CrowdStrike Holdings Inc. shares declined in after-hours trading after the company posted strong fourth-quarter results but missed expectations with its guidance.

Nasdaq-listed CrowdStrike is one of the world’s largest cybersecurity providers. Its flagship Falcon platform can block malware across cloud environments, on-premises hardware and employee devices. The software is used by more than 20,000 organizations.

CrowdStrike’s revenue climbed 25% year-over-year in the fourth quarter, to $1.06 billion, slightly exceeding the $1.03 billion forecast by analysts. The company attributed the strong growth partly to increased demand from large customers. It inked about 350 deals worth over $1 million in the three months ended Jan. 31, including 20 deals worth over $10 million.

The company’s Falcon platform comprises multiple modules that each focus on a different set of cybersecurity tasks. According to CrowdStrike, the percentage of customers that use at least five modules grew to 67% during the third quarter. More than a fifth of its customers have purchased eight or more modules.

CrowdStrike said demand for its LogScale, identity security and cloud security features grew particularly fast during the quarter.

LogScale is a SIEM, or security information and event management, tool. It can analyze cybersecurity data from a company’s internal systems to find signs of malicious activity. A built-in search feature allows administrators to surface specific data points for use in breach investigations.

According to CrowdStrike, LogScale’s annualized recurring revenue topped $330 million in the quarter after jumping 115% year-over-year. The company’s cloud security portfolio grew by 45% in the same time frame, to $600 million, while identity security ARR climbed 25%. CrowdStrike’s identity security features block cyberattacks that use stolen employee login credentials.

The company pointed to its Flex subscription as another source of revenue growth. The offering gives enterprises access to significant discounts if they commit to using Falcon for multiple years. Additionally, it simplifies the task of adding new Falcon modules to a deployment.

“With 97% gross retention and accounts adopting Falcon Flex adding over $1 billion of in-quarter deal value, customers are increasingly consolidating on the Falcon platform,” said founder and Chief Executive Officer George Kurtz.

The company closed the fourth quarter with adjusted net income of $260.9 million, up from $236.2 million a year earlier. That translated into adjusted earnings of $1.03 per share, well above the 86-cent consensus estimate.

CrowdStrike’s shares nevertheless declined 8% in after-hours trading. The selloff may have been a response to the company’s guidance, which forecasts revenue of $1.10 billion to $1.11 billion for the current quarter. At the midpoint, that’s slightly less than the $1.11 billion anticipated by analysts. However, the overall stock market also had heavy losses for the second straight day after President Trump imposed tariffs on Canada and Mexico, the United States’ largest trading partners.

The company projects that its full-year revenue will range between $4.74 billion and $4.81 billion, which is in line with the consensus estimate. It projects annual sales of $10 billion by its 2031 fiscal year. 

Image: CrowdStrike