- Ending ARR surpasses $3 billion milestone, growing 35%
year-over-year to reach $3.15 billion
- Record net new ARR of $223 million driven by accelerating
year-over-year growth
- Delivers record profitability
- Achieves record Q3 cash flow from operations and record free
cash flow
CrowdStrike Holdings, Inc. (Nasdaq: CRWD), a global
cybersecurity leader that provides cloud-delivered protection of
endpoints, cloud workloads, identity and data, today announced
financial results for the third quarter fiscal year 2024, ended
October 31, 2023.
“CrowdStrike’s record third quarter exceeded expectations,
delivering new milestones across the business: net new ARR growth
accelerated to a record $223 million and ending ARR surpassed $3
billion, making CrowdStrike the fastest and only pure play
cybersecurity software vendor in history to achieve this
milestone," said George Kurtz, CrowdStrike's president, chief
executive officer and co-founder. "Our single platform architecture
and unique data advantage unites security and I.T. teams in solving
cybersecurity’s mission-critical challenges, driving increased win
rates and record pipeline. Customers increasingly trust the
AI-native Falcon XDR platform as their cybersecurity consolidator
of choice.”
Commenting on the company's financial results, Burt Podbere,
CrowdStrike's chief financial officer, added, “Our relentless focus
on operational excellence drove record operating margin, net income
and free cash flow, while at the same time we continued
aggressively investing in our innovation engine to flight the
company to achieve its vision of reaching $10 billion in ARR over
the next five to seven years.”
Third Quarter Fiscal 2024 Financial Highlights
- Revenue: Total revenue was $786.0 million, a 35%
increase, compared to $580.9 million in the third quarter of fiscal
2023. Subscription revenue was $733.5 million, a 34% increase,
compared to $547.4 million in the third quarter of fiscal
2023.
- Annual Recurring Revenue (ARR) increased 35%
year-over-year and grew to $3.15 billion as of October 31, 2023, of
which $223.1 million was net new ARR added in the quarter.
- Subscription Gross Margin: GAAP subscription gross
margin was 78%, compared to 75% in the third quarter of fiscal
2023. Non-GAAP subscription gross margin was 80%, compared to 78%
in the third quarter of fiscal 2023.
- Income/Loss from Operations: GAAP income from operations
was $3.2 million, compared to a loss of $56.4 million in the third
quarter of fiscal 2023. Non-GAAP income from operations was $175.7
million, compared to $89.7 million in the third quarter of fiscal
2023.
- Net Income/Loss Attributable to CrowdStrike: GAAP net
income attributable to CrowdStrike was $26.7 million, compared to a
loss of $55.0 million in the third quarter of fiscal 2023. GAAP net
income per share attributable to CrowdStrike, diluted, was $0.11,
compared to a loss of $0.24 in the third quarter of fiscal 2023.
Non-GAAP net income attributable to CrowdStrike was $199.2 million,
compared to $96.1 million in the third quarter of fiscal 2023.
Non-GAAP net income attributable to CrowdStrike per share, diluted,
was $0.82, compared to $0.40 in the third quarter of fiscal
2023.
- Cash Flow: Net cash generated from operations was $273.5
million, compared to $242.9 million in the third quarter of fiscal
2023. Free cash flow was $239.0 million, compared to $174.1 million
in the third quarter of fiscal 2023.
- Cash, Cash Equivalents and Short-term Investments was
$3.17 billion as of October 31, 2023.
Recent Highlights
- CrowdStrike’s module adoption rates were 63%, 42% and 26% for
five or more, six or more and seven or more modules, respectively,
as of October 31, 20231.
- Achieved perfect 100% coverage scores across protection,
visibility, and analytic detections in MITRE Engenuity ATT&CK®:
Evaluations Enterprise Round 5, an industry-first.
- Became the first cybersecurity independent software vendor
(ISV) founded for the cloud to exceed $1 billion of software sales
through AWS Marketplace.
- Announced a new release of CrowdStrike Falcon® Go, delivering
the cybersecurity protection that small and medium businesses need
to stop ransomware attacks and prevent data breaches.
- Launched CrowdStrike Falcon® Go on Amazon Business Marketplace
to meet the needs and budgets of its small-to-midsize business
(SMB) customers.
- Unveiled a series of new offerings during the seventh annual
Fal.Con cybersecurity conference. Announcements included Data
Protection, Exposure Management and IT Automation innovations; the
‘Raptor’ release, the next generation of the CrowdStrike Falcon
Platform powered by Falcon LogScale; Falcon Foundry, a no-code
application development platform and Falcon Complete for Service
Providers.
- Acquired Bionic, the pioneer of Application Security Posture
Management (ASPM), extending CrowdStrike’s leading Cloud Native
Application Protection Platform (CNAPP) with ASPM to deliver
comprehensive risk visibility and protection across the entire
cloud estate.
- Recognized as a Customers’ Choice and one of the highest rated
in the 2023 Gartner Peer Insights™ Voice of the Customer for
Endpoint Protection Platform report2.
