let's get right to it. Here, when we talk about the cleanup, how long is this going to take before maybe CrowdStrike can sort of get the momentum back and get people back into this stop. Yeah, there's still some unanswered questions around the extent of the breach, the extent of the outage, and any potential ramifications due to customers' lost revenue. But the important thing that we pointed out to clients is this was not a breach. It was not a data loss. This was an outage, which is very different. It feels to me like the stock is being treated more in the line of a breach than an outage. Um, obviously still a serious thing, but we do think over time this will make CrowdStrike a better company and one that we think will continue to have customers' trust in an increasingly um worrisome cyber landscape. Well, I am curious though on that point though too because yes, it was not a breach, but it was also something that effectively CrowdStrike was responsible for. And we talk about a cybersecurity space that is highly

competitive and to a certain extent pretty crowded. I know not everyone is a CrowdStrike, but there are alternatives, and the fear amongst investors is that some of these companies will now start to look for other alternatives than CrowdStrike. Is that not a threat? Yeah, that is a common threat that we hear from investors. The reality, in our perspective, has been for a long time that CrowdStrike is built differently. We don't think there are a lot of great alternatives. There's a lot of legacy providers in this space, and we think some of the fundamental value of CRRI is really in the architecture of their Falcon platform. And so, while theoretically there are alternatives, we generally think, given the broad and increasingly broadening scope of the platform beyond just endpoint security, we think it's an increasingly important vendor, not just from the cyber perspective, but from a broad IT perspective. And so, we think the threat of a vendor switching is lower than perhaps other software companies out.

there but that is a key question. What is the impact on potential churn, upsell, discounting? I think these are all things that the market is trying to discount in the stock right now, but we do think the risk of churn is lower given what we think is a dominant platform today. What about clients asking for some money back to help recover damages? For example, Delta is saying there's going to be a couple more days before the worst of the cancellations are done. That might make it near a week. Um, Delta's going to want to get that money back from somebody. Yeah, it's a great question and one that, you know, candidly, we don't have a lot of great answers for. The company's not talking yet. M, in regards to that. Um, one of the, you know, there's, there's, we've talked to a number of partners that we wrote about in the note, you know, things like discounting, free credits, um, things like that to ensure that customers feel that Crow strike is really, you know, a true partner.

for them, but yet, you're right. That is an outstanding question. A lot of these software companies have SLAs in place that handle things like outages and things of that nature. But ultimately, CrowdStrike, we think, is working really tirelessly right now to ensure that customers truly feel like they have a partner in what is a really dark situation in terms of this outage, in terms of, you know, how globally interconnected this world is. But that is an obviously a question, and I think that's one of the bigger overhangs on the stock right now, is the potential monetary ramifications. Yeah, it's going to be hard, in theory, to buy the stock until you know what that number looks like. Do we have any idea of how long something like that is going to take? It's my sense that by the time they report earnings, we'll have a pretty good sense of it. Generally, they would report earnings towards the end of August. I think the company is gathering that information as we speak right now.

and so yes, that uncertainty is what we wrote in the note. In terms of some of the near-term overhang on the stock, I think once we get more clarity on that and a bit of a perspective on how they think this impacts the back half of their fiscal year, um, you know, ultimately we think this is a buying opportunity. But nonetheless, the overhang, given some of the questions that you bring up, is what's pressuring the stock right now. But we think there still is long-term value, especially given today's move. Yeah, we did cut our target, as you noted. But ultimately, we do think this company is built for the long haul. We think that when we look back on this, obviously, is an extremely unfortunate event, but ultimately we think customers will gain even more trust through this, given how the company reacts to it, which has generally been honesty and transparency early on in this situation. And so, Matt, just more broadly, though, too, you think that the current structure of kind of how Microsoft and these other clients rely on CrowdStrike, uh, for their cyber.

security needs the idea that you sort of keep that separate let effectively. CrowdStrike sort of take the impact of anything rather than bringing more of that in-house. You think that business structure that model remains well it's it's it's a great question too. I mean I think one of the things that Microsoft talked about in a blog post this weekend was that the entire Tech ecosystem needs to look at things like redundancy and backup and just alternative plans. This world is obviously incredibly interconnected when Microsoft said it only impacted they think 8.5 million devices that's a relatively small number. Relative they said it's less than 1% of the total Windows devices but regardless it had a profound impact given how interconnected this world is and so I do think that you know companies thinking through Disaster Recovery backups Alternatives redundancies that's all going to be part of the ongoing decision here but ultimately we've been a big fan from a cyber perspective of a layered approach to cyber meaning multiple vendors handling multiple potential U

security threats. Yeah, and so we think that also bodes well for that, you know, redundancy comment.

CrowdStrike Is Built for the Long Haul, Says RBC Analyst

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