As the culprit that caused the "largest IT failure in history" last month, CrowdStrike, although performing strongly in the second quarter, still lowered its annual performance expectations. The company's CFO expects the challenges to continue for about a year, with growth expected to accelerate again in the second half of next year.
On Wednesday after the close of US East Coast time, the US cybersecurity software manufacturer CrowdStrike released its second quarter financial report.
As the culprit that caused the "largest IT failure in history" last month, CrowdStrike, although performing strongly in the second quarter, still lowered its annual performance expectations. After the release of the financial report, the company's stock price briefly dropped by 4% during after-hours trading on Wednesday, but narrowed to 2.69% at the time of writing.
The financial report shows that in the second quarter ending July 31st,
revenue was $0.9639 billion, a 32% year-on-year increase, slightly better than the expected $0.959 billion;
net income was $47 million, or $19 per share, a significant increase year-on-year; compared to $8.47 million, or $3 per share in the same period last year.
As for the financial guidance,
the company expects an adjusted earnings per share of $0.80-0.81 for the third quarter, while analysts expect $0.96.
The company expects adjusted earnings per share for the full year to be $3.61 to $3.65, with revenue ranging from $3.89 billion to $3.99 billion. This is a reduction from management's forecast in June this year, when adjusted earnings per share were expected to be $3.93 to $4.03 and revenue was projected to be $39.8 billion to $40.1 billion.
Major IT failures have led to long-term negative impacts.
On July 19th of this year, CrowdStrike caused global disruption in various industries such as aviation, banks, and medical care due to a software update error, resulting in approximately 8.5 million Windows computers experiencing blue screen crashes. Airlines suffered particularly severe losses.
Although CrowdStrike quickly released a solution after the incident, CEO George Kurtz also apologized to customers and partners, the company still faced trouble.
After the incident, investors sold off CrowdStrike's stocks, and several Wall Street institutions also reduced the company's target price.
Moreover, Delta Airlines, most severely affected by this incident, reported $0.38 billion in revenue losses and $170 million in costs, and stated intentions to seek compensation from CrowdStrike. The airline's passengers also collectively filed lawsuits against CrowdStrike.
"All customers are looking for some kind of discount," wrote Gray Powell, an analyst at investment firm BTIG, and others in last week's report, giving CrowdStrike a 'hold' rating.
Expected to resume growth in one year.
After the financial report was released, crowdstrike CEO Kurtz stated in a conference call with analysts that last month's IT failure incident resulted in some transactions being delayed for the next few quarters, but most transactions are still "in progress".
Chief Financial Officer Burt Podbere said that the challenges facing the company will continue for about a year, and it is expected to accelerate growth again in the second half of next year.
Kurz said, "I will never forget the seriousness of the events on July 19, and my commitment is to ensure that such events do not happen again... The days after the event were some of the most challenging in my professional career, as I deeply empathize with everything our customers have been through."
Before crowdstrike released its performance report, its stock price has risen by about 4% this year, while during the same period the s&p 500 index has risen by 17%.
Meanwhile, crowdstrike's competitors SentinelOne and palo alto networks have both raised their annual revenue expectations this month, indicating that their market share is increasing.