- Named a leader in The Forrester Wave™: Endpoint Security, Q4
2023 report3.
- Positioned as a leader in the IDC MarketScape: Worldwide
Risk-Based Vulnerability Management Platforms 2023 Vendor
Assessment4.
- Named a global cloud security leader for the second consecutive
time in Frost & Sullivan’s Frost Radar: Cloud-Native
Application Protection Platforms, 2023 report5.
- Named a growth leader among cybersecurity companies selling
through the channel in a report released by Canalys.
Financial Outlook
CrowdStrike is providing the following guidance for the fourth
quarter of fiscal 2024 (ending January 31, 2024) and increasing its
guidance for the fiscal year 2024 (ending January 31, 2024).
Guidance for non-GAAP financial measures excludes stock-based
compensation expense, amortization expense of acquired intangible
assets (including purchased patents), amortization of debt issuance
costs and discount, mark-to-market adjustments on deferred
compensation liabilities, legal reserve and settlement charges or
benefits, acquisition-related provision (benefit) for income taxes,
losses (gains) and other income from strategic investments,
acquisition-related expenses (credits), net, and losses (gains)
from deferred compensation assets. The company has not provided the
most directly comparable GAAP measures because certain items are
out of the company's control or cannot be reasonably predicted.
Accordingly, a reconciliation for non-GAAP income from operations,
non-GAAP net income attributable to CrowdStrike, and non-GAAP net
income per share attributable to CrowdStrike common stockholders is
not available without unreasonable effort.
Q4 FY24
Guidance
Full Year FY24
Guidance
Total revenue
$836.6 - $840.0 million
$3,046.8 - $3,050.2 million
Non-GAAP income from operations
$186.5 - $189.0 million
$633.6 - $636.2 million
Non-GAAP net income attributable to
CrowdStrike
$199.6 - $202.1 million
$715.2 - $717.7 million
Non-GAAP net income per share attributable
to CrowdStrike common stockholders, diluted
$0.81 - $0.82
$2.95 - $2.96
Weighted average shares used in computing
Non-GAAP net income per share attributable to common stockholders,
diluted
245 million
243 million
These statements are forward-looking and actual results may
differ materially as a result of many factors. Refer to the
Forward-Looking Statements safe harbor below for information on the
factors that could cause the company's actual results to differ
materially from these forward-looking statements.
Conference Call Information
CrowdStrike will host a conference call for analysts and
investors to discuss its earnings results for the third quarter of
fiscal 2024 and outlook for its fiscal fourth quarter and fiscal
year 2024 today at 2:00 p.m. Pacific time (5:00 p.m. Eastern time).
A recorded webcast of the event will also be available for one year
on the CrowdStrike Investor Relations website
ir.crowdstrike.com.
Date:
November 28, 2023
Time:
2:00 p.m. Pacific time / 5:00 p.m. Eastern
time
Pre-registration link for dial-in
access:
register.vevent.com/register/BI72be2e1693b44982848e655513ecdae9
Webcast:
ir.crowdstrike.com
Forward-Looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties, including statements regarding
CrowdStrike’s future growth, and future financial and operating
performance, including CrowdStrike’s financial outlook for the
fourth quarter fiscal 2024, fiscal year 2024, and beyond. There are
a significant number of factors that could cause actual results to
differ materially from statements made in this press release,
including: risks associated with managing CrowdStrike’s rapid
growth; CrowdStrike’s ability to identify and effectively implement
necessary changes to address execution challenges; CrowdStrike’s
limited experience with new product and subscription and support
introductions and the risks associated with new products and
subscription and support offerings, including the risk of defects,
errors, or vulnerabilities; CrowdStrike's ability to respond to an
intensely competitive market; length and unpredictability of sales
cycles; CrowdStrike’s ability to attract new and retain existing
customers; CrowdStrike’s ability to successfully integrate
acquisitions; the failure to timely develop and achieve market
acceptance of new products and subscriptions as well as existing
products and subscriptions and support; CrowdStrike’s ability to
collaborate and integrate its products with offerings from other
parties to deliver benefits to customers; industry trends; rapidly
evolving technological developments in the market for security
products and subscription and support offerings; and general
market, political, economic, and business conditions, including
those related to a deterioration in macroeconomic conditions,
inflation, geopolitical uncertainty and conflicts, public health
crises and volatility in the banking and financial services
sector.
Additional risks and uncertainties that could affect
CrowdStrike’s financial results are included in the filings
CrowdStrike makes with the Securities and Exchange Commission
(“SEC”) from time to time, particularly under the captions “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations”, including CrowdStrike’s most
recently filed Annual Report on Form 10-K, most recently filed
Quarterly Report on Form 10-Q and subsequent filings.
You should not rely on these forward-looking statements, as
actual outcomes and results may differ materially from those
contemplated by these forward-looking statements as a result of
such risks and uncertainties. All forward-looking statements in
this press release are based on information available to
CrowdStrike as of the date hereof, and CrowdStrike does not assume
any obligation to update the forward-looking statements provided to
reflect events that occur or circumstances that exist after the
date on which they were made.
