CrowdStrike shares dip after revenue guidance misses expectations amid ongoing scrutiny
Shreeaa Rathi | Jun 04, 2025, 22:35 IST
( Image credit : AP, TOIGLOBAL )
In a surprising turn, CrowdStrike's stock took a hit following a revenue forecast that fell short of analyst expectations. The cybersecurity company attributed this setback to adjustments made after a significant outage in July. Meanwhile, the scrutiny from the U.S. Justice Department and SEC regarding their revenue recognition practices adds another layer of complexity.
CrowdStrike shares experienced a decline on Wednesday after the cybersecurity company released revenue guidance for the current fiscal quarter that fell short of expectations, with the company citing the impact of initiatives implemented following a July 2024 outage. The company anticipates revenue between $1.14 billion and $1.15 billion for the quarter, below the $1.16 billion estimate from analysts polled by LSEG, while also facing scrutiny from the U.S. Justice Department and the Securities and Exchange Commission regarding revenue recognition, annualized revenue, the outage, and related matters. Despite exceeding earnings estimates for the fiscal first quarter and lifting its full-year earnings outlook, CrowdStrike's stock dipped due to the revenue forecast and ongoing concerns about "one-time events," leading to a downgrade from Evercore ISI.
Shares of CrowdStrike slumped more than 6% on Wednesday morning.
The security software maker expects revenue to range between $1.14 billion and $1.15 billion this quarter.
This falls short of the $1.16 billion estimate from analysts polled by LSEG.
CrowdStrike called for adjusted earnings per share between 82 cents and 84 cents for the quarter, versus an LSEG estimate of adjusted earnings of 81 cents per share.
The company is still feeling a pinch from last July's widespread outage.
This outage temporarily halted flights and forced hospitals to push off some procedures.
CrowdStrike recently ended its incentive program, known as customer commitment packages, to lure and maintain customers on the heels of the incident.
Finance chief Burt Podbere said the program shrank revenue by about $11 million in the quarter.
He also said the company expects a $10 million to $15 million impact on revenue through the end of the fiscal year.
CrowdStrike said it received requests for information from the U.S. Justice Department and the country's Securities and Exchange Commission.
The requests pertain to revenue recognition and annualized revenue for some deals, the outage and related matters.
\"It's the combination of a full valuation and a theme of one-time events that keep coming up that makes it difficult for us to underwrite meaningful upside at these levels,\" wrote Evercore ISI's Peter Levine, as he downgraded shares to in line.
\"Additionally, we detect growing investor frustration around several lingering, unaddressed issues.\"
Despite the weaker-than-expected guidance, CrowdStrike topped earnings estimates and posted in-line revenue for the fiscal first quarter.
Adjusted earnings per share came in at 73 cents, topping the adjusted per-share earnings of 65 cents expected by LSEG.
Revenue grew about 20% in the period, according to a release.
The company also recorded a net loss of $110.2 million, or 44 cents per share, compared with net income of $42.8 million, or 17 cents per share, a year ago.
Along with the results, CrowdStrike announced a $1 billion share repurchase plan.
Shares of CrowdStrike slumped more than 6% on Wednesday morning.
The security software maker expects revenue to range between $1.14 billion and $1.15 billion this quarter.
This falls short of the $1.16 billion estimate from analysts polled by LSEG.
CrowdStrike called for adjusted earnings per share between 82 cents and 84 cents for the quarter, versus an LSEG estimate of adjusted earnings of 81 cents per share.
The company is still feeling a pinch from last July's widespread outage.
This outage temporarily halted flights and forced hospitals to push off some procedures.
CrowdStrike recently ended its incentive program, known as customer commitment packages, to lure and maintain customers on the heels of the incident.
Finance chief Burt Podbere said the program shrank revenue by about $11 million in the quarter.
He also said the company expects a $10 million to $15 million impact on revenue through the end of the fiscal year.
CrowdStrike said it received requests for information from the U.S. Justice Department and the country's Securities and Exchange Commission.
The requests pertain to revenue recognition and annualized revenue for some deals, the outage and related matters.
\"It's the combination of a full valuation and a theme of one-time events that keep coming up that makes it difficult for us to underwrite meaningful upside at these levels,\" wrote Evercore ISI's Peter Levine, as he downgraded shares to in line.
\"Additionally, we detect growing investor frustration around several lingering, unaddressed issues.\"
Despite the weaker-than-expected guidance, CrowdStrike topped earnings estimates and posted in-line revenue for the fiscal first quarter.
Adjusted earnings per share came in at 73 cents, topping the adjusted per-share earnings of 65 cents expected by LSEG.
Revenue grew about 20% in the period, according to a release.
The company also recorded a net loss of $110.2 million, or 44 cents per share, compared with net income of $42.8 million, or 17 cents per share, a year ago.
Along with the results, CrowdStrike announced a $1 billion share repurchase plan.