CRWD 4th Quarter Results

Investment Analysis Clubs Saul’s Investing Discussions
1

Fourth Quarter Fiscal 2021 Financial Highlights

-Revenue: Total revenue was $264.9 million, a 74% increase, compared to $152.1 million in the fourth quarter of fiscal 2020. Subscription revenue was $244.7 million, a 77% increase, compared to $138.5 million in the fourth quarter of fiscal 2020.

-Annual Recurring Revenue (ARR) increased 75% year-over-year and grew to $1.05 billion as of January 31, 2021, of which $142.7 million was net new ARR added in the quarter.
Subscription Gross Margin: GAAP subscription gross margin was 78%, compared to 75% in the fourth quarter of fiscal 2020. Non-GAAP subscription gross margin was 80%, compared to 77% in the fourth quarter of fiscal 2020.

-Income/Loss from Operations: GAAP loss from operations was $15.8 million, compared to $31.1 million in the fourth quarter of fiscal 2020. Non-GAAP income from operations was $34.4 million, compared to a loss of $6.7 million in the fourth quarter of fiscal 2020.

-Net Income/Loss: GAAP net loss was $19.0 million, compared to $28.4 million in the fourth quarter of fiscal 2020. GAAP net loss per share, basic and diluted, was $0.09, compared to $0.14 in the fourth quarter of fiscal 2020. Non-GAAP net income was $31.6 million, compared to a loss of $3.9 million in the fourth quarter of fiscal 2020. Non-GAAP net income per share, diluted, was $0.13, compared to a loss of $0.02 in the fourth quarter of fiscal 2020.

-Cash Flow: Net cash generated from operations was $114.5 million, compared to $66.1 million in the fourth quarter of fiscal 2020. Free cash flow was $97.4 million, compared to $50.7 million in the fourth quarter of fiscal 2020.

-Cash and Cash Equivalents was $1.92 billion as of January 31, 2021.

Full Year Fiscal 2021 Financial Highlights

-Revenue: Total revenue was $874.4 million, an 82% increase, compared to $481.4 million in fiscal 2020. Subscription revenue was $804.7 million, an 84% increase, compared to $436.3 million in fiscal 2020.
Subscription Gross Margin: GAAP subscription gross margin was 77%, compared to 74% in fiscal 2020. Non-GAAP subscription gross margin was 79%, compared to 75% in fiscal 2020.
Income/Loss from Operations: GAAP loss from operations was $92.5 million, compared to $146.1 million in fiscal 2020. Non-GAAP income from operations was $62.4 million, compared to a loss of $65.6 million in fiscal 2020.

-Net Income/Loss: GAAP net loss was $92.6 million, compared to $141.8 million in fiscal 2020. GAAP net loss per share, basic and diluted, was $0.43, compared to $0.96 in fiscal 2020. Non-GAAP net income was $62.6 million, compared to a loss of $62.6 million in fiscal 2020. Non-GAAP net income per share, diluted, was $0.27, compared to a loss of $0.42 in fiscal 2020.

-Cash Flow: Net cash generated from operations was $356.6 million, compared to $99.9 million in fiscal 2020. Free cash flow was $292.9 million, compared to $12.5 million in fiscal 2020.
Recent Highlights

-Added 1,480 net new subscription customers in the quarter for a total of 9,896 subscription customers as of January 31, 2021, representing 82% growth year-over-year.

-CrowdStrike’s subscription customers that have adopted four or more modules, five or more modules and six or more modules increased to 63%, 47%, and 24%, respectively, as of January 31, 2021.
Acquired Humio, a leading provider of high-performance cloud log management and observability technology.

-Completed the issuance of $750 million in senior unsecured notes due 2029 with a coupon rate of 3.000% per year. Additionally, CrowdStrike expanded its revolving credit facility to $750 million, which remains undrawn.

Expanded Cloud Security Posture Management and Cloud Workload Protection capabilities to deliver greater control, visibility and security for cloud workloads and cloud-native applications from build to runtime.
Integrated CrowdStrike Falcon’s threat intelligence feeds with AWS Network Firewall, a managed service that makes it easy to deploy essential network protections across a customer’s Amazon Virtual Private Clouds.

