CrowdStrike, a cybersecurity software maker, experienced a 4% decline in share value in after-hours trading following the release of its fiscal second-quarter results. Despite beating expectations in terms of earnings per share and revenue, the company revised its full-year guidance downwards due to a global outage.
The company reported that its revenue had grown by 32% year over year, reaching $963.9 million in the quarter ending on July 31. Additionally, CrowdStrike recorded a net income of $47 million, translating to 19 cents per share. The annual recurring revenue was reported to be $3.86 billion, slightly exceeding the StreetAccount consensus of $3.85 billion.
On July 19, CrowdStrike rolled out a flawed content configuration update for its Falcon sensor on computers running Microsoft Windows operating systems. The update was intended to collect data on new attacks but instead caused millions of computers to crash. This led to the disruption of various services, including flight cancelations, delayed package deliveries, and postponed medical appointments.
As a result of the outage, the company faced a backlash from its clients and partners. CEO George Kurtz issued an apology and assured that a fix had been deployed to address the issue. Despite the corrective measures, shareholders lodged lawsuits against CrowdStrike, and Delta Air Lines, which suffered substantial financial losses as a result of the incident, announced its intention to seek damages.
In light of the global outage and its repercussions, CrowdStrike revised its guidance for the fiscal year. The company now anticipates adjusted net earnings of 80 to 81 cents per share on revenues ranging from $979.2 million to $984.7 million. For the 2025 fiscal year, CrowdStrike has adjusted its forecast to $3.61 to $3.65 in adjusted earnings per share and $3.89 billion to $3.90 billion in revenue.
This revised guidance represents a significant downgrade from the management’s previous forecast, which had projected adjusted earnings per share of $3.93 to $4.03 and revenue between $3.98 billion to $4.01 billion. The reduction in revenue is attributed to a negative impact on subscription revenue of $30 million in each quarter and a decline in professional services revenue due to incentives offered under a customer commitment package.
Before the release of the earnings report, CrowdStrike’s stock had seen a modest increase of 4% for the year, while the S&P 500 index had surged by 17% over the same period. However, the negative impact of the global outage on the company’s financial performance caused investors to react unfavorably, resulting in a decline in share price.
The executives at CrowdStrike are scheduled to discuss the quarterly results with analysts on a conference call. The incident has raised concerns about the company’s ability to maintain customer trust and deliver on its financial projections. It remains to be seen how CrowdStrike will navigate the fallout from the global outage and restore confidence among shareholders and clients.