CrowdStrike (NASDAQ:CRWD) delivered better-than-expected results for the first quarter of fiscal 2027, driven by accelerating demand for AI-powered cybersecurity solutions. The company reported record growth in annual recurring revenue (ARR), strong cash generation and improved profitability, leading management to raise its outlook for the full year and approve a four-for-one stock split.
Despite the strong headline figures, the stock came under pressure in premarket trading on Thursday, falling more than 10% as investors focused on a sharp increase in operating expenses.
Total operating costs rose to $1.07 billion during the quarter, compared with $934.3 million in the same period last year, highlighting the company’s continued investment in growth initiatives, artificial intelligence capabilities and platform expansion.
Revenue for the quarter reached $1.39 billion, representing a 26% year-on-year increase and exceeding analyst expectations of $1.36 billion. Subscription revenue, which remains the core of CrowdStrike’s business model, also grew 26% to $1.32 billion.
Annual recurring revenue climbed 24% from a year earlier to $5.51 billion. The company generated a record $255.8 million in net new ARR during the quarter, reflecting continued customer adoption and expansion across its cybersecurity platform.
Chief Executive Officer George Kurtz said the growing convergence between artificial intelligence and cybersecurity is creating a significant opportunity for the company. He pointed to strong customer demand, increasing partner engagement and continued market-share gains as key factors behind the decision to raise CrowdStrike’s fiscal 2027 ARR expectations.
Profitability also improved significantly. Adjusted net income increased to $283.4 million from $184.7 million a year earlier, while adjusted earnings per share rose to $1.10 from $0.73.
Management now expects fiscal 2027 revenue to range between $5.91 billion and $5.96 billion, while adjusted earnings per share are projected at $4.88 to $4.96. The company also increased its forecast for net new ARR growth, citing a healthy second-quarter sales pipeline, strong customer retention rates and continued momentum for its Falcon Flex platform.
Analysts at Bank of America said AI adoption is “driving accelerating demand, but durability remains the key debate.”
“The key question remains whether this represents a durable reacceleration cycle or a more front loaded demand step up,” they noted, while raising their price target on the stock to $750 from $535.
Bernstein analysts also acknowledged the company’s strong positioning in the AI security market.
“stock price remains the only thing holding us back from recommending CrowdStrike.”
“We raise our growth duration ~1% point in the next few years due to AI tailwinds,” they added.
AI Security Expansion Continues
CrowdStrike continued to expand its artificial intelligence strategy during the quarter through a series of partnerships and product initiatives.
Among the key developments was Project QuiltWorks, a collaboration involving OpenAI and Anthropic, as well as the rollout of the Charlotte AI AgentWorks platform developed alongside AWS, NVIDIA and OpenAI.
The company also introduced additional AI-driven security capabilities and cloud protection features across its Falcon platform, further strengthening its position in one of the fastest-growing segments of the cybersecurity industry.
Management believes that increasing enterprise adoption of AI technologies will create greater demand for security solutions capable of protecting AI models, data and cloud environments, providing a significant long-term growth opportunity.
Four-for-One Stock Split Approved
Separately, CrowdStrike’s board approved a four-for-one stock split through a stock dividend.
Shareholders recorded on June 25 will receive three additional shares for every share owned. Trading on a split-adjusted basis is expected to begin on July 2.
The move is designed to improve share accessibility and liquidity following the stock’s substantial appreciation over recent years.
More About CrowdStrike Holdings
CrowdStrike Holdings is a leading cybersecurity company specialising in cloud-native endpoint protection, threat intelligence, identity security and AI-powered cyber defence. Its Falcon platform provides organisations with a unified security architecture designed to protect endpoints, cloud workloads, identities and data across increasingly complex digital environments.
As artificial intelligence becomes more deeply integrated into enterprise operations, CrowdStrike is positioning itself at the intersection of cybersecurity and AI, leveraging partnerships with major technology companies and continued platform innovation to expand its addressable market and support long-term growth.