Use of Non-GAAP Financial Information
CrowdStrike believes that the presentation of non-GAAP financial
information provides important supplemental information to
management and investors regarding financial and business trends
relating to CrowdStrike’s financial condition and results of
operations. For further information regarding these non-GAAP
measures, including the reconciliation of these non-GAAP financial
measures to their most directly comparable GAAP financial measures,
please refer to the financial tables below, as well as the
“Explanation of Non-GAAP Financial Measures” section of this press
release.
Channels for Disclosure of Information
CrowdStrike intends to announce material information to the
public through the CrowdStrike Investor Relations website
ir.crowdstrike.com, SEC filings, press releases, public conference
calls, and public webcasts. CrowdStrike uses these channels, as
well as social media and its blog, to communicate with its
investors, customers, and the public about the company, its
offerings, and other issues. It is possible that the information
CrowdStrike posts on social media and its blog could be deemed to
be material information. As such, CrowdStrike encourages investors,
the media, and others to follow the channels listed above,
including the social media channels listed on CrowdStrike’s
investor relations website, and to review the information disclosed
through such channels. Any updates to the list of disclosure
channels through which CrowdStrike will announce information will
be posted on the investor relations page on CrowdStrike’s
website.
Definition of Module Adoption Rates
1. Beginning in the fourth quarter of fiscal
2023, module adoption rates are calculated by taking the total
number of customers with five or more, six or more, and seven or
more modules, respectively, divided by the total number of
subscription customers (excluding Falcon Go customers). Falcon Go
customers are defined as customers who have subscribed with the
Falcon Go bundle, a package designed for organizations with 100
endpoints or less.
Reports Referenced and Disclaimers
2. Gartner, Voice of the Customer for
Endpoint Protection Platforms, Peer Contributors, 8 September
2023
3. The Forrester Wave™: Endpoint Security, Q4
2023
4. IDC MarketScape: Worldwide Risk-Based
Vulnerability Management Platforms 2023 Vendor Assessment (doc
#US50302323, November 2023).
5. Frost & Sullivan Frost Radar:
Cloud-Native Application Protection Platforms, 2023.
Gartner and Peer Insights™ are trademarks of Gartner, Inc.
and/or its affiliates. All rights reserved.
Gartner Peer Insights content consists of the opinions of
individual end users based on their own experiences, and should not
be construed as statements of fact, nor do they represent the views
of Gartner or its affiliates. Gartner does not endorse any vendor,
product or service depicted in this content nor makes any
warranties, expressed or implied, with respect to this content,
about its accuracy or completeness, including any warranties of
merchantability or fitness for a particular purpose.
The Gartner content described herein, (the "Gartner Content")
represent(s) research opinion or viewpoints published, as part of a
syndicated subscription service, by Gartner, Inc. ("Gartner"), and
are not representations of fact. Gartner Content speaks as of its
original publication date (and not as of the date of this press
release) and the opinions expressed in the Gartner Content are
subject to change without notice.
About CrowdStrike Holdings
CrowdStrike Holdings, Inc. is a global cybersecurity leader that
provides cloud-delivered protection of endpoints, cloud workloads,
identity and data.
Powered by the CrowdStrike Security Cloud and advanced
artificial intelligence, the CrowdStrike Falcon® platform delivers
better outcomes to customers through rapid and scalable deployment,
superior protection and performance, reduced complexity and
immediate time-to-value.
CrowdStrike Falcon leverages a single lightweight-agent
architecture with integrated cloud modules spanning multiple
security markets, including corporate workload security, managed
security services, security and vulnerability management, IT
operations management, threat intelligence services, identity
protection and log management.
For more information, please visit: ir.crowdstrike.com
CrowdStrike, the CrowdStrike logo, and other CrowdStrike marks
are trademarks and/or registered trademarks of CrowdStrike, Inc.,
or its affiliates or licensors. Other words, symbols, and company
product names may be trademarks of the respective companies with
which they are associated.
CROWDSTRIKE HOLDINGS,
INC.
