crwd revenue guide beat YoY_(ttm)_rev YoY QoQ compounded periods report date price shares(M) mcap mca_ growth_QoQ periods mca_ growth_YoY(TTM)
1q19 47300
2q19 55700 17.76% 17.76% 1
3q19 66400 19.21% 18.48% 2
4q19 72800 242200 9.64% 15.46% 3
1q20 96100 291000 32.01% 19.39% 4 18-Jul-19 83.52
2q20 108100 104000 3.9% 343400 12.49% 17.98% 5 5-Sep-19 67.1 129900 8716290
3q20 125100 119500 4.7% 402100 15.73% 17.60% 6 5-Dec-19 50.89 204100 10386649 19.16% 1
4q20 152100 138600 9.7% 481400 98.76% 21.58% 18.16% 7 19-Mar-20 49.01 205200 10056852 7.42% 2
1q21 178100 167600 6.3% 563400 93.61% 17.09% 18.03% 8 2-Jun-20 98.1 211300 20728530 33.48% 3
2q21 199000 190300 4.6% 654300 90.54% 11.73% 17.31% 9 2-Sep-20 129.25 216000 27918000 33.78% 4 220%
3q21 232500 215000 8.1% 761700 89.43% 16.83% 17.26% 10 2-Dec-20 161.19 235000 37879650 34.16% 5 265%
4q21 264900 250500 5.7% 874500 81.66% 13.94% 16.96% 11 16-Mar-21 208.03 236000 49095080 33.39% 6 388%
1q21 302800 292100 3.7% 999200 77.35% 14.31% 16.73% 12 3-Jun-21 206.94 238000 49251720 28.07% 7 138%
2q22 337700 324400 4.1% 1137900 73.91% 11.53% 16.32% 13 31-Aug-21 269.97 238000 64252860 28.36% 8 130%
3q22 382419 365300 4.7% 1287819 69.07% 13.24% 16.10% 14 1-Dec-21 300 240000 72000000 26.44% 9 90%
assuming similar beat as 3q20 of 4.7% I am projecting 382.419M revenue. which would show 13.24% QoQ and 16.1 compounded revenue growth over 14 quarters. YoY (TTM) would be 69.07% vs 73.91% last quarter.
mcap growth at this point is about 23% compounded over 9 quarters which seems to be taking slowing growth in account now.
of all the available data the average QoQ growth had been 16.45%....beating that would be sign of acceleration in my opinion. that would be 393.42M revenue or 7.7% vs forecasted revenue.
assuming similar beat as 3q20 of 4.7%
I am projecting 382.419M revenue.
Personally I wouldn’t look back to Q3 2020. That’s a long time ago. Their beats the last two quarters have been 3.7% and 4.1%. I think even a 4.0% beat this quarter for $380m in revenue would be seen as a positive.
The other thing I’ll be looking for with Crowdstrike is ARR. They’ve told us it’s the best metric for them, so of course we need to watch it! Unfortunately that’s where it most looks like growth is stalling a bit. Here is the progression:
Q1 Q2 Q3 Q4
2018 $71.00 $90.00 $113.00 $141.31
2019 $170.39 $208.17 $254.15 $312.66
2020 $364.65 $423.78 $501.72 $600.46
2021 $686.13 $790.58 $907.39 $1,050.05
2022 $1,193.89 $1,344.45
which means the percentage added has been dropping steadily:
Q1 Q2 Q3 Q4
2018 26.8% 25.6% 25.1%
2019 20.6% 22.2% 22.1% 23.0%
2020 16.6% 16.2% 18.4% 19.7%
2021 14.3% 15.2% 14.8% 15.7%
2022 13.7% 12.6%
I think they need to get to about 1500m ARR just to keep the story intact. However, if they can hit 1515m, they hold at 12.6% sequential growth. That seems like it would be a fairly big win for them. And if they can do even more, I would be pretty excited.
Bear
PS If you’re wondering, yes I sold out of Crowdstrike in October, but I have again taken a ~4% position as the price has fallen. I said a month ago that I don’t think Crowdstrike quite deserves a large position, but that I’m willing to hold a small position as long as there’s nothing else I want to do with the cash. I also said I’m not sure they can maintain hypergrowth at scale, but we will see.
