CrowdStrike Holdings reported better-than-expected earnings after the stock market closed Tuesday.
CrowdStrike posted fourth-quarter adjusted earnings of $1.12 a share, which came in above analyst estimates of $1.10 a share, according to FactSet. Revenue for the quarter of $1.31 billion also beat Wall Street expectations of $1.3 billion.
Annual recurring revenue, or the annualized value of CrowdStrike’s customer subscription contracts, was $5.25 billion, a 24% increase from the prior year.
The cybersecurity company also said it expects first-quarter earnings to be between $1.06 a share to $1.07 a share on revenue of $1.36 billion to $1.364 billion. That’s compared with analyst earnings estimates of $1.06 a share on revenue of $1.36 billion.
For the year, CrowdStrike says it estimates earnings of $4.78 a share to $4.90 a share on revenue of $5.87 billion to $5.93 billion. Analysts were expecting fiscal 2027 earnings of $4.80 a share and revenue of $5.86 billion.
Shares were down 1.3% in after-hours trading. The stock has dropped 17% this year.
It’s been rough sledding for all business software names in 2026, and CrowdStrike is no exception.
A narrative that has taken hold is that artificial intelligence will disrupt software by replacing many of its functions and challenging current subscription revenue models. On Feb. 22, CrowdStrike CEO George Kurtz offered a rebuttal for the security companies in a LinkedIn post, saying, “AI is powerful. It’s transformative. And it absolutely makes security better. But AI doesn’t eliminate the need for security. It increases it.”
He was responding to an 8% stock decline on Feb. 20 triggered by the release of a tool that can scan code for possible security holes from AI start-up Anthropic. This indeed makes software more secure.
But that is only one part of security. Hackers will also have AI tools at their disposal, and traditional attacks will get more complex, effective, and widespread. The advent of AI agents—software that can execute a complex series of tasks from simple prompts—opens up a huge new security hole. To be useful, agents must be given a lot of privileges around private data and communications, and that makes them subject to a new class of cyberattack called prompt injection.
CrowdStrike offers a range of security services, many of which were added to its core endpoint security through acquisitions. The company is following that playbook with three recent acquisitions to plug up new AI holes in security that are emerging.
“The AI revolution is creating a massive growth opportunity for CrowdStrike, one that our technology, team, and ecosystem are well positioned to continue winning,” Kurtz said in the earnings report on Tuesday.
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