-Received a perfect score on the Human Rights Campaign 2021 Corporate Equality Index, demonstrating CrowdStrike’s commitment to a supportive and inclusive culture for all employees.

-Released the annual CrowdStrike Services Cyber Front Lines Report and the annual Global Threat Report, revealing critical insights and takeaways, including an observed 4x increase in the number of hands-on-keyboard attacks uncovered by the OverWatch team in the last two years.

-Supported our community through the CrowdStrike Foundation by expanding the NextGen Scholarship program for university students in cybersecurity degree programs, partnering with the Thurgood Marshall College Fund on HBCU student scholarships, supporting Black Girls Code, NAACP Empowerment Programs and the Northside Achievement Zone. The CrowdStrike Foundation also directed grants to more than twenty nonprofits helping communities across the globe fighting the COVID-19 pandemic.
Financial Outlook

CrowdStrike is providing the following guidance for the first quarter of fiscal 2022 (ending April 30, 2021) and guidance for fiscal year 2022 (ending January 31, 2022):

Q1 FY22 Guidance

Total revenue $287.8 - $292.1 million
Non-GAAP income from operations $18.5 - $21.7 million
Non-GAAP net income $10.8 - $13.9 million
Non-GAAP net income per share, diluted $0.05 - $0.06

Full Year FY22 Guidance

Total revenue $1,310.4 - $1,320.7 million
Non-GAAP income from operations $94.8 - $102.5 million
Non-GAAP net income $63.8 - $71.4 million
Non-GAAP net income per share, diluted $0.27 - $0.30

Full Press Release:
https://ir.crowdstrike.com/news-releases/news-release-detail…

28 Likes
2

Here is a link to the investor presentation that goes along with the results press release.

https://ir.crowdstrike.com/static-files/547e5c92-3594-4eef-9…

Lee

7 Likes
3

Acquired Humio, a leading provider of high-performance cloud log management and observability technology.

I think Humio competes with Data Dog as a log analysis tool vendor, but were less well known. Perhaps this is more to facilitate their own log analysis as opposed to going after Data Dog’s business.

2 Likes
4

The growth in FCF in the past year is quite remarkable. I don’t think I have ever seen a company growing revenues at this scape and still able to produce a 30% FCF margin (besides ZM this past yr).

Long CRWD
Bnh

20 Likes
5

(Just a comment first. I think it is best to just link to the investor relations source rather than copy and paste information unless there is some commentary to add. This cuts down on having to double-read)

Here is my look at the numbers to see QoQ and guidance in that context:


CRWD										
										
	_**GUIDE**_	**Jan-21**	Oct-20	Jul-20	Apr-20	Jan-20	Oct-19	Jul-19	Apr-19	Jan-31-19
Revenue	*292.1*	**264.9**	232.5	199	178.1	152.1	125.1	108.1	96.1	80.5
YoY	*64.0%*	**74.2%**	85.9%	84.1%	85.3%	77.9%	84.9%	95.7%	103.1%	107.80%
QoQ	*10.3%*	**13.9%**	16.8%	11.7%	17.1%	21.6%	15.7%	12.5%	19.4%	21.2%
QoQ$	*27.2*	**32.4**	33.5	20.9	26	27	17	12	15.6	
										
	<i>__GUESS*__</i>	**Jan-21**	Oct-20	Jul-20	Apr-20					
Revenue	*300*	**264.9**	232.5	199	178.1					
YoY	*68.4%*	**74.2%**	85.9%	84.1%	85.3%					
QoQ	*13.3%*	**13.9%**	16.8%	11.7%	17.1%					
QoQ$	*35.1*	**32.4**	33.5	20.9	26

* “GUESS” is a reasonable beat based on a blend of guidance and past QoQ/QoQ$. Also it looks like historically the current quarter is a seasonal high, so a slight drop in QoQ for next seems right, though perhaps it makes this guess aggressive too.

I wonder if the market will look at the seasonal highs and wonder why the current quarter wasn’t a big spike. Guidance is conservative but not overly so. In the extreme short term I am only a curious spectator anyway. Just musing aloud. A slight deceleration but they are growing so I think this is to be expected.