Condensed Consolidated
Statements of Operations
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended
October 31,
Nine Months Ended
October 31,
2023
2022
2023
2022
Revenue
Subscription
$
733,463
$
547,376
$
2,074,610
$
1,513,397
Professional services
52,551
33,506
135,610
90,472
Total revenue
786,014
580,882
2,210,220
1,603,869
Cost of revenue
Subscription (1)(2)
159,830
134,229
455,236
362,258
Professional services (1)
35,174
23,999
91,915
63,369
Total cost of revenue
195,004
158,228
547,151
425,627
Gross profit
591,010
422,654
1,663,069
1,178,242
Operating expenses
Sales and marketing (1)(2)(4)
286,186
239,672
850,209
657,970
Research and development (1)(2)(3)(4)
196,072
155,256
554,499
416,519
General and administrative
(1)(2)(3)(4)(5)
105,589
84,148
290,027
232,365
Total operating expenses
587,847
479,076
1,694,735
1,306,854
Income (loss) from operations
3,163
(56,422
)
(31,666
)
(128,612
)
Interest expense(6)
(6,503
)
(6,334
)
(19,334
)
(18,967
)
Interest income
40,086
16,245
107,245
25,479
Other income (expense)(7)(8)
(474
)
750
(1,978
)
5,835
Income (loss) before provision for income
taxes
36,272
(45,761
)
54,267
(116,265
)
Provision for income taxes(9)
9,603
8,870
18,623
17,088
Net income (loss)
26,669
(54,631
)
35,644
(133,353
)
Net income attributable to non-controlling
interest
4
325
16
2,411
Net income (loss) attributable to
CrowdStrike
$
26,665
$
(54,956
)
$
35,628
$
(135,764
)
Net income (loss) per share attributable
to CrowdStrike common stockholders:
Basic
$
0.11
$
(0.24
)
$
0.15
$
(0.58
)
Diluted
$
0.11
$
(0.24
)
$
0.15
$
(0.58
)
Weighted-average shares used in computing
net income (loss) per share attributable to CrowdStrike common
stockholders:
Basic
239,297
233,785
237,890
232,502
Diluted
243,799
233,785
242,196
232,502
_________________________
(1)
Includes stock-based compensation expense
as follows (in thousands):
Three Months Ended
October 31,
Nine Months Ended
October 31,
2023
2022
2023
2022
Subscription cost of revenue
$
11,477
$
8,108
$
30,575
$
21,957
Professional services cost of revenue
5,645
4,093
16,020
10,596
Sales and marketing
42,544
41,895
129,725
109,172
Research and development
52,388
46,268
143,754
120,347
General and administrative
47,560
39,749
135,173
112,085
Total stock-based compensation expense
$
159,614
$
140,113
$
455,247
$
374,157
(2)
Includes amortization of acquired
intangible assets, including purchased patents, as follows (in
thousands):
Three Months Ended
October 31,
Nine Months Ended
October 31,
2023
2022
2023
2022
Subscription cost of revenue
$
3,580
$
3,484
$
10,741
$
10,336
Sales and marketing
506
641
1,483
1,938
Research and development
468
—
468
—
General and administrative
83
22
221
65
Total amortization of acquired intangible
assets
$
4,637
$
4,147
$
12,913
$
12,339
(3)
Includes acquisition-related expenses
(credits), net as follows (in thousands):
Three Months Ended
October 31,
Nine Months Ended
October 31,
2023
2022
2023
2022
Research and development
$
379
$
—
$
750
$
—
General and administrative
3,277
1,886
3,204
2,187
Total acquisition-related expenses
$
3,656
$
1,886
$
3,954
$
2,187
(4)
Includes mark-to-market adjustments on
deferred compensation liabilities as follows (in thousands):
Three Months Ended
October 31,
Nine Months Ended
October 31,
2023
2022
2023
2022
Sales and marketing
$
(68
)
$
—
$
(33
)
$
—
Research and development
(34
)
—
(20
)
—
General and administrative
(15
)
—
(8
)
—
Total mark-to-market adjustments on
deferred compensation liabilities
$
(117
)
$
—
$
(61
)
$
—
(5)
Includes legal reserve and settlement
charges as follows (in thousands):
Three Months Ended
October 31,
Nine Months Ended
October 31,
2023
2022
2023
2022
General and administrative
$
4,700
$
—
$
6,797
$
—
Total legal reserve and settlement
charges
$
4,700
$
—
$
6,797
$
—
(6)
Includes amortization of debt issuance
costs and discount as follows (in thousands):
Three Months Ended
October 31,
Nine Months Ended
October 31,
2023
2022
2023
2022
Interest expense
$
547
$
546
$
1,640
$
1,639
Total amortization of debt issuance costs
and discount
$
547
$
546
$
1,640
$
1,639
(7)
Includes gains and other income from strategic investments as
follows (in thousands):
Three Months Ended
October 31,
Nine Months Ended
October 31,
2023
2022
2023
2022
Other income, net
$
7
$
652
$
31
$
4,824
Total gains and other income from
strategic investments
$
7
$
652
$
31
$
4,824
(8)
Includes losses on deferred compensation
assets as follows (in thousands):
Three Months Ended
October 31,
Nine Months Ended
October 31,
2023
2022
2023
2022
Other expense
$
(117
)
$
—
$
(61
)
$
—
Total losses on deferred compensation
assets
$
(117
)
$
—
$
(61
)
$
—
(9)
Includes provision (benefit) for income
taxes related to acquisitions as follows (in thousands):
Three Months Ended
October 31,
Nine Months Ended
October 31,
2023
2022
2023
2022
Provision (benefit) for income taxes
$
(615
)
$
4,658
$
(615
)
$
4,658
Total provision (benefit) for income
taxes
$
(615
)
$
4,658
$
(615
)
$
4,658
CROWDSTRIKE HOLDINGS,
INC.
