CrowdStrike Holdings Inc. issued a lower-than-expected earnings forecast for the fiscal fourth quarter, disappointing investors who were hoping for signs that the cybersecurity company had recovered from a disastrous update that caused widespread computer crashes.
The company projected adjusted earnings of 84 to 86 cents per share for the fourth quarter, below analysts’ expectations of 87 cents, according to Bloomberg estimates. Following the announcement, CrowdStrike’s shares fell approximately 5% in extended trading.
This forecast comes just months after the company’s flawed update, which crashed millions of devices running Microsoft Corp.’s Windows system. The incident, which occurred on July 19, disrupted industries globally, including air travel, banking, and healthcare. Despite the setback, CrowdStrike’s previous quarterly results, which exceeded expectations, had led many to believe the IT outage wouldn’t significantly affect the company’s financials.
However, Tuesday’s report also highlighted some positive developments. CrowdStrike’s third-quarter revenue reached $1.01 billion, surpassing Wall Street’s forecasts. The company posted adjusted earnings of 93 cents per share, significantly above the average estimate of 81 cents.
In addition to the strong third-quarter performance, CrowdStrike raised its full-year revenue guidance to a range of $3.92 billion to $3.93 billion, slightly above analysts’ expectations of $3.9 billion.
The company also announced it surpassed $4 billion in annual recurring revenue as of October 31, marking a significant milestone. CEO George Kurtz highlighted that CrowdStrike is “the fastest and only pure-play cybersecurity software company to reach this reported milestone.”
Despite these successes, the aftermath of the summer outage continued to loom large. Delta Airlines, one of the companies affected by the disruption, filed a lawsuit in October seeking at least $500 million in damages, alleging significant losses due to the outage. CrowdStrike, however, dismissed the claim, stating that Delta was attempting to shift blame from its failure to update outdated IT infrastructure.
In a call with investors, Kurtz acknowledged the summer incident, stating, “Following this summer’s incident, as a company we were tested. We responded with speed, care, and resolve, and we focused on becoming even better.”
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