CrowdStrike delivers strong Q1, ups outlook

CrowdStrike reported better-than-expected first quarter earnings, announced a 4-for-1 stock split and raised its outlook.

The company reported first quarter earnings of $27.8 million, or 11 cents a share, on revenue of $1.39 billion, up 26% from a year ago. Non-GAAP earnings were $1.10 a share.

Wall Street was expecting non-GAAP earnings of $1.07 a share on revenue of $1.36 billion.

• Palo Alto Networks Q3 strong as CEO says Mythos boosted demand
• Zscaler Q3 strong, outlook hit by component costs, sales turnover

Like Palo Alto Networks, CrowdStrike said Mythos raised awareness of AI cybersecurity.

• Claude Mythos and the New Cybersecurity Operating Model

CEO George Kurtz said:

"In Q1, the worlds of cybersecurity and frontier AI collided: this was the Mythos moment. We’re seeing platform adoption from existing customers, new logo lands, and increased partner engagement, each giving me the conviction to significantly raise our FY27 net new ARR guidance."

By the numbers for the first quarter:

• Net annual recurring revenue for the first quarter was $256 million, up 32%.
• Free cash flow was $468 million.
• ARR overall for the first quarter was up 24% from a year ago to $5.51 billion.
• CrowdStrike ended the quarter with cash and equivalents of $4.55 billion.

As for the outlook, CrowdStrike projected second quarter revenue of $1.436 billion to $1.442 billion with non-GAAP earnings of $1.16 a share to $1.17 a share. Annual recurring revenue guidance for the second quarter is $5.793 billion to $5.795 billion.

For fiscal 2027, CrowdStrike is projecting revenue of $5.915 billion to $5.96 billion with non-GAAP earnings of $4.88 a share to $4.96 a share. ARR is projected to be between $6.532 billion to $6.555 billion.

Kurtz argued the cybersecurity will see additional budget due to Mythos. He said the following on the earnings call:

• "CrowdStrike is the only cybersecurity company to secure both Anthropic and OpenAI's introduction programs from the very start. What the Mythos moment proved is that the world starting from the frontier AI labs themselves realized that AI needs a cybersecurity ecosystem. This was the Mythos inflection point. The discussion evolved from, "is AI going to disrupt cybersecurity" to organizations and even the frontier AI labs relying on Falcon as their AI-powered defender for the post-Mythos era. Even more consequential is how adversaries can use these new and future models to democratize destruction. Now any human or agent can be a vibe hacker or worse with serious cyber attacks that threaten enterprise survival, nation-state continuity and critical infrastructure operations."
• "For the first time in my career, the market's view of cybersecurity's role has shifted from being viewed primarily through the lens of risk management, compliance and protection to being recognized as a strategic accelerator and a critical enabler of AI adoption."
• "As soon as Project Glasswing and Mythos were announced, a deluge of customer, prospect and partner inquiries followed. Post-Mythos threat landscape readiness reached a fever pitch with the primary question being, "is my organization protected?" The immediate focus turned to uncovering and remediating vulnerabilities susceptible to being weaponized by new models. Answering this question across tens of thousands of organizations created an opportunity to showcase the power of our platform and ecosystem."