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Cybersecurity company CrowdStrike is seeing more blue skies than blue screens of death, following a Q2 earnings call announcing increased quarterly profits, adjusted revenue expectations, and some “our bad” benefits for impacted customers. CrowdStrike’s chief exec expressed an optimistic outlook for the firm and did not appear intimidated by competitor claims that customers want to diversify their security vendors.
“Customers’ comments back to me are: they don’t want to go backwards. They don’t want a bunch of disparate products. They don’t want a bunch of different consoles,” George Kurtz, CrowdStrike CEO, said during the company’s August 28 announcement.
Earnings learnings. Though the company adjusted its annual profit-per-share expectations from $3.93–$4.03 in its previous quarterly announcement to $3.61–$3.65, CrowdStrike also announced a total revenue of $963.9 million, a 32% year over year increase.
To address the “July 19 incident”—one impacting 8.5 million Windows machines, according to Microsoft—CrowdStrike said it plans to offer “customer commitment packages,” some combination of module ads, flexible payment terms, and added subscription time, which will impact revenue by approximately $60 million, the company said on the call.
Kick ’em when they’re Crowd. Some competitors, SentinelOne CEO Tomer Weingarten and Palo Alto Networks CEO Nikesh Arora, see opportunity in outage.
“I think people are looking at us obviously as the number one alternative. People are looking to diversify risk and not really concentrate more and more capabilities with one vendor,” Weingarten said during an August 27 earnings call that announced $199 million in revenue—a 33% YOY revenue growth.
“The recent outage has caused a number of customers to reevaluate their options,” Arora said during the company’s August 19 quarterly review, which reported revenue growth of 12% year over year, reaching $2.2 billion.)
Consolidate night. A recent report from research firm ETR suggests security consolidation isn’t exactly coming together. ETR’s March 2024 survey revealed that 51% of 300+ security specific IT decision makers expect to add vendors to their security stack over the next twelve months. Nine percent of organizations reported a decrease in their security-tool suppliers.
A separate August survey from ETR found that 40 out 100 polled CrowdStrike customers said their organizations had evaluated alternative vendors in the previous month (although 17 had planned to do so prior to the outage).
On August 1, the company’s stock value fell to $217.89 per share (from $392.15 on July 1). Value has climbed steadily since August, reaching $277.28 per share on August 30.
Kurtz told the earnings audience that customers see the company as “one of the key consolidators in the market.”
“There’ll be a diminishing impact over time. So, Q3 will be harder than Q4. Q4 will be harder than Q1 and so on and so forth,” CrowdStrike CFO Burt Podbere said on the August 28 call.