We would like to remind you that during today's presentations, we will be making forward-looking statements. These statements reflect our views and expectations only as of today. While we believe these forward-looking statements are reasonable, the outcomes are subject to risks and uncertainties, so actual results could differ materially from our expectations. Please see the Risk Factors section of our most recent 10-Q, filed with the SEC, for further information about these risks and uncertainties. Furthermore, we undertake no obligation to update these forward-looking statements as a result of new information or future events. Additionally, unless otherwise stated, excluding revenue, all financial measures discussed in this presentation will be Non-GAAP . Please refer to our disclosures on why we use Non-GAAP financial measures and the reconciliation of these Non-GAAP financial measures to their most directly comparable GAAP financial measures in the Events and Presentation section of our Investor Relations website.
Please welcome Chief Financial Officer, Burt Podbere.
All right. Welcome, everybody. Good morning. Hope everybody had their coffee. Excited to have you here. I've already spoken to a bunch of you today, and since earnings, I think I've seen a few of you two or three times. So thanks for coming out again. Thanks for speaking, coming to speak with our customers and our partners. That's a big part of this event for everybody in this room. I think that, you know, we've had quite a few last few days. I hope that all of you will be able to catch George's keynote, where we saw Satya video streamed. I hope that you caught Mike's keynote, where we had that FBI excerpt. That was kinda really informative and kinda gave you an idea about what we're really dealing with.
And it's pretty severe. We have an exciting lineup for you today. I can't wait to get started. Quickly, I wanna go over the agenda. We've got George, who I'll introduce in a second. He's coming on up. We've got some fireside chats with our customers and our partners. We're gonna have lunch, which is gonna be right to my... right over here. Then Mike and myself will round it out with the presentations, and then we'll take Q&A. So that's the agenda. You know, it's exciting for us, and I look forward to, you know, speaking to many of you even after this event. So without further ado, I'd love to introduce my friend and Co-founder and CEO of CrowdStrike, Mr. George Kurtz.
Hopefully, this works. Yeah, there we go. All right. You guys look pretty good for two days in Vegas, I have to say, so thanks for coming. I hope you enjoyed the keynotes that we had yesterday and today. I think it's really indicative of what we've been able to put together as a company, and I love hearing the customer success stories, one of my favorite takeaways. Okay, so let's jump into building cybersecurity's most resilient platform. This has always been the topic of the day. We talked a lot about it, and part of... Hopefully, everybody caught my keynote yesterday.
Part of what I talked about is really resilient by design, and security is an element of being resilient, but resilient by design is something as a company that we're focused on and committed to and driving towards, and that really means something that's foundational, something that's adaptive, and something that's continuous, and making CrowdStrike the pillar of success in helping our customers become more resilient and delivering the right outcomes, which is stopping the breaches, so let's talk about July nineteenth and some of the takeaways, the things that we actually put in front of our customers. Number one is customer control, right? Hopefully, you've seen the root cause analysis, a little bit technical, but obviously giving our customers more control, enhance the configuration and visibility of delivering content and configuration updates.
The second one is the ability to roll out in a fashion that they deem appropriate for them. The ability for them, our customers, to actually roll it out in concentric rings in their own network, and then obviously some changes in terms of our rollout and content testing and guardrails. And then third is external third-party input review and validation. If you were in the last session, Mike talked about the public report that we have out from Accenture. That actually went through and verified and validated what we said in the root cause analysis, what we actually did. All that is done, checked, and it's available in the report. So that is all good news.
