CrowdStrike swung to profit and raised its outlook — but the stock sank

Measuring against the prior-year period's loss of $104.3 million, or 42 cents per share, the quarter ended April 30 saw the cybersecurity company earn $27.8 million in net income, equal to 11 cents per share. Adjusted earnings came in at $1.10 per share. That topped analyst expectations of $1.07 per share, according to CNBC.

Total revenue rose 26% to $1.39 billion, ahead of analyst estimates of $1.36 billion, according to CNBC. The quarter brought in $255.8 million in net new ARR, pushing the company's annual recurring revenue figure up 24% to $5.51 billion.

Looking ahead to the full fiscal year 2027, management lifted its total revenue target to a range of $5.91 billion to $5.96 billion, revising upward from the previous forecast of $5.87 billion to $5.93 billion. Adjusted earnings guidance was similarly revised higher, moving to $4.88 to $4.96 per share from what had been a range of $4.78 to $4.90. Second-quarter targets set by the company call for roughly $1.44 billion in revenue alongside adjusted earnings in the range of $1.16 to $1.17 per share.

Free cash flow reached $468.5 million in the quarter, up from $279.4 million a year earlier. Cash and cash equivalents stood at $4.55 billion as of April 30.

"In Q1, the worlds of cybersecurity and frontier AI collided: this was the Mythos moment," CEO George Kurtz said in a statement. "CrowdStrike is AI security infrastructure, critical to successful AI adoption."

Separately, CrowdStrike's board gave the green light to a four-for-one stock split, under which shareholders on record as of June 25 will be issued three new shares per share owned, with split-adjusted trading set to kick off on July 2.

The selloff drew comparisons to what happened with fellow cybersecurity company Palo Alto Networks $PANW, which had itself shed 5.6% during Wednesday's regular session even after posting better-than-expected numbers, according to MarketWatch.

Mark Malek, chief investment officer at Siebert Financial, offered a pre-release take that proved prescient, writing that AI-security enthusiasm had driven the stock hard into the print and that even a strong quarter can get sold on the news when a name is priced to perfection, according to Barron's. Before Wednesday's session closed, the shares had already climbed roughly 59% on the year.