By Jaspreet Singh
(Reuters) -CrowdStrike cut its annual revenue and profit forecasts on Wednesday, as demand for its cybersecurity products takes a hit from a global Windows outage caused by a faulty update from the company last month.
The outage had disrupted to internet services, leaving thousands of people stranded at airports after mass flight cancellations and causing broadcasters to go off-air.
Analysts had said the reputational hit may hurt CrowdStrike’s ability to draw new customers, but its dominant industry position and high costs of switching between providers could stave off a bigger impact.
CrowdStrike shares rose 3% in choppy extended trading, with TD Cowen analyst Shaul Eyal saying the second-quarter results and guidance was “better than feared” and that “skies are not falling” in light of the outage incident.
“One of the main discussion points will be the potential rising liabilities associated with the outage,” Eyal said.
Rivals SentinelOne and Palo Alto Networks had raised their annual revenue forecasts this month, in a sign that they are gaining market share at the expense of CrowdStrike.
Big businesses are spending heavily on cybersecurity products to shield themselves from a surge in digital scams and high-profile hacks, which have hit companies such as UnitedHealth Group, Microsoft and U.S. oilfield services firm Halliburton.
CrowdStrike expects annual revenue to be between $3.89 billion and $3.90 billion, compared with its prior expectations of $3.98 billion to $4.01 billion. Analysts on average were expecting $3.95 billion, according to LSEG data.
It expects annual adjusted profit per share to be between $3.61 and $3.65, compared with prior estimates of $3.93 to $4.03.
Revenue for the second quarter rose about 32% to $963.9 million, beating estimates of $958.6 million, and it reported adjusted profit per share of $1.04, above expectations of 97 cents.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Arun Koyyur)