And as we think about moving forward in our architecture and what we've built, we've really brought cybersecurity to the cloud, right? We've brought AI to cybersecurity, and we created cybersecurity's platform of record for our customers. You hear time and time again of how customers are solving new and unique use cases, how they're actually leveraging all of the rich data that CrowdStrike provides, that goes well beyond just security. You heard the stories about leveraging it for IT, for visibility, for asset information. And why does it all work? Well, it's a single agent architecture, no multi agents required, and it's not a store and forward model like a lot of our competitors, which require gigabytes of storage on the endpoint before they actually can send that data to the cloud. What does this mean from an architecture pers-
They got more modules. So what did they end up with? At the end of the day, they ended up with a longer commit of 36 months of $3 million, and ARR went up to $1.1 million. So what happened for us? At the end of the day, when some of these incentives start rolling off, you can see that the starting expansion opportunity is now $3.6 million. And so when you walk through the journey with us, you can see that, yes, we were able to do more with our customers. When customer came to the table, they added some commitment dollars. We added some funding into that package, and lo and behold, the customer was really happy when they walked away with more of our modules.
You know, they were able to get, you know, more from us, and everybody kind of walked away saying: "Yeah, this is the right answer." And this is what George was talking about in terms of how flex can work and how powerful it can be. The third example I want to walk you through is, it's not a Flex, it's not a Flex-led commitment package. It's, it's a healthcare company, and this, this particular example, and these are real-life examples again, this one included term elongation as well as additional modules. So on this particular example, the customer had $1.6 million in TCV and ARR over 12 months. We talked to them, we said, "Hey, look, we're gonna add in..." The customer wanted a bunch of different modules. We added in three modules.
We added in three months of elongation. So when you move along the path in the negotiations, at the end of the day, you ended up with a customer that now has $6.1 million commitment with us over 39 months, and you have an ARR that went to $1.9 million. So what do you have here? You have a commitment that went up by over three times and ARR that went up almost twice. These are really good things for the customer, and they really are beneficial to us as well, and so you can see that all three examples were very different. They're bespoke, right? Each one of these things took a different, you know, outcome or a different discussion to get to the outcome they wanted.
And we're still early in our journey, and I'd love to be able to share more and more about where customers are going, and I wanna give that data. Trust me, I wanna give that data, but I don't wanna give misleading data. It's a little early to kind of give you, you know, a trend about where some of these are going. But at some point, I wanna be able to do that and say, "Hey, look, this is where it all came from." Like, we all feel confident and comfortable that we can give you a trend that makes sense. Okay. So let's look back to that first example where you saw some contraction based on time, right?
I think case one is, you know, the one that I wanna, you know, focus in on in terms of our discussion, in terms of how to think about modeling and decoupling the modeling of ARR and revenue in the short term. So we've talked a little bit about, you know, the commitment packages, and on the earnings call, I wanted to talk about, you know, some of the impacts. But one of the most important things is I wanna decouple the modeling of ARR and revenue in the short term, and how to think about the $60 million, right? So the $60 million hits both revenue and ARR, but the modeling of net new ARR and revenue are different in the back half in the short term because of how in-quarter revenue is recognized for a SaaS business.
You can't take a look at that in-quarter revenue and then back-end it into ARR because the outcome you're gonna get, the range is gonna be too big. It's just too big. So when we thought about how to model this thing, we separated and took a look at each one of them separately, ARR and revenue. So let's start with ARR. And we said, "Hey, let's review the short-term impact, and let's review how all the things that are in front of us are gonna impact, you know, ARR for the back half." So I gave out a number of $60 million in terms of impact directly from the Customer Commitment Package. I wanted to give a, you know, I wanted to give a quant. This is how I interpreted it.
It goes into the sum of all the different customers from case one, right? Or a variation of case one, where you have contraction, and we have a lot of customers. So we said, "Okay, let's just do some math and come up with a number that kind of makes sense." This is what we came up with ARR strictly from the CCP perspective. But then on the earnings call as well, I mentioned here, we have a lot of headwinds against that we're up against, right? We talked about delaying our prospecting, so we've had prospecting on hold for a few weeks post the incident. That impacts, obviously, ARR. We talked about, you know, these extended sales cycles.
