Cybersecurity specialist CrowdStrike Holdings on Wednesday estimated it absorbed a roughly $60 million blow to its sales pipeline last month after its botched handling of a software update triggered a technology meltdown that stranded thousands of people in airports in addition to other exasperating disruptions.
Although the massive outage spooked customers that had been expected to close deals totaling $60 million during the final few weeks of CrowdStrike’s fiscal second quarter, executives running the Austin, Texas, company predicted it will still be able to cinch those contracts before its fiscal year ends in January 2025 because customers still have faith in its cybersecurity products despite the July 19 gaffe that froze up machines running on Windows software.
“Our mission is alive and well, and I know that CrowdStrike’s very best days are ahead of us,” CrowdStrike CEO George Kurtz told analysts during a conference call covering the company’s April-July period. He also apologized for the company’s role in an outage that he said “will never be lost on me, and my commitment is to make sure this never happens again. The days following the incident were among the most challenging in my career because I deeply felt what our customers experienced.”
Kurtz’s reassuring comments, coupled with quarterly earnings that exceeded analysts’ projections, seemed to reassure investors who have been buying up CrowdStrike’s stock in recent weeks after initially dumping the shares in the wake of the havoc that the company blamed on a computer bug. The shares rose slightly in Wednesday’s extended trading, leaving the stock price 13% below its level before the tech outage — a loss of about $10 billion in market value. Earlier this month, CrowdStrike’s shares plunged nearly 25%, knocking off more than $20 billion in market value.
Even if the $60 million in deals that CrowdStrike expected to close before the tech meltdown never happen, that will be a minor price to pay compared to the massive bills those affected by the outage are facing.
Delta Air Lines, for instance, has estimated that it may owe its customers $380 million after the CrowdStrike-induced outage fouled up its computer systems so horribly that it had to cancel about 7,000 flights. Delta has threatened to sue CrowdStrike, which has insisted that the airline is using the tech outage as an excuse for its own bungling.
CrowdStrike didn’t provide an estimate of legal expenses it may face from the outage, but indicated the bills probably won’t be too burdensome.
“Our customer agreements contain provisions limiting our liability, and we maintain insurance policies intended to mitigate the potential impact of certain claims,” Burt Podbere, CrowdStrike’s chief financial officer, said during Wednesday’s conference call.