CrowdStrike estimates that the technological debacle caused by its mistakes resulted in a loss of $60 million in sales
Cybersecurity specialist CrowdStrike Holdings estimated Wednesday that it took a roughly $60 million hit to its sales pipeline last month after the mishandling of a software update triggered a technology outage that stranded thousands of people at airports in addition to other maddening disruptions.
Although the massive outage spooked customers who expected to close $60 million in deals in the final weeks of CrowdStrike’s fiscal second quarter, executives at the Austin, Texas, company predicted it would still be able to close those deals before its fiscal year ends in January 2025 because customers still have confidence in its cybersecurity products despite the outage. the blunder of July 19 which blocked machines running Windows software.
“Our mission is still alive and I know that CrowdStrike’s best days are ahead of us,” CrowdStrike CEO George Kurtz told analysts on a conference call covering the April-July period. He also apologized for the company’s role in an outage that he said “will never be out of my hands, and I am committed to ensuring that it never happens again. The days following the incident were some of the most difficult of my career, as I deeply felt what our customers went through.”
Kurtz’s reassuring comments, coupled with quarterly profits that beat analysts’ forecasts, appear to reassure investors who have bought CrowdStrike shares in recent weeks after initially dumping them following the devastation the company blamed on the pandemic. on a computer bug. Shares edged higher in extended trading Wednesday, leaving the stock 13% below its pre-outage level — a loss of about $10 billion in market value. Earlier this month, CrowdStrike shares plunged nearly 25%, knocking more than $20 billion off its market value.
Even if the $60 million in deals CrowdStrike hoped to close before the tech crisis never materialize, it will be a small price to pay compared to the huge bills facing those affected by the outage.
Delta Air Lines, for example, estimates it owes customers $380 million after the CrowdStrike outage disrupted its computer systems so badly that it had to cancel about 7,000 flights. Delta has threatened to sue CrowdStrike, which has insisted that the airline is using the technical outage as an excuse for its own blunders.
CrowdStrike did not provide an estimate of the legal fees it might face as a result of the outage, but said the bills likely won’t be too onerous.
“Our customer agreements contain provisions that limit our liability, and we maintain insurance policies designed to mitigate the potential impact of certain claims,” Burt Podbere, CrowdStrike’s chief financial officer, said during Wednesday’s conference call.
