I thought I’d give my prior beliefs about Crowdstrike’s quarter which as you all know will be reported this Tuesday. That way when the numbers are given you’ll probably know my reaction as soon as I do.
Prior Belief: Revenue will come in at ~340m (up 71% YoY and 12% sequentially), or higher. Obviously I’m hoping higher, but they’ve never added more dollars to revenue sequentially in a Q2 than a Q1…although if they were ever going to break that trend, now would be the time (with the crazy demand surge for cybersecurity in general.)
Prior Belief: ARR will come in above 1360m, or higher. This would be a slightly higher sequential increase than last quarter, but Q1 has been slower than Q2 more often than not, and again, demand seems especially high right now.
Prior Belief: I believe they will add more than 1600 new customers. That’s adding 14% sequentially which is an astounding pace, and would be the most they’ve ever added in a quarter. Incredibly, percentage-wise it would also be the lowest rate they’ve ever hit sequentially (by a percent or so). I think 1600 reflects the idea that customers are still absolutely flocking to them, but takes into account the law of large numbers and the fact that they simply have so many customers already.
Those are the big ones, especially customers. Though if they come in at 335m revenue and 1500 new customers, I probably won’t sell or panic. I might trim, I might not. The important thing is that I’ll have to update my beliefs (namely the demand tailwinds I referenced a couple times). Then I’ll have to decide what to do about it.
Not so big ones:
Prior Belief: NRR will stay at “120%+”
Prior Belief: FCF will be strongly positive, though Q2 is seasonally lower than Q1
Prior Belief: Gross Margin will be above 75%
Prior Belief: More customers will use multiple modules (in Q1 it was 64% using 4+, 50% using 5+, and 27% using 6+)
Prior Belief: positive non-GAAP EPS (it was 0.03 last year in the covid quarter so I’ll just say close to if not double digits)
I’d be less concerned if these don’t hit as long as there is a good explanation…but again, this is what I’m expecting.
Looking forward to Tuesday PM!
Bear