Crowdstrike Reports strong Q4 FY23 results

Strong Q4 results from CrowdStrike.
Fourth quarter highlights

  • Record net new ARR of $222 million
  • Ending ARR grows 48% year-over-year to reach $2.56 billion
  • Record cash flow from operations of $273 million and record free cash flow of $209 million

“CrowdStrike delivered a record fourth quarter that exceeded our expectations across the board,” said George Kurtz, CrowdStrike’s president, chief executive officer and co-founder. “Highlights of the quarter included record net new ARR of $222 million, record net new subscription customers of 1,873, record operating and free cash flow and a rule of 81 on a free cash flow basis. "

FY24 Financial Guidance
FY 24 guide better than I expected with the company expected to hit $3bn in revenue for January 2024. A guide of 34%+ YoY with FCF expected to stay strong at 30% , I am projection $1bn in FCF for the coming year.
Applying a 40 x FCF multiple I expect this to be at least a $40bn in Enterprise Value company by year-end (current EV is circa $28bn)
Projecting conservatively forward 3 years and $1.5bn in FCF we can expect a EV of $60bn so see a reasonable chance of a double from current prices in a few years.
Overall, a very strong earnings report and guidance allaying the fears of the sudden drop in net new ARR that many feared.
Long CRWD and looking to add more on any non-sense dips that the market may give!


NB - edited based on CC transcript run through…

OK - seems a pretty strong quarter. Overall I liked all the numbers, especially: ARR, new ARR, new product line additions/penetration, customer additions, performance in enterprise customer cohort, competitive market share performance (particularly vs Microsoft), non GAAP Op Inc and earnings; with only a few exceptions.

Exceptions being:

  1. Net retention drop - (sequential but still high for Q4)
  2. Pull back in Gross Margin - (explained by legacy Humio integration and will revert upwards. Subscription GM is higher at 82%)
  3. Negative progress on GAAP measures - (I get that it’s negative for a company at this stage in its life cycle but still expect it to be trending in the right direction)
  4. Forward guidance growth rate of only 34% - (38% for coming Q1 and 32-34% for full year)

It’s difficult to compare with ZS as they have different FY reporting periods and Crowdstrike are forecasting 34% for a full year ahead whilst ZS forecasted FY growth of 40% next quarter and 43% full full year which is only 2 quarters forwards and could slow further over a 4 quarter forecast period in line with Crowdstrike perhaps.



I respectfully disagree with your perception of a poor guidance. Let’s compare their guidance with some of our other darlings:

  • Datadog: Guided for 24% after growing at 63% → 24/63 = 38% endurance
  • Monday: Guided for 34% after growing at 68% → 34/68 = 50% endurance
  • Snowflake (product): Guided for 40% after growing at 70% → 40/70 = 57% endurance
  • Crowdstrike: Guided for 35% after growing at 54% → 35/54 = 65% endurance
  • Cloudflare: Guided for 38% after growing at 49% → 38/49 = 77% endurance (note that Crowdstrike is at >2x the scale)



@rmtzp you have this spot on, I was happy with that guidance in relation to the other ex hyper Saas players. If you factor in their scale, cashflow etc, its quite a compelling buy in my view.


Good point RMTZP on endurance basis it compares well but on a quantum basis I have to say I’m not stoked by 34%. I feel that Datadog and Snowflake have reasons for their guidance given they operate more of a consumption business model temporarily affected by workload optimisation and consumption suspension and Bill is affected by underlying transactions and float but Crowdstrike is pure and simple SaaS in mission critical cyber security and wouldn’t necessarily expect their growth rates to “recover” once “consumption” turns back on.


It looks like it’s a compelling buy, at least from a valuation perspective.

Here is a table showing the end of quarter share prices, market cap with YoY changes, Revenues with YoY changes, the valuation multiples and the YoY & QoQ valuation compression:

The multiple has seen some significant compression over the last year or so.

Here are the same data using TTM FCF instead of TTM Revenues:

Perhaps it’s time to pay a bit more attention to valuing Crowdstrike in terms of its multiple on FCF. Their FCF has been at least 30% of Revenues in 9 of the last 12 quarters, falling below this figure every 2nd fiscal quarter.

Unfortunately, I haven’t calculated these numbers yet for my other holdings. So I cannot compare the numbers like in RMTZP’s post.

