- Achieves record revenue, GAAP and non-GAAP earnings, cash flow
from operations and free cash flow
- Ending ARR grows 42% year-over-year to reach $2.73 billion,
adding $174 million in net new ARR
- Delivers record GAAP subscription gross margin of 78% and
record non-GAAP subscription gross margin of 80%
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 first quarter fiscal year 2024, ended
April 30, 2023.
“CrowdStrike's first quarter results exceeded our guided metrics
and reached new financial milestones, delivering the winning
combination of growth, profitability and free cash flow at scale,”
said George Kurtz, CrowdStrike’s president, chief executive officer
and co-founder. "Our demonstrated leadership in leveraging AI to
drive better security outcomes and consolidate security spend
strategically positions CrowdStrike to win in our markets.”
Commenting on the company's financial results, Burt Podbere,
CrowdStrike’s chief financial officer, added, “Highlights of the
quarter included a rule of 75 on a free cash flow basis and records
across revenue, gross margin, GAAP and non-GAAP earnings, and cash
flow. Through our relentless focus on execution, we achieved these
records while remaining capital efficient and increasing module
adoption rates.”
First Quarter Fiscal 2024 Financial Highlights
- Revenue: Total revenue was $692.6 million, a 42%
increase, compared to $487.8 million in the first quarter of fiscal
2023. Subscription revenue was $651.2 million, a 42% increase,
compared to $459.8 million in the first quarter of fiscal
2023.
- Annual Recurring Revenue (ARR) increased 42%
year-over-year and grew to $2.73 billion as of April 30, 2023, of
which $174.2 million was net new ARR added in the quarter.
- Subscription Gross Margin: GAAP subscription gross
margin was 78%, compared to 77% in the first quarter of fiscal
2023. Non-GAAP subscription gross margin was 80%, compared to 79%
in the first quarter of fiscal 2023.
- Income/Loss from Operations: GAAP loss from operations
was $19.5 million, compared to $23.9 million in the first quarter
of fiscal 2023. Non-GAAP income from operations was $115.9 million,
compared to $83.0 million in the first quarter of fiscal 2023.
- Net Income/Loss Attributable to CrowdStrike: GAAP net
income attributable to CrowdStrike was $0.5 million, compared to a
loss of $31.5 million in the first quarter of fiscal 2023. GAAP net
income per share attributable to CrowdStrike, diluted, was $0.00,
compared to a loss of $0.14 in the first quarter of fiscal 2023.
Non-GAAP net income attributable to CrowdStrike was $136.4 million,
compared to $74.8 million in the first quarter of fiscal 2023.
Non-GAAP net income attributable to CrowdStrike per share, diluted,
was $0.57, compared to $0.31 in the first quarter of fiscal
2023.
- Cash Flow: Net cash generated from operations was $300.9
million, compared to $215.0 million in the first quarter of fiscal
2023. Free cash flow was $227.4 million, compared to $157.5 million
in the first quarter of fiscal 2023.
- Cash, Cash Equivalents and Short-term Investments was
$2.93 billion as of April 30, 2023.
Recent Highlights
- CrowdStrike’s module adoption rates were 62%, 40% and 23% for
five or more, six or more and seven or more modules, respectively,
as of April 30, 20231.
- Introduced Charlotte AI, a new generative AI security analyst
that uses the world’s highest-fidelity security data and is
continuously improved through a tight human feedback loop from
usage by CrowdStrike’s industry-leading threat hunters, managed
detection and response operators, and incident response
experts.
- Announced CrowdStrike and AWS are working together to develop
powerful new Generative AI applications that help customers
accelerate their cloud, security and AI journeys.
- Granted an Impact Level 5 Provisional Authorization from the
Department of Defense.
- Named a leader in The Forrester Wave™: Managed Detection and
Response (MDR), Q2 2023 report2.
- Ranked #1 worldwide for revenue for a second consecutive year
in Managed Detection and Response (MDR) in the new Gartner® report:
“Market Share: Managed Security Services, Worldwide, 2022.”3
- Announced CrowdStrike Falcon Complete XDR, a new Managed
eXtended Detection and Response (MXDR) service.
