CrowdStrike Beats Earnings Estimates with Strong Growth Metric

CrowdStrike Holdings (CRWD) witnessed a surge in its shares on Wednesday following its fourth-quarter earnings report, which surpassed expectations and showcased robust growth metrics. The company’s fiscal 2025 guidance also exceeded projections.

After reporting earnings post-market close on Tuesday, CrowdStrike stock soared by 10.8% to close at 329.57 on Wednesday.

This positive momentum in CRWD stock contrasted with the declines seen in Palo Alto Networks (PANW) and Zscaler (ZS) due to disappointing earnings reports.

According to Morgan Stanley analyst Hamza Fodderwala, CrowdStrike management highlighted ongoing robust spending, driven by various factors such as increasing cyberattacks, new SEC regulations, and growing demand fueled by artificial intelligence.

In the fourth quarter, CrowdStrike’s adjusted earnings surged by 102% to 95 cents per share, while revenue, including acquisitions, rose by 33% to $845.3 million. These figures exceeded analyst expectations, with FactSet’s consensus projecting earnings of 82 cents per share on revenue of $839 million.

A significant focus for CrowdStrike is its annual recurring revenue (ARR), a crucial metric tied to subscription services growth. In Q4, ARR increased by 34% to $3.44 billion, surpassing analysts’ estimates of $3.39 billion.

For fiscal 2025, CrowdStrike predicted revenue of $3.957 billion at the midpoint of its outlook, surpassing estimates for $3.942 billion. Analysts at BMO Capital Markets and William Blair highlighted the company’s strong execution and strategic acquisitions, including the recent acquisition of cloud-computing security firm Flow Security.

While the Flow Security deal was described as a tech-plus-team acquisition with no direct ARR contribution, CrowdStrike remains well-positioned for further growth. As of the earnings report, CRWD stock had climbed 22% year-to-date and boasted an impressive IBD Relative Strength Rating of 97 out of 99.

CrowdStrike utilizes machine learning and specialized databases to detect malware across various devices accessing corporate networks, further solidifying its position as a leader in cybersecurity and artificial intelligence-driven solutions.