Shares of CrowdStrike dropped approximately 5% during after-hours trading on Tuesday, prompted by the cybersecurity firm’s lower-than-expected revenue outlook.
Q1 Earnings Beat but Revenue Outlook Concerns Investors
CrowdStrike reported adjusted earnings of 73 cents per share, surpassing analysts’ expectations of 65 cents per share, according to LSEG consensus estimates. Revenue matched expectations at $1.10 billion, reflecting a nearly 20% increase year-over-year for the fiscal quarter ending April 30.
However, despite meeting current revenue estimates, CrowdStrike’s forward guidance disappointed the market. The company projected adjusted earnings per share of 82 to 84 cents and revenue ranging from $1.14 billion to $1.15 billion for the upcoming quarter, slightly below analysts’ expectations of $1.16 billion.
Rising Costs and Net Loss Impact Results
CrowdStrike recorded a net loss of $110.2 million, or 44 cents per share, a significant downturn compared to a net income of $42.8 million, or 17 cents per share, during the same period last year. Increased expenses in sales and marketing, research and development, and administrative areas, exacerbated by last summer’s extensive software outage, contributed significantly to the quarterly loss.
Full-Year Earnings Guidance Improved, Revenue Steady
Despite the cautious short-term outlook, CrowdStrike revised its full-year adjusted earnings forecast upward, now projecting earnings per share between $3.44 and $3.56. Revenue expectations remained steady, anticipated between $4.74 billion and $4.81 billion, aligning closely with the LSEG consensus of $4.77 billion.
$1 Billion Stock Buyback Program Announced
CrowdStrike also announced a new $1 billion share repurchase initiative. CEO George Kurtz emphasized that this buyback highlights confidence in the company’s long-term prospects and its ongoing commitment to cybersecurity excellence.
Workforce Reduction and Improved Cash Flow Forecast
In May, the company revealed plans to reduce its workforce by about 5%, cutting approximately 500 positions. Chief Financial Officer Burt Podbere stated that CrowdStrike now targets a free cash flow margin exceeding 30% by fiscal 2027.
CrowdStrike’s 2025 Stock Performance Remains Strong
Despite recent volatility, CrowdStrike’s stock has experienced robust growth, rising approximately 43% year-to-date as of Tuesday’s market close, significantly outperforming the S&P 500, which has increased less than 2% in the same period.
CrowdStrike’s mixed financial updates underline investor sensitivity toward forward-looking revenue metrics, despite current strong earnings performance.
