CrowdStrike shares jumped in after-hours trading after the cybersecurity company reported its best quarter in history, with revenue up 26% and annual recurring revenue climbing 25%. The company also raised its fiscal 2027 guidance as enterprises rush to secure AI systems.
CrowdStrike shares rose more than 11% in after-hours trading Wednesday after the company posted what CEO George Kurtz called "the best quarter in CrowdStrike's history." The move extends a rally that has already pushed the stock up 67% so far this year.
Revenue and ARR beat expectations
Fiscal second-quarter revenue reached $1.47 billion, up 26% year-over-year. That beat analyst estimates of $1.44 billion. Subscription revenue alone hit $1.40 billion, up 27% from the same period last year.
Annual recurring revenue grew 25% to $5.84 billion as of July 31. Net new ARR came in at $332.8 million, a 51% jump year-over-year. Wall Street had expected weaker growth on both revenue and ARR, according to FactSet data cited by MarketWatch.
Net income rose to $322.9 million, compared with $237.4 million a year earlier, above the $302 million FactSet consensus. Free cash flow hit a record $377.4 million for the quarter, and the company closed the period holding $5.01 billion in cash and equivalents.
Falcon Flex adoption accelerates
CrowdStrike's Falcon platform, which combines endpoint protection, cloud workloads, identity security and security-operations-center management, saw its Falcon Flex licensing model expand sharply. Falcon Flex accounts generated $2.29 billion in ARR, more than doubling with a 101% increase year-over-year. On the earnings call, Kurtz said the company added more than 935 Flex accounts during the quarter, with customers expanding contracts an average of eight months.
AI adoption drives demand, guidance rises
Growing concern over AI-powered threats is fueling the demand. Earlier this year Anthropic introduced Claude Mythos, an AI model said to be very good at finding and exploiting security vulnerabilities, and concerns over such capabilities have made cybersecurity a growing focus for technology companies.
CrowdStrike raised its fiscal 2027 revenue guidance to a range of $5.99 billion to $6.01 billion. It also lifted its net new ARR growth outlook by 630 basis points to a midpoint of 34%. For fiscal third-quarter ARR, the company guided to up to $6.19 billion, above the $5.79 billion analysts expected.
Sources: MarketWatch, Crypto Briefing
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