CRWD Q2 Earnings Beat: Will Weak FY25 Guidance Drag Down Shares?
CrowdStrike Holdings, Inc. (NASDAQ: CRWD) reported non-GAAP earnings of $1.04 per share in the second quarter of fiscal 2025, which surpassed the Zacks Consensus Estimate of 98 cents and came ahead of management’s guidance of 98-99 cents. CRWD reported non-GAAP earnings of 74 cents in the year-ago quarter. The robust bottom-line performance was mainly driven by higher revenues and better cost management.
CrowdStrike’s fiscal second-quarter revenues of $963.9 million rose 32% year over year and surpassed the consensus mark of $958.58 million. The top line was also higher than the company’s guidance of $958.3-$961.2 million. The strong adoption of the Falcon platform and better sales execution mainly aided top-line growth in the fiscal second quarter.
Strong adoption of the Falcon platform can be attributable to its ability to consolidate cybersecurity functions at scale, meeting the market’s demand for a unified AI-powered solution. The expansion of available modules has enhanced the platform’s value, leading to increased adoption, particularly in cloud, Identity and Falcon Next-Gen SIEM modules.
Despite the strong second-quarter performance, CrowdStrike lowered guidance for fiscal 2025 due to several factors, including an extended sales cycle and planned delay in the vast majority of outbound pipeline generation activities for a few weeks following the July 19 incident.
The stock has plunged 23% since the global IT outage incident on July 19, underperforming the Zacks Internet – Software industry’s growth of 4.6%. Given the company’s lowered guidance for fiscal 2025, we expect CrowdStrike’s share price to be under pressure in the near term.
CrowdStrike Price, Consensus and EPS Surprise
CrowdStrike price-consensus-eps-surprise-chart | CrowdStrike Quote
Top-Line Details of CRWD
Subscription revenues (95.3% of the total revenues) jumped 33% year over year to $918.3 million. Professional services revenues (4.7% of the total revenues) rose 9.5% year over year to $45.6 million.
As of July 31, 2024, annual recurring revenues were $3.86 billion, up 32% year …
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