Crowdstrike Q3FY21 Analyst Q/A After Earnings Call
12/2/2020 4PM CT
George Kurtz, CEO
Burt Podbure, CFO
Q
Barkley’s – What are you hearing re: Broadcom and are customers exploring other options?
A
Ability to install and get up and running is unparalleled in the industry. It’s yet another accelerator in why people are coming to crowdstrike, plus we have multiple legs to help customers with security.
How sustainable is the services revenue piece of your business.
It results in platform deals and helps as a means of getting people signed-up.
RE: We can infer based on the guidance that there is some seasonality for services sector, especially during holidays.
Q
BOA – Growth is stable at 85-89%, as you look into next year, what do you think the year will look like in 2Q and 3Q FY22? And what do you think will naturally slow down and grow to give you this great guidance?
A
Don’t specifically guide into next FY until next year. In general, looking at cloud offerings and new modules, forensics, horizon and a lot more modules next year. It’s broad-based demand from lots of modules and continued module expansion.
Covid is thought of by CRWD as having been an accelerator, and now seeing a steady stream of acceleration that is going forward.
Q
Key growth drivers gross revenue and gross revenue per customer. Deal size and selling into installed base.
A
See lots of expansion with head growth and new logos. Value sell and increase offerings, deal sizes continue to be larger and larger. Lots of room for expansion of opportunities and offerings.
Q
Are the opportunities in installed base larger than new logos?
A
Looking at module expansion, and ability to sell frictionless, no one area stands out, it’s enterprise all the way to SMB and across all modules. Easy for small companies to adopt CRWD.
Q
Needham -20% of workloads are in the cloud. On-prem, edge and per user footprints –Talk about each as a % of business.
A
CRWD does not specifically disclose this and it’s a HUGE runway ahead of them. It’s still early days and CRWD sees a tremendous amount of opportunity in the cloud.
Is it reasonable to see 20% of revenue in the cloud?
We’ll have to wait and see.
Q
Piper-Sandler –RE: velocity we saw the covid play, reason seeing an inflection point?
A
Really expanding and winning in the market because we’re solving problems across all segments and because the technology is literally transformative. Covid is behind them and CRWD transforms digitally and in the cloud and sees continued energy in their growth as a direct result of these.
Q
When you’re looking at container workloads, on prem servers and cloud native servers…Who are you running into in the cloud as competitors?
A
CRWD has an architecture with a single agent that is seamless across all of these. This is the reason people are choosing Crowdstrike.
Q
UBS –EY distribution partnership. Talk in broad strokes RE: How will this flourish re: revenue growth?
A
Looking throughout how they go to market with EY, they have a good setup to see value and create larger deals for EY and CRWD both.
Q
Seasonality of ARR…Pinpoint what factors provided upside relative to your conservative caution as we’re headed into the back half of the year?
A
Biggest reason they had increased revenue is because CRWD really performed well. What’s changed is they have not seen any movement and very stable re: churn and contraction. Adoption within their base has been significant. This all together adds up to why they had such a fantastic Q3.
CRWD’s solution is really good for constrained budgets.
Q
Oppenheimer & Co.- OKTA, netscope and endpoint. Is this making your life a little easier re: OKTA partnership (he just asked same of OKTA).
A
Customers want interoperability and connectivity. This is an integrated solution that really works. They’ve seen CIO after CIO ask for this combination. Going well, yet it’s still in the early days.
Q
Personal services converting to new subscription revenue. Every initial $ is now turning into $5.
A
Very strategic in terms of cross sell. Actually compensate their teams for this. Something they’re going to continue to focus on and pay their sales teams for.
Q
Davidson – Target Corporation: How long were you working on the deal and how competitive was it?
A
Deal came together quickly. There was a lot of dissatisfaction with their current vendor and how they were being treated. To get a corporation of this size on-boarded and online this quickly is literally unheard of.
Q
Endpoint security is so competitive…Have you seen competitive change from McAfee or is it the same as Symantic?
A
Same for legacy and next gen vendors. When customers go through the testing, there are incompatibility issues. This bodes well for CRWD.
Q
RBC Capital Markets –E&Y partnership. What % of deals are partner led?
A
Majority of deals are going through partners, channel partners. CRWD helps other partners land deals and deals that include the partner’s in-house solution.
Q
OKTA, identity. Your view of where identity begins and ends?
A
CRWD knows the identity of the endpoint and CRWD wants to provide the identity data to their partners such as CRWD. Clients can make better decisions with the combination of OKTA and CRWD.
PS: I missed first question or two due to technical difficulties with my internet connection.
sjo