Last night, CrowdStrike reported what I thought was an excellent quarter, but the stock got hammered today, mainly because the cybersecurity company didn't beat the estimates by as much as we've all become accustomed to. The guidance was strong, too, and they even announced a four-for-one stock split, which shouldn't matter in theory, but in practice tends to attract more individual investors. And I think this is a buying opportunity. But don't take it from me. Earlier today, I had the chance to speak with George Kurtz, the founder and CEO of CrowdStrike. Take a look. George, welcome back to Mad Money.
You know, George, I got to tell you, I followed your company since you came public. And I saw you had record new annual recurring revenue, yet accelerating revenue growth. You had record cash flow, free cash flow. That was terrific. You had new AR that was great. But somehow it was regarded as disappointing. So I have to believe that at some level, you might have been surprised that this quarter was disappointing.
Well, Jim, the way I look at it is we have the best products and we're taking care of our customers in an era where AI is obviously going to be pervasive and you're going to need security. So I thought we posted a fantastic quarter. Obviously, you went through some of the stats. The other stat that I'll point out to you is our rule of 40 was 59. So when you think about the growth and the cash flow generation, it's insane at our scale. So we're very proud of the quarter and we're excited about the future and the tailwinds that we're seeing from AI.
But let me posit something. We've had this terrible discovery, basically this mythos where it looks like things are way out of control. And I figured that you would have a huge amount of business when this news broke, but it doesn't seem like maybe it turned into a lot of business. Was I wrong?
Well, Jim, you have to look at the calendar. You're talking about those breaking in the middle of April, or quarter ends at the end of April. Right. So we're selling enterprise software, not necessarily shipping boxes. So these things take time to get into customers' hands. You got to go through a sales cycle. But what I want to point out is you have to look at the guidance of the next quarter. We raised the full year guidance across the entire year. Our net new AR guidance by over 50 million, over 520 basis points, which is an incredible raise. So we have the confidence to do that because we see the opportunity that's in front of us and we see what customers are looking for, which is CrowdStrike, which is our ADR technology, AI detection and response to be able to identify rogue AI agents and be able to protect those and allow people to actually accelerate their AI adoption in an enterprise.
Well, I mean, is it possible that people are concerned that you did not raise your near-term ARR and you came in with 5.51 billion versus 5.503 billion? And people thought that maybe the spring rally wasn't justified.
Well, I would point you to the whole year, Jim. You know, 520 basis points is a big move. And we see this taking place across the entirety of the year. So we feel really good about the raise. I think we feel fantastic about the pipeline. As an example, our AI technology, we're entering the pipeline with over 50 million. In Q2 alone, we saw 250% quarter-over-quarter growth just in that product alone. And what I know from talking to customers is they want to roll out more AI. And if you need more AI, you want to consume more AI, you're going to need security. So, you know, I thought it was a great Q1 and we're excited about the future and the guidance that we provide.
All right. Well, couldn't agree more. It's why I told our people who belong to the investing club, don't believe what you read. This is an amazing quarter. I want to ask about Project Glasswing from Anthropic. What I understand from the people I talked to, you're pretty much leading the cybersecurity efforts to try to figure out what to do here, despite the fact that Anthropic thought at one point that they could handle it themselves. I don't think insurance companies want Anthropic to handle it themselves, and I think they wanted you to do it because I think you actually know how to stop it.
Jim, what's important to realize is that security is an ecosystem. And to be successful, you need to have an ecosystem that's going to help customers and help partners. So when you look at what Anthropic has come out with, they've got some great models, no doubt. But in order to be able to work with customers, you have to take advantage of those deep, trusted relationships with which companies like CrowdStrike have built over the last 15 years. You have to leverage the deep data moat that we have with our Falcon technology, and you have to leverage the fact that we're in the middle of helping to stop these big breaches or helping non-customers respond to the breaches they have, and then we turn them into customers. So I think the ecosystem is a key part. They recognize that and we're happy to be part of that coalition. And you know, again, we're also working with OpenAI in their TAC program. So we're at the epicenter of AI and security. And I think that goes to show you the leadership position that we have.
