CrowdStrike's stock soars after AI fuels the cybersecurity company's 'best quarter in history'

By William Gavin and Christine Ji

'Every enterprise will run on AI, and securing it is the largest market opportunity in our history,' CEO George Kurtz says

CrowdStrike has benefited from growing cybersecurity concerns raised by artificial-intelligence advancements.

Shares of CrowdStrike Holdings were roaring after the cybersecurity company revealed a record-breaking quarter, one partially boosted by fears about the power of artificial intelligence.

The second quarter "was the best quarter in CrowdStrike's history," CrowdStrike CEO George Kurtz said in a statement. "The Mythos moment translated into mass-market acceptance that AI adoption needs security."

CrowdStrike's stock (CRWD) rose 10.5% in after-hours trading Wednesday, even in the face of high investor expectations set by the stock's 67% rally so far this year.

Earlier this year, Anthropic introduced Claude Mythos, an AI model that is said to be very good at finding and exploiting security vulnerabilities. Concerns over the capabilities of Mythos and other AI models have made cybersecurity a growing focus of technology companies. That's one reason cybersecurity stocks like CrowdStrike have seen strong performance this year, bucking the selloff that's enveloped many other software names.

"Every enterprise will run on AI, and securing it is the largest market opportunity in our history," Kurtz said.

The company reported fiscal second-quarter total revenue of $1.47 billion, up 26% compared to a year earlier. Annual recurring revenue, a metric that helps companies show the income they expect to receive from customers, grew 25% from a year before to $5.84 billion as of July 31. Wall Street had expected weaker growth on both metrics, according to FactSet data.

CrowdStrike's flagship Falcon platform consolidates endpoint protection, cloud workloads, identity security and security operations-center management. Customers are utilizing Falcon Flex, the company's flexible licensing model, to buy a prepaid balance of funds for use across various modules.

"This quarter, we delivered record Flex volume, adding more than 935 Flex accounts," Kurtz said on the earnings call, adding that customers are expanding contracts an average of eight months.

CrowdStrike also achieved record free cash flow and new net annual recurring revenue, according to CFO Burt Podbere. The company posted net income of $322.9 million, compared with $237.4 million a year earlier. That new figure was also above the $302 million FactSet analyst consensus.

"We also exited the quarter with a record Q3 pipeline," Podbere said on the call. That led CrowdStrike to issue a fiscal third-quarter outlook that calls for annual recurring revenue of up to $6.19 billion, compared to the $5.79 billion expected by analysts, according to FactSet. Additionally, the company boosted its forecast for ARR and total revenue for its 2027 fiscal year, which ends in January.

-William Gavin -Christine Ji

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08-26-26 2043ET