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What Happened?
Shares of cybersecurity company CrowdStrike (NASDAQ:CRWD) fell 10.8% in the morning session after the company reported mixed fourth quarter (fiscal 2025) results: Its full-year revenue guidance was just in line, while full-year operating profit guidance missed Wall Street's estimates.
The profit guidance miss was due to investments in platform resiliency, AI efficiencies, and sales and marketing costs, some of which are from CCPs (customer compensation packages) following the July 19th outage.
On the other hand, CrowdStrike beat analysts' annual recurring revenue (ARR), revenue, and operating profit expectations during the quarter. Sales climbed 25% year-on-year, largely driven by a 27% growth in subscription revenue as companies leaned more on its Falcon platform. Overall, the quarter was solid, but the guidance was mixed, and the latter is weighing on shares.
The shares closed the day at $365.27, down 6.4% from previous close.
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What The Market Is Telling Us
CrowdStrike’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. But moves this big are rare even for CrowdStrike and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 25.2% on the news that the company reported impressive fourth-quarter results with revenue and ARR (annual recurring revenue) beating by a slight margin but very convincingly on operating profit.
Keeping with that theme, while forward guidance for the next quarter and the full year were only slightly above expectations, non-GAAP EPS guidance was more convincingly ahead, showing better-than-expected profitability.
CrowdStrike is up 4.8% since the beginning of the year, but at $364.02 per share, it is still trading 20.1% below its 52-week high of $455.36 from February 2025. Investors who bought $1,000 worth of CrowdStrike’s shares 5 years ago would now be looking at an investment worth $6,510.
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