DOJ closes CrowdStrike probe without charges; the SEC's parallel review of its ARR reporting is still unresolved

Federal prosecutors in Manhattan have closed their investigation of CrowdStrike's deals with distributors and certain customers without bringing charges, Bloomberg reported on Friday, citing people familiar with the matter. Justice Department lawyers told people connected to the probe in July that they had finished and would not pursue criminal or civil action, and did not explain their findings, according to the report as carried by Investing.com. The review had been under way since early 2025.

CrowdStrike shares were down 1.51% at $255.74 early Friday afternoon, according to Nasdaq data, just below their 52-week high of $263.87. A stock sitting near its high had not been priced for a charge.

What the company's own filing says

The more useful document is CrowdStrike's quarterly report for the period ended July 31, filed with the SEC on Aug. 27. It says the company received requests for information from both the Justice Department and the Securities and Exchange Commission "relating to the Company's recognition of revenue and reporting of ARR for transactions with certain customers," as well as the July 19, 2024 outage and related matters, and that it is cooperating.

Two things follow from that language.

• This was about the metric investors use to value the stock. Annual recurring revenue is a headline figure CrowdStrike reports every quarter and a core input for how the stock is valued. A question over how ARR was reported went to the heart of that, whatever the size of any penalty.
• The DOJ is only half of it. Bloomberg's report covers the prosecutors. The status of the SEC's review has not been disclosed. The SEC can bring a civil case on its own, and its conclusion is the one that would bear on the accounting. Until CrowdStrike updates its disclosure, "closed without charges" describes one of two agencies.

The filing was dated after the July notice Bloomberg describes, and it still listed both agencies. That does not contradict the report, since the DOJ reportedly spoke to individuals connected to the probe. But it means the next 10-Q is the place to look for confirmation in the company's own words.

The outage costs are small now

The same filing shows how far the 2024 outage has faded from the numbers. CrowdStrike's accrual for outage-related costs, net of insurance, was $13.1 million at July 31, down from $15.5 million at the end of January. The separate lawsuit by Delta Air Lines is still in discovery after a Georgia court partly denied CrowdStrike's motion to dismiss in May 2025.

What traders are watching

Any SEC disclosure change in the next quarterly report, how CrowdStrike describes ARR in its next results, and the Delta case. For software stocks broadly, the result removes one legal overhang from one of the sector's largest names.

Sources: Bloomberg, Investing.com, CrowdStrike Form 10-Q (SEC EDGAR), Nasdaq.com market data. This is market information, not investment advice.