CrowdStrike Q125

Good stuff from team CrowdStrike. They remain one of the few SaaS companies guiding over 30% growth. (SentinelOne is there too, and Monday and Klaviyo are close.)

  • Sub revenue accelerating, +9.6% seq vs +8.8% last yr
  • RPO accelerating, +41.8% YoY vs +40.8% last yr
  • Current RPO growing slightly faster than top line
  • Weak +4.4% seq guide for Q2 (but is always seasonally weakest)
  • FY guide raised +$21.7M to +31.3%
  • ARR +$212M, TTM +$913M to now $3.65B
  • Rule of 68
Revenue $921.0M +33% (vs +32.6% last Q)
Sub Rev $872.2M +34% (vs +33.0% last Q)
ARR $3.65B +33%
Net new ARR +$211.7M +22%

RPO $4.7B +41.8%
Current RPO $2.82B +35.0%

Op margin 21.6% +5pp
FCF margin 35.0% +2pp
Cash 3.7B

They are really leaning on Microsoft’s drubbing by CISA and State Dept for its massive security lapses that lead to a massive email breach by China state actors on government agencies. They recently created a new Falcon for Defender to allow Falcon to sit over MS365’s bundled XDR (Defender).

Also really leaning on the big shifts going on in SIEM world, with Cisco’s acquisition of Splunk, as well as Palo Alto buying IBM QRadar, and Exabeam merging with Thoma Bravo’s LogRhythm. Their latest release (“Raptor”) has their next-gen SIEM directly embedded in the Falcon platform, and all customers now have available. To spur interest they just announced customers can ingest 10GB of 3rd party data daily for free.

Wins highlighted huge deals with displacements from SIEM (Splunk), Falcon for IT (Tanium), an MSSP doing a huge EDR shift for 100s of custs over 500K devices (Broadcom/Vmware’s Carbon Black), and a large displacement thanks to Identity on 100K devices (Broadcom, probably Symantec). They were also gushing about the new Flex pricing system (like cloud commits in hyperscalers) and how it spurs module adoption for large customers w/o wasting time on a procurement cycle.

Other fun facts:

  • deals with 8+ modules grew +95%
  • deals with cloud, identity, or SIEM grew over +100%
  • SOAR automation module used by 47% of top 5k custs
  • CNAPP now used by 62 of Fortune 100
  • AWS came out as their major hyperscaler cust, as I covered before
  • new DLP has 100s of custs after one Q
  • new Falcon for IT has 8 fig pipeline after one Q
  • new Charlotte AI has 90% win rate after demoing in Proof of Value tests

They increased hiring, growing +15%, to front-load staff and allow them to ramp by 2H.

Expect FCF to drop -7pp next Q from seasonality. And expect net new ARR ~+13% YoY (say +$221M), implying ARR +32% or +6% seq.

Side note - I am miffed at CFO & IR for dropping customer counts and NRR KPIs! These used to be given at their April IR event, but per IR, that event was dropped this year to solely have their Fal.con IR event in Sept. Unfortunately, they missed adding customer KPIs to that IR day, so we no longer have any cust counts or their ARR contrib any more. (See slides 67-81 from last April IR day, which are missing from Falcon IR day.)

-muji

87 Likes

Totally agree with your assessment of Crowdstrike Muji and some nice additional points of interest you make, thank you. Also interesting to note for those of us who rate and hold both Crowdstrike and Zscaler, this is the first quarter I can remember that Crowdstrike’s revenue growth rate has come in above Zscaler. Usually it trails Zscaler by a few percentage points each quarter.

Samsara (if considered SaaS) also guided above 30% growth for the coming quarter and also whole year on an adjusted revenue basis (LFL) and 29% on unadjusted (13 weeks vs 14 weeks compare in Q4). Zscaler might come in above 30% but their guide was high 20s% so almost there too.

Ant

31 Likes

Reemphasizing this point because there’s so much focus around declining SaaS revenue growth and speculations on where the bottom might be.

We’ve seen three consecutive quarters of accelerating subscription revenue growth:

  • Q2 '23: 6.0% Q/Q → 6.3% → 8.5% → 9.6% for Q1’24

That 9.6% is the highest quarterly subscription revenue growth we’ve seen in the past seven quarters. It might be tough to beat in the upcoming quarter, but no other major SaaS company I know of has shown a similar turnaround in sequential revenue growth.

Long $CRWD 15.4% (Top Holding)

39 Likes

With today’s announcement that CRWD will enter the S&P 500, the stock is now up 680% (almost 8x) from my initial purchase price in March 2020. This is all thanks to Saul. Eternally grateful to him and the board members here for introducing us to a few tremendous multi-baggers during those early years of SaaS.

42 Likes

Well all that reminiscing made me dredge up a blast from the past… my 2 part writeup of CrowdStrike at IPO!

You’ve come a long way, baby!

40 Likes