CrowdStrike Q3 - Great recovery

Cybersecurity firm CrowdStrike is a Vestact-recommended stock. They are based in Austin, Texas, and compete with SentinelOne, Microsoft Defender, and Palo Alto. Their core product is called Falcon which does endpoint detection and response, which replaces legacy anti-virus systems. They also do forensic investigations and data protection consulting.

In July, the company had a nightmare when a Falcon update caused a meltdown of 8.5 million computers running Microsoft Windows operating systems around the world. The stock price tumbled then, as it seemed that they may be legally liable for damages. In reality, the impact was limited to a few subscription refunds, and the share price has since recovered, moving back towards historic highs.

On Tuesday, CrowdStrike reported numbers for the quarter concerned, and all appears to be going smoothly. Despite reporting a modest loss for the period they surpassed their target for recurring revenues, at excellent margins. Profits are growing and they have over $4 billion in cash or equivalents on their balance sheet. Management guidance for the year ahead was lowered marginally, leading to a modest share price decline this week.

Oddly enough, customers seem to be responding to the debacle in July by doubling down on their CrowdStrike systems and subscriptions. As one analyst said, "They are becoming an even stickier, more leaned-on vendor for these companies, which will be great for retention and lifetime value."