CrowdStrike lowers revenue forecasts after global IT outage
CrowdStrike has revised its revenue and profit projections for the year. This decision comes in the wake of a global outage in July, triggered by a flawed software update from the company. The outage had significant repercussions, disrupting internet services on 8.5 million Windows devices and leading to widespread flight cancelations.
Outage's impact on CrowdStrike's operations and market position
The software glitch not only stranded thousands of people at airports but also forced broadcasters off-air. CrowdStrike CEO George Kurtz acknowledged that this incident has pushed some company deals into future quarters, although most remain "in the pipeline." Despite concerns about potential damage to CrowdStrike's market dominance, analysts believe that the cost of switching providers may mitigate larger impacts.
Shares and future growth prospects
Following the announcement of revised forecasts, CrowdStrike's shares experienced a more than 3% drop in extended trading. However, they later recovered with a 3% rise in volatile extended trading. CFO Burt Podbere anticipates that the company's challenges will persist for about a year, but expects growth to pick up again in the latter half of next year.
Customer support package and annual revenue forecast
Podbere also revealed that the annual revenue forecast would be affected by a customer commitment package costing $60 million in H2. Shrenik Kothari, lead sector analyst at Baird, stated that "The customer support package and Falcon Flex are CrowdStrike's moves to solidify trust and ramp up platform adoption after the July 19 outage." The company now anticipates its annual revenue to range between $3.89 billion and $3.90 billion, down from previous expectations of $3.98 billion to $4.01 billion.
CrowdStrike's Q2 results and analyst ratings
Despite the challenges, CrowdStrike reported a 32% increase in its Q2 revenue to $963.9 million, surpassing estimates of $958.6 million. The company also posted an adjusted profit per share of $1.04, exceeding expectations of 97 cents. According to FactSet data, despite the incident, CrowdStrike maintains buy ratings from 78% of analysts—higher than any other pure-play cybersecurity provider except for CyberArk.
