Shares of CrowdStrike Holdings were down in morning trading after the cybersecurity vendor issued an earnings forecast that came in below expectations as it continues to recover from the global IT outage in July 2024.
The company is now forecasting first quarter earnings of 64 to 66 cents a share, and annual earnings of $3.33 to $3.45 cents a share for the fiscal year 2026. The company expects full year revenue to come in between $4.74 billion and $4.8 billion.
Shares were down 9% at $354.85 in early afternoon trading.
The company said it is ending its customer commitment package, which was offered in 2024 as an incentive to retain customers following the global outage, which disrupted millions of Microsoft Windows systems at major airlines, hospitals, financial institutions and other companies around the world.
“The CCP program was an excellent proactive measure, which not only built our relationship with impacted customers, but also resulted in significant platform adoption,” CrowdStrike CEO George Kurtz said on a Tuesday earnings call.
CrowdStrike has been operating in a fiercely competitive environment for cybersecurity business in recent years. Rivals like Palo Alto Networks have offered deferred payments and other incentives to help consolidate large customers on single security platforms in an effort to reduce the number of tools they deploy.
The industry incentives have been driven in part to help customers avoid double payments, particularly if they are exiting a contract with an existing security vendor while consolidating with a new vendor.
Following the IT outage, which was caused by a faulty software update from CrowdStrike, rival security firms pounced in an attempt to take market share from the company.
CrowdStrike said annual recurring revenue grew 23% year-over-year to $4.24 billion. The metric is a closely watched indicator of how much money is coming into a company based on subscriptions.
CrowdStrike said total revenue was up 25% to $1.06 billion in the fiscal fourth-quarter ended Jan. 31, compared with $845 million in the year-ago quarter.
The company reported non-GAAP net income of approximately $261 million, or $1.03 per share, compared with $236 million or 96 cents in the year-ago quarter.