The quarter looks amazing across the board. At a glance I’m very happy:

  • Subscription revenue actually up 77% versus total at 74%. Most of the revenue is subscription now so this will just help that much more.
  • ARR up 75% YoY to $1.05 billion
  • GM hit 80%!!
  • FCF $97.4 million vs $50.7 million!! ← a double!
  • 82% customer growth YoY!
  • Income $31.6 million vs a LOSS of $3.9 million
  • Observed 4x increase in the number of hands-on-keyboard attacks uncovered by the OverWatch team in the last two years.
64 Likes
6

The only thing that I can’t fully understand is why every metric is great and still revenue growth is below 80% for the first time. I think the answer lies in the Q4 2019 - Q4 2020 customer growth, which led to a Q4 2019 revenue growth of 22% QoQ as shown above by Rafe, and makes for a tough comp.


Cust	Q1	Q2	Q3	Q4
2019				2515
2020	3059	3789	4561	5431
2021	6261	7230	8416	9896

QoQ				
2020	22%	24%	20%	19%
2021	15%	15%	16%	18%

YoY				
2020				**116%**
2021	105%	91%	85%	**82%**

So it seems a bit of a spike in Q4 last year, making for a tough comp leading to the YoY revenue growth deceleration.

As pointed out above all of the other numbers are fantastic.

Wonder if anyone has a view at this stage on whether it is just tough comp or some other factor?

16 Likes
7

I guess CRWD noted the post by Broadway Dan recently:

BD wrote "I notice that…

I am seeing Sentinel One mentioned more often in articles on cyber security/CRWD.

CEO George Kurtz is well aware of them, the two companies are trading barbs - and CrowdStrike even has a page dedicated to detailing why they are the superior offering…"

Me here----They mentioned Sentinel One and the customer they took from them as a significant win. Also said their products are not as scalable or as comprehensive----

BD wrote- "I’m sorry I don’t have too much time to document all I’d like here but I had read an article where the Sentinel One COO or CFO claim they were winning more business from CrowdStrike lately.

Sentinel One’s CEO is Israeli and forgive the absurdly generalist take but these guys are warriors and it seems he’s rallied top guys from Cylance - who was once CrowdStrike’s toughest competitor, as the company was formed by Kurtz’s ex-best friend."

Me here—They also mentioned the new Israeli customer as a big win. I hope this call and quarterly results made you feel better.—

Have not figured out this formatting thing yet. Tried pasting to and from Word not success.

8 Likes
8

It’s hard to see any “shortfalls” as much more than the law of large numbers for both customer adds and revenue.


Subscription Customers							% YoY							% QoQ					
	Q1	Q2	Q3	Q4	YR			Q1	Q2	Q3	Q4	YR			Q1	Q2	Q3	Q4	YR
2018				1,242			2018							2018					
2019	1,491	1,800	2,147	2,516			2019				102.6%			2019	20.0%	20.7%	19.3%	17.2%	
2020	3,059	3,789	4,561	5,431			2020	105.2%	110.5%	112.4%	115.9%			2020	21.6%	23.9%	20.4%	19.1%	
2021	6,261	7,230	8,416	9,896			2021	104.7%	90.8%	84.5%	82.2%			2021	15.3%	15.5%	16.4%	17.6%

Since that 2020 high of 870 net customers in Q4, they’ve added 830, 969, 1186 and accelerated to this Q’s record 1480.

I’ve been trying to nitpick for about 15 minutes now, and the only thing I can come up with is I thought a little more of the SolarWinds fallout might hit this quarter. That doesn’t seem to be much of a worry either though as the $28M raw revenue add to get Q1’s top end is the biggest ever.

I haven’t done anything with the call yet, but at this point I can’t see this as anything other than yet another awesome quarter for CRWD.

45 Likes
9

Just listened to the call, and the biggest takeaways for me, apart from a generally excellent quarter are:

  1. Customers worried about Microsoft as single vendor - looking for security outside.
  2. Humio acquisition - is pushing CRWD outside of security into log management, and eventually observability spaces. These companies (CRWD, DDOG, ESTC …) are all very quickly moving across all of those spaces.
  3. Also looking very strongly into Identity (with Preempt acquisition). Stated that no large customer conversations happen without Identity conversation, ie, moving into Okta space.

