Why did Cloud Strike stock soar 22% last month

Cloud Strike announced financial results for the first quarter of fiscal year 2025 on 6/4. In short, the cybersecurity company's business was doing better than expected. Sales for the first quarter were 921 million dollars, up 33% from the same period last year, which exceeded analysts' expectations. Furthermore, management raised full-year sales guidance slightly to 3.99 billion dollars, making it the middle of the range.

The company offers multiple cybersecurity products through a single cloud-based platform. Also, customers have consistently adopted more of the company's products over time. As is the case with many software businesses, this has led to profitable growth with high margins. Cloud Strike's free cash flow growth has also surpassed the top line in recent years.

Cloud Strike isn't just making profits on a free cash flow basis. Net profit for the full fiscal year 2024 was 89.3 million dollars, which was 42.8 million dollars in the most recent quarter alone. Also, this profitability is one of the reasons for inclusion in the S&P 500 index.

Cloud Strike was officially adopted by the S&P 500 on 6/24, further accelerating the momentum of stock prices last month.