CrowdStrike Q2 revenue forecast was way below the Wall Street estimates, signaling weaker government and enterprise spending on cybersecurity products. This saw the CrowdStrike share price falling by 5.7% in extended trading on Tuesday. Through Tuesday’s close, CrowdStrike Holdings Inc. clocked in as the 10th-best-performing stock in the S&P 500 this year. But the reaction to the cybersecurity company’s latest earnings report brought stock rally to a halt.
The increasing interest rates and stagflation have forced its customers to hold back on tech spending, weighs heavily on demand for companies such as CrowdStrike.
CrowdStrike Q1 earnings
The reported Q1 earning for CrowdStrike and how the company did against LSEG consensus:
CrowdStrike earnings per share: 73 cents adjusted vs. 65 cents expected
CrowdStrike revenue: $1.10 billion vs. $1.10 billion expected
The revenue of CrowdStrike increased nearly 20% in the fiscal first quarter, ending on April 30, as per the company’s statement. The net loss registered by CrowdStrike was of $110.2 million, or 44 cents per share, this was way higher compared with net income of $42.8 million, or 17 cents per share, in the same quarter last year.
Rising cost affected CrowdStrike’s revenue
Costs rose in sales and marketing as well as in research and development and administration, partly because of a broad software outage last summer.
Rising competition from other cybersecurity firms including Palo Alto Networks and Fortinet affected CrowdStrike. As per CrowdStrike it expects Q2 free cash flow to be impacted by about $29 million due to outage and related expenses.
For the current quarter, CrowdStrike called for 82 cents to 84 cents in adjusted earnings per share on $1.14 billion to $1.15 billion in revenue. Analysts polled by LSEG were expecting 81 cents in earnings per share and $1.16 billion in revenue.
CrowdStrike’s earning guidance
CrowdStrike bumped up its guidance for full-year earnings but maintained its expectation for revenue. The company now sees $3.44 to $3.56 in adjusted earnings per share, with $4.74 billion to $4.81 billion in revenue. The LSEG consensus was $3.43 per share and $4.77 billion in revenue. The earnings guidance provided in March was $3.33 to $3.45 in adjusted earnings per share.
CrowdStrike’s share buyback
Also on Tuesday, CrowdStrike said it had earmarked $1 billion for share buybacks.
“Today’s announced share repurchase reflects our confidence in CrowdStrike’s future and unwavering mission of stopping breaches,” CEO George Kurtz said in the statement.
Job cuts at CrowdStrike
In May, CrowdStrike announced job cuts of around 500 employees, or about 5% of its workforce. As per Burt Podbere, its finance chief, on a conference call with analysts, the company now anticipates a free cash flow margin above 30% for the 2027 fiscal year.
CrowdStrike stock update
As of Tuesday’s close, the Crwd stock was up 43% so far in 2025, while the S&P 500 index had gained less than 2%.
