CRWD Possibly Benefitting from COVID

I’m paraphrasing because the transcript isn’t out yet, but there is positive news here:

Per the CC that I am currently listening to, management is saying that CRWD utilizes zoom to set up remote sales meetings, and that because so many of CRWD’s customers are working from home now, they are easier than ever to get a hold of. Per the conference call, their number of “first business meetings” has increased 13% as a result.

On a separate note (still related to COVID), they did “de-risk” their future guidance estimates due to COVID (which I assume is another word to say that they are being extra conservative in light of current events).

Another analyst asked about small businesses, and how they are disproportionately being hit by COVID, which could possibly cause CRWD to miss out on revenues. CRWD management says they are still seeing an uptick in small business revenues, because small businesses get especially hard hit by ransomware, which CRWD is very capable at protecting against. Management also reiterated that using CRWD enables small businesses to not have to deal with cybersecurity themselves - helping these small businesses to stay running.


I think he said 70% of the company is remote and actually raved about Zoom.

Great CC - intense enthusiasm for the wins they’re racking up. And for Zoom, hard to imagine a better endorsement.


I think it is also important to realize that unlike many companies, CRWD was already skilled in WFH…….while other companies are trying to transition to this environment, CRWD has perfected it.

NO slowing down just getting its operations together…its been together:…


CRWD won another great Q again but some stuff confused me.

CFO Burt Podbere:

Net retention came in at 124% as of the end of FY '20, which compares to 147% in FY '19 and 119% at the end of FY '18. For the interim to FY '20 quarters net retention was 131% in Q3, 133% in Q2 and 142% in Q1. As you may recall in Q4 of FY '19 we had an outsized expansion deal that contributed 11 percentage points to our net retention in that quarter. While we once again expanded within this account in Q4 of FY '20, the impact was smaller than the prior year as we have expected. As George mentioned, we are seeing strong success with our strategy to land bigger with more modules and we are also seeing an acceleration in new logo business which further accelerated in Q4 as the dynamics in the competitive landscape shifted in our favor. We view these two trends as positive developments and very healthy long-term indicators for our business, but they have a natural trade-off on expansions in the near term.

According to this, net retention rate dropped from 131% to 124%. Of course 124% (imply old customers spend less)is still good numbers, but the subscribe revenue grows to +90% yoy. Much better than I thought around +82-84%. Not only beat but even more. Which means new customers contribute more? And the non GAAP margin rate still up 100 base point. What I missed? I thought CRWD improved their margin rate depends on multiple modules selling to old customers. The gross margin rate should drop if new customers adding more than existing customers contribution. Please let me know which parts I got wrong, thanks.


1 Like