Cybersecurity firm CrowdStrike Holdings revealed Wednesday that it suffered a major setback in its sales pipeline last month. The company said it lost an estimated $60 million in potential deals due to a software update failure that caused widespread disruption on July 19.
The botched update triggered a massive technology breakdown, stranding thousands of travelers in airports and causing other severe interruptions. Despite the setback, CrowdStrike's executives expressed optimism about recovering the lost deals by the end of the company's fiscal year in January 2025, Associated Press reported
They believe that customers remain confident in the company's cybersecurity products despite the glitch that affected systems running on Windows software.
"Our mission is alive and well, and I know that CrowdStrike's very best days are ahead of us," CEO George Kurtz told analysts during a conference call discussing the company's performance for the April-July period. He issued an apology for the outage and acknowledged the gravity of the situation.
"The days following the incident were among the most challenging in my career because I deeply felt what our customers experienced," Kurtz said. He also pledged to prevent such incidents from happening again.
Kurtz's reassurances, along with quarterly earnings that surpassed analysts' expectations, appeared to stabilize investor confidence.
CrowdStrike's stock, which had initially plummeted in the wake of the outage, saw a modest increase in extended trading Wednesday. However, the stock remains 13% below its pre-outage level, which reflects a loss of about $10 billion in market value.
Earlier this month, the company's shares dropped nearly 25%, wiping out more than $20 billion in market value.
Even if the company is unable to recover the $60 million in deals that were expected to close before the technical failure, that loss may pale in comparison to the potential liabilities from the disruption.
Delta Air Lines, one of the companies severely affected by the outage, has estimated that it could owe customers $380 million due to the resulting cancellations of approximately 7,000 flights.
The airline said it may pursue legal action against CrowdStrike for causing the meltdown. However, CrowdStrike has hit back, saying Delta is using the incident to deflect from its own operational issues.
CrowdStrike did not disclose specific legal costs it might incur as a result of the outage, but Chief Financial Officer Burt Podbere suggested that any financial impact would be manageable.
"Our customer agreements contain provisions limiting our liability, and we maintain insurance policies intended to mitigate the potential impact of certain claims," Podbere said during the conference call.
