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Earnings Results: CrowdStrike stock retreats following coronavirus-fueled earnings beat

Earnings Results

CEO George Kurtz says hackers attempted more breaches in the first half of 2020 than in all of 2019


CrowdStrike Holdings Inc.  shares retreated from 2020’s meteoric rise in the extended session Wednesday after the cloud-based cybersecurity company topped Wall Street estimates, with more businesses seeking to protect their systems as employees work from home.

On a conference call, CrowdStrike

co-founder and Chief Executive George Kurtz said that businesses adapting to COVID-19 restrictions of have been “on balance, a tailwind,” even in stressed industries like airlines.


reported a fiscal second-quarter loss of $29.9 million, or 14 cents a share, compared with a loss of $51.9 million, or 40 cents a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation and other items, were 3 cents a share, compared with a loss of 18 cents a share in the year-ago period.

Revenue rose to $199 million from $108.1 million in the year-ago quarter.

Analysts surveyed by FactSet had estimated a loss of a penny a share on revenue of $188.6 million, based on CrowdStrike’s forecast adjusted loss of 2 cents a share to break-even on revenue of $185.8 million to $190.3 million .

Shares declined 7% after hours, following a 1.1% decline in the regular session to close at $142.07, after nearly tripling in price year to date.

Since the COVID-19 pandemic has forced millions to log onto corporate networks from home, CrowdStrike has benefited from the need for more dynamic security measures, reporting its first-ever adjusted profit last quarter. CrowdStrike has been publicly traded for a little more than a year, following its June 2019 IPO that priced at $34 a share. CrowdStrike also gained notoriety less than a year ago after President Donald Trump referenced the company in his phone call with Ukrainian President Volodymyr Zelensky in trying to get information on Democratic political rival Joe Biden and his son.

In the first half of 2020, CrowdStrike’s Kurtz said the number of “distinct and sophisticated” intrusions into sensitive systems jumped more than 150%, and that the company stopped about 41,000 potential breaches, more than all of last year.

“Many of the security leaders we spoke with believe that experiencing a breach now, while their business is under extreme stress due to the impact of COVID, will be far more detrimental to their business versus last year,” Kurtz said.

Annual recurring revenue, a software-as-a-service metric that shows how much revenue the company can expect based on subscriptions, rose 87% to $791 million for the quarter, while the Street expected $732 million. Kurtz said CrowdStrike added a record $104 million in new ARR in the second quarter, and landed the “second-largest deal in the company history” with an unidentified customer.

CrowdStrike expects an adjusted fiscal third-quarter loss of a penny a share to break even on revenue of $210.6 million to $215 million, while analysts forecast a loss of 5 cents a share on revenue of $195.9 million, according to FactSet.

For the year, CrowdStrike shares have surged 187%, while the ETFMG Prime Cyber Security ETF

is up 23%, the S&P 500

is up 11%, and the tech-heavy Nasdaq Composite Index

is up 34%.

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