CrowdStrike shares rise premarket after fourth-quarter guidance tops expectations

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CrowdStrike shares rise premarket after fourth-quarter guidance tops expectations
Credit: © Reuters.

Investing.com -- CrowdStrike Holdings (NASDAQ: CRWD ) shares rose in premarket U.S. trading on Wednesday after the cybersecurity company unveiled better-than-expected fourth-quarter guidance thanks in part to strong demand for digital protection.

A growing number of firms have chosen to spend more cybersecurity in the wake of a series of hacks against companies across multiple industries, including gambling groups Caesar's Entertainment and MGM Resorts (NYSE: MGM ) and consumer products maker Clorox (NYSE: CLX ).

Crowdstrike reported adjusted per-share earnings of $0.82 a share and revenue of $786 million in the three months ended on Oct. 31, beating estimates of $0.74 and $624.77M, respectively. 

Annual recurring revenue, or ARR, increased 35% year-over-year to reach $3.15 billion at the end of last month, of which $223.1M was added in the quarter due in part to solid performance by CrowdStrike's Falcon cybersecurity platform.

In a call with analysts, Chief Executive Officer George Kurtz noted that October had been a particularly "strong" month. However, he flagged that the broader economic environment remains "challenging," leading many customers to closely scrutinize their spending habits.

As a result, Kurtz said that CrowdStrike does not expect to see "budget flush" during the fourth quarter, referring to a typical crush of expenditures during the period by clients who are worried that money might not be available in the following year.

Even still, the company said it expects to report current-quarter adjusted earnings per share in a range of $0.81 to $0.82 on revenue of $836.6M to $840M, topping estimates of $0.78 on revenue of $836.78M.

CrowdStrike also sees its full-year adjusted per-share income in a range of $2.95 to $2.96 and revenue of $3.047B to $3.050B, up from a prior forecast of $2.80 to $2.84 and revenue between $3.031B and $3.043B.

"[W]e think the company’s macro-related assumptions remain realistic if not conservative," analysts at BTIG said in a note to clients.

Yasin Ebrahim contributed to this report.

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