CrowdStrike Holdings, Inc. CRWD used its second-quarter fiscal 2027 earnings call to argue that enterprise AI adoption is becoming a durable driver of cybersecurity spending. Record net new ARR of $333 million, up 51%, reinforced management’s case that demand is broadening across Falcon.
The call also raised the forward bar. CrowdStrike increased its fiscal 2027 net new ARR outlook again, while emphasizing Falcon Flex as the commercial engine for platform consolidation.
CRWD Raises Full-Year ARR Outlook
Chief financial officer Burt Podbere said fiscal 2027 net new ARR is now expected to be in the range of $1.350 billion to $1.359 billion, suggesting 34% year-over-year growth. The midpoint is approximately $116 million above the company’s initial outlook.
For the third quarter, Podbere guided to $343-$347 million of net new ARR and revenues of $1.523 billion to $1.529 billion. He cited a record third-quarter pipeline as a key source of confidence.
Full-year revenues are expected to be in the band of $5.99-$6.011 billion. Podbere also maintained an expectation for at least a 30% free cash flow margin for fiscal 2027 and said XM Cyber’s technology assets contribute no ARR or revenues to the guidance.
CrowdStrike Makes Flex the Commercial Engine
Co-Founder, president and CEO George Kurtz said ending ARR from accounts adopting Falcon Flex exceeded $2.29 billion, up 101% year over year. More than 935 Flex accounts were added during the quarter.
Kurtz said customers converting from standard subscriptions to Flex generated an average ending ARR uplift above 40%. Flex new-logo ARR represented 34% of quarterly net new ARR.
Podbere said platform adoption deepened, with 51%, 35% and 26% of subscription customers using six, seven and eight or more modules, respectively. He also reported sequential improvement in both dollar-based net and gross retention.
CRWD Balances Growth With Margin Expansion
CrowdStrike’s second-quarter fiscal 2027 non-GAAP earnings of $0.31 per share surpassed the Zacks Consensus Estimate of $0.29. The company’s second-quarter revenues rose 26% to $1.47 billion, which also exceeded the Zacks Consensus Estimate of $1.44 billion by 2.10%.
Non-GAAP operating margin reached 25%, up 350 basis points year over year. Free cash flow was $377 million, or 26% of revenue.
Podbere attributed the profitability gains to revenue execution, gross-margin expansion, operating efficiency and internal automation and AI investments. He guided to a 27.5% free cash flow margin at the midpoint for the third quarter.
CRWD Pushes AI Security Across the Platform
Kurtz said AIDR ending ARR nearly tripled from the first quarter as customers sought visibility, control and data protection for AI use. He said immediate AI deployments were increasing demand for those capabilities.
Next-gen SIEM ending ARR topped $695 million, identity exceeded $585 million and cloud surpassed $905 million. Kurtz linked those businesses to security needs created by AI agents, non-human identities and expanding cloud workloads.
He also highlighted exposure management, arguing that faster exploit activity is increasing the importance of real-time prioritization when organizations cannot patch every vulnerability immediately.
CrowdStrike Q&A Tests AI Durability
A JPMorgan analyst asked how long the post-Mythos demand strength could last. Kurtz said customers want to deploy more AI but face security, compliance, privacy and data protection constraints, which he described as a sustained tailwind.
A Raymond James analyst asked whether AIDR substitutes for EDR. Kurtz was explicit that AIDR is separate, incremental and priced independently, while using the same Falcon agent.
A UBS analyst asked about token-based pricing. Kurtz said AIDR already includes a token model, with customers receiving defined allowances and able to purchase additional token packs through Falcon Flex.
CrowdStrike's Direction After Q2
Kurtz’s call message centered on using the Falcon platform to secure AI adoption across endpoints, identity, cloud, SIEM and exposure management, with Flex reducing friction in how customers expand usage.
Podbere paired that growth posture with what he described as prudent guidance, pointing to broad demand across customer sizes and geographies alongside the record pipeline.
CrowdStrike’s Zacks Signals
CRWD carries a Zacks Rank #3 (Hold), with a Value Score of F, Growth Score of A, Momentum Score of A and VGM Score of B. The strong Growth and Momentum grades and favorable VGM Score contrast with the weakest Value grade, while the Rank is a Hold. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Style Scores complement the Zacks Rank and are optimized for the same one-to-three-month horizon, with the strongest historical combinations centered on Rank #1 or 2 (Buy) stocks paired with A or B Style Scores. A Zacks Rank #3 can still be held under the framework, but the Zacks Rank can change as earnings estimates are revised after the just-reported results.
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