CrowdStrike Drops 8% on Weak Guidance Despite Beating Q4 Expectations

Shares of CrowdStrike (NASDAQ:CRWD) fell more than 8% intra-day today after the cybersecurity firm issued weaker-than-expected guidance for the current quarter, overshadowing its strong fourth-quarter results.

The growing threat of cyberattacks has driven increased spending on digital security solutions, benefiting CrowdStrike and its artificial intelligence-driven cybersecurity products. High-profile hacking incidents last year, including those targeting AT&T, Live Nation Entertainment’s Ticketmaster, and UnitedHealth Group, underscored the rising demand for robust cybersecurity defenses.

For the fourth quarter, CrowdStrike posted adjusted earnings per share (EPS) of $1.03 on revenue of $682 million, surpassing analyst estimates of $0.86 EPS and $668.9 million in revenue. Annual recurring revenue (ARR), a key metric for subscription-based businesses, grew 23% year-over-year.

Despite the strong Q4 performance, investors reacted negatively to the company’s forward outlook. CrowdStrike projected adjusted operating income for the current quarter between $173.1 million and $180 million, significantly below the consensus estimate of $219.7 million. Revenue guidance ranged from $1.10 billion to $1.11 billion, roughly in line with the expected $1.11 billion.

For the full fiscal year, the company expects adjusted diluted EPS between $3.33 and $3.45, while revenue is forecast to reach between $4.74 billion and $4.81 billion. While CrowdStrike continues to benefit from growing cybersecurity demand, the cautious outlook raised concerns among investors, driving the stock lower in early trading.