CrowdStrike CEO George Kurtz on Wednesday repeatedly used the word “resilience” in describing the cybersecurity company’s financial outlook, just weeks after a flawed software update took down businesses around the world.
His comments came after CrowdStrike released its latest quarterly results and warned that full-year revenue would fall short of expectations, though the projections were only slightly lower than analysts had expected, offering hope that most customers will stick with the company despite the massive technical outage.
“These results demonstrate the resilience of our business and team,” Kurtz said on a conference call with investors.
CrowdStrike reported second-quarter revenue of $969.3 million, up 32% from the same period a year ago. Net income was $46.7 million, compared with $8.5 million a year ago.
A CrowdStrike software update on July 19 took down more than 8 million Windows-connected computer systems, including those at airports and hospitals. The crash is estimated to have cost Fortune 500 companies more than $5 billion.
Analyst Dan Ives called it a “misstep” for CrowdStrike, and investors worried about customer exodus and potential legal costs sent CrowdStrike shares plummeting 27% in a matter of weeks.
“This has been the most difficult event in the history of our company,” Kurtz said Wednesday.
As part of its earnings report, CrowdStrike slightly revised down the full-year revenue forecast it had made before the outage. The company now says it will report full-year revenue of between $3.89 billion and $3.9 billion, which is lower than the $3.95 billion analysts had been expecting, according to LSEG data, but it’s a strong signal that CrowdStrike’s business isn’t in steep decline.
CrowdStrike shares fell 2% after the close of trading.
Kurtz and Chief Financial Officer Bert Podbere sought to allay concerns about the company during an earnings call on Wednesday, emphasizing its focus on retaining customers for its products and encouraging them to add more products and longer subscriptions.
“The events of July 19th mark the beginning of a new chapter for CrowdStrike,” Kurtz said, adding that he believes the market opportunity for cybersecurity companies is the same now as it was on July 18.
Podbert said he expects fallout from the outage to continue “to varying degrees” into next year, including increased scrutiny from buyers that could lengthen deal negotiations. He also said he expects about $60 million worth of backlogged deals that have been stalled since July 19 to close in the coming quarters.
“These types of events have a half-life,” Kurtz told investors, adding that he expects business to recover next year.
CrowdStrike estimates that its “customer commitment package” incentives have impacted subscription revenue by approximately $60 million since the outage, and have an “estimated single-digit multi-million dollar impact” on professional services revenue for the remainder of fiscal 2025. The packages, offered after the outage, are designed to encourage CrowdStrike customers to make greater use of its products and sign longer subscription agreements.
In the weeks since July 19, CrowdStrike has continued to close multimillion-dollar contracts, including an eight-figure deal with a “large enterprise software company” and a seven-figure deal with a “large generative AI company,” Kurtz said.
Microsoft has also faced intense scrutiny over the glitch, and last week announced plans to host a cybersecurity summit at its Redmond, Washington, headquarters, inviting CrowdStrike, other security companies, and government officials.
Delta Airlines, one of the companies hardest hit by the CrowdStrike outage, is now seeking $500 million in damages from Microsoft and CrowdStrike. Delta struggled to get back online and canceled flights for six days after the outage. Delta has told US regulators that the outage was caused by its overreliance on CrowdStrike and Microsoft.
Podbere said the full extent of legal risks posed by the blackouts was “difficult to predict.”
“The significance of that is something I’ll never forget,” Kurtz said. “The days that followed were some of the most difficult of my career because I felt so deeply about what our customers were going through.”
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