CrowdStrike Shares Decline Following Cautious Revenue Outlook and Lingering Impact from 2024 Outage

Shares of cybersecurity firm CrowdStrike fell more than 6% on Wednesday after the company issued weaker-than-expected revenue guidance for the current quarter, raising investor concerns about lingering challenges stemming from a July 2024 outage and the company’s overall valuation.

CrowdStrike projected fiscal second-quarter revenue between $1.14 billion and $1.15 billion, falling short of analysts’ expectations of $1.16 billion, according to LSEG data. Adjusted earnings per share are expected to fall between 82 and 84 cents, slightly above the consensus estimate of 81 cents.

The company attributed part of the revenue drag to residual effects from a widespread outage last year that disrupted operations at airlines, banks, and hospitals. In response to that incident, CrowdStrike rolled out temporary customer incentive programs aimed at retention, which have since ended but continue to impact financial performance. According to CFO Burt Podbere, these incentives reduced revenue by roughly $11 million in the last quarter and are expected to weigh on results by another $10 million to $15 million per quarter through the end of the fiscal year.

Despite posting better-than-expected adjusted earnings of 73 cents per share and in-line revenue for the first fiscal quarter, investors responded cautiously to the company’s forecast. CrowdStrike also reported a net loss of $110.2 million, compared to a $42.8 million net profit in the same quarter last year.

Analysts have noted growing investor frustration with what some see as a series of one-time disruptions and challenges.

“It’s the combination of a full valuation and a theme of one-time events that keep coming up that makes it difficult for us to underwrite meaningful upside at these levels,” said Evercore ISI analyst Peter Levine, who downgraded the stock to “in line.”

Adding to the market’s reaction, CrowdStrike’s shares have significantly outperformed in recent months, rising more than 40% in 2025 after a 34% gain in 2024. This strong performance has led to a premium valuation — more than 120 times forward earnings estimates — which leaves limited room for earnings disappointments. For comparison, rival Palo Alto Networks trades at roughly 54 times forward earnings.

Still, not all sentiment is negative. Despite the guidance miss, several brokerages raised their price targets following the company’s first-quarter report. Many analysts believe CrowdStrike is gaining market share, citing continued demand across its product lines.

To bolster investor confidence, the company also announced a $1 billion share repurchase program.

CNBC and Reuters contributed to this report.