- Ending ARR grows 59% year-over-year to reach $2.14 billion
- Achieves record net new ARR of $218 million with accelerating
year-over-year growth
- Adds record 1,741 net new subscription customers
- Cash flow from operations of $210 million grows 94%
year-over-year, free cash flow of $136 million grows 84%
year-over-year
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 second quarter fiscal year 2023, ended
July 31, 2022.
“CrowdStrike delivered a strong second quarter with new
milestones across the business. Ending ARR surpassed the $2 billion
milestone, net new ARR reached a record $218 million and net new
subscription customers reached a record 1,741 in the quarter. As
organizations respond to macroeconomic conditions, they are
prioritizing investments and looking to standardize with a security
partner they can trust to achieve better protection with less time,
fewer resources and lower total cost of ownership. Our ability to
deliver immediate ROI and consolidate the security and IT stack
significantly sets us apart from the competition,” said George
Kurtz, CrowdStrike’s co-founder and chief executive officer.
Commenting on the company's financial results, Burt Podbere,
CrowdStrike’s chief financial officer, added, “CrowdStrike
delivered robust growth at scale and exceptional unit economics
with over 80% year-over-year growth in operating and free cash
flow. We are raising our guidance for fiscal year 2023, which
reflects our technology advantage and strong industry tailwinds
combined with a pragmatic view of current macroeconomic conditions.
Additionally, we remain committed to delivering increased non-GAAP
operating leverage and 30% or more free cash flow margin for the
full year.”
Second Quarter Fiscal 2023 Financial Highlights
- Revenue: Total revenue was $535.2 million, a 58%
increase, compared to $337.7 million in the second quarter of
fiscal 2022. Subscription revenue was $506.2 million, a 60%
increase, compared to $315.8 million in the second quarter of
fiscal 2022.
- Annual Recurring Revenue (ARR) increased 59%
year-over-year and grew to $2.14 billion as of July 31, 2022, of
which $218.1 million was net new ARR added in the quarter.
- Subscription Gross Margin: GAAP subscription gross
margin was approximately 76% in both the second quarter of fiscal
2023 and 2022. Non-GAAP subscription gross margin was approximately
78% in both the second quarter of fiscal 2023 and 2022.
- Income/Loss from Operations: GAAP loss from operations
was $48.3 million, compared to $47.4 million in the second quarter
of fiscal 2022. Non-GAAP income from operations was $87.3 million,
compared to $35.3 million in the second quarter of fiscal
2022.
- Net Income/Loss Attributable to CrowdStrike: GAAP net
loss attributable to CrowdStrike was $49.3 million, compared to
$57.3 million in the second quarter of fiscal 2022. GAAP net loss
per share attributable to CrowdStrike, basic and diluted was $0.21,
compared to $0.25 in the second quarter of fiscal 2022. Non-GAAP
net income attributable to CrowdStrike was $85.9 million, compared
to $25.9 million in the second quarter of fiscal 2022. Non-GAAP net
income attributable to CrowdStrike per share, diluted, was $0.36,
compared to $0.11 in the second quarter of fiscal 2022.
- Cash Flow: Net cash generated from operations was $209.9
million, compared to $108.5 million in the second quarter of fiscal
2022. Free cash flow was $135.8 million, compared to $73.6 million
in the second quarter of fiscal 2022.
- Cash and Cash Equivalents was $2.32 billion as of July
31, 2022.
Recent Highlights
- Added 1,741 net new subscription customers in the quarter for a
total of 19,686 subscription customers as of July 31, 2022,
representing 51% growth year-over-year.
- CrowdStrike’s subscription customers that have adopted five or
more, six or more and seven or more modules was 59%, 36% and 20%,
respectively, as of July 31, 2022.
- Achieved the highest Mac malware protection score in
AV-Comparatives Mac Security Test and Review 2022 and won the
Approved Security Product award for the fifth consecutive
time.
