Shares of CrowdStrike, a leading cybersecurity firm, experienced a decline early Wednesday as the company issued a fiscal first quarter and full year earnings outlook that fell short of market estimates, even though it reported better-than-expected results for the previous three-month period. The company anticipates per-share adjusted earnings to be between $0.64 and $0.66 for the current quarter, announcing late Tuesday, in contrast to a consensus estimate on FactSet of $0.76.
Furthermore, revenue expectations are set between $1.1 billion and $1.11 billion, aligning with forecasts from Wall Street. Consequently, the stock slipped by 7.6% in the latest premarket trading activity. CrowdStrike's guidance indicates a "typical" sequential seasonal downturn in net new annual recurring revenue (ARR), projected to be around 21% to 23% as noted by Chief Financial Officer Burt Podbere during an earnings call.
Podbere also highlighted that the company anticipates cash impacts amounting to $73 million in the ongoing quarter, attributed to costs associated with last year’s global tech outage. Looking ahead to fiscal 2026, CrowdStrike projects that adjusted earnings per share (EPS) will range from $3.33 to $3.45, alongside revenue expectations of $4.74 billion to $4.81 billion.
Analysts on Wall Street are currently forecasting a non-GAAP EPS of $3.88 and a revenue of $4.79 billion. The data from the previous fiscal year reflected a significant adjusted EPS increase from $3.09 to $3.93 on an annual basis, while revenue saw a robust rise of 29% to $3.95 billion. Podbere emphasized, "The fundamental strengths of our business, reflected in strong customer retention, the acceleration in module adoption, and multiple significant growth opportunities, provide us with confidence that we can reach our target model by fiscal year 2029 and deliver long-term profitable growth." This statement underscores the company's growth strategy despite the recent setbacks.
For the quarter ended in January, CrowdStrike reported an adjusted EPS of $1.03, up from $0.95 the previous year, surpassing the average analyst estimate of $0.86. Revenue grew by 25% year-over-year, amounting to $1.06 billion, exceeding the market's estimate of $1.03 billion. Subscription revenue saw a remarkable increase of 27% to $1.01 billion, and professional services revenue also increased to $50.2 million, up from $49.4 million the prior year.
As of the end of January, ARR expanded by 23% to $4.24 billion, with $224.3 million attributed to net new ARR added during the fourth quarter. Podbere further communicated expectations of a reacceleration in net new ARR along with expansions in operating margin and free cash flow margin in the second half of fiscal 2026..