CrowdStrike cuts revenue forecast after global IT outage

CrowdStrike has cut its annual sales and profit forecasts after demand for its cybersecurity products was hit by the global Windows outage caused by a faulty update from the company.

The systems failure last month affected 8.5 million Microsoft Windows devices, interrupting internet services and leaving thousands of people stranded at airports after mass flight cancellations.

It has led to the company saying that it expects to bring in annual revenue of between $3.89 billion and $3.90 billion, down from a previous forecast of $3.98 billion to $4.01 billion and from a consensus prediction by analysts of $3.95 billion. Similarly, its annual adjusted profit per share was forecast to be between $3.61 and $3.65, down from a range of $3.93 to $4.03 previously.

SentinelOne and Palo Alto Networks, the rival cybersecurity providers, have raised their annual revenue forecasts this month, suggesting that they are gaining market share at the expense of CrowdStrike.

However, revenue for the second quarter rose by about a third to $963.9 million, beating estimates of $958.6 million. Moreover, Shaul Eyal, an analyst at TD Cowen, said the second-quarter results and guidance were “better than feared”, argued that “skies are not falling” in light of the outage incident and noted that “one of the main discussion points will be the potential rising liabilities associated with the outage”.

“Working with customers to recover from the July 19 incident, we emerge as an even more resilient and even more customer-obsessed CrowdStrike, continuing to aggressively invest in innovation,” George Kurtz, 59, CrowdStrike’s co-founder and chief executive, said.

Burt Podbere, its chief financial officer, said: “For the second quarter, we delivered strong growth in revenue, operating profit and net income, demonstrating our focused execution.” He said that the company’s “market opportunity remains unchanged”.

CrowdStrike’s shares, which lost about a third of their value after the outage last month and have yet to recover, were down by $2.42, or 0.9 per cent, at $261.78 in pre-market trading in New York.