- Named Best Security Company by 2022 SC Awards US and received
the Best Emerging Technology Award at SC Awards Europe 2022 for
Falcon XDR.
- Earned Frost & Sullivan’s 2022 Global Technology Innovation
Leadership Award in Endpoint Security.
- Announced the general availability of the Falcon Identity
Threat Protection module for its GovCloud-1 environment. This makes
Falcon Identity Threat Protection available to U.S. public sector
organizations that require Federal Risk and Authorization
Management Program (FedRAMP) Moderate or Impact Level 4 (IL-4)
authorization.
- Unveiled CrowdStrike Asset Graph, a new graph database powered
by the CrowdStrike Security Cloud that provides visibility into IT
assets alongside visibility into attack surfaces to simplify IT
operations and stop breaches.
- Launched Falcon OverWatch Cloud Threat Hunting, the first
standalone cloud threat hunting service for threats originating,
operating or persisting in cloud environments.
- Introduced the first AI-powered Indicators of Attack (IoA), new
innovations for fileless attack prevention and enhanced visibility
for stealthy cloud intrusions.
- Added new Cloud Native Application Protection Platform (CNAPP)
capabilities, including support for Amazon Elastic Container
Service (ECS) within AWS Fargate to enable Software Composition
Analysis (SCA) for open source software and expand image registry
scanning for eight new container registries.
- Announced the release of the Open Cybersecurity Schema
Framework (OCSF) project, a collaborative open-source effort among
cybersecurity and technology leaders to break down silos that
impede cybersecurity teams’ abilities to quickly and effectively
detect, investigate and stop breaches.
Financial Outlook
CrowdStrike is providing the following guidance for the third
quarter of fiscal 2023 (ending October 31, 2022) and increasing its
guidance for fiscal year 2023 (ending January 31, 2023):
Q3 FY23
Guidance
Full Year FY23
Guidance
Total revenue
$569.1 - $575.9 million
$2,223.0 - $2,232.0 million
Non-GAAP income from operations
$72.7 - $77.7 million
$321.8 - $328.5 million
Non-GAAP net income attributable to
CrowdStrike
$73.0 - $78.0 million
$313.7 - $320.5 million
Non-GAAP net income per share attributable
to CrowdStrike common stockholders, diluted
$0.30 - $0.32
$1.31 - $1.33
Weighted average shares used in computing
Non-GAAP net income per share attributable to common stockholders,
diluted
241 million
240 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 our actual results to differ materially
from these forward-looking statements.
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, legal reserve and settlement charges or
benefits, gain (loss) and other income from strategic investments,
and acquisition-related expenses. We have not provided the most
directly comparable GAAP measures because certain items are out of
our 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.
Conference Call Information
CrowdStrike will host a conference call for analysts and
investors to discuss its earnings results for the second quarter of
fiscal 2023 and outlook for its fiscal third quarter and fiscal
year 2023 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:
August 30, 2022
Time:
2:00 p.m. Pacific time / 5:00 p.m. Eastern
time
Pre-registration link for dial-in
access:
register.vevent.com/register/BIbbb440746d774634bbe655adba4a5730
Webcast:
ir.crowdstrike.com
Forward-Looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties, including statements regarding our
future growth, and future financial and operating performance,
including our financial outlook for the fiscal third quarter and
fiscal year 2023. 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 our rapid growth; our ability to identify and effectively
implement the necessary changes to address execution challenges;
the impact of the COVID-19 pandemic on our and our customers’
business; our 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; our ability to attract new
and retain existing customers; our 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; our ability to
collaborate and integrate our products with offerings from other
parties to deliver benefits to customers; rapidly evolving
technological developments in the market for security products and
subscription and support offerings; length of sales cycles; and
general market, political, economic, and business conditions,
including those related to inflation, COVID-19 and geopolitical
uncertainty.
