CrowdStrike's fiscal second-quarter revenue rose 26% to $1.47 billion, beating estimates and pushing shares up 20.5% on Thursday. Three Wall Street firms raised their price targets afterward, citing rising security spending tied to AI adoption, and rival cybersecurity stocks rallied alongside it.
CrowdStrike Holdings, Inc. (CRWD) posted fiscal second-quarter revenue of $1.47 billion, up 26% from a year earlier, with adjusted earnings of 31 cents a share against a Wall Street estimate of 29 cents. Shares jumped as much as 12% in after-hours trading before closing up 20.5% the next session.
The result marks a turnaround from 2024, when a faulty CrowdStrike software update halted flights and postponed hospital procedures worldwide. Its chief executive called this the best quarter in the company's history.
Guidance climbs on Falcon Flex growth
The company added a record $332.8 million in new annual recurring revenue, a 51% jump from last year. It also raised its full-year revenue forecast to $5.99 billion-$6.01 billion and lifted its net new ARR growth guidance by 630 basis points to 34%.
Much of that strength traces to Falcon Flex, the subscription bundle that lets customers add security tools without renegotiating contracts. ARR from Flex customers surpassed $2.29 billion, more than doubling from a year ago, with 935 new accounts added in the quarter. That structure locks in larger commitments earlier in the sales cycle instead of depending on future upsells.
Analysts point to AI-driven demand
Needham analysts Mike Cikos and Matthew Calitri said CrowdStrike is benefiting from broad-based demand tied to AI adoption forcing companies to rebuild their security stacks. Needham raised its price target to $250 from $235 and kept its Buy rating.
Morgan Stanley analyst Meta Marshall made a similar case, noting that customers increasingly rely on CrowdStrike to defend against threats tied to agentic AI. Morgan Stanley raised its target to $238 from $227. Goldman Sachs analyst Gabriela Borges lifted her target to $230 from $208, pointing to CrowdStrike's AI Detection and Response product as an early proof point. CRWD had closed regular trading at $189.18 right before the earnings dropped, so the new targets still imply further upside.
Rivals climb on the same trade
Rival Palo Alto Networks, Inc. (PANW) gained almost 13% the same day, stretching its year-to-date gain past 80%. Identity software drew attention too, as Okta, Inc. (OKTA) jumped more than 28% the same day.
CrowdStrike still holds an edge on scale: its 26% revenue growth outpaces Palo Alto Networks' larger but slower-growing business, while SentinelOne, Inc. (S) trails both rivals on annual recurring revenue. Investors chasing this quarter's rally are betting that security spending keeps rising alongside AI adoption across the sector.
Source: TheStreet
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