CrowdStrike Swings to a Loss With Costs Tied to Massive Outage, Despite Revenue Gains

Core Insights - CrowdStrike reported a third-quarter revenue of $1.01 billion, reflecting a 29% year-over-year increase, surpassing analyst expectations [1] - The company experienced an unexpected loss of $16.82 million, or 7 cents per share, compared to a profit of $26.67 million, or 11 cents per share, in the same quarter last year [1] - The loss was attributed to rising expenses, particularly related to the fallout from a significant software update issue in July [2] Financial Performance - Third-quarter revenue was $1.01 billion, exceeding analyst consensus [1] - The company raised its full-year revenue guidance to between $3.92 billion and $3.93 billion, up from a previous range of $3.89 billion to $3.90 billion [4] - Despite the revenue increase, the company reported a loss of $16.82 million, indicating a significant rise in costs [1][4] Incident Impact - The July software update issue had widespread effects, including grounding thousands of flights and incurring significant costs for CrowdStrike [2] - Delta Air Lines has filed a lawsuit against CrowdStrike, estimating the incident cost the airline $500 million, along with future revenue losses and reputational damage [3] - CrowdStrike maintains that it is not responsible for Delta's handling of the incident and claims the airline did not accept its offers for assistance [3] Market Reaction - Following the earnings release, CrowdStrike's shares fell by 2% in extended trading, although the stock had risen over 42% since the beginning of the year [4]