CrowdStrike Dips Despite Strong Q2 Earnings
Weaker-than-expected Q3 revenue guidance sends shares down over 6% in after-hours trading, overshadowing a beat on earnings and revenue.
CrowdStrike Holdings, Inc. (CRWD) saw its shares fall more than 6% in after-hours trading on Wednesday, as investors reacted to a mixed financial report that saw strong second-quarter results undercut by a cautious outlook for the coming quarter.
The cybersecurity firm reported robust earnings for the second quarter of fiscal year 2026, with an adjusted earnings per share of $0.93 on revenue of $1.17 billion. These figures surpassed Wall Street's expectations, which had forecasted an EPS of $0.83 and revenue of $1.15 billion. The company also reported a 20% year-over-year increase in annual recurring revenue (ARR), a key metric for subscription-based businesses, which reached $4.66 billion.
Despite the strong performance in the second quarter, CrowdStrike's guidance for the third quarter fell short of analyst expectations. The company projected Q3 revenue to be in the range of $1.208 billion to $1.218 billion, below the consensus estimate of $1.228 billion. This softer-than-expected forecast appeared to be the primary driver of the after-hours sell-off, overshadowing the otherwise positive results.
George Kurtz, CrowdStrike's founder and CEO, expressed confidence in the company's position, stating, "With reacceleration a quarter ahead of our expectations, CrowdStrike delivered an exceptional Q2. Record Q2 net new ARR of $221 million, over 1,000 Flex customers, and more than 100 re-flexes highlight CrowdStrike as the leader in cybersecurity consolidation."
Analysts, on average, maintain a positive outlook on the stock. Based on a survey of 48 analysts, the average price target for CrowdStrike shares is $468.63, suggesting a potential upside of nearly 11% from its current price. The consensus recommendation remains an "Outperform."
In a move to bolster its technological capabilities, CrowdStrike also announced its intention to acquire Onum, a company specializing in real-time telemetry pipeline management. The terms of the acquisition were not disclosed.