Crowdstrike Q2 - Strong numbers, cautious outlook

CrowdStrike released quarterly earnings on Wednesday night. The shares initially fell 4% in after-hours trading but quickly turned around and are now 6% higher from Tuesday's close. The cybersecurity firm beat analyst expectations with adjusted earnings per share of $1.04 versus the anticipated 97 cents. Revenue was $963.9 million, a 32% YoY increase, with net income rising to $47 million, up from $8.47 million the previous year.

CrowdStrike slightly reduced its full-year guidance due to a global outage in July that significantly impacted its operations. The outage, caused by a flawed update to its Falcon sensor on Windows computers, led to widespread disruptions including flight cancellations and delayed medical appointments.

Affected companies, like Delta Airlines, incurred hundreds of millions of Dollars in lost revenue and are now suing for damages. CrowdStrike has had to offer discounts and extended payment terms to keep affected customers happy. The backlash hasn't been as bad as the market first feared.

CEO George Kurtz acknowledged the prolonged sales cycles and the need for higher-level deal approvals following the incident. Despite the challenges, most delayed deals remain in the pipeline, suggesting potential for future recovery.

To recap, Crowdstrike uses machine learning to detect any irregularities in IT management tools and also uses a specialised database to find malware on laptops, cellphones, and other devices that access dedicated corporate networks. We're still bullish on Crowdstrike as a company that protects classified information from online criminals.