- CrowdStrike (CRWD) shares fell $36.36 or 9.32% to $353.80 in extended trading Tuesday after Q4 earnings of $1.03 per share beat the $0.86 consensus and $1.06 billion in revenue topped $1.03 billion, but weak guidance disappointed investors.
- The company’s Q1 EPS guidance of $0.64 – $0.66 trailed the $0.95 consensus and FY26 EPS of $3.33 – $3.45 missed $4.40, despite $4.24 billion ARR (up 23%) and $224.3 million net new ARR in Q4.
- CEO George Kurtz highlighted AI’s growing role in cybersecurity, following a disruptive IT outage eight months ago, as subscription gross margins held at 80% non-GAAP and dipped to 77% GAAP from 78%.
CrowdStrike (CRWD) saw its shares plummet $36.36, or 9.32%, to $353.80 in extended trading on Tuesday, reflecting investor disappointment over lackluster guidance despite a robust fourth-quarter performance. The cybersecurity firm reported Q4 earnings of $1.03 per share, excluding non-recurring items, surpassing the $0.86 consensus by $0.17, while revenues climbed 25.2% year-over-year to $1.06 billion, edging out the $1.03 billion expected. Annual Recurring Revenue (ARR) reached $4.24 billion as of January 31, 2025, up 23% from the prior year, with $224.3 million in net new ARR added in the quarter, underscoring the company’s strong growth in its subscription-based model. Yet, the market’s focus shifted to the company’s cautious outlook, overshadowing these gains.
The forward-looking guidance painted a less rosy picture, triggering the $36.36 drop to $353.80. For Q1, CrowdStrike projects earnings of $0.64 to $0.66 per share, well below the $0.95 consensus, with revenues of $1.1006 billion to $1.1064 billion slightly under the $1.1 billion anticipated. For fiscal year 2026, the company forecasts EPS of $3.33 to $3.45, missing the $4.40 consensus, though revenue guidance of $4.7435 billion to $4.8055 billion aligns closely with the $4.77 billion expected. This disconnect between a solid $1.06 billion Q4 and tempered projections suggests CrowdStrike is bracing for headwinds, despite maintaining a non-GAAP subscription gross margin of 80%, consistent with the prior year’s Q4, and a GAAP margin of 77%, down from 78%.
CEO George Kurtz emphasized the rising role of artificial intelligence in cybersecurity, stating, “As businesses of all sizes rapidly adopt AI, stopping the breach necessitates cybersecurity’s AI-native platform.” This focus comes nearly eight months after a disruptive technology update caused a global IT outage, grounding flights and sparking lawsuits, a reminder of the stakes in CrowdStrike’s mission. The $4.24 billion ARR and $224.3 million net new ARR highlight its resilience, yet the $0.64 – $0.66 Q1 EPS and $3.33 – $3.45 FY26 EPS guidance reflect caution amid competitive pressures and recovery efforts. The stock’s 36-plus point dip signals investor skepticism, testing CrowdStrike’s ability to leverage its AI-driven strategy to regain momentum in a volatile cybersecurity landscape.
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