CrowdStrike estimates the crash caused by its failure resulted in a loss of $60 million in sales

By Michael Liedtke, The Associated Press

Cybersecurity firm CrowdStrike Holdings estimated Wednesday that it lost about $60 million in sales last month after mismanaged software updates led to a technology meltdown that stranded thousands of people at airports and other annoying disruptions.

While the major outage scared off customers who were expecting to sign $60 million in contracts in the last few weeks of CrowdStrike’s second fiscal quarter, executives at the Austin, Texas-based company predict the company will be able to sign those contracts before the end of its fiscal year in January 2025 because customers still have faith in its cybersecurity products despite the July 19 mishap that froze Windows computers.

“Our mission is alive and well, and I know that CrowdStrike’s best days are yet to come,” CrowdStrike CEO George Kurtz told analysts on a conference call spanning April through July. He also apologized for the company’s role in the outage, which he said “will never escape my notice, and I am committed to making sure it never happens again. The days after the incident were some of the most difficult of my career, as I felt deeply what our customers experienced.”

Kurtz’s reassuring comments, coupled with quarterly earnings that beat analysts’ forecasts, seemed to reassure investors who had been buying CrowdStrike stock in recent weeks after initially dumping the stock in the wake of the devastation the company blamed on a computer glitch. The stock rose slightly in extended trading Wednesday, leaving the stock 13% below where it was before the technical glitch — a loss of about $10 billion in market value. Earlier this month, CrowdStrike stock fell nearly 25%, wiping out more than $20 billion in market value.

Even if the $60 million in deals CrowdStrike expected to close before the tech crisis never materializes, it will be a small price to pay compared to the hefty bills faced by those affected by the outage.

Delta Air Lines, for example, estimated it could owe its customers $380 million after a CrowdStrike-induced outage so badly messed up its computer systems that it was forced to cancel about 7,000 flights. Delta has threatened to sue CrowdStrike, which insists the airline is using the technical failure as an excuse for its own mistakes.

CrowdStrike did not provide an estimate of the legal costs it might face as a result of the outage, but said the bills likely would not be too onerous.

“Our customer agreements contain provisions that limit our liability, and we also have insurance policies in place to mitigate the potential impact of certain claims,” Burt Podbere, CrowdStrike’s chief financial officer, said on a conference call Wednesday.