CrowdStrike sees upbeat quarterly revenue as AI adoption drives endpoint security demand

CrowdStrike forecasts upbeat quarterly revenue as AI adoption fuels growth

The company has been rolling out AI-driven features on its Falcon platform, including new detection and triage tools launched in September, as part of a broader push to consolidate security operations and attract customers seeking integrated solutions. CrowdStrike forecast fourth-quarter revenue above analysts' estimates on Tuesday, as the cybersecurity firm benefits from growing adoption of AI across its product suite. Shares of the company rose about 1% in extended trading. The company has been rolling out AI-driven features on its Falcon platform, including new detection and triage tools launched in September, as part of a broader push to consolidate security operations and attract customers seeking integrated solutions. "This isn't a one-off; it has lifted its full-year outlook to match the growing momentum in its tools...It's not a world-beating upgrade.. but it shows that CrowdStrike is taking the AI opportunity with both hands, growing margins and scaling efficiently," said Farhan Badami, Market Analyst at eToro. The demand for cybersecurity continues to be robust, as businesses ramp up investments in AI-powered security systems to counter a surge in sophisticated digital threats, benefiting companies such as CrowdStrike. The upbeat outlook marks a turnaround for the Texas-based firm, which faced reputational damage last year after a faulty software update triggered widespread outages on Windows systems, and disrupted hospitals, banks and airports. CrowdStrike sees fourth-quarter revenue between $1.29 billion and $1.30 billion, compared with analysts' estimates of $1.22 billion according to data compiled by LSEG. The company also increased its full-year revenue outlook to between $4.80 billion and $4.81 billion. For the third quarter, the company posted revenue growth of 22% to $1.23 billion, compared with estimates of $1.22 billion.

CrowdStrike CEO: Endpoint Security Re-Accelerates As AI Surge Leads To 'Renewed Interest'

While EDR (endpoint detection and response) has been CrowdStrike's core business from the start, the usage of AI applications and browsers has ushered in a new phase of EDR demand from customers and partners, CrowdStrike CEO George Kurtz said Tuesday. CrowdStrike is seeing "renewed" demand from customers and partners for its Falcon endpoint security offering, spurred by the surging adoption of AI tools that are creating massive new risk on endpoint devices, CrowdStrike co-founder and CEO George Kurtz said Tuesday. Kurtz made the comments as CrowdStrike disclosed financial results for the third quarter of its fiscal 2026, ended Oct. 31, which surpassed Wall Street expectations and included a re-acceleration of several key growth metrics. [Related: 'Flexing' Its Muscle: CrowdStrike CEO Kurtz Says It's The First 'Hyperscaler Of Security'] EDR (endpoint detection and response) has been CrowdStrike's core business ever since its founding nearly a decade and a half ago. However, a new phase of demand for EDR is now underway in connection with the deployment of GenAI applications such as OpenAI's ChatGPT and Anthropic's Claude, as well as AI web browsers such as Perplexity's Comet and ChatGPT Atlas, according to Kurtz. "Our endpoint business accelerated in the quarter on the heels of AI-driven demand. In the world of AI, so much is being pushed to the edge," Kurtz said during the vendor's quarterly call with analysts Tuesday. "Employees are now deploying new applications such as Claude desktop and ChatGPT, directly onto the machines -- driving both rapidly improved productivity and also significant new risks." The issue is "further exacerbated by the rapid adoption of new AI browsers, such as Comet and Atlas, which bring new opportunities and, concurrently, new vulnerabilities and threats," he said. Ultimately, "AI adoption is supercharging renewed interest in the endpoint, as the endpoint is the epicenter of human and non-human interaction with AI," Kurtz said. In one major customer win during the quarter, a large government agency deployed Falcon across 75,000 endpoints in a massive replacement of a "legacy" antivirus product, he said. Another recent standout deal will see Kroll migrate nearly 500,000 endpoints to Falcon as part of adopting CrowdStrike's Falcon Complete Next-Gen MDR platform as the backbone for its own managed detection and response (MDR) offering, CrowdStrike announced Tuesday. The deal will see Kroll replacing a "point product SMB EDR" with Falcon, Kurtz said during the call with analysts. Kroll is "up-leveling their own MDR service with Falcon Complete for Service Providers, with our Falcon Complete team becoming the SOC [Security Operations Center] for Kroll," he said. CrowdStrike's total revenue for the quarter was $1.23 billion, climbing 22 percent from the same period a year earlier and coming in just above the Wall Street analysts' consensus estimate. That represented an acceleration in year-over-year revenue from the prior sequential quarter, when CrowdStrike sales were up 21 percent. In a recent interview with CRN, Kurtz said that CrowdStrike sees massive partner opportunities ahead for driving consolidation on the cybersecurity giant's Falcon platform, including through the expansion of Falcon Flex subscription model deals to SMBs and midmarket customers. The company is boosting growth for the channel with its first-mover advantage on Falcon Flex, which enables upsized deals through gaining customer pre-commitments at a discount for deploying multiple products from the broad Falcon platform, he said. Looking ahead, "net-new business from partners, particularly because of Flex, I think will expand in the future," Kurtz said. CrowdStrike disclosed Tuesday that it generated $1.35 billion in ARR, as of the end of the latest quarter, from customers that had adopted Falcon Flex. That was up more than 200 percent compared to a year earlier, Kurtz said Tuesday. Total ARR reached $4.92 billion as of the end of CrowdStrike's most recent quarter, a 23-percent increase from a year ago, the company reported.