CRWD Q4 forecast

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.
23 Likes

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.

65 Likes

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.

4 Likes

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

15 Likes

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

31 Likes

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.

36 Likes

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)

8 Likes

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.

1 Like