By Jaspreet Singh

(Reuters) – CrowdStrike (NASDAQ:CRWD)’s results on Wednesday will provide insights into the financial consequences of the global cyber outage that paralyzed Microsoft (NASDAQ:MSFT) Windows operating system last month. Investors are eager to assess the impact on CrowdStrike’s reputation and potential market share losses to competitors.

The outage on July 19 was triggered by a faulty software update from CrowdStrike, disrupting internet services worldwide. This incident left many stranded at airports due to mass flight cancellations and affected sectors like broadcasting, banking, and healthcare.

Microsoft reported that nearly 8.5 million Windows devices were impacted, leading to several lawsuits against CrowdStrike, including one from Delta Air Lines (NYSE:DAL).

Bernstein analysts expressed concerns that new customer additions could be adversely affected. Executives may delve into why CrowdStrike remains a viable option and why choosing them won’t invite similar outages in the future.

Following the incident, customers reassessed their options, with Palo Alto Networks (NASDAQ:PANW)’s CEO noting during a post-earnings call that many rivals increased discounts to lure customers, potentially capturing market share from CrowdStrike.

More than half of the 45 brokerages monitoring CrowdStrike have downgraded their annual revenue forecasts in light of the outage. Many expect the company to adjust its revenue outlook from the current estimate of between $3.98 billion and $4.01 billion.

Since the outage, CrowdStrike’s shares have dropped about 20%, erasing approximately $20 billion in market value. In contrast, SentinelOne (NYSE:S) and Palo Alto Networks’ shares rose by 25.4% and 8.3%, respectively.

Despite these challenges, CrowdStrike’s stock has increased over 5% year-to-date, buoyed by its leading role in an industry where clients prefer larger providers offering comprehensive cybersecurity solutions to cut costs.

Analysts anticipate a 31% revenue increase for the quarter ending July, according to data collected by LSEG. While some analysts believe the damages from the outage will be short-term, citing CrowdStrike’s robust industry position and the high switching costs for clients, others mention that the company must actively regain trust with partners and customers amidst strong competition from Palo Alto Networks.

CrowdStrike will also participate in an upcoming Microsoft summit in September aimed at enhancing cybersecurity systems.