CrowdStrike pops 11% on Q2 beat and raised guidance amid AI security demand

CrowdStrike popped more than 11% in extended trading after the cybersecurity company topped Wall Street's fiscal second-quarter estimates and boosted guidance as artificial intelligence threats mount.

Earnings per share: 31 cents adjusted vs. 29 cents expected

Revenue: $1.47 billion vs. $1.44 billion expected

Revenue jumped 26% in Q2 from $1.17 billion a year ago, with CEO George Kurtz calling it "the best quarter in CrowdStrike's history" in the earnings release.

"The Mythos moment translated into mass-market acceptance that AI adoption needs security, and that's CrowdStrike," he said. "Every enterprise will run on AI, and securing it is the largest market opportunity in our history."

Anthropic's release of its advanced Mythos model, capable of exploiting previously unknown software vulnerabilities, has upended the cyber industry in recent months and sparked demand for new security tools.

CrowdStrike's annual recurring revenue rose 25% year over year to $5.84 billion, which included record net new annual recurring revenue of $333 million, the company said. Net income totaled $5.3 million, or 1 cent per share, compared to a net loss of $70.2 million, a loss of 7 cents per share, a year ago.

Agentic AI is driving demand for security tools to protect companies from proliferating threats. The backdrop has powered shares of CrowdStrike and its competitors to all-time highs, with the stock up more than 61% this year.

CrowdStrike said its Falcon Flex offering, which allows customers to deploy and swap out different security tools, more than doubled from a year ago. Kurtz said on the earnings call that the company added 935 Flex accounts during the quarter and these accounts comprised its top 10 deals by deal value.

Finance chief Burt Podbere said the Flex setup is helping CrowdStrike win bigger, longer-term deals and allowing customers to buy multiple products under one single platform.

"At the end of the day, it's the platform sale," he said. "They want better outcomes at a cheaper cost."

CrowdStrike lifted its full-year revenue outlook to between $5.99 billion and $6.01 billion and adjusted earnings per share between $1.25 and $1.26. That topped a $5.93 billion revenue estimate and a $1.23 EPS estimate from analysts.

For the third quarter, the company forecasted between $1.52 billion and $1.53 billion in revenue and adjusted EPS of 31 cents per share, which were roughly in line with estimates.