Attention, Market Monitors readers: Despite a stellar quarterly performance, CrowdStrike Holdings, Inc. (CRWD) is feeling the heat. The company’s stock took a hit after reducing its full-year guidance following a major IT hiccup. What’s going on, and what does it mean for you? Let’s dive in.
CrowdStrike delivered robust earnings, surpassing Wall Street expectations in Q2. Adjusted earnings per share (EPS) came in at $1.04, beating the $0.98 estimate—a surprising 6.12% gain. Revenue reached $963.87 million, marking a 32% year-over-year spike and surpassing expectations by 0.55%.
However, the joy from the impressive earnings report was tempered by the aftershocks of a global IT outage in July. This wasn’t a minor glitch—it caused serious disruptions, resulting in flight cancellations, delayed package deliveries, and postponed medical appointments. One of the hardest hits came from Delta Air Lines, suing CrowdStrike for $380 million in lost revenue and $170 million in costs.
Due to the outage, CrowdStrike felt compelled to revise its full-year guidance, a move that disappointed investors. New revenue estimates are now pegged between $3.89 billion and $3.902 billion, down from the previous forecast of $3.953 billion. Adjusted EPS has also been revised to range from $3.61 to $3.65, a drop from the earlier estimate of $3.93 to $4.03.
Analysts aren’t taking this lightly. Wolfe Research’s Joshua Tilton maintained a Hold rating, highlighting uncertainty about the company’s future performance and the lingering impact of the outage. BTIG analysts Gray Powell and Trevor Rambo shared similar sentiments, pointing out the potential financial hit from customer demands for discounts.
Despite the challenges, CEO George Kurtz is committed to steering the company through this turbulent period. CrowdStrike has implemented extended commitment packages for affected customers, which will impact subscription and professional services revenue in the remaining fiscal quarters. Kurtz emphasized the company’s resilience and ongoing commitment to innovation during these trying times.
Here’s a breakdown of the key metrics from CrowdStrike’s quarterly report and forward guidance:
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Q2 Results:
Metric Q2 Revenue $963.9 million, 32% YoY growth Adjusted EPS $1.04, 32% YoY growth Annual Recurring Revenue (ARR) $3.86 billion, 32% YoY growth Free Cash Flow (FCF) $272.2 million -
Guidance:
Metric Q3 FY2025 Revenue $979.2 – $984.7 million $3.89 billion – $3.902 billion Adjusted EPS 80 – 81 cents $3.61 – $3.65 Guidance Impact – $30 million subscription revenue impact, high-single-digit million impact on professional services revenue
The table provides a concise summary of Q2 results and forward guidance, emphasizing key revenue and EPS metrics, along with the financial impacts from the July outage.
By understanding these key points, you’ll get a clearer picture of CRWD’s current landscape. Stay tuned to see how the situation evolves and whether CrowdStrike can navigate these challenging waters. Guard your portfolios and be prepared—intelligence will out, as always.