1515m this quarter would be 67% YOY growth, in line with the “law of large numbers”. Keep in mind their incremental sales growth dollars YOY have been consistently growing - so even though the percentage declines a little (70 to 67%), if they hit 1515 (or even close to it), their revenue growth will be $607M YOY vs a year ago $405M growth.
Actually I agree - whilst I also top sliced at 295 or so, I don’t see the wheels coming off this quarter.
ARR might be slowing but as of Q2 FY 2022 they had grown their deferred revenues by 68% year on year to $1.164bn and their RPO by 84% YoY to $1.7bn.
That’s a huge amount of coverage of their current run rate. I think they’ve got enough in the tank for now to post another solid 65%+ revenue growth for Q3 and to be fair to Crowdstrike leaving aside the drop off in growth from 85% in Q3 to 74% in Q4 last year they have held their growth track record together pretty well with 2 quarters in a row at the 70% mark.
Ant
Thank you all for the board!
Thank you for the thoughts and commentary on CRWD. Just to offer my perspective, albeit could be wrong - critique away :).
I completely agree that $1500M ARR is required to keep the story intact, but what is that story? It’s a story that ARR is decelerating at an average rate of ~1% per quarter for the past seven quarters as revenue grows.
ARR Seq Add % growth
Q121 85.6 14.3%
Q221 104.5 15.2%
Q321 116.8 14.8%
Q421 142.6 15.7%
Q122 140 13.3%
Q222 150.6 12.7%
Q322 159.4 11.9% *assumes $1,500 ARR
Just for fun I have been using proportions to guide my personal expectations. Meaning that I scale the number for the unreported quarter to match the proportionality of three known quarters. Using that as a methodology gives an ARR of ~$1500 ($1508 to be exact).
Moving on to revenue I believe a 4% beat would be less than desirable. It will show an increase in their current deceleration rate of -3.4% per quarter to -5.2% for Q3, from a TTM perspective. Although this would represent 12.5% sequential growth that would be a fairly bad Q3 for CRWD, given how Q1 and Q2 have reported. It would also lead to believe that CRWD will be a sub 60% TTM grower Y/Y by Q1 of next year.
TTM Revenue Y/Y % Delta of %
Q420 $481.42 92.71%
Q121 $563.42 88.68% -4.03%
Q221 $654.28 86.39% -2.29%
Q321 $761.62 85.87% -0.52%
Q421 $874.44 81.64% -4.23%
Q122 $999.16 77.34% -4.30%
Q222 $1,137.88 73.91% -3.43%
Q322 $1,292.64 69.72% -4.19% ***6% beat
Q322 $1,285.33 68.76% -5.15% ***4% beat
Q322 $1,298.12 70.44% -3.47% ***7.5% beat
Raw Seq Add Add as a %
Q219 8.4 17.8%
Q319 10.7 19.2%
Q419 14.1 21.2%
Q120 15.6 19.4%
Q220 12.0 12.5%
Q320 17.0 15.7%
Q420 27.0 21.6%
Q121 26.0 17.1%
Q221 20.9 11.7%
Q321 33.5 16.8%
Q421 32.5 14.0%
Q122 37.9 14.3%
Q222 34.9 11.5%
Q322 42.2 12.5% ***4% beat on revenue
Q322 49.53 14.7% ***6% beat on revenue
Q322 55.01 16.3% ***7.5% beat on revenue
In order to maintain momentum of a -3.4% acceleration, I believe they have to report closer to $392M in revenue or a 7.5% beat. This is also supported by proportions of sequential quarters.
Using the $1508 ARR from the proportions in conjunction with the $392M in revenue, I see the revenue stabilized from deceleration getting worse as well as the ARR.
All this being said I am personally putting a minimum expectation on CRWD of a $387M in revenue 6% beat to maintain current macro story, $392M in revenue 7.5% beat to reinforce early signs of reacceleration and anything higher would be the time to start giving high fives.
Do I think CRWD can pull off those numbers? I think maybe - just because a number can be supported through analysis does not mean it is real, and that is what I have been struggling with lately - is how to balance excitement/hopes with realistic expectations.
