Strong Outlook Rallies Shares of CrowdStrike Holdings

As a new public company, CrowdStrike Holdings has released its first earnings report, as well as a better-than-expected July-quarter guidance. This earnings news has sent shares of the cybersecurity firm on a climb in extended trading, on Thursday.  

CrowdStrike pre-released the April-quarter revenue estimate as part of its IPO.  Having now completed the first fiscal quarter of 2020, CrowdStrike has corrected the initial guidance down 47 cents per share. Fortunately, this is right in line with analyst estimates. 

On June 11, the CrowdStrike IPO raised $659 million, registering shares priced at $34.  Since IPO, the value of this stock has more than doubled.  They have managed to grow quickly because they use a form of artificial intelligence called machine learning, combined with a “graph database” to detect malware on mobile phones, laptops, and other devices that have access to corporate networks. 

The cybersecurity firm commented that revenue increased 103 percent—to $96.1 million—in the quarter, which beat analyst estimates of $95.7 million.  The company also said that annual recurring revenue jumped 114 percent, year-over-year, to $364.6 million. 

Specifically, CrowdStrike projected that revenue for the July quarter would be $103.5 million, nearing the guidance midpoint. Following up on this, the company did admit expectations of a loss, which would fall within the range of 23 and 24 cents.  But even with this admission, the results still beat what analysts had expected: a loss of 29 cents per share on revenue of only $96.7 million.

With that, shares of CrowdStrike grew 9.6 percent, to $79.95 per share, in after-hours trading, by close of day on Thursday.  

Still, CrowdStrike did report a fiscal first-quarter loss of $26 million. That is the equivalent of 55 cents per share, compared against $33.6 million (or 77 cents per share) from the same period one year ago. All in all, adjusted earnings ranged around 47 cents per share; and revenue grew $96.1 million, more than double the $47.3 million from the same period last year.

Beating analyst forecasts, CrowdStrike co-founder and chief executive officer George Kurtz exalted, “We are pleased with the strong start to the year. We achieved 103 percent year-over-year revenue growth in the first quarter, which is consistent with the preliminary results that we shared in our IPO prospectus.”