So… is it easier to move from Security to Logs to Observability (CRWD), or move from Logs to Observability to Security (DDOG, ESTC etc)?

As far as I know, Okta isn’t doing to much in the Threat Protection space, so potentially are vulnerable to CRWD who just go: Can’t do Security without Identity, we’ll do it all.

But looks like an excellent quarter, massive FCF and financial resources, and heading strongly into adjacent markets.

cheers
Greg

25 Likes
10

Adding to Rafe’s comments…

Crowdstrike has beaten their top line revenue guidance by an average of ~6% per quarter for the past two years. If you put that into context for their top line Q1 guide of $292.1 million, that gives them ~$310 million. That would keep them at 74% YoY growth, the same growth % from this quarter.

Here’s how the numbers look since Q119 (calendar year):


+---------------------------+---------+---------+---------+---------+---------+---------+---------+-----------+
|                           | Q119    | Q219    | Q319    | Q419    | Q120    | Q220    | Q320    | Q420      |
+---------------------------+---------+---------+---------+---------+---------+---------+---------+-----------+
| Rev (in millions)         | $96.10  | $108.10 | $125.10 | $152.10 | $178.10 | $199.00 | $232.50 | $264.90   |
+---------------------------+---------+---------+---------+---------+---------+---------+---------+-----------+
| ARR (in millions)         | $364.60 | $423.80 | $501.70 | $600.50 | $686.10 | $790.60 | $907.40 | $1,050.00 |
+---------------------------+---------+---------+---------+---------+---------+---------+---------+-----------+
| New New ARR (in millions) |         | $59.20  | $77.90  | $98.70  | $85.70  | $104.50 | $116.80 | $143.00   |
+---------------------------+---------+---------+---------+---------+---------+---------+---------+-----------+
|                           |         |         |         |         |         |         |         |           |
+---------------------------+---------+---------+---------+---------+---------+---------+---------+-----------+
| Rev Growth (YoY)          |         |         |         |         | 85.33%  | 84.09%  | 85.85%  | 74.16%    |
+---------------------------+---------+---------+---------+---------+---------+---------+---------+-----------+
| Rev Growth (QoQ)          |         | 12%     | 16%     | 22%     | 17%     | 12%     | 17%     | 14%       |
+---------------------------+---------+---------+---------+---------+---------+---------+---------+-----------+
| ARR (YoY)                 |         |         |         |         | 88.18%  | 86.55%  | 80.87%  | 74.85%    |
+---------------------------+---------+---------+---------+---------+---------+---------+---------+-----------+
| ARR (QoQ)                 |         | 16%     | 18%     | 20%     | 14%     | 15%     | 15%     | 16%       |
+---------------------------+---------+---------+---------+---------+---------+---------+---------+-----------+
| Net New ARR (YoY)         |         |         |         |         |         | 76.52%  | 49.94%  | 44.88%    |
+---------------------------+---------+---------+---------+---------+---------+---------+---------+-----------+
| Net New ARR (QoQ)         |         |         | 32%     | 27%     | -13%    | 22%     | 12%     | 22%       |
+---------------------------+---------+---------+---------+---------+---------+---------+---------+-----------+

And look at these impressive Operating Margin numbers. It’s pretty astounding. This is nearly 6 straight quarters of increased operating leverage (sans Q220), and it’s not like these are minor improvements. Subscription Gross Margins hitting their long term target of 80% on an adjusted basis. Subscription is up to 92% of total revenues!


+------------------------------------+------+------+------+------+------+------+------+------+
|                                    | Q119 | Q219 | Q319 | Q419 | Q120 | Q220 | Q320 | Q420 |
+------------------------------------+------+------+------+------+------+------+------+------+
| Total CoR                          | 30%  | 29%  | 30%  | 29%  | 26%  | 27%  | 26%  | 25%  |
+------------------------------------+------+------+------+------+------+------+------+------+
| Research and Development           | 29%  | 29%  | 29%  | 25%  | 23%  | 25%  | 25%  | 25%  |
+------------------------------------+------+------+------+------+------+------+------+------+
| Sales and Marketing                | 59%  | 60%  | 55%  | 50%  | 49%  | 48%  | 45%  | 42%  |
+------------------------------------+------+------+------+------+------+------+------+------+
| General and Administrative         | 12%  | 28%  | 17%  | 17%  | 14%  | 15%  | 14%  | 13%  |
+------------------------------------+------+------+------+------+------+------+------+------+
| Operating Margin (GAAP)            | -27% | -47% | -31% | -20% | -13% | -15% | -10% | -5%  |
+------------------------------------+------+------+------+------+------+------+------+------+
|                                    |      |      |      |      |      |      |      |      |
+------------------------------------+------+------+------+------+------+------+------+------+
| Gross Margin (Subscription) (GAAP) | 72%  | 74%  | 74%  | 74%  | 77%  | 76%  | 77%  | 78%  |
+------------------------------------+------+------+------+------+------+------+------+------+

