CrowdStrike Plunges 6.56% on Earnings Miss, Job Cuts

CrowdStrike Holdings, a prominent cybersecurity firm, experienced a significant drop of 6.56% in pre-market trading on June 4, 2025. This decline comes amidst a series of financial updates and strategic decisions that have influenced investor sentiment.

CrowdStrike recently released its first-quarter financial results, reporting a 20% year-over-year increase in revenue to $1.1 billion, which met market expectations. However, the company's adjusted earnings per share decreased to $0.73 from $0.79 in the previous year, although it still exceeded analyst estimates of $0.65. The company's second-quarter revenue forecast of $1.14 billion to $1.15 billion fell short of the $1.16 billion consensus estimate, contributing to the stock's decline.

In addition to the financial performance, CrowdStrike's board approved a $10 billion stock repurchase program, indicating confidence in the company's long-term prospects. However, the company's decision to cut approximately 500 jobs, or about 5% of its global workforce, has raised concerns about operational efficiency and future growth. This move is part of a broader strategy to achieve an annual recurring revenue target of $100 billion.

The company's outlook for the second quarter and beyond has been met with caution, as investors grapple with the lingering effects of a global IT outage that occurred in July 2024. This incident disrupted business operations worldwide and has led to concerns about contract renewals and pricing negotiations with enterprise clients. Analysts have revised their expectations for fiscal 2026, casting doubt on CrowdStrike's ability to maintain its recent growth trajectory.