- Released CrowdStrike Falcon Insight for IoT, the world’s first
and only EDR/XDR solution for Extended Internet of Things (XIoT)
assets.
- Launched a new partnership with Abnormal Security, the leading
behavioral AI-based email security platform.
- Introduced CrowdStream, a native platform capability that
directly connects any data source into the CrowdStrike Falcon
platform using Cribl’s observability pipeline technology.
- Expanded partnership with Google with industry’s first native
EDR/XDR offering for ChromeOS.
- Named to the 2023 Fortune 100 Best Companies to Work For® list
for the third consecutive year.
Financial Outlook
CrowdStrike is providing the following guidance for the second
quarter of fiscal 2024 (ending July 31, 2023) 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, gain (loss) and other income from strategic investments,
acquisition-related expenses, 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.
Q2 FY24
Guidance
Full Year FY24
Guidance
Total revenue
$717.2 - $727.4 million
$3,000.5 - $3,036.7 million
Non-GAAP income from operations
$116.4 - $123.8 million
$498.9 - $526.2 million
Non-GAAP net income attributable to
CrowdStrike
$129.5 - $137.0 million
$562.8 - $590.1 million
Non-GAAP net income per share attributable
to CrowdStrike common stockholders, diluted
$0.54 - $0.57
$2.32 - $2.43
Weighted average shares used in computing
Non-GAAP net income per share attributable to common stockholders,
diluted
242 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 first quarter of
fiscal 2024 and outlook for its fiscal second 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:
May 31, 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/BI598eb6ba76e2464eae231d18fa2614f0
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
fiscal second quarter and fiscal year 2024. 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; 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, 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. The Forrester Wave™: Managed Detection And
Response, Q2 2023 report, Forrester Research, Inc., May 18,
2023
3. Gartner, Market Share: Managed Security
Services, Worldwide, 2022, Rahul Yadav, Travis Lee, Matt Milone,
Akshita Joshi, Shailendra Upadhyay, 18 April 2023
GARTNER is a registered trademark and service mark of Gartner,
Inc. and/or its affiliates in the U.S. and internationally and is
used herein with permission. All rights reserved. Gartner does not
endorse any vendor, product or service depicted in its research
publications, and does not advise technology users to select only
those vendors with the highest ratings or other designation.
Gartner research publications consist of the opinions of Gartner’s
research organization and should not be construed as statements of
fact. Gartner disclaims all warranties, expressed or implied, with
respect to this research, 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 April
30,
2023
2022
Revenue
Subscription
$
651,175
$
459,822
Professional services
41,405
28,012
Total revenue
692,580
487,834
Cost of revenue
Subscription (1)(2)
142,100
107,942
Professional services (1)
27,130
18,890
Total cost of revenue
169,230
126,832
Gross profit
523,350
361,002
Operating expenses
Sales and marketing (1)(2)
281,107
193,532
Research and development (1)(3)
179,065
123,399
General and administrative
(1)(2)(3)(4)
82,634
67,954
Total operating expenses
542,806
384,885
Loss from operations
(19,456
)
(23,883
)
Interest expense(5)
(6,387
)
(6,298
)
Interest income
30,521
1,507
Other income, net(6)(7)
230
1,705
Income (loss) before provision for income
taxes
4,908
(26,969
)
Provision for income taxes(9)
4,409
3,440
Net income (loss)
499
(30,409
)
Net income attributable to non-controlling
interest
8
1,114
Net income (loss) attributable to
CrowdStrike
$
491
