CrowdStrike Raises Annual Forecasts and Exceeds Revenue Expectations

Driven by the growing demand for cybersecurity services and in light of increasing online threats, the IT security company CrowdStrike on Tuesday revised its revenue and profit forecasts for the current fiscal year upwards. Revenue for the third quarter exceeded estimates of $982.4 million with an increase of 29% to $1.01 billion, providing significant tailwind for the company. The trend towards comprehensive cybersecurity solutions is supported, among other things, by increasing investments from companies like AT&T, Live Nation Entertainment's Ticketmaster, and UnitedHealth Group, which were targeted by hacking attempts in 2023. Despite the successful quarter, CrowdStrike's stocks faced a decline of about 2% in after-hours trading, as the revenue forecast for the fourth quarter did not meet investors' expectations. CFO Burt Podbere remained optimistic and pointed to the success of the newly introduced customer retention programs, which were positively received by customers. The forecast for annual revenue has now been raised to $3.92 to $3.93 billion, while analysts on average expected $3.90 billion. JP Morgan had previously predicted an acceleration of growth and profitability despite short-term challenges. Not overshadowed is competitor Palo Alto Networks, which also exceeded expectations, driven by strong spending in November. CrowdStrike now expects an annual adjusted earnings per share between $3.74 and $3.76, surpassing the previous estimate of $3.61 to $3.65. For the fourth quarter, revenue of $1.03 to $1.04 billion is expected, which aligns with analysts' estimates.