CrowdStrike's in-line sales forecast fails to impress Wall Street

By Vansh Agarwal

(Reuters) -CrowdStrike Holdings Inc forecast annual revenue largely in line with the Street, pushing its shares down 11% after hours, and its CFO said he did not expect macroeconomic conditions to improve for the rest of the year.

CrowdStrike's shares are set to lose about $4 billion in market capitalization, if losses hold through open on Thursday. The stock has gained about 52% so far in 2023.

The Austin, Texas-based company on Wednesday raised its annual revenue guidance, and posted a $0.5 million net profit in the first quarter ended April 30, its first ever.

A rise in cyber attacks and growing digital presence of businesses and governments have lifted the demand for cybersecurity software, cushioning the blow from technology budgets cuts in the face of high interest rates and inflation.

However, the company does not "see the macro improving now and for the rest of the year", Chief Financial Officer Burt Podbere said on a post-earnings call.

"We know that there's going to be deals that are going to be more difficult to close within a particular quarter," he said.

CrowdStrike expects 2024 revenue in the range of $3 billion to $3.04 billion, versus analysts' average estimate of $3 billion, according to Refinitiv.

The company expects revenue for the second quarter to be between $717.2 million and $727.4 million, compared with an average estimate of $718.5 million.

"Overall solid results during the quarter ... However, the incremental raise in guidance for the year continues to reflect a higher level of uncertainty in the macro environment," said Janice Quek, an equity analyst at CFRA Research.

Last week, peer Palo Alto Networks Inc raised annual forecasts for revenue and adjusted profit as it benefited from enterprise customers shifting to one-stop shops for their cybersecurity needs in a bid to reduce costs.

(Reporting by Vansh Agarwal in Bengaluru; Editing by Shilpi Majumdar)