CrowdStrike drops 6% on lackluster guidance, ongoing impact from July IT outage

CrowdStrike's stock experienced a significant decline of over 6% on Wednesday morning following the cybersecurity firm's release of uninspiring revenue projections for the upcoming quarter. The company anticipates revenue to fall between $1.14 billion and $1.15 billion, which is below the $1.16 billion forecasted by analysts from LSEG. Additionally, CrowdStrike expects adjusted earnings per share to be between 82 cents and 84 cents, slightly exceeding the LSEG estimate of 81 cents per share. The firm continues to feel the repercussions of a major outage last July that disrupted flights and delayed medical procedures at hospitals. In response to this incident, CrowdStrike has discontinued its customer commitment packages, which were designed to attract and retain clients. According to Chief Financial Officer Burt Podbere, this program negatively impacted revenue by approximately $11 million during the quarter and is expected to further affect revenue by an additional $10 million to $15 million through the fiscal year’s end. Evercore ISI analyst Peter Levine downgraded CrowdStrike’s shares, citing a combination of high valuation and recurring one-off issues that hinder potential for significant growth. Despite the disappointing guidance, the company surpassed earnings expectations and reported revenue in line with forecasts for the first fiscal quarter, with adjusted earnings per share reaching 73 cents compared to the anticipated 65 cents. Revenue saw a growth of about 20% in this period. However, CrowdStrike also reported a net loss of $110.2 million, or 44 cents per share, in contrast to a net income of $42.8 million, or 17 cents per share, from the same quarter last year. Alongside these results, CrowdStrike unveiled a $1 billion share repurchase initiative.