George Kurtz, chief executive officer of Crowdstrike Inc., listens during an interview in San Francisco, California, U.S., on Wednesday, Sept. 25, 2019.
Michael Short | Bloomberg | Getty Images
Shares of CrowdStrike slumped more than 6% on Wednesday morning after the cybersecurity company issued lackluster revenue guidance for the current quarter.
The security software maker said it expects revenue to range between $1.14 billion and $1.15 billion this quarter, falling 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.
CrowdStrike also said it is still feeling a pinch from last July’s widespread outage that temporarily halted flights and forced hospitals to push off some procedures. The company 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.
In a securities filing, CrowdStrike said it received requests for information from the U.S. Justice Department and the country’s Securities and Exchange Commission regarding 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. The company also lifted its full-year earnings outlook, but maintained revenue estimates.
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.
— CNBC’s Jordan Novet contributed to this report.
