Co-Founder, President, Chief Executive Officer & Director, CrowdStrike
CrowdStrike CEO on AI’s impact on cybersecurity demand
crowdstrike #ai #cybersecurity #yahoofinance Shares of CrowdStrike (CRWD) are trading lower after the stock surged on ...
About George Kurtz
George Kurtz, co-founder and CEO of CrowdStrike, has been active in recent months discussing the company's financial performance, its strategic initiatives, and the evolving cybersecurity landscape. In multiple earnings calls and media appearances, Kurtz highlighted record quarterly results, including strong annual recurring revenue (ARR) growth and a Rule of 40 of 59. He promoted the company's Falcon Flex subscription model, which he described as enabling customers to adopt modules as needed, and noted that its total deal value had grown significantly. Kurtz also announced a $1 billion share repurchase authorization and outlined expectations for margin expansion in fiscal 2027. Kurtz has focused public remarks on the impact of artificial intelligence on cybersecurity. He introduced "Project Quilt Works," a coalition with firms such as Accenture, IBM, and EY aimed at identifying and prioritizing AI-related vulnerabilities, which he characterized as a "security Y2K moment" requiring urgent board-level attention. He described AI agents as expanding the attack surface and stated that CrowdStrike aims to be the "protector of autonomous AI agents." Kurtz also discussed the company's expanded partnership with AWS, its work with frontier AI models from OpenAI and Anthropic, and the growing threat of state-sponsored cyber operations, which he said increased by 150% in the previous year. Separately, he addressed requests from the DOJ and SEC related to revenue recognition and the July 19 outage. In an interview focused on business and racing, he cited his investment in the Mercedes-AMG Petronas Formula 1 team and emphasized that people, execution, and strategy are key to success.
Transcript (13 segments)
✨ AI-enhanced transcript with speaker attribution
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Interviewer0:00
Cyber security company CrowdStrike pulling back this morning after surging on Wednesday. The company issuing strong guidance and citing increased demand for its services. This comes as we've seen huge companies recently hit by cyber attacks. Joining us now we've got George Kurtz, who is the CrowdStrike co-founder and CEO. George, great to have you back on Yahoo Finance here with us. I mean, you think about some of the companies that have been impacted most recently by a wave of cyber threats here: UnitedHealth, you've got Microsoft reporting hackers spying on its executives last year, MGM casinos of course took a $100 million hit from a hack. I mean, bad news in the environment generally, good news for demand at least perhaps for some of your solutions and services. Where are you seeing that demand remains strong in the environment right now?
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George Kurtz0:47
Well, what we're seeing is broad-based demand. And we reflected those results obviously for Q4 with incredible growth: 282 million of ARR for the quarter and 66% rule of 40, if you will, from a free cash flow perspective. So what we're seeing is that the threat environment is actually getting worse. We're seeing that take shape with some of these companies that you talked about. But the biggest thing to keep in mind is these adversaries are very determined. It's very hard for organizations to continue to battle them back, and that's one of the reasons why CrowdStrike has been successful. We've got technology to help fight these sorts of adversaries and stop the breach.
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Interviewer1:35
George, given that and the fact that the threat seems to just be escalating at this point, I know you made an acquisition here in the most recent quarter of Flow Security. Should we expect more M&A down the line as you do try to beef up the protection here against these types of threats?
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George Kurtz1:51
We've been very diligent about our acquisition strategy. We've got some great companies, great technologies, great teams over the years. We're really excited about Flow because that brings capabilities in the cloud that allows us to basically identify data, be able to classify that data, and be able to protect that data from leaking. And that ties nicely into our data protection module which we recently launched. So having this DSPM capabilities is really important for us. And I think when you look at our cloud strategy and what we put together and what we reflected and disclosed to Wall Street just a couple of days ago, a $4 billion business in cloud security, one of the largest and fastest growing cloud security businesses on the planet. So we're excited about those acquisitions, and we will continue to look at great companies that fit within our product portfolio.
