The cybersecurity sector has been under perceived pressure due to accelerating deployment of AI tools.

CrowdStrike reported better-than-expected earnings during the fiscal first quarter, as accelerating demand for AI is pushing more enterprises to focus on tighter cybersecurity controls.

CrowdStrike CEO George Kurtz said demand for AI and the introduction of Anthropic’s Mythos created an inflection point that demonstrated to the market that cybersecurity is an essential part of the AI ecosystem.

“AI has now directly entered the world of cybersecurity across two dimensions,” Kurtz said during the company earnings call Wednesday. “First, you need cybersecurity to secure AI itself. Deploying AI across the enterprise is simply too risky without cybersecurity from the start.”

Secondly, Kurtz added that accelerated AI use has created an explosion in “greenfield attack surfaces” that require cybersecurity to operate in a secure manner. For example, he referenced neoclouds, data centers, hyperscalers and GPUs.

The company said revenue increased 26%, to $1.39 billion, during the fiscal first quarter ended April 30, compared with year-ago revenue of $1.1 billion.

Adjusted earnings reached $283.4 million, or $110 a share, during the quarter, compared with $184.7 million, or 73 cents, in the year-ago period.

Annual recurring revenue (ARR), a key metric of growth among cybersecurity companies, rose 24% to reach $5.5 billion. CrowdStrike reported record net new ARR growth of $256 million in the latest quarter, an increase of 32% year over year.

The company raised estimates for full-year, net new ARR growth to nearly 28%. The company’s share price was down more than 7%, to $693.40, on Thursday morning.

On Tuesday, CrowdStrike rival Palo Alto Networks reported a 31% increase in revenue , to $3 billion, during the company’s fiscal third quarter.

“These results are materializing as AI fundamentally redefines the enterprise tech stack, elevating cybersecurity to a mission-critical priority for every organization,” Nikesh Arora, chairman and CEO of Palo Alto Networks, said during his company conference call on Tuesday.

Shares of Palo Alto Networks were down more than 3% on Thursday morning, to $270.98.