Crowdstrike, Asana Cap a Wild Day on Wall Street

The stock market has been giving many investors a rockier ride than they would have preferred, but sometimes, volatility is the market's friend. That was the case on Wednesday, when major market benchmarks reversed a big part of the losses they suffered earlier in the week. By the market's close, the Nasdaq Composite (^IXIC -0.64%) posted the largest gains, but the Dow Jones Industrial Average (^DJI -0.98%) and the S&P 500 (^GSPC -0.46%) also climbed 2% or more.

Data source: Yahoo! Finance.

Earnings reports from the tech sector have gotten mixed results all year, and that was definitely the case after hours on Wednesday afternoon. Crowdstrike Holdings (CRWD 0.13%) rose sharply after a report that investors took favorably, but Asana (ASAN -2.40%) moved the other way on fears of a slowdown. You can read about the details below.

Image source: Getty Images.

Crowdstrike looks secure

Shares of Crowdstrike Holdings had a great day on Wednesday. After rising more than 8% in the regular session, the cybersecurity-specialist's stock rose another 12% in after-hour trading following the release of its fourth-quarter financial report.

Crowdstrike's numbers were impressive. Total sales rose 63% year over year on a 66% rise in subscription revenue. Annual recurring revenue of $1.73 billion was up 65% from 12 months earlier, with $217 million of that number coming in just the most recent three months. Adjusted earnings of $0.30 per share were more than double what Crowdstrike posted in the fourth quarter of its previous fiscal year.

Crowdstrike's metrics showed its business growth. The company boosted its customer count by more than 1,600 between October 2021 and January 2022 to 16,325. Nearly 70% of those customers have adopted at least four modules on Crowdstrike's Falcon platform, which the company continued to enhance during the period.

Best of all, Crowdstrike foresees a strong fiscal 2023 ahead. The company set revenue expectations at between $2.13 billion and $2.16 billion, which would be up roughly 48% from fiscal 2022's final numbers.

Adjusted full-year earnings of $1.03 to $1.13 per share also gave investors optimism about the future. Given the rising need for cybersecurity services, Crowdstrike is in the right place at the right time.

Asana sinks on loss fears

Meanwhile, Asana reversed gains from earlier in the day. The work management platform-provider's stock jumped almost 10% during the regular session but dropped almost 19% after hours following its fourth-quarter financial report.

Asana's sales growth looked similar to Crowdstrike's. Fourth-quarter revenue of $112 million was up 64% year over year. That closed a full year of 67% top-line growth, as Asana ended the year with more than 119,000 customers. Of those, nearly 900 spent at least $50,000 annually on Asana's platform, more than double the number from a year ago. Dollar-based net retention rates were over 120%, with even higher figures for top-paying clients.

However, Asana wasn't able to produce the bottom-line results to match Crowdstrike's. Quarterly losses widened to $0.25 per share on an adjusted basis for the quarter, bringing total adjusted annual losses to $0.92 per share.

Moreover, Asana expects to keep losing money, with first-quarter projections including $0.35 to $0.36 per share in losses and revenue growth of about 50% to roughly $115 million. That big a slowdown in sales gains was somewhat troublesome, and Asana needs to get closer to profitability to give shareholders complete comfort in the current environment.