$
(31,523
)
Net income (loss) per share attributable
to CrowdStrike common stockholders:
Basic
$
0.00
$
(0.14
)
Diluted
$
0.00
$
(0.14
)
Weighted-average shares used in computing
net income (loss) per share attributable to CrowdStrike common
stockholders:
Basic
236,414
231,179
Diluted
240,598
231,179
____________________________
(1)
Includes stock-based compensation expense
as follows (in thousands):
Three Months Ended April
30,
2023
2022
Subscription cost of revenue
$
8,966
$
6,578
Professional services cost of revenue
4,630
3,001
Sales and marketing
35,739
26,710
Research and development
44,381
34,036
General and administrative
37,140
32,169
Total stock-based compensation expense
$
130,856
$
102,494
(2)
Includes amortization of acquired
intangible assets, including purchased patents, as follows (in
thousands):
Three Months Ended April
30,
2023
2022
Subscription cost of revenue
$
3,580
$
3,425
Sales and marketing
531
649
General and administrative
63
14
Total amortization of acquired intangible
assets
$
4,174
$
4,088
(3)
Includes acquisition-related expenses
(credit), net as follows (in thousands):
Three Months Ended April
30,
2023
2022
Research and development
$
371
$
—
General and administrative
(70
)
301
Total acquisition-related expenses,
net
$
301
$
301
(4)
Includes mark-to-market adjustments on
deferred compensation liabilities as follows (in thousands):
Three Months Ended April
30,
2023
2022
Sales and marketing
$
3
$
—
Research and development
1
—
Total mark-to-market adjustments on
deferred compensation liabilities
$
4
$
—
(5)
Includes amortization of debt issuance
costs and discount as follows (in thousands):
Three Months Ended April
30,
2023
2022
Interest expense
$
546
$
546
Total amortization of debt issuance costs
and discount
$
546
$
546
(6)
Includes gains and other income from
strategic investments as follows (in thousands):
Three Months Ended April
30,
2023
2022
Other income, net
$
16
$
2,229
Total gains and other income from
strategic investments
$
16
$
2,229
(7)
Includes gains on deferred compensation
assets as follows (in thousands):
Three Months Ended April
30,
2023
2022
Other income, net
$
4
$
—
Total gains on deferred compensation
assets
$
4
$
—
CROWDSTRIKE HOLDINGS,
INC.
Condensed Consolidated Balance
Sheets
(in thousands)
(unaudited)
April 30, 2023
January 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
2,829,677
$
2,455,369
Short-term investments
100,000
250,000
Accounts receivable, net of allowance for
credit losses
461,092
626,181
Deferred contract acquisition costs,
current
186,901
186,855
Prepaid expenses and other current
assets
131,100
121,862
Total current assets
3,708,770
3,640,267
Strategic investments
57,877
47,270
Property and equipment, net
523,721
492,335
Operating lease right-of-use assets
50,459
39,936
Deferred contract acquisition costs,
noncurrent
254,397
260,233
Goodwill
430,755
430,645
Intangible assets, net
83,215
86,889
Other long-term assets
28,664
28,965
Total assets
$
5,137,858
$
5,026,540
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
16,900
$
45,372
Accrued expenses
91,494
137,884
Accrued payroll and benefits
151,099
168,767
Operating lease liabilities, current
16,215
13,046
Deferred revenue
1,788,304
1,727,484
Other current liabilities
16,052
16,519
Total current liabilities
2,080,064
2,109,072
Long-term debt
741,377
741,005
Deferred revenue, noncurrent
615,487
627,629
Operating lease liabilities,
noncurrent
36,774
29,567
Other liabilities, noncurrent
29,797
31,833
Total liabilities
3,503,499
3,539,106
Commitments and contingencies
Stockholders’ Equity
Common stock, Class A and Class B
118
118
Additional paid-in capital
2,752,716
2,612,705
Accumulated deficit
(1,147,672
)
(1,148,163
)
Accumulated other comprehensive income
(loss)
139
(1,019
)
Total CrowdStrike Holdings, Inc.