Additional risks and uncertainties that could affect our
financial results are included in the filings we make 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 our most recently filed Annual Report on
Form 10-K, 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 us as of
the date hereof, and we do 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
We believe that the presentation of non-GAAP financial
information provides important supplemental information to
management and investors regarding financial and business trends
relating to our 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
We intend 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. We use these channels, as well as social media and our
blog, to communicate with our investors, customers, and the public
about our company, our offerings, and other issues. It is possible
that the information we post on social media and our blog could be
deemed to be material information. As such, we encourage investors,
the media, and others to follow the channels listed above,
including the social media channels listed on our investor
relations website, and to review the information disclosed through
such channels. Any updates to the list of disclosure channels
through which we will announce information will be posted on the
investor relations page on our website.
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 July
31,
Six Months Ended July
31,
2022
2021
2022
2021
Revenue
Subscription
$
506,199
$
315,836
$
966,021
$
597,064
Professional services
28,954
21,854
56,966
43,469
Total revenue
535,153
337,690
1,022,987
640,533
Cost of revenue
Subscription (1)(2)
120,087
75,993
228,029
140,896
Professional services (1)
20,480
14,439
39,370
28,041
Total cost of revenue
140,567
90,432
267,399
168,937
Gross profit
394,586
247,258
755,588
471,596
Operating expenses
Sales and marketing (1)(2)
224,766
153,861
418,298
288,992
Research and development (1)(2)
137,864
90,455
261,263
168,635
General and administrative (1)(3)(4)
80,263
50,345
148,217
92,719
Total operating expenses
442,893
294,661
827,778
550,346
Loss from operations
(48,307
)
(47,403
)
(72,190
)
(78,750
)
Interest expense(5)
(6,335
)
(6,296
)
(12,633
)
(12,526
)
Other income, net(6)
11,107
619
14,319
5,387
Loss before provision for income taxes
(43,535
)
(53,080
)
(70,504
)
(85,889
)
Provision for income taxes(7)
4,778
4,238
8,218
54,300
Net loss
(48,313
)
(57,318
)
(78,722
)
(140,189
)
Net income attributable to non-controlling
interest
972
—
2,086
2,178
Net loss attributable to CrowdStrike
$
(49,285
)
$
(57,318
)
$
(80,808
)
$
(142,367
)
Net loss per share attributable to
CrowdStrike common stockholders, basic and diluted
$
(0.21
)
$
(0.25
)
$
(0.35
)
$
(0.63
)
Weighted-average shares used in computing
net loss per share attributable to CrowdStrike common stockholders,
basic and diluted
232,554
226,362
231,850
225,276
_____________________________
(1) Includes stock-based compensation
expense as follows (in thousands):
Three Months Ended July
31,
Six Months Ended July
31,
2022
2021
2022
2021
Subscription cost of revenue
$
7,271
$
5,294
$
13,849
$
9,579
Professional services cost of revenue
3,502
2,389
6,503
4,417
Sales and marketing
40,567
25,265
67,277
42,679
Research and development
40,043
25,808
74,079
43,609
General and administrative
40,167
17,531
72,336
30,365
Total stock-based compensation expense
$
131,550
$
76,287
$
234,044
$
130,649
(2) Includes amortization of acquired
intangible assets, including purchased patents, as follows (in
thousands):
Three Months Ended July
31,
Six Months Ended July
31,
2022
2021
2022
2021
Subscription cost of revenue
$
3,427
$
2,771
$
6,852
$
4,766
Sales and marketing
648
547
1,297
969
General and administrative
29
—
43
—
Total amortization of acquired intangible
assets
$
4,104
$
3,318
$
8,192
$
5,735
(3) Includes acquisition-related expenses
as follows (in thousands):
Three Months Ended July
31,
Six Months Ended July
31,
2022
2021
2022
2021
General and administrative
$
—
$
596
$
301
$
4,941
Total acquisition-related expenses
$
—
$
596
$
301
$
4,941
(4) Includes legal reserve and settlement
charges as follows (in thousands):
Three Months Ended July
31,
Six Months Ended July
31,
2022
2021
2022
2021
General and administrative
$
—
$
2,500
$
—
$
2,500
Total legal reserve and settlement
charges
$
—
$
2,500
$
—
$
2,500
(5) Includes amortization of debt issuance
costs and discount as follows (in thousands):
Three Months Ended July
31,
Six Months Ended July
31,
2022
2021
2022
2021
Interest expense
$
547
$
546
$
1,093
$
1,093
Total amortization of debt issuance costs
and discount
$
547
$
546
$
1,093
$
1,093
(6) Includes gains and other income from
strategic investments as follows (in thousands):
Three Months Ended July
31,
Six Months Ended July
31,
2022
2021
2022
2021
Other income, net
$
1,943
$
—
$
4,172
$
4,356
Total gains and other income from
strategic investments
$
1,943
$
—
$
4,172
$
4,356
(7) Includes tax costs for intellectual
property integration relating to the Humio acquisition as follows
(in thousands):
Three Months Ended July
31,
Six Months Ended July
31,
2022
2021
2022
2021
Provision for income taxes
$
—
$
—
$
—
$
48,824
Total provision for income taxes
$
—
$
—
$
—
$
48,824
CROWDSTRIKE HOLDINGS,
INC.
