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Investing.com -- CrowdStrike reported better-than-expected second quarter fiscal 2026 results but saw its shares drop 3% in premarket trading Thursday after issuing third quarter revenue guidance below analyst expectations.
The cybersecurity firm posted adjusted earnings of $0.93 per share for the quarter ended July 31, exceeding the analyst estimate of $0.83. Revenue came in at $1.17 billion, above the consensus estimate of $1.15 billion and representing 21% growth YoY.
The company achieved record second-quarter net new annual recurring revenue (NNARR) of $221 million, with ending ARR growing 20% YoY to $4.66 billion.
Subscription revenue came in at $1.10 billion, marking a 20% increase.
"Highlighting the quarter, NNARR returned to positive growth as the company begins to comp the negative impacts associated with last year’s incident," Piper Sandler analyst Rob D. Owens said in a note.
However, the impact of the incident "continues to dampen revenue in the near-term as subscription revenue was in line for the 2nd consecutive quarter," he added.
Despite strong quarterly results, investors reacted negatively to CrowdStrike’s third quarter revenue guidance of $1.208-1.218 billion, which fell short of the $1.23 billion analyst consensus.
The company’s full-year revenue outlook of $4.749-4.815 billion was in line with the $4.78 billion consensus, while its full-year EPS guidance of $3.60-$3.72 came in above analyst expectations of $3.51.
"We understand investors’ desire to invest in a strong management team that has demonstrated the ability to execute in good times and bad, but there is a lot going on here and, in our view, more risk in the numbers than usual,” Guggenheim analysts said, and maintained a Neutral rating given the company’s valuation.
The company generated record second quarter cash flow from operations of $333 million and record second quarter free cash flow of $284 million, demonstrating strong financial performance despite market concerns about future revenue growth.
"With reacceleration a quarter ahead of our expectations, CrowdStrike delivered an exceptional Q2," said George Kurtz, Founder and CEO. "Record Q2 net new ARR of $221 million, over 1,000 Flex customers, and more than 100 re-flexes highlight CrowdStrike as the leader in cybersecurity consolidation."
Elsewhere, CrowdStrike said it has acquired Onum, a real-time telemetry pipeline management company.
(Senad Karaahmetovic contributed to this report.)