Condensed Consolidated Balance
Sheets
(in thousands)
(unaudited)
October 31,
2023
January 31,
2023
Assets
Current assets:
Cash and cash equivalents
$
2,968,872
$
2,455,369
Short-term investments
197,522
250,000
Accounts receivable, net of allowance for
credit losses
561,872
626,181
Deferred contract acquisition costs,
current
209,216
186,855
Prepaid expenses and other current
assets
141,651
121,862
Total current assets
4,079,133
3,640,267
Strategic investments
59,541
47,270
Property and equipment, net
581,037
492,335
Operating lease right-of-use assets
50,941
39,936
Deferred contract acquisition costs,
noncurrent
273,859
260,233
Goodwill
637,678
430,645
Intangible assets, net
109,423
86,889
Other long-term assets
39,444
28,965
Total assets
$
5,831,056
$
5,026,540
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
56,968
$
45,372
Accrued expenses
146,050
137,884
Accrued payroll and benefits
169,768
168,767
Operating lease liabilities, current
14,430
13,046
Deferred revenue
1,942,750
1,727,484
Other current liabilities
20,451
16,519
Total current liabilities
2,350,417
2,109,072
Long-term debt
742,122
741,005
Deferred revenue, noncurrent
600,366
627,629
Operating lease liabilities,
noncurrent
38,371
29,567
Other liabilities, noncurrent
38,933
31,833
Total liabilities
3,770,209
3,539,106
Commitments and contingencies
Stockholders’ Equity
Common stock, Class A and Class B
120
118
Additional paid-in capital
3,146,645
2,612,705
Accumulated deficit
(1,112,535
)
(1,148,163
)
Accumulated other comprehensive loss
(5,280
)
(1,019
)
Total CrowdStrike Holdings, Inc.
stockholders’ equity
2,028,950
1,463,641
Non-controlling interest
31,897
23,793
Total stockholders’ equity
2,060,847
1,487,434
Total liabilities and stockholders’
equity
$
5,831,056
$
5,026,540
CROWDSTRIKE HOLDINGS,
INC.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended
October 31,
2023
2022
Operating activities
Net income (loss)
$
35,644
$
(133,353
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
89,972
53,622
Amortization of intangible assets
12,913
12,338
Amortization of deferred contract
acquisition costs
173,158
121,550
Non-cash operating lease costs
9,725
6,818
Stock-based compensation expense
455,247
374,157
Deferred income taxes
(2,355
)
2,286
Non-cash interest expense
2,337
2,077
Change in fair value of strategic
investments
—
(4,757
)
Accretion of short-term investments
purchased at a discount
(1,934
)
—
Changes in operating assets and
liabilities, net of impact of acquisitions
Accounts receivable, net
65,858
(117,240
)
Deferred contract acquisition costs
(206,678
)
(183,265
)
Prepaid expenses and other assets
(21,972
)
(14,121
)
Accounts payable
2,361
25,007
Accrued expenses and other liabilities
33,597
21,820
Accrued payroll and benefits
1,810
21,635
Operating lease liabilities
(16,147
)
(7,037
)
Deferred revenue
185,655
486,177
Net cash provided by operating
activities
819,191
667,714
Investing activities
Purchases of property and equipment
(123,945
)
(179,609
)
Capitalized internal-use software and
website development costs
(38,605
)
(20,739
)
Purchases of strategic investments
(12,177
)
(18,006
)
Business acquisitions, net of cash
acquired
(238,749
)
(18,464
)
Purchases of intangible assets
(526
)
(700
)
Purchases of investments
(195,581
)
—
Proceeds from maturities and sales of
short-term investments
250,000
—
Purchases of deferred compensation
investments
(1,462
)
—
Net cash used in investing activities
(361,045
)
(237,518
)
Financing activities
Repayment of loan payable
—
(1,591
)
Proceeds from issuance of common stock
upon exercise of stock options
6,178
6,396
Proceeds from issuance of common stock
under the employee stock purchase plan
45,432
34,445
Capital contributions from non-controlling
interest holders
8,088
9,053
Net cash provided by financing
activities
59,698
48,303
Effect of foreign exchange rates on cash,
cash equivalents and restricted cash
(3,411
)
(7,074
)
Net increase in cash, cash equivalents and
restricted cash
514,433
471,425
Cash, cash equivalents and restricted
cash, beginning of period
2,456,924
1,996,633
Cash, cash equivalents and restricted
cash, end of period
$
2,971,357
$
2,468,058
CROWDSTRIKE HOLDINGS,
INC.