stockholders’ equity
1,605,301
1,463,641
Non-controlling interest
29,058
23,793
Total stockholders’ equity
1,634,359
1,487,434
Total liabilities and stockholders’
equity
$
5,137,858
$
5,026,540
CROWDSTRIKE HOLDINGS,
INC.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended April
30,
2023
2022
Operating activities
Net income (loss)
$
499
$
(30,409
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
26,409
16,341
Amortization of intangible assets
4,174
4,088
Amortization of deferred contract
acquisition costs
55,322
37,592
Non-cash operating lease costs
3,092
2,237
Stock-based compensation expense
130,856
102,494
Deferred income taxes
(255
)
1,752
Non-cash interest expense
754
669
Change in fair value of strategic
investments
—
(2,208
)
Changes in operating assets and
liabilities, net of impact of acquisitions
Accounts receivable, net
165,089
(1,058
)
Deferred contract acquisition costs
(49,532
)
(51,354
)
Prepaid expenses and other assets
(8,542
)
4,243
Accounts payable
(18,596
)
(36,431
)
Accrued expenses and other liabilities
(36,576
)
(7,300
)
Accrued payroll and benefits
(17,281
)
13,235
Operating lease liabilities
(3,199
)
(2,210
)
Deferred revenue
48,678
163,276
Net cash provided by operating
activities
300,892
214,957
Investing activities
Purchases of property and equipment
(62,264
)
(52,211
)
Capitalized internal-use software and
website development costs
(10,902
)
(5,214
)
Purchases of strategic investments
(10,513
)
(2,825
)
Purchases of intangible assets
—
(700
)
Proceeds from sales of investments
150,000
—
Purchases of deferred compensation
investments
(290
)
—
Net cash used provided by (used in)
investing activities
66,031
(60,950
)
Financing activities
Proceeds from issuance of common stock
upon exercise of stock options
2,651
3,106
Capital contributions from non-controlling
interest holders
5,257
1,462
Net cash provided by financing
activities
7,908
4,568
Effect of foreign exchange rates on cash,
cash equivalents and restricted cash
(190
)
(2,472
)
Net increase in cash, cash equivalents and
restricted cash
374,641
156,103
Cash, cash equivalents and restricted
cash, beginning of period
2,456,924
1,996,633
Cash, cash equivalents and restricted
cash, end of period
$
2,831,565
$
2,152,736
CROWDSTRIKE HOLDINGS,
INC.
GAAP to Non-GAAP
Reconciliations
(in thousands, except
percentages)
(unaudited)
Three Months Ended April
30,
2023
2022
GAAP subscription revenue
$
651,175
$
459,822
GAAP professional services revenue
41,405
28,012
GAAP total revenue
$
692,580
$
487,834
GAAP subscription gross profit
$
509,075
$
351,880
Stock based compensation expense
8,966
6,578
Amortization of acquired intangible
assets
3,580
3,425
Non-GAAP subscription gross profit
$
521,621
$
361,883
GAAP subscription gross margin
78
%
77
%
Non-GAAP subscription gross margin
80
%
79
%
GAAP professional services gross
profit
$
14,275
$
9,122
Stock based compensation expense
4,630
3,001
Non-GAAP professional services gross
profit
$
18,905
$
12,123
GAAP professional services gross
margin
34
%
33
%
Non-GAAP professional services gross
margin
46
%
43
%
Total GAAP gross margin
76
%
74
%
Total Non-GAAP gross margin
78
%
77
%
GAAP sales and marketing operating
expenses
$
281,107
$
193,532
Stock based compensation expense
(35,739
)
(26,710
)
Amortization of acquired intangible
assets
(531
)
(649
)
Mark-to-market adjustments on deferred
compensation liabilities
(3
)
—
Non-GAAP sales and marketing operating
expenses
$
244,834
$
166,173
GAAP sales and marketing operating
expenses as a percentage of revenue
41
%
40
%
Non-GAAP sales and marketing operating
expenses as a percentage of revenue
35
%
34
%
GAAP research and development operating
expenses
$
179,065
$
123,399
Stock based compensation expense
(44,381
)
(34,036
)
Acquisition-related expenses
(371
)
—
Mark-to-market adjustments on deferred
compensation liabilities
(1
)
—
Non-GAAP research and development
operating expenses
$
134,312
$
89,363
GAAP research and development operating
expenses as a percentage of revenue
26
%
25
%
Non-GAAP research and development
operating expenses as a percentage of revenue
19
%
18
%
GAAP general and administrative operating
expenses
$
82,634
$
67,954
Stock based compensation expense
(37,140
)
(32,169
)
Acquisition-related credit (expense)
70
(301
)
Amortization of acquired intangible
assets
(63
)
(14
)
Non-GAAP general and administrative
operating expenses
$
45,501
$
35,470
GAAP general and administrative operating
expenses as a percentage of revenue
12
%
14
%
Non-GAAP general and administrative
operating expenses as a percentage of revenue
7
%
7
%
CROWDSTRIKE HOLDINGS,
INC.
