Morning Note: Market News and crowdstrike
Market News
U.S. Markets: U.S. stocks closed higher on Tuesday, with the S&P 500 finishing at 5,970.37 (+34.43, +0.58%) and the Nasdaq Composite at 19,398.96 (+156.34, +0.81%). The Dow Jones Industrial Average also advanced, marking its fourth consecutive day of gains.
Asia: In Asia, the Hang Seng Index rose 0.57% to 23,645, buoyed by gains in technology and electric vehicle stocks amid optimism over potential trade de-escalation and stimulus measures in China.
China: China's manufacturing sector showed signs of contraction, with the Caixin/S&P Global Manufacturing PMI falling to 48.3 in May from 50.4 in April, marking the first decline in eight months and the lowest reading since September 2022. The decline was attributed to weaker overseas demand and new orders.
UK Trade: President Trump signed a proclamation doubling tariffs on steel and aluminium imports from 25% to 50%, effective June 4, 2025. However, the United Kingdom was exempted from this increase, maintaining tariffs at 25% as both countries work towards finalizing a trade agreement.
China Trade: Donald Trump said on social media that Xi Jinping is “very tough, and extremely hard” to make a deal with, underscoring ongoing tensions between the world’s largest economies. Foreign Affairs Minister Wang Yi used his first meeting with the new US ambassador complain about recent actions by Washington. China may order hundreds of Airbus jets as soon as next month.
Europe: Eurozone inflation eased to 1.9% in May, below the European Central Bank's 2% target, strengthening expectations for an interest rate cut in the upcoming ECB meeting. The decline was driven by a drop in services inflation to 3.2% from 4.0% in April.
Elon Musk lambasted Trump’s signature tax bill as Republican fiscal hawks stepped up criticism of the package. He added later that the bill defeats all the cost savings achieved by the DOGE team.
CrowdStrike – Q1 Results
Last night, CrowdStrike Holdings released its results for the first quarter of its financial year ending 31 January 2026, reflecting continued robust growth but also highlighting challenges stemming from last year's significant outage. The company's cautious guidance led to a 6.5% decline in its share price during after-hours trading.
CrowdStrike is a US-listed cybersecurity technology company with annual revenue exceeding $4 billion. The CrowdStrike Falcon platform safeguards customers against cyber threats across on-premise, virtualized, and cloud-based environments, protecting various endpoints such as laptops, desktops, servers, virtual machines, and Internet of Things devices.
The CrowdStrike Threat Graph aggregates security data across its customer base, employing advanced AI techniques to create a security solution that continually adapts to emerging threats. As the company expands, its access to security data grows, enhancing its competitive edge. The AI-native Falcon XDR platform has solidified its position as a leading cybersecurity consolidator.
The business is well-positioned to benefit from secular trends like digital and security transformation, cloud adoption, and an increasingly complex threat landscape, intensified by current geopolitical uncertainties. The 2025 CrowdStrike Global Threat Report emphasized a rise in adversaries exploiting stolen identity credentials. Despite this, cloud security spending remains a small fraction of overall cloud IT expenditure, indicating significant growth potential. The total addressable market is projected to expand from $116 billion in 2025 to $250 billion by 2029.
The group offers over 20 cloud modules via a software-as-a-service (SaaS) model, covering multiple large security markets, including corporate workload security, security and vulnerability management, managed security services, IT operations management, and threat intelligence services. CrowdStrike continues to enhance its platform organically and through acquisitions. The success of its platform strategy and growing brand leadership have led to an increasing number of customers selecting CrowdStrike as their trusted security platform.
In the three months to 30 April 2025, total revenue grew 20% year-over-year to $1.10 billion, slightly below market expectations. Subscription revenue increased by 20% to $1.05 billion. Annual Recurring Revenue (ARR) rose 22% to $4.44 billion, with $194 million added in the latest quarter. The company remains committed to its vision of reaching $10 billion in ARR over the next five to seven years.
The company introduced new innovations in Cloud Detection and Response and expanded its Falcon platform capabilities. It also announced a $1 billion share repurchase program, reflecting confidence in its long-term growth prospects.
Gross retention rates remained high, with strong customer adoption of multiple modules: 48% of subscription customers used six or more modules, 32% used seven or more, and 22% used eight or more as of 30 April.
The business demonstrated solid operating leverage, with subscription gross margin at 80%. Operating income (non-GAAP) was $201 million, and adjusted EPS was $0.73, surpassing the company's guidance and market forecasts. Free cash flow stood at $279 million, and the company ended the quarter with cash and equivalents of $4.6 billion.
CrowdStrike has updated its guidance for FY2026, now expecting revenue between $4.74 billion and $4.81 billion and adjusted EPS between $3.44 and $3.56. While the revenue guidance is slightly below previous estimates, the company anticipates a return to stronger growth in the latter half of the fiscal year.
