CrowdStrike's stock soars as earnings impress in face of cybersecurity jitters

By Emily Bary

Earnings from some cybersecurity peers this quarter were met with sharply negative reactions, but CrowdStrike's earnings seemed to wow Wall Street

CrowdStrike Holdings Inc. shares exploded 24% higher in Tuesday's extended session after the cybersecurity company delivered an upbeat forecast on top of its better-than-expected quarterly results.

For the fiscal first quarter, CrowdStrike (CRWD) models $902.2 million to $905.8 million in total revenue, along with 89 cents to 90 cents in adjusted earnings per share. Analysts tracked by FactSet were looking for $900 million and 82 cents, respectively.

Looking to the full fiscal year, CrowdStrike's management is anticipating about $3.925 billion to $3.989 billion in revenue, as well as $3.77 to $3.97 in adjusted EPS. The revenue forecast beat the $3.938 billion consensus view at the midpoint. The earnings outlook came in ahead of the FactSet consensus, which was for $3.76.

The upbeat stock movement for CrowdStrike in the extended session comes after shares dropped about 5% in Tuesday's regular session. In general, there have been some jitters among cybersecurity investors after Palo Alto Networks Inc. (PANW) delivered a downbeat outlook in mid-February and Zscaler Inc.'s (ZS) results last week were met with a negative stock reaction.

CrowdStrike logged fourth-quarter net income of $53.7 million, or 22 cents a share, whereas it recorded a net loss of $47.5 million, or 20 cents a share, in the year-earlier period.

On an adjusted basis, CrowdStrike's earnings per share roughly doubled to 95 cents from 47 cents, while analysts tracked by FactSet had been modeling 82 cents.

Revenue increased to $845.3 million from $637.4 million, whereas analysts were looking for $839.1 million.

CrowdStrike's ending annual recurring revenue grew 34% from a year earlier, the company said. Net new ARR growth accelerated to 27%.

"Our achievements in fiscal 2024 represent another high-water mark for CrowdStrike and we remain relentlessly focused on profitably scaling the business to $10 billion ARR and beyond," Chief Financial Officer Burt Podbere said in a release.

The company also announced plans to acquire Flow Security in a deal that it says will enhance its cloud-data protection.

CrowdStrike is "expanding our cloud leadership by protecting data in all states as it flows through the cloud, and ... redefining the future of data protection by securing data from code, to application, to device and cloud," its chief executive, George Kurtz, said in a release.

-Emily Bary

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03-05-24 2014ET

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