CrowdStrike Tops Views, But Shares Dip; Okta Jumps On Solid Beat

CrowdStrike Holdings' (CRWD) earnings and revenue for the July quarter surpassed Wall Street expectations. Okta, a cybersecurity rival, also beat Wall Street estimates. CRWD's stock fell while OKTA's stock soared.

Earnings for CrowdStrike's second fiscal quarter increased 105% on a adjusted basis to 74 cents per share. Revenues, including acquisitions grew 37% to $731.6 millions.

FactSet polled analysts who projected earnings of 56c per share for the period ending July 31.

Sunnyvale, Calif., based company earned 36 cents per share on revenues of $535 millions a year ago.

CRWD Stock Reverses after Hours

The stock of CrowdStrike initially grew on the earnings announcement, but then fell in extended trading. CRWD stock fell 1.5% today to 147.

Wall Street is focusing on the annual recurring revenue (ARR) with CrowdStrike. This is a key financial indicator that's tied to the growth of subscription services. ARR grew 37% during the quarter ending July to $2.93billion. Analysts predicted an ARR of 2,92 billion.

Matthew Hedberg, an analyst at RBC Capital, said that the AI-powered Falcon Platform's native capabilities in cloud, identity, and next-generation security monitoring businesses contributed well over a half-billion dollars to ending ARR.

CrowdStrike's mid-point forecast for the current quarter, ending in October 2010, predicted revenues of $777 million. This was slightly less than the $774 million estimate.

OKTA Stock: Outlook Raised

Okta, meanwhile, reported a profit of 34 cents compared to a loss of 10 cents in the previous period. The revenue rose by 23%, to $556 millions. Analysts who follow OKTA stocks predicted a 22-cent profit for revenue of $535 Million.

RBC Capital's Matthew Hedberg, an analyst at the firm, said that Okta has raised its revenue forecast for the full year.

He said that the fiscal 2024 guidance was revised upwards for all metrics. The midpoint revenue is now expected to be $2.21 billion as opposed to prior guidance of only $2.18 billion. This represents a 19% increase.

The OKTA stock rose 11.6% to $82.13.

CrowdStrike Specialized Database

CrowdStrike's products use machine learning, an artificial intelligence form. It also uses a database to detect malware in laptops, smartphones and other devices that connect to corporate networks.

CRWD had risen 40% in 2023 before the CrowdStrike earnings announcement. According to IBD StockCheckup, shares had an IBD relative strength rating of 38 out of 99.