CYBERSECURITY firm CrowdStrike cut its revenue and profit forecasts on Wednesday in the aftermath of a July global outage due to its faulty software update, and said the environment would remain challenging for about a year.
The outage disrupted internet services, affecting 8.5 million Microsoft Windows devices and causing mass flight cancellations.
CEO George Kurtz said the incident delayed some of the company’s deals into subsequent quarters, but the majority remain “in the pipeline”.
Analysts expected the reputational hit could hurt CrowdStrike‘s dominant position, but the cost of switching providers could stave off a larger effect. Its shares were down 1 per cent in extended trading.
CFO Burt Podbere said the company’s challenges would remain for about a year, with reacceleration in growth expected in the back half of next year.
Big businesses are spending heavily on cybersecurity products amid a surge in digital scams and high-profile hacks, which have hit companies such as UnitedHealth Group, Microsoft and US oilfield services firm Halliburton.
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CrowdStrike expects annual revenue to be between US$3.89 billion and US$3.90 billion, compared with its prior expectations of US$3.98 billion to US$4.01 billion. Analysts on average were expecting US$3.95 billion, according to LSEG data.
Rivals SentinelOne and Palo Alto Networks raised their annual revenue forecasts this month, a sign that they were gaining market share.
CrowdStrike expects annual adjusted profit per share to be between US$3.61 and US$3.65, compared with prior estimates of US$3.93 to US$4.03.
“The overall view is skies are not falling in light of the 7/19 outage,” said TD Cowen analyst Shaul Eyal, adding that the second-quarter results and guidance was “better than feared”.
Revenue for the second quarter rose about 32 per cent to US$963.9 million, beating estimates of US$958.6 million, and it reported adjusted profit per share of US$1.04, above expectations of 97 cents. REUTERS