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Interviewer2:42
George, I wonder, and I've been able to have the opportunity to go inside of one of these artificial intelligence kind of war rooms or cybersecurity war rooms, and it's clear that artificial intelligence is within the fabric, within the DNA of cybersecurity as a whole. But for an industry, how do you take that one step further and apply the generative nature to it to go as far as rewriting code that further protects and suggests to some of your portfolio clients how they can implement that as well?
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George Kurtz3:13
Your AI has been a huge element of CrowdStrike's success. When I started the company, people weren't even talking about AI; it was machine learning. And there's a lot of techniques that we use, and over the years we've added more capabilities in terms of identifying and finding things that have never been seen before. Over the last say 18 months, we've created Charlotte AI, which is our generative AI product. And really the goal for Charlotte is to take the collective wisdom of CrowdStrike, to be able to distill it, make it available to these SOC analysts, the folks that are using our technology. But more than just a chatbot, it actually can drive workflow automation. And this is really important in today's environment. There's not enough people to do this work, there's not enough skilled people. So our goal with Charlotte and generative AI is to take eight hours of work, turn it into 10 minutes of work, and take a level one, maybe an intro analyst, and give them the capabilities of a level three, a very experienced analyst. We think it's a game changer. We just released it, customers love it, and we look forward to its future success.
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Interviewer4:15
I'm curious, given your decades of experience within the industry, where are we in AI adoption? Are we still right around that first inning? And given that, what does that then tell us about demand for your product 5, 10 years from now?
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George Kurtz4:30
Well, to be candid, I think we're putting the cleats on and getting ready to hit the batter's box. I mean, we are so early in this game. If you look at generative AI, what it means, people are just trying to figure out how they use it internally, how they use it safely. Which is one of the cool things about Flow: we can actually put guardrails on how people can use GenAI and ChatGPT and those sorts of things so that data doesn't flow out that the company doesn't want. So very early innings. And I think you're seeing a lot of companies create a strategy around GenAI: how do they use it, where do they use it, what groups, how do you look at the data, does the data go out to the internet, is it used for training in someone else's LLMs? Very, very early. But there's so much promise, so much promise from a defender perspective and just a productivity perspective. But also, we talked about in our earnings call, GenAI really is a force multiplier for the adversaries. It takes very esoteric tactics and techniques and brings it down to the masses. You're going to see more adversaries come out of evil generative AI.
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Interviewer5:30
How do we more quickly deploy some of these solutions, especially knowing the threats and how quickly they are also replicating their attempts towards getting towards some of the critical data that is extremely sensitive regardless of the sector that you're serving?
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George Kurtz5:47
That's the beauty about the CrowdStrike Falcon platform: single agent architecture, single platform, single console. So when we added our technologies around data protection as an example, customers just need to turn it on. It's a license entitlement, it's all there. And that sort of frictionless ease of use for our platform is one of the reasons why we've been so successful. So we continue to focus on that and build new technologies. More importantly, listen to customers, what they're saying, where are their problems. They're experts in pain; we need to be experts in solutions. And that's really what we're focused on, delivering that value to our customers.
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Interviewer6:21
George, just lastly while we have you here, I mean we're going into, and we are a mid now clearly after Super Tuesday, an election year. Where should cybersecurity rank in what we're hearing from political candidates, knowing how much the threat level has raised?
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George Kurtz6:37
I think it should be front and center. I can tell you it's front and center for boards of directors. I was just on a call yesterday with a big Fortune 500 company going through this. The number one risk factor when you look at the political environment and you look at our election integrity and process around that, and really going beyond that now is the deepfake opportunities, whether it's video or audio, the ability to influence. It's all wrapped together as a huge risk for election security and something that I know and I believe that the governments are taking seriously.
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Interviewer7:13
George, congratulations on the strong quarter. We hope to have you back again soon on Yahoo Finance. George Kurtz, the CEO of CrowdStrike.