CrowdStrike beats Q1 estimates, raises ARR outlook by $50M on AI demand

CrowdStrike reported Q1 revenue of $1.39 billion, beating estimates, and raised its full-year net new ARR outlook by more than $50 million.

"In Q1, the worlds of cybersecurity and frontier AI collided: this was the Mythos moment," George Kurtz, co-founder and chief executive officer at CrowdStrike, said.

Adjusted earnings were $1.10 per share, above the $1.07 consensus. Ending ARR reached $5.51 billion, up 24% from a year earlier. Net new ARR of $255.8 million increased 32% year over year. Non-GAAP operating margin expanded to 24% from 18%, and free cash flow hit a record $468.5 million, or 34% of revenue.

The company now expects fiscal 2027 net new ARR of $1.279 billion to $1.303 billion, implying 27% to 29% growth. Shares fell about 9% in after-hours trading as the beat landed within expectations rather than delivering a blowout.

Kurtz said enterprise urgency around AI security increased sharply in April, with customers seeking protection for AI workloads, agents and shadow AI activity. He tied the shift to CrowdStrike's work with Anthropic and OpenAI and its new Project QuiltWorks coalition, which helps enterprises assess frontier AI risk.

Demand was broad across product lines. AIDR, or AI detection and response, saw ending ARR grow more than 250% sequentially, with second-quarter pipeline already exceeding $50 million. Next-generation SIEM ARR surpassed $585 million, up more than 75% year over year, while cloud ARR exceeded $800 million.

Falcon Flex, the company's subscription model, approached $2 billion in ending ARR. Accounts using Flex showed customers returning ahead of renewal dates and increasing commitments as they broadened platform usage.

For the second quarter, CrowdStrike guided to revenue of $1.436 billion to $1.442 billion and adjusted earnings of $1.16 to $1.17 per share, in line with consensus. Full-year revenue is projected at $5.915 billion to $5.959 billion, with adjusted earnings of $4.88 to $4.96 per share.

The board also approved a four-for-one stock split. Shareholders of record as of June 25 will receive three additional shares for every share held, with split-adjusted trading beginning July 2.

The guidance raise signals management expects AI-driven demand to accelerate through the year. Investors will watch the Q2 earnings call for updates on AIDR adoption and Falcon Flex expansion as key drivers of the raised ARR trajectory.

This article is for informational purposes only and does not constitute investment advice.