CrowdStrike Holdings Inc. experienced a notable 10% drop in shares after issuing weak earnings guidance, underscoring the challenges the cybersecurity company faces in the wake of a global IT outage. The company anticipates an additional $73 million in expenses this quarter due to the July incident that disrupted critical systems worldwide. Despite posting better-than-expected fourth-quarter results, the disappointing guidance has overshadowed its performance.
CrowdStrike reported earnings of $1.03 per share on $1.06 billion in revenue, marking a 25% increase from the previous year. However, these figures fell short of the expected $4.42 per share, according to analysts polled by LSEG. The company also posted a net loss of $92.3 billion, or 37 cents per share, compared to net income of $53.7 million, or 22 cents per share, in the same period last year.
In addition to the outage-related costs, the company incurred $21 million in incident-related expenses and $49.9 million in tax expenses connected to acquisitions. CrowdStrike projects an additional $43 million in costs due to deal packages offered following the outage. This has also impacted the company's free cash flow margins, which they expect to rebound to 30% or more by fiscal 2027.
CEO and Founder George Kurtz addressed these challenges during a conference call with analysts, describing CrowdStrike as a "comeback story." He expressed pride in the company's resilience and engagement with stakeholders during a difficult year.
"I'm extremely proud of the engagement we've had with customers, partners, prospects in the market navigating a year that tested CrowdStrike"
- George Kurtz
Looking ahead, CrowdStrike projects annual earnings between $3.33 and $3.45 per share, excluding items. For the first quarter, the company expects earnings ranging from 64 cents to 66 cents per share, significantly lower than the average Factset estimate of 95 cents.