CrowdStrike reduces annual forecasts as Windows cut-out raises deals fear

CrowdStrike reduced its annual revenue and profit forecasts on Wednesday, as demand for its cybersecurity products takes a hit from a global Windows cut-out caused by a faulty update from the company last month.
The cut disrupted internet services, left thousands of people stranded at airports after mass flight cancellations and caused broadcasters to go off-air.
Analysts had said the reputational damage may hurt CrowdStrike’s ability to draw new customers, but its dominant industry position and high costs of switching between providers could avert greater damage.
CrowdStrike shares rose 3 per cent in choppy extended trading, with TD Cowen analyst Shaul Eyal saying the second-quarter results and guidance was “better than feared” and that “skies are not falling” after the cut incident.
“One of the main discussion points will be the potential rising liabilities associated with the outage,” Mr Eyal said.
Rivals SentinelOne and Palo Alto Networks had raised their annual revenue forecasts this month, in a sign that they are gaining market share at the expense of CrowdStrike.
Big businesses are spending heavily on cybersecurity products to protect themselves from a surge in digital scams and high-profile hacks, which have hit companies such as UnitedHealth Group, Microsoft and US oilfield services firm Halliburton.
CrowdStrike expects annual revenue to be between $3.89 billion and $3.90 billion, compared with its prior expectations of $3.98 billion to $4.01 billion. Analysts on average were expecting $3.95 billion, according to LSEG data.
The company expects annual adjusted profit per share to be between $3.61 and $3.65, compared with prior estimates of $3.93 to $4.03.
Revenue for the second quarter rose about 32 per cent to $963.9 million, beating estimates of $958.6 million, and it reported adjusted profit per share of $1.04, above expectations of 97 cents.