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CrowdStrike stock sinks after missing revenue expectations

Shares of CrowdStrike plummeted after the company's third-quarter earnings results showed its Q4 revenue guidance missed expectations.

Video Transcript

[AUDIO LOGO]

DAVE BRIGGS: Jared, what do you have?

JARED BLIKRE: Yeah. I'm looking at CrowdStrike reporting third quarter earnings, and the numbers overall better than [? NAD. ?] But you're seeing the stock down about 17%, has to do with a little bit of guidance and some warnings about macroeconomic headwinds.

Let me give you the third quarter numbers first. Revenue clocking in at $580.9 million. That is beating the estimate of $574.1 million. Subscription revenue, $547.4 million. The estimate was for lower by about $2 million, $545.7 million.

Adjusted EPS coming in at $0.40, the estimate was for $0.09 lower at $0.31. And that annual recurring revenue, ARR, key stat there, $2.34 billion. The estimate was for $2.35 billion, close enough to call in line. Total subscription customers, 21,146, a little bit better than the estimate of 20-- a little bit lower than the estimate of 21,357.

Do want to give those fourth quarter guidance results that was a little bit disappointing. The revenue coming in estimates for $619.1 to $628.2 million. Estimate was for higher at $634.8 million. For the full year, the estimate is for $2.22 billion, $2.23 billion. Estimate is for $2.23 billion. So right in line there.

But I think the commentary is what's tripping up investors. So here we have the CEO saying total new annual recurring revenue was below our expectations as increased macroeconomic headwinds elongated sales, the sales cycles, with smaller customers and caused some larger customers to pursue multiphase subscription start dates.

This delays ARR recognition until future quarters. So maybe all will be well in future quarters, and investors just have to look past the numbers. We shall see, Dave.

DAVE BRIGGS: They are getting hammered today. All right. Thanks, Jared.