Condensed Consolidated Balance
Sheets
(in thousands)
(unaudited)
July 31,
January 31,
2022
2022
Assets
Current assets:
Cash and cash equivalents
$
2,318,858
$
1,996,633
Accounts receivable, net of allowance for
credit losses
418,799
368,145
Deferred contract acquisition costs,
current
148,125
126,822
Prepaid expenses and other current
assets
90,198
79,352
Total current assets
2,975,980
2,570,952
Strategic investments
35,585
23,632
Property and equipment, net
383,012
260,577
Operating lease right-of-use assets
28,463
31,735
Deferred contract acquisition costs,
noncurrent
202,441
192,358
Goodwill
416,066
416,445
Intangible assets, net
89,840
97,336
Other long-term assets
22,849
25,346
Total assets
$
4,154,236
$
3,618,381
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
53,817
$
47,634
Accrued expenses
101,181
83,382
Accrued payroll and benefits
102,687
104,563
Operating lease liabilities, current
10,316
9,820
Deferred revenue
1,363,558
1,136,502
Other current liabilities
17,691
24,929
Total current liabilities
1,649,250
1,406,830
Long-term debt
740,261
739,517
Deferred revenue, noncurrent
480,594
392,819
Operating lease liabilities,
noncurrent
21,340
25,379
Other liabilities, noncurrent
19,444
16,193
Total liabilities
2,910,889
2,580,738
Commitments and contingencies
Stockholders’ Equity
Common stock, Class A and Class B
116
115
Additional paid-in capital
2,276,704
1,991,807
Accumulated deficit
(1,045,726
)
(964,918
)
Accumulated other comprehensive loss
(5,675
)
(1,240
)
Total CrowdStrike Holdings, Inc.
