CrowdStrike (NASDAQ: CRWD) is giving investors plenty of reasons to be bullish.
The cybersecurity company reported better-than-expected results for its latest quarter. It also raised its financial forecast for the rest of the year. Better, analysts at Citi reiterated a buy rating and raised their price target to $260 from $250.
Strong Quarterly Results
CRWD reported adjusted earnings of 31 cents per share. Analysts had expected 29 cents.
The company also reported $1.47 billion in revenue, beating the $1.44 billion expected. Revenue was up 26% from the same quarter last year, when CRWD reported $1.17 billion. And CEO George Kurtz called it “the best quarter in CrowdStrike’s history,” as quoted by CNBC.
The company also reported a big improvement in its bottom line. CRWD made $5.3 million in net income, compared with a loss of $70.2 million a year earlier.
AI Creating Opportunity
One of the biggest reasons why investors are excited about CRWD is the growing use of artificial intelligence. As more businesses use AI, they will need to protect their systems from new types of cyberattacks. AI can help businesses work faster and more efficiently, but hackers can also use the technology to find weaknesses in computer systems.
Recent developments in AI have shown how quickly these threats are changing. That could increase demand for cybersecurity companies like CrowdStrike. Kurtz believes protecting AI systems could become one of the company’s biggest opportunities. “Every enterprise will run on AI, and securing it is the largest market opportunity in our history,” as quoted by CNBC.
Customers Are Spending More
CrowdStrike’s annual recurring revenue, or ARR, increased 25% from last year to $5.84 billion.
ARR is important because it shows how much money the company expects to receive from customers through ongoing subscriptions. CRWD also added a record $333 million in new annual recurring revenue during the quarter.
Even better, CrowdStrike also raised its outlook for the full year. The company now expects revenue between $5.99 billion and $6.01 billion. That is higher than Wall Street’s estimate of $5.93 billion. CRWD also expects adjusted earnings of between $1.25 and $1.26 per share. Analysts had expected $1.23.
For the next quarter, CrowdStrike expects revenue between $1.52 billion and $1.53 billion. It expects adjusted earnings of 31 cents per share. Those numbers are roughly in line with what analysts were expecting.
What’s Next For CrowdStrike?
The latest earnings report could give the stock another boost. The company is growing its subscription business, signing larger customers and building products designed to protect businesses from AI-related threats. For investors, the message is simple: companies are using more AI, and they need more security to protect it. CrowdStrike is betting that it can be one of the biggest companies helping businesses stay safe in that new AI-driven world.