CrowdStrike, the cybersecurity software maker, recently reported its fiscal second-quarter results, exceeding expectations in terms of earnings per share and revenue compared to LSEG consensus. The company’s revenue grew by 32% year over year, reaching $963.9 million for the quarter ending on July 31. The net income also saw a significant increase to $47 million, or 19 cents per share, from $8.47 million, or 3 cents per share, in the same quarter a year ago.
On July 19, CrowdStrike experienced a global outage due to a flawed content configuration update for its Falcon sensor, causing widespread disruptions. Millions of computers crashed, resulting in flight cancelations, delayed packaged deliveries, and postponed medical appointments. Administrators had to manually reboot affected computers. The incident led to shareholders filing lawsuits against the company, including Delta Air Lines seeking damages for lost revenue and costs amounting to $380 million and $170 million, respectively. Travelers affected by the outage have also filed class-action suits against CrowdStrike.
Impact on Financial Guidance
As a consequence of the global outage, CrowdStrike revised its full-year guidance, lowering its adjusted net earnings forecast to 80 to 81 cents per share on $979.2 million to $984.7 million in revenue. For the 2025 fiscal year, the company now anticipates adjusted earnings per share between $3.61 and $3.65, with revenue ranging from $3.89 billion to $3.90 billion. This marks a significant reduction from the previous forecast of adjusted earnings per share of $3.93 to $4.03 and revenue between $3.98 billion to $4.01 billion. The updated guidance factored in a negative subscription revenue impact of $30 million per quarter, as well as professional services revenue in the high-single-digit millions, attributed to incentives for a customer commitment package.
The repercussions of the outage were reflected in the market, with CrowdStrike’s shares dropping by 4% in extended trading following the earnings report. Investors, including shareholders and customers, expressed concerns and sought compensation for the disruptions caused by the incident. Analysts at BTIG, with a hold rating on CrowdStrike shares, noted that customers were expecting some form of discount in light of the outage. Despite the challenges, CrowdStrike CEO George Kurtz issued an apology to clients and partners, emphasizing the company’s efforts to address the issue promptly.
Looking ahead, CrowdStrike aims to navigate the aftermath of the global outage and regain investor confidence. The management’s commitment to delivering value to customers and strengthening cybersecurity solutions remains unwavering. While the financial projections have been revised downward for the current and future fiscal years, the company is focused on enhancing operational efficiency and mitigating risks to ensure sustainable growth in the long term. Executives will engage with analysts in a conference call to provide further insights on the company’s performance and strategic initiatives moving forward.
The global outage incident has undoubtedly impacted CrowdStrike’s financial results and overall business operations. The company’s ability to manage the crisis effectively, address stakeholder concerns, and adapt its strategic direction will be critical in restoring trust and achieving sustainable growth in the challenging cybersecurity landscape.
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