The current quarter's revenue and profit prediction by CrowdStrike Holdings Inc. was much higher than Wall Street had anticipated, thanks to the company's success in gaining market share through a single-platform strategy. Due to extended trading, the stock price surged.
Analysts had predicted 82 cents in earnings per share for the first quarter, but the cybersecurity firm predicted 89 cents to 90 cents, thus it topped the average. Additionally, it earns $902.2 million to $905.8 million, which is more than expected.
Cybersecurity stock prices are currently quite volatile, and the earnings beat from the Austin, Texas-based company comes at a very volatile time. Not all security companies have benefited from the increased demand that has resulted from high-profile cybersecurity breaches
Unlike CrowdStrike, Palo Alto Networks Inc. fell in February following a reduction in its annual sales projection, citing cybersecurity "spending fatigue" among clients as the reason.
In New York's extended trading, CrowdStrike's stock price soared 26%. On Wednesday morning in New York, shares will open at a record if the gains persist. Palo Alto Networks, SentinelOne, and Fortinet were among the other cybersecurity firms that benefited.
With adjusted earnings of 95 cents per share for the fourth quarter, CrowdStrike outperformed projections of 83 cents. Revenue for the quarter came in at $845.3 million, which was higher than expected.
The "exceptionally strong" results were attributed by Chief Executive Officer George Kurtz to the company's strategy of selling its security products on a single platform.
He asserted that CrowdStrike's products differentiate themselves from Palo Alto's by being "all on one platform, one agent and one integrated workflow." During an investor call, Kurtz mentioned that a financial services company that remained nameless had replaced its Palo Alto cloud products "in a large seven-figure deal."
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