GAAP to Non-GAAP
Reconciliations
(in thousands, except
percentages)
(unaudited)
Three Months Ended
October 31,
Nine Months Ended
October 31,
2023
2022
2023
2022
GAAP subscription revenue
$
733,463
$
547,376
$
2,074,610
$
1,513,397
GAAP professional services revenue
52,551
33,506
135,610
90,472
GAAP total revenue
$
786,014
$
580,882
$
2,210,220
$
1,603,869
GAAP subscription gross profit
$
573,633
$
413,147
$
1,619,374
$
1,151,139
Stock based compensation expense
11,477
8,108
30,575
21,957
Amortization of acquired intangible
assets
3,580
3,484
10,741
10,336
Non-GAAP subscription gross profit
$
588,690
$
424,739
$
1,660,690
$
1,183,432
GAAP subscription gross margin
78
%
75
%
78
%
76
%
Non-GAAP subscription gross margin
80
%
78
%
80
%
78
%
GAAP professional services gross
profit
$
17,377
$
9,507
$
43,695
$
27,103
Stock based compensation expense
5,645
4,093
16,020
10,596
Non-GAAP professional services gross
profit
$
23,022
$
13,600
$
59,715
$
37,699
GAAP professional services gross
margin
33
%
28
%
32
%
30
%
Non-GAAP professional services gross
margin
44
%
41
%
44
%
42
%
Total GAAP gross margin
75
%
73
%
75
%
73
%
Total Non-GAAP gross margin
78
%
75
%
78
%
76
%
GAAP sales and marketing operating
expenses
$
286,186
$
239,672
$
850,209
$
657,970
Stock based compensation expense
(42,544
)
(41,895
)
(129,725
)
(109,172
)
Amortization of acquired intangible
assets
(506
)
(641
)
(1,483
)
(1,938
)
Mark-to-market adjustments on deferred
compensation liabilities
68
—
33
—
Non-GAAP sales and marketing operating
expenses
$
243,204
$
197,136
$
719,034
$
546,860
GAAP sales and marketing operating
expenses as a percentage of revenue
36
%
41
%
38
%
41
%
Non-GAAP sales and marketing operating
expenses as a percentage of revenue
31
%
34
%
33
%
34
%
GAAP research and development operating
expenses
$
196,072
$
155,256
$
554,499
$
416,519
Stock based compensation expense
(52,388
)
(46,268
)
(143,754
)
(120,347
)
Amortization of acquired intangible
assets
(468
)
—
(468
)
—
Acquisition-related expenses
(379
)
—
(750
)
—
Mark-to-market adjustments on deferred
compensation liabilities
34
—
20
—
Non-GAAP research and development
operating expenses
$
142,871
$
108,988
$
409,547
$
296,172
GAAP research and development operating
expenses as a percentage of revenue
25
%
27
%
25
%
26
%
Non-GAAP research and development
operating expenses as a percentage of revenue
18
%
19
%
19
%
18
%
CROWDSTRIKE HOLDINGS,
INC.
GAAP to Non-GAAP
Reconciliations (continued)
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended
October 31,
Nine Months Ended
October 31,
2023
2022
2023
2022
GAAP general and administrative operating
expenses
$
105,589
$
84,148
$
290,027
$
232,365
Stock based compensation expense
(47,560
)
(39,749
)
(135,173
)
(112,085
)
Acquisition-related credits (expenses)
(3,277
)
(1,886
)
(3,204
)
(2,187
)
Amortization of acquired intangible
assets
(83
)
(22
)
(221
)
(65
)
Mark-to-market adjustments on deferred
compensation liabilities
15
—
8
—
Legal reserve and settlement charges
(4,700
)
—
(6,797
)
—
Non-GAAP general and administrative
operating expenses
$
49,984
$
42,491
$
144,640
$
118,028
GAAP general and administrative operating
expenses as a percentage of revenue
13
%
14
%
13
%
14
%
Non-GAAP general and administrative
operating expenses as a percentage of revenue
6
%
7
%
7
%
7
%
GAAP income (loss) from operations
$
3,163
$
(56,422
)
$
(31,666
)
$
(128,612
)
Stock based compensation expense
159,614
140,113
455,247
374,157
Amortization of acquired intangible
assets
4,637
4,147
12,913
12,339
Acquisition-related expenses (credits),
net
3,656
1,886
3,954
2,187
Mark-to-market adjustments on deferred
compensation liabilities
(117
)
—
(61
)
—
Legal reserve and settlement charges
4,700
—
6,797
—
Non-GAAP income from operations
$
175,653
$
89,724
$
447,184
$
260,071
GAAP operating margin
—
%
(10
)%
(1
)%
(8
)%
Non-GAAP operating margin
22
%
15
%
20
%
16
%
GAAP net income (loss) attributable to
CrowdStrike
$
26,665
$
(54,956
)
$
35,628
$
(135,764
)
Stock based compensation expense
159,614
140,113
455,247
374,157
Amortization of acquired intangible
assets
4,637
4,147
12,913
12,339
Acquisition-related expenses (credits),
net
3,656
1,886
3,954
2,187
Amortization of debt issuance costs and
discount
547
546
1,640
1,639
Mark-to-market adjustments on deferred
compensation liabilities
(117
)
—
(61
)
—
Legal reserve and settlement charges
4,700
—
6,797
—
Provision (benefit) for income
taxes(1)
(615
)
4,658
(615
)
4,658
Gains and other income from strategic
investments attributable to CrowdStrike
(4
)
(325
)
(16
)
(2,411
)
Losses on deferred compensation assets
117
—
61
—
Non-GAAP net income attributable to
CrowdStrike
$
199,200
$
96,069
$
515,548
$
256,805
Weighted-average shares used in computing
basic net income (loss) per share attributable to CrowdStrike
common stockholders (GAAP)
239,297
233,785
237,890
232,502
GAAP basic net income (loss) per share
attributable to CrowdStrike common stockholders
$
0.11
$
(0.24
)
$
0.15
$
(0.58
)
CROWDSTRIKE HOLDINGS,
INC.
