5 Wall Street analysts discuss CrowdStrike results, IT outage impact

CrowdStrike (NASDAQ:CRWD ) shares slipped in premarket trading Thursday despite posting strong fiscal second-quarter results, as the company lowered its full-year guidance following a global outage.

For the quarter ending July 31, CrowdStrike reported adjusted earnings per share of $1.04, surpassing the LSEG consensus estimate of 97 cents. Revenue came in at $963.9 million, slightly above the expected $959 million. This represents a 32% year-over-year increase.

The company posted net income of $47 million, or 19 cents per share, up from $8.47 million, or 3 cents per share, in the same quarter last year. Annual recurring revenue (ARR) reached $3.86 billion, just above the StreetAccount consensus of $3.85 billion.

This is the first earnings report since CrowdStrike encountered a significant issue when it distributed a flawed content configuration update for its Falcon sensor on Microsoft (NASDAQ:MSFT ) Windows systems.

The error caused millions of computers to crash, resulting in flight cancellations, delayed package deliveries, and postponed medical appointments. Administrators were required to manually reboot affected systems.

In its revised guidance, CrowdStrike projected adjusted net earnings of 80 to 81 cents per share on revenue between $979.2 million and $984.7 million for the third quarter.

For the full fiscal year 2025, the company now expects adjusted earnings per share of $3.61 to $3.65 and revenue between $3.89 billion and $3.90 billion. This is a downgrade from the June forecast of $3.93 to $4.03 in adjusted earnings per share and revenue between $3.98 billion and $4.01 billion.

The revised full-year revenue guidance reflects a $30 million negative impact per quarter on subscription revenue due to incentives tied to a customer commitment package. The guidance also excludes costs related to the outage, CrowdStrike said. What analysts said after CrowdStrike’s earnings

UBS: “There were a number of positives to the quarter: the 2Q impact was less than expected, discounting programs sound contained, and the long-term ARR target was reiterated (albeit pushed out by 1 year). While we expected the 2H Net New Annual Recurring Revenue (NNARR) outlook to be uncertain, the discounting program adds complexity to model mechanics for at least 2 quarters. We leave our cautious ARR assumptions ~intact.”

Oppenheimer: “While we expect the stock to remain range-bound until investors gain greater clarity around FY26 growth trends and the timing of NNARR re-acceleration, we believe CrowdStrike's long-term growth opportunity remains intact, and continue to view it as a leading cybersecurity platform. Adj. est. for results/guidance and lowering PT to $365. Maintain Outperform.”

Morgan Stanley: “With strong Q2 results and derisked 2H outlook, the focus now shifts to the pace of topline recovery over the next 12-18 months. We see upside to estimates and a potential positive catalyst in the upcoming Sep 18th Analyst Day and Fal.Con user conference. Remain OW.”

Piper Sandler: “A conservative forward outlook builds in a beatable scenario and likely represents the final shoe, in our view. Most impressive in 2Q was the large post-incident transactions highlighted in key growth areas of Cloud, Identity and SIEM (all growing >85% and representing over $1B in ARR). While there will be some fall-out, which we feel is appropriately discounted in numbers, the platform proposition remains alive and well.”

RBC Capital Markets: “We see a number of catalysts including stepping over reduced estimates, SLED/FED in Q3, a potential Q4 budget flush and acceleration into 2H of FY/26 on strong renewals following customer commitment offerings. Overall, we think the company likely emerges stronger following the outage and believe there has been no change to the consolidation opportunity as management continues to see a path to $10B in ARR.”

Source: Investing.com