CrowdStrike Holdings Inc. shares jumped by double digits in the extended session Thursday after the cybersecurity company‘s first earnings report since going public included an optimistic outlook that its chief executive credited to customer frustration with legacy security products.
CrowdStrike CRWD, +14.80% reported that it experienced one of its largest customer boosts in the quarter, adding 543 net new subscriptions in the quarter for a total of 3,059 customers as of the end of April. With the IPO, the company’s profile has been raised as more customers are becoming more frustrated with legacy security platforms, George Kurtz, CrowdStrike co-founder and CEO, told MarketWatch in an interview.
See also: Five things to know about CrowdStrike
“The legacy technologies are just failing, continuing to fail, and as they talk about new releases coming out, they’re just really not giving anything that even remotely resembles a cloud-native architecture,” Kurtz said.
Customers are also buying multiple products on the CrowdStrike platform, Kurtz said, with the average customer buying about four modules, which is contributing to the higher-than-expected numbers.
“Increasing our customer base is a key component of our growth strategy and we will continue to invest in customer-acquisition programs, channel partnerships and frictionless go-to-market programs including free and in-app trials,” Kurtz said in a post-earnings conference call. “We are focused on expanding our relationships with existing subscription customers by deploying additional cloud modules and protecting more of their endpoints.”
For more: CrowdStrike CEO compares security company to Salesforce and ServiceNow after IPO
The company reported a fiscal first-quarter loss of $26 million, or 55 cents a share, compared with $33.6 million, or 77 cents a share, in the year-ago period. Adjusted earnings were 47 cents a share. Revenue rose to $96.1 million from $47.3 million in the year-ago quarter. Analysts had forecast a loss of 47 cents a share on revenue of $95.6 million.
CrowdStrike said it expects an adjusted loss of 24 cents to 23 cents a share on revenue of $103 million to $104 million in the fiscal second quarter, and an adjusted loss of 72 cents to 70 cents on revenue of $430.2 million to $436.4 million for the year. Analysts surveyed by FactSet had forecast a loss of 31 cents a share on revenue of $96.7 million for the second quarter, and a loss of $1.02 a share on revenue of $412.3 million for the year.
CrowdStrike shares surged 14% after hours, following a 2.5% gain to close the regular session at $72.75. In comparison, the S&P 500 index SPX, -0.62% rose 0.4%, the tech-heavy Nasdaq Composite Index COMP, -0.74% advanced 0.3%, and the ETFMG Prime Cyber Security ETF HACK, -0.48% gained 0.2% on Thursday.
Back in June, CrowdStrike’s stock nearly doubled in its first day of trading, following its initial public offering, where the company raised $659.1 million in net proceeds.
Of the 16 analysts who cover CrowdStrike so far, 11 have buy ratings and five have hold ratings, and an average target price of $77.56, according to FactSet data.