CrowdStrike Holdings Inc. (NASDAQ:CRWD)

The common-size income statement reveals a significant shift in the company’s financial performance between 2021 and 2026. Initially operating with losses, the company achieved profitability in 2023 and 2024, though profitability declined in the later forecast years. Revenue composition and expense management demonstrate notable changes over the period.

Revenue Composition

Subscription revenue consistently represents the vast majority of total revenue, ranging from 92.02% to 95.14% over the analyzed period. While generally stable, a slight increase is projected in 2025 before a minor decrease in 2026. Professional services revenue, conversely, exhibits a decreasing trend as a percentage of total revenue, falling from 7.98% in 2021 to 5.14% in 2026. This suggests a growing reliance on subscription-based income.

Cost of Revenue & Gross Profit

Cost of revenue as a percentage of revenue decreased from 26.25% in 2021 to 24.73% in 2024, contributing to an increase in gross profit margin. However, cost of revenue increased slightly in 2025 and 2026, reaching 25.33% of revenue, resulting in a corresponding decrease in gross profit margin. Gross profit remained relatively stable between 73.17% and 75.27% of revenue during the period.

Operating Expenses

Operating expenses, encompassing sales and marketing, research and development, and general and administrative costs, initially constituted a substantial 84.33% of revenue in 2021. These expenses decreased significantly to 75.33% in 2024, indicating improved operational efficiency. However, operating expenses began to rise again in 2025 and 2026, reaching 80.76% of revenue, driven primarily by increases in research and development spending. Sales and marketing expenses show a consistent decline as a percentage of revenue, while general and administrative expenses fluctuate.

Profitability

The company experienced a loss from operations in the early years, peaking at -10.58% of revenue in 2021. This loss narrowed considerably, turning into a slight profit of 0.07% in 2024. However, losses from operations re-emerged in 2025 and 2026, reaching -6.10% of revenue. Net income (loss) followed a similar pattern, transitioning from a loss of -10.59% in 2021 to a profit of 2.96% in 2024, before declining to a loss of -3.35% in 2026. Interest income increased significantly over the period, partially offsetting interest expense and contributing to improved income before taxes.

Tax Impact

The provision for income taxes varied considerably, reflecting the company’s profitability. A substantial tax expense was recorded in 2022, despite the overall net loss, likely due to taxable temporary differences. The tax rate fluctuated significantly, impacting net income attributable to the company.

Net Income Attributable to Non-Controlling Interest

Net income attributable to non-controlling interest is a small percentage of revenue and consistently negative, indicating a minor drag on overall profitability. This impact remains relatively stable throughout the forecast period.

In summary, the company demonstrated a positive trajectory towards profitability, achieving a brief period of net income before experiencing renewed losses in the later forecast years. The increasing investment in research and development, coupled with rising operating expenses, appears to be a key factor contributing to this recent decline. The continued dominance of subscription revenue provides a stable foundation, but managing expense growth will be crucial for sustained profitability.