stockholders’ equity
1,225,419
1,025,764
Non-controlling interest
17,928
11,879
Total stockholders’ equity
1,243,347
1,037,643
Total liabilities and stockholders’
equity
$
4,154,236
$
3,618,381
CROWDSTRIKE HOLDINGS,
INC.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended July
31,
2022
2021
Operating activities
Net loss
$
(78,722
)
$
(140,189
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
34,146
24,969
Amortization of intangible assets
8,192
5,735
Amortization of deferred contract
acquisition costs
77,554
50,419
Non-cash operating lease costs
4,524
4,469
Stock-based compensation expense
234,044
130,649
Deferred income taxes
1,604
(967
)
Non-cash interest expense
1,366
1,199
Change in fair value of strategic
investments
(4,128
)
(4,356
)
Changes in operating assets and
liabilities, net of impact of acquisitions
Accounts receivable, net
(50,728
)
(23,903
)
Deferred contract acquisition costs
(108,940
)
(87,576
)
Prepaid expenses and other assets
(10,938
)
(46,687
)
Accounts payable
794
5,383
Accrued expenses and other liabilities
5,723
67,290
Accrued payroll and benefits
245
22,853
Operating lease liabilities
(4,704
)
(5,022
)
Deferred revenue
314,831
251,742
Net cash provided by operating
activities
424,863
256,008
Investing activities
Purchases of property and equipment
(118,339
)
(55,793
)
Capitalized internal-use software and
website development costs
(13,235
)
(9,273
)
Purchases of strategic investments
(7,825
)
(7,309
)
Business acquisitions, net of cash
acquired
—
(353,746
)
Purchases of intangible assets
(700
)
—
Net cash used in investing activities
(140,099
)
(426,121
)
Financing activities
Payments of debt issuance costs related to
revolving line of credit
—
(219
)
Payment of debt issuance costs related to
Senior Notes
—
(1,581
)
Proceeds from issuance of common stock
upon exercise of stock options
4,919
9,492
Proceeds from issuance of common stock
under the employee stock purchase plan
34,445
27,452
Capital contributions from non-controlling
interest holders
3,963
3,655
Net cash provided by financing
activities
43,327
38,799
Effect of foreign exchange rates on cash,
cash equivalents and restricted cash
(4,330
)
(243
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
323,761
(131,557
)
Cash, cash equivalents and restricted
cash, beginning of period
1,996,633
1,918,608
Cash, cash equivalents and restricted
cash, end of period
$
2,320,394
$
1,787,051
CROWDSTRIKE HOLDINGS,
INC.
GAAP to Non-GAAP
Reconciliations
(in thousands, except
percentages)
(unaudited)
Three Months Ended July
31,
Six Months Ended July
31,
2022
2021
2022
2021
GAAP subscription revenue
$
506,199
$
315,836
$
966,021
$
597,064
GAAP professional services revenue
28,954
21,854
56,966
43,469
GAAP total revenue
$
535,153
$
337,690
$
1,022,987
$
640,533
GAAP subscription gross profit
$
386,112
$
239,843
$
737,992
$
456,168
Stock based compensation expense
7,271
5,294
13,849
9,579
Amortization of acquired intangible
assets
3,427
2,771
6,852
4,766
Non-GAAP subscription gross profit
$
396,810
$
247,908
$
758,693
$
470,513
GAAP subscription gross margin
76
%
76
%
76
%
76
%
Non-GAAP subscription gross margin
78
%
78
%
79
%
79
%
GAAP professional services gross
profit
$
8,474
$
7,415
$
17,596
$
15,428
Stock based compensation expense
3,502
2,389
6,503
4,417
Non-GAAP professional services gross
profit
$
11,976
$
9,804
$
24,099
$
19,845
GAAP professional services gross
margin
29
%
34
%
31
%
35
%
Non-GAAP professional services gross
margin
41
%
45
%
42
%
46
%
Total GAAP gross margin
74
%
73
%
74
%
74
%
Total Non-GAAP gross margin
76
%
76
%
77
%
77
%
GAAP sales and marketing operating
expenses
$
224,766
$
153,861
$
418,298
$
288,992
Stock based compensation expense
(40,567
)
(25,265
)
(67,277
)
(42,679
)
Amortization of acquired intangible
assets
(648
)
(547
)
(1,297
)
(969
)
Non-GAAP sales and marketing operating
expenses
$
183,551
$
128,049
$
349,724
$
245,344
GAAP sales and marketing operating
expenses as a percentage of revenue
42
%
46
%
41
%
45
%
Non-GAAP sales and marketing operating
expenses as a percentage of revenue
34
%
38
%
34
%
38
%
GAAP research and development operating
expenses
$
137,864
$
90,455
$
261,263
$
168,635
Stock based compensation expense
(40,043
)
(25,808
)
(74,079
)
(43,609
)
Non-GAAP research and development
operating expenses
$
97,821
$
64,647
$
187,184
$
125,026
GAAP research and development operating
expenses as a percentage of revenue
26
%
27
%
26
%
26
%
Non-GAAP research and development
operating expenses as a percentage of revenue
18
%
19
%
18
%
20
%
GAAP general and administrative operating
expenses
$
80,263
$
50,345
$
148,217
$
92,719
Stock based compensation expense
(40,167
)
(17,531
)
(72,336
)
(30,365
)
Acquisition-related expenses
—
(596
)
(301
)
(4,941
)
Amortization of acquired intangible
assets
(29
)
—
(43
)
—
Legal reserve and settlement charges
—
(2,500
)
—
(2,500
)
Non-GAAP general and administrative
operating expenses
$
40,067
$
29,718
$
75,537
$
54,913
GAAP general and administrative operating
expenses as a percentage of revenue
15
%
15
%
14
%
14
%
Non-GAAP general and administrative
operating expenses as a percentage of revenue
7
%
9
%
7
%
9
%
CROWDSTRIKE HOLDINGS,
INC.
