CrowdStrike Earnings Report Overview

CrowdStrike (NASDAQ:CRWD) shares slipped in premarket trading Thursday despite posting strong fiscal second-quarter results, as the company lowered its full-year guidance following a global outage.

Fiscal Second Quarter Results

For the quarter ending July 31, CrowdStrike reported:

• Adjusted earnings per share: $1.04 (surpassing the LSEG consensus estimate of 97 cents)
• Revenue: $963.9 million (slightly above the expected $959 million, representing a 32% year-over-year increase)
• Net income: $47 million, or 19 cents per share (up from $8.47 million, or 3 cents per share year-over-year)
• Annual recurring revenue (ARR): $3.86 billion (exceeding the StreetAccount consensus of $3.85 billion)

Incident Overview

This is the first earnings report since CrowdStrike encountered a significant issue when it distributed a flawed content configuration update for its Falcon sensor on Microsoft (NASDAQ:MSFT) Windows systems. This error caused millions of computers to crash, leading to:
– Flight cancellations
– Delayed package deliveries
– Postponed medical appointments

Administrators were required to manually reboot affected systems.

Revised Guidance

CrowdStrike projected:
– Third Quarter: Adjusted net earnings of 80 to 81 cents per share on revenue between $979.2 million and $984.7 million.
– Full Fiscal Year 2025: Adjusted earnings per share of $3.61 to $3.65 and revenue between $3.89 billion and $3.90 billion. This is a downgrade from previous forecasts of $3.93 to $4.03 in adjusted earnings per share and revenue between $3.98 billion and $4.01 billion.

The revised guidance reflects a $30 million negative impact per quarter on subscription revenue due to incentives linked to a customer commitment package and excludes outage-related costs.

Analyst Opinions

UBS

• Positive quarter performance, though uncertainty remains regarding the impact of the discounting program.

Oppenheimer

• Stock may remain steady until clarity around FY26 growth trends emerges, but long-term outlook remains positive.

Morgan Stanley

• Strong Q2 results shift focus to topline recovery in the next 12-18 months.

Piper Sandler

• Conservative outlook presents a beatable scenario, emphasizing growth in Cloud, Identity, and SIEM areas.

RBC Capital Markets

• Anticipates catalysts for growth and believes the company will emerge stronger post-outage, with a clear path to $10B in ARR.