GAAP to Non-GAAP
Reconciliations (continued)
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended
October 31,
Nine Months Ended
October 31,
2023
2022
2023
2022
GAAP diluted net income (loss) per share
attributable to CrowdStrike common stockholders
$
0.11
$
(0.24
)
$
0.15
$
(0.58
)
Stock-based compensation
0.65
0.59
1.88
1.57
Amortization of acquired intangible
assets
0.02
0.02
0.05
0.05
Acquisition-related expenses, net
0.01
0.01
0.02
0.01
Amortization of debt issuance costs and
discount
—
—
0.01
0.01
Mark-to-market adjustments on deferred
compensation liabilities
—
—
—
—
Legal reserve and settlement charges
0.02
—
0.03
—
Provision (benefit) for income taxes
(1)
—
0.02
—
0.02
Adjustment to fully diluted earnings per
share (2)
0.01
—
(0.01
)
—
Gains and other income from strategic
investments attributable to CrowdStrike
—
—
—
(0.01
)
Losses on deferred compensation assets
—
—
—
—
Non-GAAP diluted net income per share
attributable to CrowdStrike common stockholders
$
0.82
$
0.40
$
2.13
$
1.07
Weighted-average shares used in diluted
net income (loss) per share attributable to CrowdStrike common
stockholders calculation:
GAAP
243,799
233,785
242,196
232,502
Non-GAAP
243,799
239,502
242,196
238,957
______________________________________________________
(1) For periods in which we had diluted
non-GAAP net income per share attributable to CrowdStrike common
stockholders, the sum of the impact of individual reconciling items
may not total to diluted Non-GAAP net income per share attributable
to CrowdStrike common stockholders because of rounding differences
or because the basic share counts used to calculate GAAP net loss
per share attributable to CrowdStrike common stockholders differ
from the diluted share counts used to calculate non-GAAP net income
per share attributable to CrowdStrike common stockholders. The GAAP
net loss per share attributable to CrowdStrike common stockholders
calculation uses a lower share count as it excludes dilutive shares
which are included in calculating the non-GAAP net income per share
attributable to CrowdStrike common stockholders.
(2) For periods in which we had diluted
non-GAAP net income per share attributable to CrowdStrike common
stockholders, the sum of the impact of individual reconciling items
may not total to diluted Non-GAAP net income per share attributable
to CrowdStrike common stockholders because of rounding differences
or because the basic share counts used to calculate GAAP net loss
per share attributable to CrowdStrike common stockholders differ
from the diluted share counts used to calculate non-GAAP net income
per share attributable to CrowdStrike common stockholders. The GAAP
net loss per share attributable to CrowdStrike common stockholders
calculation uses a lower share count as it excludes dilutive shares
which are included in calculating the non-GAAP net income per share
attributable to CrowdStrike common stockholders.
CROWDSTRIKE HOLDINGS,
INC.
GAAP to Non-GAAP
Reconciliations (continued)
(in thousands, except
percentages)
(unaudited)
Three Months Ended
October 31,
Nine Months Ended
October 31,
2023
2022
2023
2022
GAAP net cash provided by operating
activities
$
273,518
$
242,851
$
819,191
$
667,714
Purchases of property and equipment
(21,264
)
(61,270
)
(123,945
)
(179,609
)
Capitalized internal-use software and
website development costs
(12,630
)
(7,504
)
(38,605
)
(20,739
)
Purchases of deferred compensation
investments
(586
)
—
(1,462
)
—
Free cash flow
$
239,038
$
174,077
$
655,179
$
467,366
GAAP net cash used in investing
activities
$
(468,836
)
$
(97,419
)
$
(361,045
)
$
(237,518
)
GAAP net cash provided by financing
activities
$
2,051
$
4,976
$
59,698
$
48,303
GAAP net cash provided by operating
activities as a percentage of revenue
35
%
42
%
37
%
42
%
Purchases of property and equipment as a
percentage of revenue
(3
)%
(11
)%
(6
)%
(11
)%
Capitalized internal-use software and
website development costs as a percentage of revenue
(2
)%
(1
)%
(2
)%
(1
)%
Purchases of deferred compensation
investments as a percentage of revenue
—
%
—
%
—
%
—
%
Free cash flow margin
30
%
30
%
30
%
29
%
Explanation of Non-GAAP Financial Measures
In addition to determining results in accordance with U.S.
generally accepted accounting principles (“GAAP”), CrowdStrike
believes the following non-GAAP measures are useful in evaluating
its operating performance. CrowdStrike uses the following non-GAAP
financial information to evaluate its ongoing operations and for
internal planning and forecasting purposes. CrowdStrike believes
that non-GAAP financial information, when taken collectively, may
be helpful to investors because it provides consistency and
comparability with past financial performance and facilitates
period-to-period comparisons of operations, as these measures
eliminate the effects of certain variables unrelated to
CrowdStrike’s overall operating performance. However, non-GAAP
financial information is presented for supplemental informational
purposes only, has limitations as an analytical tool, and should
not be considered in isolation or as a substitute for financial
information presented in accordance with GAAP.