Bottom line is to have a plan. Only hindsight will determine the validity of my plan, but anything less than a 6% beat will confirm to me that CRWD is continuing the slow down and I will put my money in better opportunities. Anything better than that might be what we’ve been waiting for as a result of the past year of good news from CRWD and awards they have been winning.
~Currently have a 7% position in CRWD trimmed down from 20% at the start of the year.
Note: The way I have been doing proportions is Q222/Q322 = Q221/Q321 take the three knowns and solve for the unknown
skudrun -
Good writeup. I agree 100% with the trends you point out.
I am personally putting a minimum expectation on CRWD of a $387M in revenue 6% beat
Unfortunately, I’m not as optimistic about your 6% beat though I’d love to see it. Below is CRWD’s entire guide and beat history (1Q20 is so low because it was a preliminary estimate given just before IPO with much more insight behind it):
Est: top end guide
Act: actual result
+/-: raw $ beat
Beat: % beat
Seq: sequential revenue add
QoQ: QoQ growth
Est Act +/- Beat Seq QoQ
4Q19 $80.46 $14.08 21.2%
1Q20 $95.70 $96.08 $0.38 0.4% $15.62 19.4%
2Q20 $104.00 $108.11 $4.11 4.0% $12.03 12.5%
3Q20 $119.50 $125.12 $5.62 4.7% $17.01 15.7%
4Q20 $138.60 $152.11 $13.51 9.7% $26.99 21.6%
1Q21 $167.60 $178.08 $10.48 6.3% $25.97 17.1%
2Q21 $190.30 $198.97 $8.67 4.6% $20.89 11.7%
3Q21 $215.00 $232.46 $17.46 8.1% $33.49 16.8%
4Q21 $250.50 $264.93 $14.43 5.8% $32.47 14.0%
1Q22 $292.10 $302.84 $10.74 3.7% $37.91 14.3%
2Q22 $324.40 $337.69 $13.29 4.1% $34.85 11.5%
3Q22 $365.30 $380.00 $14.70 4.0% $42.31 12.5%
As you can see, I’m anticipating $380 and a 4% beat of the top end $365.3M guide. That would also mean more than $42M in sequential dollars added, which would be CRWD’s best ever by a considerable amount. That’s one of the difficulties in maintaining growth at this scale.
In my opinion, a 6% beat wouldn’t qualify as an expectation but rather an upside surprise. Management’s guiding history just doesn’t support it. I would guess the market feels similarly. I also think we’d see a decent rise with a 6% beat since it would likely lead to a higher than expected guide as well (I’m looking for something around $410M).
I hope you’re right.
It's a story that ARR is decelerating at an average rate of ~1% per quarter for the past seven quarters as revenue grows.
ARR Seq Add % growth
Q121 85.6 14.3%
Q221 104.5 15.2%
Q321 116.8 14.8%
Q421 142.6 15.7%
Q122 140 13.3%
Q222 150.6 12.7%
Q322 159.4 11.9% *assumes $1,500 ARR
I have to dispute that statement. It’s not decelerating by 1% per quarter for 7 quarters. Based on the numbers you gave, it was highest (during the past 7 quarters) at 15.7%. It’s lowest was 11.9%. That is NOT a 7% swing. Some quarters are showing a decline of 1%, but most are not.
I know that’s pedantic, but your statement is implying performance that is worse than reality. From Q121 to Q322, there was a decline of only 2.4%. That’s an average of a bit over .34% per quarter.
Over the past four quarters, it has declined 3.8%, which is closer to your assertion. Which also tells us that it matters what time period you look at. But, yes, it is slowly declining.
1poorguy (long CRWD; bought a year ago, has neither trimmed nor added since then)
1poorguy - Thanks for pointing that out, I took an average of the difference between quarters over that period of time (Q121-Q322), which accounts for the -5.4% that occurred in Q121 from Q420. And you are right, I allowed the average to paint a picture worse than reality and it was not a good way to represent that.
It probably would have been better to just state as you said that ARR sequential add is in a very slow decline that is showing short term signs of improvement, because that statement itself was not critical to the post and should have been omitted.
The whole point was to show that ARR is healthy and $1,500 is reasonable to assume.