GAAP to Non-GAAP
Reconciliations (continued)
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended July
31,
Six Months Ended July
31,
2022
2021
2022
2021
GAAP loss from operations
$
(48,307
)
$
(47,403
)
$
(72,190
)
$
(78,750
)
Stock based compensation expense
131,550
76,287
234,044
130,649
Amortization of acquired intangible
assets
4,104
3,318
8,192
5,735
Acquisition-related expenses
—
596
301
4,941
Legal reserve and settlement charges
—
2,500
—
2,500
Non-GAAP income from operations
$
87,347
$
35,298
$
170,347
$
65,075
GAAP operating margin
(9
)%
(14
)%
(7
)%
(12
)%
Non-GAAP operating margin
16
%
10
%
17
%
10
%
GAAP net loss attributable to
CrowdStrike
$
(49,285
)
$
(57,318
)
$
(80,808
)
$
(142,367
)
Stock based compensation expense
131,550
76,287
234,044
130,649
Amortization of acquired intangible
assets
4,104
3,318
8,192
5,735
Acquisition-related expenses
—
596
301
4,941
Amortization of debt issuance costs and
discount
547
546
1,093
1,093
Legal reserve and settlement charges
—
2,500
—
2,500
Provision for income taxes(1)
—
—
—
48,824
Gains and other income from strategic
investments attributable to CrowdStrike
(972
)
—
(2,086
)
(2,178
)
Non-GAAP net income attributable to
CrowdStrike
$
85,944
$
25,929
$
160,736
$
49,197
Weighted-average shares used in computing
basic net loss per share attributable to CrowdStrike common
stockholders (GAAP)
232,554
226,362
231,850
225,276
GAAP basic net loss per share attributable
to CrowdStrike common stockholders
$
(0.21
)
$
(0.25
)
$
(0.35
)
$
(0.63
)
GAAP diluted net loss per share
attributable to CrowdStrike common stockholders
$
(0.21
)
$
(0.25
)
$
(0.35
)
$
(0.63
)
Stock-based compensation
0.55
0.32
0.98
0.55
Amortization of acquired intangible
assets
0.02
0.01
0.03
0.02
Acquisition-related expenses
—
—
—
0.02
Legal reserve and settlement charges
—
0.01
—
0.01
Provision for income taxes (1)
—
—
—
0.21
Adjustment to fully diluted earnings per
share (2)
—
0.02
0.02
0.04
Gains and other income from strategic
investments attributable to CrowdStrike
—
—
(0.01
)
(0.01
)
Non-GAAP diluted net income per share
attributable to CrowdStrike common stockholders
$
0.36
$
0.11
$
0.67
$
0.21
Weighted-average shares used in diluted
net income (loss) per share attributable to CrowdStrike common
stockholders calculation:
GAAP
232,554
226,362
231,850
225,276
Non-GAAP
238,727
238,043
238,674
237,753
____________________________
(1)
We use our GAAP provision for income taxes
for the purpose of determining our non-GAAP income tax expense. The
tax costs for intellectual property integration relating to the
Humio acquisition is included in the GAAP provision for income
taxes during the second quarter of fiscal 2022. The income tax
benefits related to stock-based compensation, amortization of
acquired intangibles assets, including purchased patents,
acquisition related expenses, amortization of debt issuance costs
and discount, gains and other income from strategic investments
attributable to CrowdStrike and legal reserve and settlement
charges or benefits included in the GAAP provision for income taxes
were not material for all periods presented.
