CrowdStrike reported a 51% year-over-year increase in net new annual recurring revenue (ARR) to $333 million in its fiscal second-quarter results, marking the sixth consecutive quarter of accelerating growth. The company’s stock rose 19.2% to $225.52 following the earnings release, valuing the firm at $192.63 billion.
Next-Gen SIEM ARR grew 60% to $695 million, while Falcon Flex ARR surged 101% to $2.29 billion, with 935 new Flex accounts added during the quarter. Combined cloud, next-gen identity, and next-gen SIEM ARR reached $2.18 billion, up 39% year-over-year. Revenue grew 26% year-over-year, while non-GAAP operating margin expanded to 25%, or $372 million, a 46% increase from the prior year. Free cash flow stood at 26% of revenue, totaling $377 million.
Management highlighted AI-related threats as a key driver of demand, noting that AI agents are simultaneously enhancing security capabilities and creating new attack vectors. AI Detection & Response (AI DR) ARR nearly tripled quarter-over-quarter. Platform consolidation continued, with 50% of subscription customers using six or more modules and 60% of customers with ARR exceeding $100,000 utilizing eight or more modules.
The company set a fiscal 2027 free cash flow margin target of 30%+, while guiding subscription gross margins to reach 82–85% by fiscal 2029. CrowdStrike also outlined a fiscal 2031 ARR target of $10 billion, implying a roughly 15% compound annual growth rate from the current $5.84 billion base. For the third quarter of fiscal 2027, consensus estimates call for $1.51 billion in revenue and $0.31 in earnings per share.
Analysts at Jefferies, Needham, DA Davidson, TD Cowen, and Scotiabank raised price targets to a range of $240–$250, while Bernstein maintained a $119 target with a Market Perform rating. Competitors including Palo Alto Networks, SentinelOne, and Microsoft were noted in the earnings call.
