As the going gets tough, cybersecurity companies are looking to upsell

CrowdStrike Holdings Inc. warned three months ago about longer buying cycles for security software, a problem that has also struck its rivals, but the cybersecurity company now says that it has managed to combat that weakness by selling more into its current customer base.

CrowdStrike’s leaders pointed to two ways that they have overcome the macroeconomic issues: A new focus on the small- to medium-business market, where recession fears are more acute when it comes to spending, as well as “upselling” products to current customers. CrowdStrike’s ARR, a software-as-a-service metric that shows how much revenue the company can expect based on subscriptions, grew 48% to $2.56 billion from the year-ago quarter, while the Street expected $2.52 billion.

The model has supported identity-management software company Okta Inc. OKTA , which said the bulk of its business was in upsells and cross-sells to established customers, and Wall Street said the company was “partially out of the woods.” To varying degrees, that’s the same story coming out of other cybersecurity companies like Palo Alto Networks Inc. PANW and Zscaler Inc. ZS .

Citi Research analyst Fatima Boolani, who has a buy rating and a $155 price target, said the results and outlook should “not only tamp down market saturation, pricing/discounting pressure fears against a more vocal Microsoft MSFT , but also refocus investor energy on tangible tech/wallet consolidation potential, emerging module penetration runway, and still-open market share capture scope — achievable profitably at industry-best unit economics and free cash flow conversion.

CrowdStrike shares rose 3.2% to close Wednesday at $128.92, while the S&P 500 index SPX ticked 0.1% higher and the tech-heavy Nasdaq Composite Index COMP gained 0.4%. CrowdStrike shares are down 17.8% over the past 12 months, while the ETFMG Prime Cyber Security ETF HACK is down 15.2%, and the First Trust Nasdaq Cybersecurity ETF CIBR is off 12.6%.

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

CrowdStrike stock rallies as earnings, outlook beat Street viewCrowdStrike Holdings Inc. shares surged in the extended session Tuesday after the cybersecurity company's earnings beat.
Source: MarketWatch - 🏆 3. / 97 Read more »

Stocks making the biggest moves after hours: CrowdStrike, Stitch Fix and moreThese are the stocks posting the largest moves in extended trading. SEE EVERYTHING IS BULLISH ! 😂🖕🏻nothing ever bearish CRWD🤩✨🫶
Source: CNBC - 🏆 12. / 72 Read more »

Stocks making the biggest premarket moves: CrowdStrike, Occidental Petroleum, Tesla and moreMore buying from Warren Buffett's Berkshire Hathaway appears to be boosting Occidental Petroleum. All medias always sell panic and fear while organizations are buying all. Check data
Source: CNBC - 🏆 12. / 72 Read more »