CrowdStrike on Tuesday evening reported better-than-expected fiscal 2026 third-quarter results and forward guidance. The numbers, however, were not enough to power shares higher, given their roughly 24% advance since the cybersecurity company’s fiscal second-quarter print back in late August. That said, the latest beat and raise should help solidify recent stock gains and set the stage for further upside next year. Revenue in fiscal Q3 increased 22% year over year to $1.23 billion, beating the consensus estimate of $1.22 billion, compiled by market data provider LSEG. Adjusted earnings per share (EPS) increased to 96 cents in the three months ending Oct. 31, beating the 94-cent estimate, according to LSEG. Why we own it Cybersecurity is a must-have for companies in the digital age. Led by co-founder and CEO George Kurtz, CrowdStrike is one of the best there is, along with fellow Club name Palo Alto Networks . The company specializes in endpoint protection through its AI-native platform called Falcon. Competitors: Palo Alto Networks, Fortinet , SentinelOne , Microsoft Portfolio weighting: 3.33% Most recent buy: March 10, 2025 Initiation date: Oct. 16, 2024 Bottom Line The October quarter was an encore performance from CrowdStrike — delivering better-than-expected results across the board, with record-high operating cash flow, adjusted operating income, EPS, free cash flow, and net new annual recurring revenue. The Falcon Flex subscription model is clearly helping to drive more business, with annual recurring revenue (ARR) tied to these accounts surging more than 200% versus the year-ago period. Falcon Flex allows customers to quickly deploy additional protection as needed, without all the red tape of going through the often-lengthy procurement process. Artificial intelligence benefits CrowdStrike in two ways: by increasing attack vectors in its customers’ digital infrastructure, resulting in more demand, and by strengthening CrowdStrike’s ability to protect customers against these attacks, resulting in more pricing power and cross-selling. As CEO George Kurtz said on the post-earnings conference call, “Businesses every day are having jarring lightbulb moments, witnessing AI-powered adversarial tradecraft firsthand. … Now, just as anyone can use AI to vibe code and become a software engineer, anyone can also now vibe hack, becoming a sophisticated adversary with AI.” He added that CrowdStrike is mission-critical. “No matter how the market swings, geopolitical tensions evolve, or what technologies are in vogue, our digital society mandates cybersecurity as a necessity, and now, more than ever, synonymous with that, CrowdStrike is a necessity.” CRWD YTD mountain CrowdStrike YTD This speaks to the nature of demand for CrowdStrike and other cybersecurity companies, such as fellow Club name Palo Alto Networks , and what these companies can provide in an all-encompassing, platform approach to digital protection. With attacks becoming more…
Read More: We’re raising our CrowdStrike price target following a beat and raise