CrowdStrike seems to have financially patched over last month’s disastrous outage
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Smooth recovery… from the blue screen of death. CrowdStrike appears to have shrugged off the massive global outage it caused last month. In its first quarter reporting earnings since the debacle — when blue screens took over 8.5M devices — CrowdStrike said its revenue rose over 30% annually. It shaved its annual guidance but said it was unrelated to its big blunder. CrowdStrike shares have gained ~25% from their lowest point post-outage, though they haven’t fully recovered.
Turbulence: Lots of industries were affected by CrowdStrike’s faulty update, but airlines were likely the hardest hit (thousands of global flights were canceled). Delta’s under federal investigation after it took nearly a week to get its biz back to cruising altitude.
Uneven impact… CrowdStrike said it would dole out $60M in credits to customers affected by its global oopsy. But Delta alone said the incident had cost it $500M (and it’s planning to sue). Travelers and CrowdStrike shareholders are also seeking damages. CrowdStrike says its liability is limited, while cyber-insurance companies could be on the hook for billions. But the damage may not be as bad as feared for CrowdStrike:
Uncrowded market: CrowdStrike’s a top provider of “endpoint protection” software, and analysts say it’s costly and time-consuming for corporate customers to switch. CrowdStrike said it’s held onto 98% of customers since the outage.
It’s hard to make a giant fall… and the outage may amount to just a stumble for CrowdStrike, which serves ~30K companies, second in its niche only to Microsoft. Though analysts warn there could be more reputational fallout ahead, others say the incident was a blip. AT&T’s shown that big players can recover fast: despite suffering yet another major data breach in May, its churn rate (aka people canceling) in the second quarter was its second lowest ever.