CrowdStrike Raises Its Outlook for Key Margins as Cybersecurity Product Demand Grows | #hacking | #cybersecurity | #infosec | #comptia | #pentest | #ransomware

Key Takeaways

  • CrowdStrike raised its guidance for subscription gross margin and operating margin as cybersecurity demand increases.
  • The company indicated that the rise in the use of AI will increase the need for cyber protections.
  • Shares were up initially on the news, then fell after Cisco Systems bought rival Splunk.

CrowdStrike Holdings (CRWD) boosted its outlook for subscription gross margin and operating margin over the next three to five years as demand for protections against cyber attacks grows.

At a presentation at the company’s Fal.Con, CrowdStrike indicated it is targeting subscription gross margin of 82% to 85%, up 400 basis points (bps) from its earlier guidance. Its operating margin target of 28% to 32% is 900 bps higher than its prior forecast.

Co-Founder and CEO George Kurtz said that generative artificial intelligence (AI) will bring major changes to the cyberthreat landscape, and that CrowdStrike can help deliver what customers need to protect their businesses. He noted that the company is constantly improving its Falcon unified security platform to meet that challenge, announcing updates to the system and saying, “The reason we built the Falcon platform is just for this moment.”

Following the presentation, analysts at Truist, Barclays, Needham, and Rosenblatt all raised their price targets on the stock.

Shares of CrowdStrike initially popped on the news, but then lost ground and were 2% lower as of noon Eastern after Cisco Systems (CSCO) bought rival Splunk (SPLK). However, shares remained more than 50% higher this year. 



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