SECURITY
SECURITY
SECURITY
CrowdStrike shares drop despite a beat on earnings and guidance
Shares in CrowdStrike Holdings Inc. dropped in after-hours trading today as investors decided to take profits despite the company beating predictions in its fiscal second-quarter earnings report and topping guidance for the new quarter.
For the quarter ended July 31, CrowdStrike reported total revenue of $199 million, up 84% over the same quarter in 2019, thanks to an 89% increase of subscription revenue, to $184.2 million.
The company’s loss in the quarter came to $29.9 million, or 14 cents per share, way under last year’s $51.9 million or 40 cents a share. Profit per share excluding costs such as stock compensation came in at 3 cents a share, beating analysts’ predictions of a loss of 1 cent per share. According to Yahoo Finance, a quarter ago it was expected that the company would post a loss of 6 cents per share.
In a statement, George Kurtz (pictured), CrowdStrike’s co-founder and chief executive officer, credited much of the growth to the rise in remote working driven by the COVID-19 pandemic. “A favorable competitive environment and strong secular tailwinds are fueling our growth,” Kurtz said. “Organizations are shedding outdated systems and accelerating their move to modern cloud-native technologies to meet the demands of today’s threat landscape.”
Looking forward, CrowdStrike raised its estimates for the fiscal year and is now predicting revenue of $809.1 million to $826.7 million, up from a previous range of $761.2 to $772.6 million. Adjusted profit is predicted to range from 2 to 8 cents per share.
For the third quarter, the company estimates it will break even or lose a penny on an adjusted basis on revenue of $210.6 million to $215 million.
Usually a company delivering strong quarterly results and raising its estimates would be attractive, but CrowdStrike shares went in the opposite direction, down about 6% in after-hours trading.
According to Barron’s, the stock is up 46% since Aug. 10 and hit a record high of $143.90 Tuesday. The company’s fundamentals may be solid with future growth ahead, but at some point, investors like to take profits and they did with CrowdStrike today.
Photo: CrowdStrike
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