Other companies, including companies in CrowdStrike’s industry,
may calculate similarly titled non-GAAP measures differently or may
use other measures to evaluate their performance, all of which
could reduce the usefulness of CrowdStrike’s non-GAAP financial
measures as tools for comparison.
Investors are encouraged to review the related GAAP financial
measures and the reconciliation of these non-GAAP financial
measures to their most directly comparable GAAP financial measures
and not rely on any single financial measure to evaluate
CrowdStrike’s business.
Non-GAAP Subscription Gross Profit and Non-GAAP Subscription
Gross Margin
CrowdStrike defines non-GAAP subscription gross profit and
non-GAAP subscription gross margin as GAAP subscription gross
profit and GAAP subscription gross margin, respectively, excluding
stock-based compensation expense and amortization of acquired
intangible assets.
Non-GAAP Income from Operations
CrowdStrike defines non-GAAP income from operations as GAAP loss
from operations excluding stock-based compensation expense,
amortization of acquired intangible assets (including purchased
patents), acquisition-related expenses (credits), net,
mark-to-market adjustments on deferred compensation liabilities,
and legal reserve and settlement charges or benefits.
Non-GAAP Net Income Attributable to CrowdStrike
The company defines non-GAAP net income attributable to
CrowdStrike as GAAP net income (loss) attributable to CrowdStrike
excluding stock-based compensation expense, amortization of
acquired intangible assets (including purchased patents),
acquisition-related expenses (credits), net, amortization of debt
issuance costs and discount, mark-to-market adjustments on deferred
compensation liabilities, legal reserve and settlement charges or
benefits, acquisition-related provision (benefit) for income taxes,
losses (gains) and other income from strategic investments, and
losses (gains) on deferred compensation assets.
Non-GAAP Net Income per Share Attributable to CrowdStrike
Common Stockholders, Diluted
CrowdStrike defines non-GAAP net income per share attributable
to CrowdStrike common stockholders, as non-GAAP net income
attributable to CrowdStrike divided by the weighted-average shares
outstanding, which includes the dilutive effect of potentially
dilutive common stock equivalents outstanding during the
period.
Free Cash Flow
Free cash flow is a non-GAAP financial measure that CrowdStrike
defines as net cash provided by operating activities less purchases
of property and equipment, capitalized internal-use software and
website development costs, and purchases of deferred compensation
investments. CrowdStrike monitors free cash flow as one measure of
its overall business performance, which enables CrowdStrike to
analyze its future performance without the effects of non-cash
items and allow CrowdStrike to better understand the cash needs of
its business. While CrowdStrike believes that free cash flow is
useful in evaluating its business, free cash flow is a non-GAAP
financial measure that has limitations as an analytical tool, and
free cash flow should not be considered as an alternative to, or
substitute for, net cash provided by operating activities in
accordance with GAAP. The utility of free cash flow as a measure of
CrowdStrike’s liquidity is further limited as it does not represent
the total increase or decrease in CrowdStrike’s cash balance for
any given period. In addition, other companies, including companies
in CrowdStrike's industry, may calculate free cash flow differently
or not at all, which reduces the usefulness of free cash flow as a
tool for comparison.
Explanation of Operational Measures
Annual Recurring Revenue
ARR is calculated as the annualized value of CrowdStrike’s
customer subscription contracts as of the measurement date,
assuming any contract that expires during the next 12 months is
renewed on its existing terms. To the extent that CrowdStrike is
negotiating a renewal with a customer after the expiration of the
subscription, CrowdStrike continues to include that revenue in ARR
if CrowdStrike is actively in discussion with such an organization
for a new subscription or renewal, or until such organization
notifies CrowdStrike that it is not renewing its subscription.
Magic Number
Magic Number is calculated by performing the following
calculation for the most recent four quarters and taking the
average: annualizing the difference between a quarter’s
Subscription Revenue and the prior quarter’s Subscription Revenue,
and then dividing the resulting number by the previous quarter’s
Non-GAAP Sales & Marketing Expense. Magic Number = Average of
previous four quarters: ((Quarter Subscription Revenue – Prior
Quarter Subscription Revenue) x 4) / Prior Quarter Non-GAAP Sales
& Marketing Expense.
Free Cash Flow Rule of 40
Free cash flow rule of 40 is calculated by taking the current
quarter total revenue year over year growth rate percentage and
summing it with the current quarter free cash flow margin
percentage.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231128922324/en/
Investor Relations Contact CrowdStrike Holdings, Inc.
Maria Riley, Vice President of Investor Relations
investors@crowdstrike.com 669-721-0742
Press Contact CrowdStrike Holdings, Inc. Kevin Benacci,
Sr. Director, Corporate Communications press@crowdstrike.com
216-409-5055
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