Others already mentioned the FCF Margin at 37%.

Subscription customers humming along at consistent pace…


+-------------------------------------+-------+-------+-------+-------+-------+-------+-------+-------+
|                                     | Q119  | Q219  | Q319  | Q419  | Q120  | Q220  | Q320  | Q420  |
+-------------------------------------+-------+-------+-------+-------+-------+-------+-------+-------+
| Subscription Customers              | 3,059 | 3,789 | 4,651 | 5,431 | 6,261 | 7,230 | 8,416 | 9,896 |
+-------------------------------------+-------+-------+-------+-------+-------+-------+-------+-------+
| Customer Growth (YoY)(Subscription) |       |       |       |       | 105%  | 91%   | 81%   | 82%   |
+-------------------------------------+-------+-------+-------+-------+-------+-------+-------+-------+
| Customer Growth (QoQ)(Subscription) |       | 24%   | 23%   | 17%   | 15%   | 15%   | 16%   | 18%   |
+-------------------------------------+-------+-------+-------+-------+-------+-------+-------+-------+

Take a look at their PPT presentation. Relative comparisons to our other companies its pretty crazy to see CRWD’s efficiency - https://ir.crowdstrike.com/static-files/547e5c92-3594-4eef-9…

Is there a complaint about this quarter from anyone here? I’d be curious to hear if so. I can’t find a kink in the amour this far, unless you were expecting 80% growth forever, but with law of large numbers that’s really not possible and their guidance is pretty strong given the year they just had.

Hard pressed to find a more performant high growth company across the board at this point and in recent memory.

-Chris Long CRWD ~35%

58 Likes
11

Another awesome report from CRWD. I was concerned yesterday that CRWD would need to knock ER and guidance out of the park in order to avoid being judged harshly by this current market, but CRWD does not disappoint again. The only lingering question I have is whether the 3% rate contracted on the debt is on the high side in this environment of cheap corporate borrowing?

1 Like
12

GUIDE Jan-21 Oct-20 Jul-20 Apr-20 Jan-20 Oct-19 Jul-19 Apr-19 Jan-31-19
Revenue 292.1 264.9 232.5 199 178.1 152.1 125.1 108.1 96.1 80.5
YoY 64.0% 74.2% 85.9% 84

Rafe

Just an observation. Rev of $292M looks to me like an increase of 92% over Apr -20 revenue.

draj

3 Likes
13

“Rev of $292M looks to me like an increase of 92% over Apr -20 revenue.”

I think i did it right…?


    (292.1/178.1) - 1 = 0.640 = **64.0%**

Checking it in reverse by growing the original number by 64% to see if it gets us to the new number:


    178.1 * (0.640 + 1) = **292.084**

Using 92% growth:


    178.1 * 1.92 = **341.952**

As a “sanity-check”, 100% growth with this equation IS a double (it is literally x2):


    __178.1 * 2__ = 356.200

There is another equation to do percentage of increase but it results in the same answer. This one has us get “change” and then figure out percent. Handy if you already have a “change” variable I guess:


    (292.1 - 178.1) / 178.1 = 0.640 = **64.0%**
4 Likes
14

I think i did it right…?

(292.1/178.1) - 1 = 0.640 = 64.0%

You absolutely did do it right. I mistakenly shifted the numbers by a quarter and read 152 instead of 178.

Sorry,

draj

15

RafesUserName: is your Jan’20 YOY growth correct? My sheet shows 88.9%.

1 Like