CrowdStrike CEO George Kurtz repeatedly used the word “resilience” on Wednesday to describe his cybersecurity company’s financial prospects, just weeks after its faulty software update took down businesses worldwide.
His comments came after CrowdStrike reported its latest quarterly earnings and warned that its annual revenue would be lower than expected. But the forecast was only slightly lower than what analysts had anticipated, providing hope that most customers would stick around despite the huge tech glitch.
“These results illustrate the resilience of our business and our team,” Kurtz said during a call with investors.
CrowdStrike reported $969.3 million in revenue for its fiscal second quarter, up 32% from the same period last year. Net income was $46.7 million compared to last year’s $8.5 million.
CrowdStrike’s software update on July 19 took down more than 8 million Windows-connected computer systems, including at airports and hospitals. The crash is estimated to have cost Fortune 500 companies more than $5 billion.
Analyst Dan Ives called it “a black-eye moment” for CrowdStrike. Worried about a customer exodus and potential legal costs, investors sent CrowdStrike’s shares tumbling 27% over the next few weeks.
It was “the most challenging event in our company history,” Kurtz said on Wednesday.
As part of its earnings report, CrowdStrike cut its annual revenue forecast slightly from what it had expected before the outage. It now says its annual revenue will be between $3.89 billion and $3.9 billion, which is lower than the $3.95 billion that analysts had anticipated, according to LSEG data, but is a strong signal that CrowdStrike’s business hasn’t fallen off a cliff.
CrowdStrike’s shares were down 2% in after hours.
Kurtz and CFO Burt Podbere sought to quiet any concerns about the company during Wednesday’s earnings call, highlighting a focus on retaining customers of its products and incentivizing them to add more products and longer subscriptions.
“The July 19 incident starts a new chapter for CrowdStrike,” Kurtz said, confident that the cybersecurity firm’s market opportunity is the same today as it was July 18.
Aftershocks from the outage, such as longer timelines for negotiating deals due to greater scrutiny from buyers, are expected to continue into the next year “in varying degrees,” Podbere said. He added that around $60 million in pending deals that stalled after July 19 are expected to close in future quarters.
“This kind of incident has a half-life,” Kurtz told investors, anticipating business picking up next year.
Since the outage, CrowdStrike estimates that “customer commitment package” incentives will have an impact around $60 million on subscription revenue plus “an estimated impact in the high-single-digit millions” on professional services revenue for the rest of fiscal 2025. The packages—offered after the outage—are designed to get CrowdStrike customers to use more of its products and sign longer subscriptions.
Even in the weeks since July 19, CrowdStrike has continued to close multimillion-dollar deals, including an eight-figure contract with a “major enterprise software firm” and a seven-figure agreement with a “leading generative AI company,” Kurtz said.
Microsoft is also facing scrutiny over the glitch, and last week announced plans to host CrowdStrike, other security firms, and government officials at its Redmond, Wash., headquarters for a cybersecurity summit.
Delta Air Lines, one of the companies most impacted by the CrowdStrike outage, has since asked Microsoft and CrowdStrike for $500 million in damages. Delta struggled to come back online, canceling flights for six days after the incident, which the airline told U.S. regulators was due to overreliance on CrowdStrike and Microsoft.
The full scope of legal risk resulting from the outage is “difficult to predict,” Podbere said.
“The magnitude will never be lost on me,” Kurtz said. “The days following were the most challenging in my career, because I deeply felt what our customers experienced.”