Regardless, given the fact that management sees an ARR of $5 billion by the end of FY 2026 (double from here), the valuation looks pretty compelling for those of us that don’t mind sticking around for a while.



Since I just shared my thoughts on SentinelOne here, it seems appropriate to also share my thoughts on CrowdStrike’s Q4:

Revenue & Guidance

  • Revenue was $637.4M, 47.9% YoY, 9.7% QoQ → Revenue exceeded my expectation of $634.48M and accelerated on a QoQ basis, pleasing me.

  • Net New ARR was $221.67M (totaling ARR of $2,560M), 2.2% YoY, 11.9% QoQ → Surprised by the sequential increase since management guided for up to -10%.

  • Remaining performance obligations were $3,368.49M, up 20.4% sequentially. → A record high in adding net new RPO of $570.73M since they exist. Though Q4 is seasonally strong and easy comps vs Q3, great to see customers commit future spending.

  • They guided to $678.2M, translating to $690M revenue for Q1, suggesting 8.3% quarter-over-quarter and 41.4% year-over-year growth if they keep beating their guide by 1.7%. To return to pre-macro sequential growth, they must beat it by ~6%, unlikely.

  • FY2024 revenue guide was $3,014.8M, up 34.5% year over year, or 37.2% ($3,075M) if they beat their conservative guide assuming headwinds continue until year-end. Still, I expect up to 40% YoY at FY2024’s end due to fading macro effects. This requires Q1: $690M (8.3% QoQ) → Q2: $745M (8.0% QoQ) → Q3: $810M (8.7% QoQ) → Q4: $885M (9.3% QoQ). Optimistic but realistic, and first FY guides are usually most conservative.

  • FY2024 net income guide is $580.7M, up from $368.44M in FY2023. → No issue.

  • Reiterated vision to grow ARR to $5 billion by FY2026 end and reach target operating model within FY2025.

  • Revenue growth in U.S. at 44% and international at 57% year-over-year.

Cash Flow & Profitability

  • Subscription gross margin declined to 77% due to investments in data centers and acquiring Humio. Though still within their target range, they expect it to recover to 78% next quarter.

  • Operating income was $59.6M (15% of revenue), down from $80.39M last year.

  • Net income was $111.6M (17.5% of revenue), up from $70.4M.

  • Earnings per share were $0.47, up from $0.30.

  • Operating cash flow was $273.3M (42.9% of revenue), up from $159.72M. Nearly half of the revenue generated cash flow, indicating financial strength.

  • Free cash flow was $209.5M (32.9% of revenue), up from $127.33M.

  • R&D expense was $137.48M (21.6% of revenue). They continue investing substantially in R&D.

  • S&M expense was $203.07M (31.9% of revenue) but declining relative to revenue. Spending appears healthy but trending lower.

  • G&A expense was $44.64M (7% of revenue), consistent with previous trends.


  • Added 1,873 subscription customers, reaching 23,019, up 41% year over year and 8.9% from last quarter → an acceleration from last quarter, though inflated by small “Falcon Go” customers, which they don’t specify. Falcon Go costs only $300 per year. Still, the raw customer additions hit a record high, even without Falcon Go customers.

  • Added 1,000 Falcon Go customers in the past 6 months. Falcon Go is Crowdstrike’s e-commerce offering, which anyone can buy for $300 on their website. Great to see traction for this group. I’d like to see this excluded from the total subscription customers going forward.

  • Dollar-based Net Retention Rate was 125.3%, down from 127.6% last quarter but up from 124% a year ago.

  • Customers using 5+ modules was 62%, up from 61% last quarter, 6+ modules was 39%, up from 37%, 7+ modules was 22%, unchanged from last quarter → Crowdstrike continues adding value to customers, leading them to buy more. The smaller Falcon Go customers are excluded from the module adoption metrics.

  • ACV per customer was $25,990, up from $24,840 a year ago. → Smaller Falcon Go customers don’t seem to negatively impact this metric.

  • Ending ARR for the $1 million-plus cohort grew 57% year over year. They now have over 400 subscription customers with ending ARR over $1 million using an average of 10 modules.

  • Gross retention rate remained strong at 98.0%.

  • CrowdStrike now serves over 25% of the Global 2000, over 50% of the Fortune 500, and 75% of the top 20 U.S. banks.

