CrowdStrike (CRWD) Stock: AI Security Boom Drives Revenue Beat

TLDR

• CrowdStrike projects Q4 revenue of $1.29B-$1.30B, surpassing $1.22B analyst consensus
• Third quarter revenue jumped 22% to $1.23B with ARR climbing to $4.92B
• Full-year revenue guidance raised to $4.80B-$4.81B range
• Cash flow from operations hit record $397.5M with free cash flow at $295.9M
• AI-powered security features driving platform adoption and customer growth

CrowdStrike shares moved higher after the cybersecurity company delivered third-quarter results that topped expectations and raised its outlook. The company reported quarterly revenue of $1.23 billion, representing 22% growth from the same period last year.

Management set fourth-quarter revenue guidance at $1.29 billion to $1.30 billion. Wall Street had projected $1.22 billion for the period. The company also increased its full-year revenue forecast to between $4.80 billion and $4.81 billion.

CrowdStrike Holdings, Inc., CRWD

The results demonstrate recovery from last year’s software update failure that disrupted Windows systems globally. That incident affected operations at hospitals, banks, and airports. The company has since focused on rebuilding trust while expanding its technology offerings.

Platform Revenue Accelerates

Annual recurring revenue reached $4.92 billion in the quarter ending October 31. CrowdStrike added $265 million in net new ARR. The 23% year-over-year growth rate shows accelerating momentum in subscription revenue.

Subscription revenue climbed to $1.17 billion during the quarter. Growth remained balanced across endpoint security, cloud operations, identity protection, and SIEM products. This diversification strengthens the company’s position as organizations seek comprehensive security platforms.

CrowdStrike has integrated AI-powered capabilities throughout its Falcon platform this year. The company launched new detection and triage tools in September designed to streamline security operations. These features target customers looking for automated threat response systems.

Demand for AI-driven cybersecurity continues expanding as businesses confront more sophisticated attacks. Companies are investing in systems that can identify and neutralize threats faster than traditional approaches. This market shift benefits providers with advanced automation capabilities.

Strong Cash Generation

The company produced $397.5 million in operating cash flow during the quarter. Free cash flow reached $295.9 million, up substantially from the prior year. CrowdStrike ended September with $4.80 billion in cash and equivalents.

Non-GAAP operating income totaled $264.6 million for the period. Gross margins held steady with non-GAAP subscription gross margin at 81%. The company maintained profitability while continuing to invest in product development.

Partnership activity remained active throughout the quarter. CrowdStrike expanded relationships with cloud providers, consulting firms, and infrastructure companies. These collaborations help establish the platform as a standard for enterprise security.

Management expects net new ARR growth of at least 50% year over year in the second half of fiscal 2026. The company reaffirmed its target of 20% net new ARR growth for fiscal 2027. These projections reflect confidence in sustained platform demand.

eToro analyst Farhan Badami noted the raised outlook shows CrowdStrike is capitalizing on AI opportunities while improving margins and scaling operations. The company benefits from market consolidation trends as organizations prefer integrated security systems over point solutions.

CrowdStrike expects continued growth as artificial intelligence creates new security requirements across enterprise environments. The company’s unified platform approach addresses the complexity challenges facing security teams managing multiple vendors and tools.

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