UPDATE 3-CrowdStrike eyes strong annual revenue as cybersecurity spending holds up

(Adds details, executive and analyst comments) By Vansh Agarwal March 7 (Reuters) - CrowdStrike Holdings Inc forecast annual revenue above market estimates on Tuesday, the latest sign that spending on cybersecurity products was holding up in a turbulent economy. Shares of the Austin, Texas-based company were up 6% in trading after the bell. "We believe our strong fourth-quarter performance and record first-quarter pipeline demonstrates the mission-critical nature of cybersecurity for modern businesses, the resiliency of our market," said Chief Executive Officer George Kurtz. While tech budgets have shrunk this year in the face of rising interest rates and decades-high inflation, a series of high-profile hacks and the rising digital presence of companies and governments has ensured demand for cybersecurity services.

Rival Palo Alto Networks Inc raised its annual profit forecast last month and beat estimates for quarterly earnings, saying it expects cybersecurity demand to be resilient. "We continue to see conservatism in revenue guidance for FY 24 amid macro uncertainties, but note the potential upside from opportunities in its SMB (small-medium businesses) segment from its exclusive partnership with Dell and emerging product growth," said Janice Quek, equity analyst at CFRA Research.

For the quarter ended Jan. 31, CrowdStrike's revenue rose 48% to $637.4 million compared with a year earlier. Analysts on average had expected $624.9 million, according to Refinitiv data. Excluding items, the company earned net income of 47 cents per share in the fourth quarter, higher than analysts' expectations of 43 cents. The company said it expects fiscal year 2024 revenue between $2.96 billion and $3.02 billion, compared with analysts' estimates of $2.96 billion.

On a conference call with analysts, finance chief Burt Podbere said CrowdStrike expanded its team by 46% in 2022, and added it would allow the company to significantly moderate its pace of new hires.

(Reporting by Vansh Agarwal in Bengaluru; Editing by Krishna Chandra Eluri)

Reuters

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UPDATE 3-CrowdStrike eyes strong annual revenue as cybersecurity spending holds up

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