  • Crowdstrike is moving from reporting new logo metric numbers quarterly to annually.

    • Quarterly fluctuations do not appropriately reflect the health of the growing business.
    • Additional details will be provided in the April 4th investor webinar.
    • The number of smaller end customers served through partners (MSSPs) is estimated to exceed 18,000.
    • Downmarket bundles are also contributing to the overall business health.

Competition & Go-To-Market

  • Customers prefer CrowdStrike for its broad platform, simplicity, and lower cost over Microsoft Defender. Deploying Defender requires more effort, leaves security gaps, and costs twice as much.
  • Gartner again named CrowdStrike a leader in endpoint protection.
  • To drive growth, CrowdStrike appointed Daniel Bernard Chief Business Officer to lead partnerships and channels. He has a proven track record of success at other cybersecurity companies like SentinelOne.
  • Claimed to remain in a strong competitive position and average selling prices remain steady.

Pipeline & Channels

  • In fiscal year 2023, managed security service provider (MSSP) annual recurring revenue (ARR) grew over 100% and partner-sourced ARR grew over 50% year over year. Revenue through channel partners reached 83% of total revenue.

  • Despite longer sales cycles and lack of typical budget increases, they achieved a record pipeline in Q1 as organizations continue navigating macroeconomic concerns.

  • The Dell partnership will include:

    • Placing software on Dell computers for customer purchase
    • Dell selling subscriptions to large and small customers, including a small and medium-sized business (SMB) bundle and device-as-a-service offering
    • Driving Dell’s managed endpoint security service


  • Emerging cybersecurity products contributed $182M in new revenue, 22% of total new revenue and up 97%. Emerging products revenue grew 116% to $339M, exceeding CrowdStrike’s 2019 IPO revenue. Identity Protection products contributed over $100M in revenue and 1,000+ new customers. LogScale revenue grew over 200%.
  • CrowdStrike’s Falcon Go bundle for small businesses with 100 endpoints or less added 1,000+ new customers in under 2 quarters.


  • In FY23, Crowdstrike expanded the team by 46% to over 7,000 people.
  • Shares outstanding increased by 4.3% in FY2022, 2.6% in FY2023 they expect an increase of 4.3% in FY2024. Considering the company’s performance I am fine with the dilution due to stock-based compensation.

My Take

I liked:

  • The upbeat and confident tone of the call. Several analysts congratulated them on their strong performance.
  • Revenue was $637.4M, up 47.9% year over year, 9.7% quarter over quarter, which exceeded my expectation of $634.48M and accelerated sequentially, so I’m pleased with that.
  • Remaining performance obligations were $3,368.49M, up 20.4% quarter over quarter. Wow!
  • Strong profitability and cash flows, especially the 42.9% operating cash flow margin while still investing in future growth.
  • Healthy customer adds and customer retention metrics. Though, I’ll keep a close eye on customer adds since Crowdstrike now focuses more on the lower end of the market, meaning more small and midsize businesses with lower average contract values.
  • Instead of a 10% quarter over quarter decline in quarterly annualized recurring revenue growth, they delivered an 11.9% quarter over quarter increase!

The problem is the guidance again, driven by budget scrutiny and longer sales cycles.

Last quarter my $1 million question was: Competition or macro? I believe we got the answer.

The new big question: When will this end?

Here is my thesis: Crowdstrike has a seat-based subscription model. I interpret the stabilization of sequential metrics as a slowdown in layoffs, which is good for seat-based subscription model businesses like Crowdstrike, indicating the endpoint market is not saturated and the market has stabilized.

However, this does not mean we should expect further quarter over quarter acceleration, as businesses are not currently hiring more. So, I assume we’ll see minimal beats for another 1 to 2 quarters and possibly acceleration again in Q3.

I believe assuming Q1 revenue of $690M, 8.3% quarter over quarter growth with a 1.7% beat is realistic and “prudent.” I try to make conservative assumptions (and if these sound too conservative, it’s time to trim) - the last thing I want is a negative surprise every quarter.

I also assume Crowdstrike will achieve around 40% revenue year over year (with luck), more would be very optimistic.

I added after-earnings.


I dont think there was an update on their CISA business, was there? I did not see it mentioned in the earnings report. Neither did any analyst ask about it.

I am quite intrigued by what they will do with their $2.7B cash hoard. They are cashflow positive (been so since 2019) and keep adding to the kitty on the balance sheet.


