CrowdStrike and Carahsoft struck a deal to sell software the IRS didn’t buy

Last fall, CrowdStrike Holdings, Inc. CEO George Kurtz gave investors a quarterly financial update that sent the stock soaring. Among the details Kurtz highlighted was a major deal to sell cybersecurity tools for use by the US government.

“Identity threat protection gains in the quarter included an eight-figure total transaction value gain in the federal government,” Kurtz said in the earnings call after markets closed on Nov. 28, 2023.

Kurtz was referring to a $32 million order from Carahsoft Technology Corp., which serves as an intermediary between technology companies and government agencies, that came on the last day of CrowdStrike’s fiscal third quarter. It was for identity threat protection software intended for the US Internal Revenue Service, according to documents from both companies.

But the IRS never bought the software, according to records reviewed by Bloomberg News and people familiar with the situation.