CRWDCrowdStrike

In addition, the Organization for Economic Cooperation and Development (“OECD”) has published proposals covering a number of issues, including country-by-country reporting, permanent establishment rules, transfer pricing rules, tax treaties and taxation of the digital economy. On October 8, 2021, the OECD/G20 inclusive framework on Base Erosion and Profit Shifting (the “Inclusive Framework”) published a statement updating and finalizing the key components of a two-pillar plan on global tax reform originally agreed on July 1, 2021, and a timetable for implementation by 2023. The timetable for implementation has since been extended to 2024 and, with respect to certain components of the plan, to 2025. Under Pillar Two, the Inclusive Framework has agreed on a global minimum corporate tax rate of 15% for companies with revenue above €750 million, calculated on a jurisdictional basis. While substantial work remains The European Union and other countries (including those in which we operate) have enacted or committed to be completed by the OECD enact Pillar Two into their domestic laws, which may adversely impact our provision for income taxes, existing tax incentives, net income and national governments on the implementation of these proposals, future tax reform resulting from these developments may result in changes to long-standing tax principles, which could adversely affect our effective tax rate or result in higher cash tax liabilities. flows. On February 1, 2023, the U.S. Financial Accounting Standards Board ("FASB") (“FASB”) indicated that they believe the minimum tax imposed under Pillar Two is an alternative minimum tax, and, accordingly, deferred tax assets and liabilities associated with the minimum tax would not be recognized or adjusted for the estimated future effects of the minimum tax but would be recognized in the period incurred. On January 20, 2025, the Trump Administration issued an executive order declaring the Inclusive Framework has no force or effect in the U.S. absent congressional action, and directing the U.S. Department of Treasury to: (i) investigate whether any non-U.S. countries are not in compliance with any U.S. tax treaty or have implemented or are likely to implement tax rules that are extraterritorial or disproportionately affect U.S. companies, which may include actions or taxes imposed under Pillar One or Pillar Two, and (ii) develop options for “protective measures” in response to any such noncompliance or tax rules. On June 28, 2025, the United States and the rest of G7 countries announced a Side by Side (“SbS”) agreement that would, in principle, exclude U.S. parented groups from certain taxes under Pillar Two and address certain risks of base erosion and profit shifting, with the OECD publishing Administrative Guidance with respect to this on January 5, 2026. While the Administrative Guidance has approved the U.S. tax system as a “Qualified SbS Jurisdiction” (such that, for fiscal years commencing on or after January 1, 2026, U.S.-headquartered multinational enterprises may elect for the SbS safe harbor, which effectively deems the top-up tax for a jurisdiction to be zero for the purposes of the “income inclusion rules” and “under taxed profits rules”), we cannot predict whether or when such agreement will be brought into force, and whether the United States will adopt any other protective measures, including with respect to any taxes imposed under Pillar One, or whether or how any non-U.S. countries may change their tax laws, including with respect to Pillar One or Pillar Two, in response to the executive order, the agreement in principle (including the Administrative Guidance) described above, or otherwise. In addition, the OECD’s proposed solution Inclusive Framework envisages new international tax rules and the removal of all Digital Services Taxes (“DST”). Notwithstanding this, some countries, in the European Union and beyond, continue to operate existing DST regimes to capture tax revenue on digital services more immediately. Such laws may increase our tax obligations in those countries or change the manner in which we operate our business.

•On September 4, September 11, and September 20, 2024, three derivative lawsuits were filed against certain of the Company’s officers and directors, and against the Company as nominal defendant, in federal court in the Western District of Texas alleging various claims, including breach of fiduciary duty under Delaware law duty, unjust enrichment, and violations of federal securities laws, including that the defendants made false or misleading statements in violation of Sections 10(b) and 14(a) of the Exchange Act and SEC Rules 10b-5 and 14a-9. One of the lawsuits also brings a claim against certain of the defendants for contribution under Sections 10(b) and 21D of the Exchange Act. The complainants seek monetary and non-monetary relief purportedly on behalf of the Company. On November 21, 2024, all three cases were consolidated and stayed pending resolution of the putative securities class action described above. On April 9, 2025, another derivative lawsuit was filed against certain of the Company’s officers and directors, and against the Company as nominal defendant, in federal court in the District of Delaware, asserting similar claims and seeking similar relief as the previously filed derivative lawsuits. On May 22, 2025, this lawsuit was voluntarily dismissed without prejudice. On April 10, 2025, two additional derivative lawsuits were filed against certain of the Company’s officers and directors, and against the Company as nominal defendant, in federal court in the Western District of Texas, asserting similar claims and seeking similar relief as the previously filed derivative lawsuits. On May 23, 2025, these lawsuits were consolidated with each other and stayed pending a response by the Company’s board of directors to a litigation demand submitted by one of the plaintiffs and a proposed order governing next steps. On July 18, 2025, these consolidated lawsuits were stayed pending resolution of the putative securities class action described above. On July 3 and July 17, 2025, two additional derivative lawsuits were filed against certain of the Company’s officers and directors, and against the Company as a nominal defendant, in the Delaware Court of Chancery, asserting similar claims and seeking similar relief as the previously filed derivative lawsuits. On August 18, 2025, these two lawsuits were consolidated and stayed pending resolution of the putative securities class action described above.

In November 2023, 2024, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The standard requires disclosure of significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of segment profit or loss, an amount for other segment items required to reconcile the difference between segment revenue and segment expenses to segment profit or loss along 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, with a description subsequent clarification of their composition, and its effective date through ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the title and position Effective Date in January 2025, requiring additional disclosure on specific expense categories included in the expense captions presented on the statements of the entity’s CODM. The update also expands interim segment disclosure requirements. operations. The new standard can be applied either prospectively or retrospectively, and is effective for annual periods beginning after December 15, 2023, 2026 and interim reporting periods within fiscal years annual reporting periods beginning after December 15, 2024. 2027. Early adoption is permitted. The Company adopted is currently evaluating the impact of this new guidance during on its disclosures within the year ended January 31, 2025. See Note 14, Segment Information for further details. consolidated financial statements.

General and administrative expenses increased by $89.6 $189.1 million, or 23%, 39%, in fiscal 2025, 2026, as compared to fiscal 2024. 2025. The increase in general and administrative expenses was primarily due to $31.9 million of an increase in expenses relating to associated with the July 19 Incident, an increase in employee-related expenses Incident and related matters of $27.2 million driven by a 19% increase in average headcount, an increase in allocated overhead costs of $6.3 million, an increase in consulting expense of $5.0 million, an increase in leased airfare costs of $4.5 $82.4 million, an increase in stock-based compensation expense of $4.0 $52.4 million, an increase in travel expenses consulting expense of $2.3 $16.4 million, charges related to the Strategic Plan of $12.5 million, an increase in company events employee-related expenses of $2.1 $11.2 million driven by a 14% increase in average headcount, an increase in legal expense of $4.5 million unrelated to the July 19 Incident or related matters, an increase in allocated overhead costs of $4.4 million, and an increase in term-based software licenses of $2.1 million, an increase in taxes and licenses expenses of $2.0 million, an increase in employee related programs of $1.8 million, and an increase in other labor expenses of $1.7 million, partially offset by a decrease in legal expense of $7.5 million unrelated to the July 19 Incident. $3.0 million.