CrowdStrike: Solid Q4, but Guidance Disappoints; Outage Impact Lingers

CrowdStrike Holdings, Inc. (CRWD), a leading cybersecurity company, reported its fiscal fourth-quarter results on March 4, 2025. While the company posted solid earnings, its guidance for the upcoming quarter and fiscal year fell short of analysts' expectations. The recent outage incident, which occurred in July 2022, continues to impact the company's reputation and financial performance.



Q4 Results and Guidance

In the fourth quarter, CrowdStrike's revenue grew 25% year-over-year to $1.06 billion, slightly above analysts' estimates. Adjusted earnings of $260.9 million, or $1.03 per share, rose from $236.2 million, or $0.95 per share, a year earlier and beat expectations. However, the company's guidance for the upcoming quarter and fiscal year was lower than expected.

For the fiscal first quarter, CrowdStrike expects revenue between $979.2 million and $984.7 million, with adjusted EPS between $0.80 and $0.81. The company's fiscal year guidance was also revised downward, with revenue now expected to be between $3.89 billion and $3.90 billion, and adjusted EPS between $3.61 and $3.65.

Outage Impact and Customer Concerns

The July 19 outage, which was caused by a flawed software update from CrowdStrike, impacted flights worldwide and led to a loss of customer confidence in the company's services. The outage resulted in $92.28 million in losses for the company, and it expects more outage-related costs in its fiscal first quarter. The incident has also led to increased deal scrutiny and extended sales cycles, as potential customers take more time to decide whether to adopt the company's platform.



Looking Ahead

Despite the recent guidance disappointment, analysts remain optimistic about CrowdStrike's long-term prospects. The company's strong foundation in AI and cloud security suggests it will maintain its traction within these segments. For the fiscal first quarter, CrowdStrike forecasts revenue between $979.2 million and $984.7 million, with adjusted EPS between $0.80 and $0.81. The company's management lowered its fiscal year guidance, as displayed in the table below.

Full Fiscal Year Metrics
Prior Guidance Current Guidance
Revenue $3.98 billion to $4.01 billion $3.89 billion to $3.90 billion
Adjusted EPS $3.93 to $4.03 $3.61 to $3.65

Table by Author. Data Source: CrowdStrike filings.

CrowdStrike said the outage toward the end of its quarter caused many deals to be delayed, as it typically closes deals in the last two weeks of the quarter. However, it added that the "vast majority" were still in its pipeline. The company highlighted two large post-outage wins but said it has more than $60 million in deals that it has a line of sight on in the quarter that remain open. It expects them to close in future quarters.



In conclusion, while CrowdStrike's recent guidance disappointed investors, the company's strong foundation in AI and cloud security suggests positive near-term growth potential. The outage incident continues to impact the company's reputation and financial performance, but analysts remain optimistic about its long-term prospects. Investors should watch for continued ARR growth, strategic acquisitions, and adaptive strategies that enhance the company’s unified security platform.