for continuing QA investment post‑incident.

Founder‑CEO George Kurtz and CFO Burt Podbere are widely respected operators who scaled the company and navigated a major incident while maintaining customer retention and platform momentum. Leadership is pushing an ambitious agentic AI roadmap and landing blue‑chip partnerships.

That said, recent reports show Kurtz significantly reduced his voting power through gifts and recurring share sales for tax withholding, slightly lowering the founder‑owner alignment signal. The 5 percent workforce reduction in 2025 was framed as AI efficiency but drew some external criticism.

Net view: experienced, execution‑oriented team with high credibility, balanced by governance optics.