In the wake of a major global outage in July, cybersecurity firm CrowdStrike Holdings Inc CRWD has revised its annual revenue and profit forecasts downwards. This announcement led to a 2.31% drop in the company’s pre-market value on Thursday, as per Benzinga Pro.
What Happened: The July outage, triggered by a faulty software update, disrupted internet services and affected 8.5 million Microsoft Windows devices. This led to widespread flight cancellations.
CEO George Kurtz admitted that the incident had delayed several deals, but assured that most remain “in the pipeline,” Reuters reported on Thursday.
Despite the damage to the company’s reputation, analysts believe that the cost of switching providers may deter a larger impact on CrowdStrike. However, the company’s shares fell more than 3% in extended trading.
CFO Burt Podbere anticipates that the company’s challenges will persist for about a year, with a return to growth expected in the latter half of next year. The annual revenue forecast will be affected by a $60 million customer commitment package in the second half.
Amid an increase in digital scams and high-profile hacks, businesses continue to invest heavily in cybersecurity products. CrowdStrike now expects its annual revenue to be between $3.89 billion and $3.90 billion, down from its previous forecast of $3.98 billion to $4.01 billion.
Why It Matters: The July outage, described as the "largest IT outage in history", highlighted our heavy reliance on a few key companies. It impacted businesses worldwide, including airlines, banks, media, and even 911 services.
Despite the outage, CrowdStrike reported second-quarter revenue of $963.9 million, beating the consensus estimate of $958.582 million. The company also reported adjusted earnings of $1.04 per share, beating analyst estimates of 97 cents per share. This marked the continuation of a trend since the company’s public debut in 2019, where it has consistently beaten analyst estimates on the top and bottom lines.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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