5 stocks where massive buybacks are driving shareholder value higher
Companies today are returning capital to shareholders not only through dividends, but increasingly through share buybacks. For five different companies across cybersecurity, data infrastructure, industrials and operational software, we examined how much of the announced buyback programs actually translated into a lower share count. Authorization alone does not create value: what matters is the price, the actual volume of repurchases and whether they merely offset dilution from employee stock awards.
Key points
One of the cybersecurity companies increased its buyback authorization to $1.5 billion this spring, but in the following quarter it did not repurchase a single share.
The industrial conglomerate completed a $500 million accelerated share repurchase program and at the same time has increased its dividend for 55 consecutive years.
The data company spent $300 million on buybacks over the last six months, but distributed more than 2.5 times that amount to employees in stock compensation.
One of the companies has no approved buyback program. Its share count outstanding increased by 3.8% over the year solely due to employee plans.
The smallest company in the comparison is the only one that has actually managed to reduce its share count outstanding over the past year.
Share buybacks have become a standard part of capital allocation for American companies over the last decade, from established industrial conglomerates to software companies that were not GAAP-profitable until recently. The logic seems simple at first glance: a company uses its free cash flow to buy its own shares, thereby reducing the share count outstanding and increasing each remaining shareholder's stake in future earnings. The reality is more complicated, especially for technology companies that pay a significant portion of employee compensation in stock.
For fast-growing software companies, an interesting paradox emerges. A company can simultaneously grow rapidly, generate high free cash flow, invest in product development, provide employees with stock compensation worth hundreds of millions of dollars annually, and announce billion-dollar buyback programs. The question the market often fails to ask is: can such a company aggressively buy back its own shares while the share count outstanding barely declines, or even increases? For four of the five companies, the answer is yes. Only for one of them did buybacks actually outpace dilution and reduce the real number of shares that investors divide among themselves.
CrowdStrike
Business, growth and cash flow
CrowdStrike $CRWD operates the Falcon cloud platform for endpoint, identity and cloud environment protection, sold on a subscription basis. In the second fiscal quarter of 2027 (three-month period ended July 31, 2026), revenue grew 26% to $1.47 billion and annual recurring revenue (ARR) reached $5.84 billion. In that quarter, the company posted its first-ever positive GAAP operating result, albeit barely, while non-GAAP operating margin reached 25%.
Cash generation is a strength of the business: operating cash flow was $530 million in the second quarter and free cash flow was $377 million, corresponding to a 26% margin. For the first six months of fiscal 2027, CrowdStrike generated $846 million in free cash flow. At the end of the quarter, the company had $5 billion in cash and short-term investments, offset by debt in the form of senior notes due in 2030.
Buyback in numbers
CrowdStrike approved its first buyback program of $1 billion in June 2025. In April 2026, it increased it by another $500 million to a total of $1.5 billion. Management justified the increase by saying it sees a gap between the company's improving operating performance and how the market values it, which is a management assertion, not an independently verifiable fact.
The reality of repurchases is considerably more modest than the authorization size. In the first fiscal quarter of 2027 (February through April 2026), CrowdStrike repurchased 480,000 shares for $175.6 million. In the second quarter (May through July 2026), according to its own quarterly 10-Q report, the company did not repurchase any shares. Thus, for the entire six months, the total remains at $175.6 million, with $1.3 billion of the $1.5 billion authorization still unused as of July 31, 2026.
Against this stands stock compensation. For the first half of fiscal 2027, CrowdStrike reported stock-based compensation expense, including related payroll taxes, of $716.6 million — more than four times what the company spent on buybacks. The net capital effect (buybacks minus SBC) is therefore roughly negative $541 million over six months. The result is visible in the total share count: according to market aggregator data, the number of shares outstanding increased by 3.24% over the last twelve months, despite the ongoing buyback. CrowdStrike also executed a four-for-one stock split in July 2026, which does not change economic substance but must be kept in mind when comparing historical buyback prices to the current share price.
Can CrowdStrike afford it?
Based on the last two quarters, the answer is negative. The buyback yield, i.e., the ratio of the repurchased amount to a market capitalization exceeding $240 billion, is far below one percent and does not come close to offsetting the pace of new share issuance to employees.