GAAP to Non-GAAP
Reconciliations (continued)
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended April
30,
2023
2022
GAAP loss from operations
$
(19,456
)
$
(23,883
)
Stock based compensation expense
130,856
102,494
Amortization of acquired intangible
assets
4,174
4,088
Acquisition-related expenses, net
301
301
Mark-to-market adjustments on deferred
compensation liabilities
4
—
Non-GAAP income from operations
$
115,879
$
83,000
GAAP operating margin
(3
) %
(5
) %
Non-GAAP operating margin
17
%
17
%
GAAP net income (loss) attributable to
CrowdStrike
$
491
$
(31,523
)
Stock based compensation expense
130,856
102,494
Amortization of acquired intangible
assets
4,174
4,088
Acquisition-related expenses, net
301
301
Amortization of debt issuance costs and
discount
546
546
Mark-to-market adjustments on deferred
compensation liabilities
4
—
Gains and other income from strategic
investments attributable to CrowdStrike
(8
)
(1,114
)
Gains on deferred compensation assets
(4
)
—
Non-GAAP net income attributable to
CrowdStrike
$
136,360
$
74,792
Weighted-average shares used in computing
basic net income (loss) per share attributable to CrowdStrike
common stockholders (GAAP)
236,414
231,179
GAAP basic net income (loss) per share
attributable to CrowdStrike common stockholders
$
0.00
$
(0.14
)
GAAP diluted net income (loss) per share
attributable to CrowdStrike common stockholders
$
0.00
$
(0.14
)
Stock-based compensation
0.54
0.43
Amortization of acquired intangible
assets
0.02
0.02
Acquisition-related expenses, net
—
—
Amortization of debt issuance costs and
discount
—
—
Mark-to-market adjustments on deferred
compensation liabilities
—
—
Adjustment to fully diluted earnings per
share (1)
0.01
—
Gains and other income from strategic
investments attributable to CrowdStrike
—
—
Gains on deferred compensation assets
—
—
Non-GAAP diluted net income per share
attributable to CrowdStrike common stockholders
$
0.57
$
0.31
Weighted-average shares used in diluted
net income (loss) per share attributable to CrowdStrike common
stockholders calculation:
GAAP
240,598
231,179
Non-GAAP
240,598
238,654
______________________________________________________
(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.
CROWDSTRIKE HOLDINGS,
INC.
GAAP to Non-GAAP
Reconciliations (continued)
(in thousands, except
percentages)
(unaudited)
Three Months Ended April
30,
2023
2022
GAAP net cash provided by operating
activities
$
300,892
$
214,957
Purchases of property and equipment
(62,264
)
(52,211
)
Capitalized internal-use software and
website development costs
(10,902
)
(5,214
)
Purchases of deferred compensation
investments
(290
)
—
Free cash flow
$
227,436
$
157,532
GAAP net cash provided by (used in)
investing activities
$
66,031
$
(60,950
)
GAAP net cash provided by financing
activities
$
7,908
$
4,568
GAAP net cash provided by operating
activities as a percentage of revenue
43
%
44
%
Purchases of property and equipment as a
percentage of revenue
(9
) %
(11
) %
Capitalized internal-use software and
website development costs as a percentage of revenue
(2
) %
(1
) %
Purchases of deferred compensation
investments as a percentage of revenue
—
%
—
%
Free cash flow margin
33
%
32
%
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, net, and mark-to-market
adjustments on deferred compensation liabilities.
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, net, amortization of debt issuance
costs and discount, mark-to-market adjustments on deferred
compensation liabilities, gains and other income from strategic
investments, and 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/20230531005253/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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