The stock price of cybersecurity firm CrowdStrike has skyrocketed more than 130% this year, surpassing other larger competitors and various wider indices. CEO George Kurtz discussed the organization's accomplishments and the essential role of cybersecurity in terms of national security during this interview.
George Kurtz, CEO of the cybersecurity firm CrowdStrike, has had an extraordinary year. The stock price of the company has shot up 135%, outpacing larger rivals and indexes. Furthermore, its annual recurring revenue continues to increase, although at a slightly slower pace than before. Kurtz noted in an interview with CNBC that the aim to reach $10 billion in recurring revenue in seven years is still within reach.
The importance of cybersecurity has become more and more palpable, and beginning Monday, public companies will be under obligation to report any material cybersecurity incidents. As Kurtz expressed it to CNBC, this is a sign that cybersecurity is no longer a backroom operation but is now at the center of the boardroom. He mentioned that regulations of this kind could be advantageous to CrowdStrike, as the company sells Falcon security databases to protect customers from hackers, while also providing professional services to aid companies large and small in dealing with hackers already in their systems. This side of CrowdStrike's business showed double-digit growth year over year.
Kurtz went on to say that while CrowdStrike mainly focuses on preventing upfront attacks and providing visibility, their professional services revenue increased 57% year over year in the most recent quarter, as responding to hacks is good business. For every dollar clients spend on CrowdStrike to respond to hacks, they bring in approximately six dollars in subscription revenue.
As for government agencies, Kurtz commented that through Cybersecurity and Infrastructure Security Agency Director Jen Easterly, there has been recognition of the looming threats, which has led to a positive progress.
The Biden administration, with Easterly at the head, has made it clear that cybersecurity is critical for national security. Companies, including Google Cloud's Mandiant and CrowdStrike, collaborate with the government to assess and address cyberattacks, such as those associated with China and Russia. Much of this work is kept hidden due to its national security and diplomatic implications. Nevertheless, the CrowdStrike CEO did not mince words when talking about Microsoft's reaction to a significant breach that rocked the U.S government this year, when the Chinese intelligence stole Microsoft security keys for use to penetrate the State and Commerce departments."It's odd to me that they didn't file an 8-K, given the extent — literally their certificates being stolen and used to break into the government," Kurtz commented, referring to the regulatory filing companies make in the event of a "material" event. His words echoed an oft-used point put forward by CrowdStrike, which has highlighted the security risks associated with Microsoft software for sales purposes. Sen. Ron Wyden, D-Ore., expressed a similar opinion.Microsoft declined to react.Kurtz doesn't deem 2024 to be any more promising for large and small businesses alike. Artificial intelligence, which has become more widespread, may reinforce both social engineering attacks — those capitalizing on human operators' weak spots — and software-driven attacks. "In 2023, I don't know that there is any sector that is exempt from being worried about China," Kurtz said. "If you're the smallest SMB, maybe you won't be subjected to attack," Kurtz continued, referring to small to medium-sized businesses. "Yet ultimately, you might have some relation to another organization they are really interested in. Whether it is China or other opponents, you might just be the unintended casualty of their mission to reach a larger goal."
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