Another interesting point that I realized from analyzing Crowdstrike’s 10-k, is that revenue growth for international customers grew 67%, which represents an acceleration from last year’s growth rate of 64%. Naturally, this caused the revenue proportion of international customers to nudge upwards from 28% to 30%.

It’s highly encouraging to see any sort of growth acceleration in this environment. This traction will become even more important as the market starts getting saturated domestically.

For comparison’s sake, SentinelOne also appears to be growing quite well internationally (125% YoY). However, although we don’t have enough historical data to assess their growth trajectory, I doubt that it is accelerating. Their revenue from Q1’22 to Q4’22 grew 82%; and 72% for Q1-23 to Q4-23. That said, this is certainly not an apples to apples comparison so take it with a grain of salt.

The key point for me is that this can serve as a nice little tailwind from Crowdstrike to maintain growth durability.



“Another interesting point that I realized from analyzing Crowdstrike’s 10-k, is that revenue growth for international customers grew 67%, which represents an acceleration from last year’s growth rate of 64%. Naturally, this caused the revenue proportion of international customers to nudge upwards from 28% to 30%.”

It’s interesting certainly rmtzp. Do we know which region? I had been expecting this and more to show up in the numbers to be honest.

When I was talking to an Interpol cyber security and defence lead in Singapore* a year ago, he shared that cyber attacks and cyber warfare went up 10,000% in the weeks running up to and during the Russian invasion of Ukraine. I’m actually surprised we haven’t seen a whole lot more impact on revenues in Europe and Asia, (there are enough bad actors in Asia too).

*He was also crossing over and supporting Europe from Asia throughout the year.



In the quest to ascertain how much moss is on a particular tree in the forest, be careful to consider the overall picture of the forest… and realize that minute differences in numbers between two periods may be noise and not necessarily trend.

He is no fool who gives what he cannot keep to gain what he cannot lose.


I would agree if we were discussing something like a 1% difference in a quarter’s revenue beat, but I don’t consider this as minute.

First, Crowdstrike’s international growth slowed from 98% in 2020 to 64% in 2021. Reporting 67% for the subsequent year, in my opinion, is enough evidence to signal a reversing trend.

Secondly, we have to consider Crowdstrike’s scale. We’re not talking single-digit millions here. They added $677M in revenue from international customers last year (up from $405M the previous year). So again, being able to stabilize their growth at that scale is a big deal (for me at least).



To reinforce this point, I think I would be 9/10ths as excited if it increased 61%, or 3% slower than last year, instead of 67% (3% faster). The point is that it didn’t decelerate significantly.

no CRWD position, and not feeling too smart about that…


I’ve also been looking at CRWD again in the last days. Although most points have been raised, I thought maybe there is one more to add to the moss on the tree.

The point has been made about last Q’s strong RPO. But I think the story is potentially even stronger if one looks at the trend in qoq RPO growth over the last 4 quarters:

QoQ Q1 Q2 Q3 Q4
2023 4.0% 6.4% 11.6% 20.4%

-There seems to be a strong acceleration there.

Also, cRPO as a % of run-rate (annualised quarterly) revenue has gone to 83% from 76-77% for all other quarters of the past fin year, meaning they have proportionally more revenue in the bag than in all 3 prior quarters. Although there is some seasonality in there, this seems quite bullish to me.

Also no position in CRWD but thinking about changing that.


Here’s a more detailed picture that might be useful to understand the “it” part.

FY 20 FY 21 FY 22 FY 23
US 357 627 1046 1564
EMEA 67 124 200 328
APAC 38 80 143 228
Other 20 43 62 122
EMEA + APAC + Other 125 247 405 678
EMEA + APAC 105 204 343 556
US 76% 67% 49%
EMEA 84% 62% 64%
APAC 113% 78% 60%
Other 117% 45% 95%
EMEA + APAC + Other 98% 64% 67%
EMEA + APAC 94% 68% 62%

The aggregate of EMEA + APAC + “Other” didn’t decelerate. This was driven by stable growth rate in EMEA, counteracted by deceleration in APAC, and made up for by “Other”.

(No position in CRWD)


For even more context on @wsm007’s point, here is CRWD’s historic RPO info:

If nothing else, this quarter’s 20.4% is worth noting in any context.