Obviously, customers are looking for, you know, different, you know, opinions within their own company. Approvals are. We're seeing more and more approvals that are gonna take place, right? We're more scrutiny on these deals, and we have muted upsell rates. So those two things are additive, right? They're not a subset of each other. We have one that's a CCP, which I tried to give a quant for. The other one is just the specific impacts of the headwinds that we face, and you know what? I wish I had a crystal ball. Based on the fact that, the three examples I gave you, I've lost visibility in terms of how I'm gonna be able to identify where we're, you know, how we're gonna, what we're gonna look at in terms of ARR. We've lost some of the visibility.
Over time, we're gonna get it back, but in the short term, we've lost visibility. But I wanted to give you kind of how we thought about it, right? In terms of when we were running through our models. So that's ARR, right? It's very specific. I, you know, at the end of the day, we can do our best in terms of determining, you know, some of the headwinds that we face. If we switch to revenue. So for revenue, we said, "Hey, look, based on some of the CCP items that we listed before, some are gonna impact revenue, and they are at the same pace, the same rate, some won't.
Some are gonna hit revenue." And so I said, "Okay, a $60 million, again, sounded like an appropriate number in terms of what the impact is gonna be from CCP." That's just for our subscription revenue piece. It still starts with the $60 million. We talked about, you know, all the different pieces that can impact that. The second thing is the high single digits from pro services. So we talked about-
You know, we need to have visibility. We think we may be losing some data. Tell us about your DLP product." On. That's the demo, on, and then it's working. And then you can continually build out those pieces. Trial to pay. You know, people come to trial to pay, and I know I'm giving you a long answer, but it's important to understand. People come to trial to pay 'cause they wanna do next-gen AV. That next-gen AV becomes a six-figure deal because they've gone and added additional components along the way because once they have the agent, they can go a number of different ways. So I look at our core endpoint opportunity as hugely important to our growth because we've been successful, but there's so much more to go.
I just wanna follow on one point on the kernel piece 'cause I think you fully addressed that. But there are incredible benefits of being able to run in the kernel, and that's not gonna go any away anytime soon. As Mike said, if there's extensions, great, we use them. But keep in mind, there is a performance advantage of being able to run in the kernel, period. Why is it that CrowdStrike has the best performance in the market? Well, we've got the best architecture in the market. Why is it that we're the only technology that you can install without a reboot? Because we've thought about it for many, many hard years.
So I just wanna make sure that we sort of ground everybody on that fact, that there are many, many advantages to not just us, to others that run in the kernel. It's not gonna change anytime soon, and as Mike said, as new capabilities come out, A, we're gonna be part of the definition of it, right? Which you saw yesterday, and we're also gonna be one of the adopters because we're gonna help define it with Microsoft and others. So we have no issue with that, but I just wanna level set 'cause there's a lot of misinformation that's out there. There's a reason in Windows why people run in the kernel, and there's a difference, 'cause you hear this argument, "Well, Mac does it one way, Linux does it another way." Windows is a different animal.
In Windows, you literally can take an old binary from almost like XP and run it in Windows 11. There's a reason for that because of all the backward compatibility. You can't do that in other operating systems, right? When you look at the Windows kernel, it's supported on every flavor of Windows. There's a reason for that. Mac and Linux have a different model, different kernel extensions, different, you know, builds. You can't just make a change very quickly and say one size fits all. So I just wanted to make sure that we level set on that piece. It's there for a reason. It's been an architectural open ecosystem since the thing started, which was, you know, Bill Gates' model. The thing is open. We're part of it, and there's some real advantages.
I always, in my, in my personal opinion, I think it's always gonna be a bit of a hybrid model of what's in user mode and what's in the kernel. We have a hybrid model today, and again, as more things come out that we can use, we'll use them, and that's kind of the simple version of it.
That was a great question to end on, Fatima, thank you for that. Great answer. So first, on behalf of George and Mike and DB, Maria, Will, my extended IR team, and everybody at CrowdStrike, big thank you for coming. Big thank you for your questions, and we look forward to seeing you and talking to you in the near future. Thank you, everybody.