CrowdStrike Shares Surge on Strong Q3 Earnings, Raised Forecast
Cybersecurity firm posts record net new recurring revenue and boosts full-year outlook, citing strong demand for its Falcon platform.
Shares of CrowdStrike Holdings (NASDAQ: CRWD) jumped in after-hours trading Tuesday after the cybersecurity giant delivered fiscal third-quarter results that surpassed analyst expectations and raised its financial outlook for the full year, signaling sustained momentum in corporate cybersecurity spending.
The Austin-based company reported adjusted earnings of $0.96 per share on revenue of $1.23 billion for the quarter ending October 31. The results topped consensus estimates, which projected earnings of $0.94 per share on $1.22 billion in revenue. The positive report sent the stock up more than 9% in extended trading.
Driving the strong performance was a record quarter for net new annual recurring revenue (ARR), a critical metric for subscription-based software companies. CrowdStrike added a record $265 million in net new ARR, a 73% increase year-over-year, bringing its total ending ARR to $4.92 billion. This acceleration suggests the company is successfully acquiring new customers and expanding its relationships with existing ones despite a complex macroeconomic environment.
“This was an exceptional quarter of execution, resulting in one of our best quarters in company history,” said George Kurtz, CrowdStrike’s president and chief executive officer, in the company’s official earnings release. Kurtz highlighted the company's single-platform architecture, the Falcon platform, as a key differentiator, noting its role as an “enabler of secure AI transformation” for its clients.
The company’s financial health was further underscored by a record third-quarter free cash flow of $296 million. This robust cash generation provides CrowdStrike with significant flexibility for reinvestment in growth and innovation.
Wall Street analysts reacted positively to the print, with several firms reiterating their confidence in the company's trajectory. Following the report, analysts at Jefferies raised their price target on the stock to $600, citing the impressive ARR growth and management's confident tone. This sentiment reflects a broader view that CrowdStrike continues to consolidate its leadership position in the endpoint security market, taking share from competitors with less integrated platforms.
Buoyed by the strong quarter, CrowdStrike issued an optimistic forecast. For the upcoming fourth quarter, the company expects revenue between $1.24 billion and $1.25 billion, with adjusted earnings per share in the range of $0.98 to $0.99. Both figures are ahead of prevailing analyst estimates.
For the full fiscal year 2026, the company raised its guidance and now anticipates revenue in the range of $4.80 billion to $4.81 billion, up from its previous forecast. The outlook for adjusted earnings per share was also lifted to a range of $3.79 to $3.80.
The results come as organizations globally continue to prioritize cybersecurity budgets to combat increasingly sophisticated digital threats. CrowdStrike's cloud-native platform, which leverages artificial intelligence to detect and prevent breaches, has benefited from a market trend toward platform consolidation, where customers prefer a single vendor for a wide range of security needs.
As of Tuesday's market close, CrowdStrike's stock had risen significantly over the past year, reflecting investor confidence in the high-growth cybersecurity sector. The latest results and bullish forecast are likely to reinforce the view that the company remains a primary beneficiary of durable secular trends in cloud computing and digital security.