(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 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 and because of rounding
differences. 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 July
31,
Six Months Ended July
31,
2022
2021
2022
2021
GAAP net cash provided by operating
activities
$
209,906
$
108,475
$
424,863
$
256,008
Purchases of property and equipment
(66,128
)
(29,997
)
(118,339
)
(55,793
)
Capitalized internal-use software and
website development costs
(8,021
)
(4,839
)
(13,235
)
(9,273
)
Free cash flow
$
135,757
$
73,639
$
293,289
$
190,942
GAAP net cash used in investing
activities
$
(79,149
)
$
(41,175
)
$
(140,099
)
$
(426,121
)
GAAP net cash provided by financing
activities
$
38,759
$
36,190
$
43,327
$
38,799
GAAP net cash provided by operating
activities as a percentage of revenue
39
%
32
%
42
%
40
%
Purchases of property and equipment as a
percentage of revenue
(12
)%
(9
)%
(12
)%
(9
)%
Capitalized internal-use software and
website development costs as a percentage of revenue
(1
)%
(1
)%
(1
)%
(1
)%
Free cash flow margin
25
%
22
%
29
%
30
%
Explanation of Non-GAAP Financial Measures
In addition to our results determined in accordance with U.S.
generally accepted accounting principles (“GAAP”), we believe the
following non-GAAP measures are useful in evaluating our operating
performance. We use the following non-GAAP financial information to
evaluate our ongoing operations and for internal planning and
forecasting purposes. We believe 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 our 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 our 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 our non-GAAP financial measures as tools
for comparison. In addition, the utility of free cash flow as a
measure of our financial performance and liquidity is limited as it
does not represent the total increase or decrease in our cash
balance for a given period.
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 our
business.
Non-GAAP Subscription Gross Profit and Non-GAAP Subscription
Gross Margin
We define 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
We define 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 and legal reserve and settlement
charges or benefits.
Non-GAAP Net Income Attributable to CrowdStrike
We define non-GAAP net income attributable to CrowdStrike as
GAAP net loss attributable to CrowdStrike excluding stock-based
compensation expense, amortization of acquired intangible assets,
including purchased patents, acquisition-related expenses,
amortization of debt issuance costs and discount, gains and other
income from strategic investments, legal reserve and settlement
charges or benefits and the tax costs for intellectual property
integration relating to the Humio acquisition.
Non-GAAP Net Income per Share Attributable to CrowdStrike
Common Stockholders, Diluted
We define 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
diluted common stock equivalents outstanding during the period. We
may periodically incur charges or receive payments in connection
with litigation settlements. We exclude these charges and payments
received from non-GAAP net income attributable to CrowdStrike when
associated with a significant settlement because we do not believe
they are reflective of ongoing business and operating results.
Free Cash Flow
Free cash flow is a non-GAAP financial measure that we define as
net cash provided by operating activities less purchases of
property and equipment and capitalized internal-use software and
website development costs. We monitor free cash flow as one measure
of our overall business performance, which enables us to analyze
our future performance without the effects of non-cash items and
allow us to better understand the cash needs of our business. While
we believe that free cash flow is useful in evaluating our
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 our liquidity is further
limited as it does not represent the total increase or decrease in
our cash balance for any given period. In addition, other
companies, including companies in our 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 our 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 we are negotiating a renewal
with a customer after the expiration of the subscription, we
continue to include that revenue in ARR if we are actively in
discussion with such an organization for a new subscription or
renewal, or until such organization notifies us 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220830005147/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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