Crowdstrike (Crwd)
Price $93.93 06/06/2020
Market Cap: 20.019 Billion
P/S of 35.5
FCF Yield .57%
P/E N/A
NON-GAAP EPS of $0.02 beats by $0.08 Revenue of $178.08M (85.35% Y/Y) beats by $12.68M
Overview of Crowdstrike: Taken from 10K (not verbatim)
They founded CrowdStrike in 2011 to reinvent security for the cloud era. When they started the company, cyberattackers had a decided, asymmetric advantage over existing security products. They turned the tables on the adversaries by taking a fundamentally new approach that leverages the network effects of crowdsourced data applied to modern technologies such as AI, cloud computing, and graph databases. Realizing that the nature of cybersecurity problems had changed but the solutions had not, they built their CrowdStrike Falcon platform to detect threats and stop breaches.
They believe they are defining a new category called the Security Cloud, with the power to transform the security industry much the same way the cloud has transformed the CRM, HR, and service management industries. With their Falcon platform, they created the first multi-tenant, cloud native, intelligent security solution capable of protecting workloads across on-premise, virtualized, and cloud-based environments running on a variety of endpoints such as desktops, laptops, servers, virtual machines, and IoT devices. Their Falcon platform is composed of two tightly integrated proprietary technologies: their easily deployed intelligent lightweight agent and their cloud-based, dynamic graph database called Threat Graph. Their solution benefits from crowdsourcing and economies of scale, which they believe enables their AI algorithms to be uniquely effective. They call this cloud-scale AI. They initially provided intelligence and incident response services while they developed their Falcon platform. In June 2013, they first began providing EDR capabilities as a single solution. In February 2017, as they executed on their Falcon platform expansion strategy, they began offering these and additional capabilities as separate cloud modules. This strategic move facilitated new customer adoption and allowed them to further expand within their customer base. Today, they offer 11 cloud modules on their Falcon platform via a SaaS subscription-based model that spans multiple large security markets, including endpoint security, security and IT operations (including vulnerability management), and threat intelligence.
All Numbers are GaaP unless stated:
Current:
June 2nd, 2020 1Q:2021 earnings’ highlights:
** Revenue was $178,078 million up 85% From $96,077 million
** TTM Revenue was $563,414 million or $2.64 per share
** Earnings per share loss ($.09) up from ($.55)
** TTM earnings (loss) ($.80)
** Diluted share count 213.129 million
** Cash $1,004,991 Million; debt 0
** Cash flow for the quarter was $87 million up from ($16,110) Million yoy
** TTM cash flow was $115,567 million or $.54 per share
** Stock based compensation for the quarter was $23,369 million up from $3,752 million
** TTM stock based compensation was $99,557 Million
** Gross profits were $131,183 million up 96% from $66,804 million
** Total operating expenses were $153,759 million up 66% from $92,579 million
** Net Income loss ($19,222) Million up from ($25,977) Million
** Trading range between March 20th, 2020 and June 3rd, 2020 was $46.01 to $103.80 : PE ratio range NA: PS ratio range was 17.40 to 39.26: FCF Yield was 1.17% to .53%
**The day of the report 6/2/2020 the stock closed at $92.25 on June 3rd it opened at $99.98 and went to a high of $103.80 to close at $98.10 an increase of 6.3%.
**Added 830 net new subscription customers in the quarter for a total of 6,261 subscription customers as of April 30, 2020, representing 105% growth year-over-year.
**CrowdStrike’s subscription customers that have adopted four or more cloud modules increased to 55% and those with five or more cloud modules increased to over 35% as of April 30, 2020.
**The CrowdStrike Falcon® endpoint protection platform was named a Leader in The Forrester Wave™: Enterprise Detection And Response, Q1 2020. CrowdStrike received the highest possible score in 11 criteria.
**For the second consecutive year, CrowdStrike earned the highest overall rating among vendors named in 2020 Gartner Peer Insights Customers’ Choice for Endpoint Detection and Response (EDR) with an overall rating of 4.9 out of 5 from 106 verified customer reviews.
**Announced partnerships with Computacenter, a technology partner trusted by large corporate and public sector organizations, and Veronym, a cloud-managed security service provider that specializes in small and medium-sized enterprises (SME). These partnerships make the CrowdStrike Falcon® platform widely available for enterprise customers across Germany and to SMEs across Germany, Austria, and Switzerland.
**CrowdStrike successfully completed its second MITRE ATT&CK® evaluation. The MITRE ATT&CK evaluation tests a vendor’s ability to detect attacker activity across the full spectrum of sophisticated attacks. CrowdStrike’s results indicate once again that CrowdStrike Falcon® delivers best-in-class visibility and detection.
**In March 2020, we implemented several measures to help ensure the health and safety of all our employees around the globe including restricting all travel and transitioning 100% of our workforce to be remote. In addition, in response to the uncertain macroeconomic environment, we converted all of our marketable securities to cash and cash equivalents as of April 30, 2020.
Income Statement:
Revenue was $178,078 million up 85% from $96,077 million. Their Cost of Revenue was 26% of Revenue down 3 percent sequentially. Their Gross margins were at 74% up 3 percent sequentially. Their operating margin were Loss (12.9%) up from (20%) sequentially. You can really see their Operating leverage finally taking over this quarter. Their Earnings per share were Loss (.09) up from Loss (.55) YoY. They were Non Gaap positive with an earnings per share of .02 cents. Let’s look at the numbers for their Income Statement.
all numbers in Thousands except EPS.
Q119 Q219 Q319 Q419 Q120 Q220 Q320 Q420 Q121
Revenue 47289 55701 66379 80455 96077 108108 125119 152109 178078
Growth YoY 108% 103% 94% 89% 89% 85%
Net Inc (33617) (32877) (42323) (31260) (25977) (51889) (35505) (28408) (19222)
Dil EPS (.77) (.75) (.93) (.67) (.55) (.40) (.17) (.14) (.09)
NGaapEPS (.69) (.64) (.60) (.47) (.18) (.07) (.02) .02
Now this is where you really see the leverage. Their Cost of Revenue, Sales and Market, Research and Development , and General and Administrative are all coming down nicely.
They grew their Gross Margins 3 percent and grew their Operating Margins by 7 percent. This company is close to becoming Gaap Profitable.
All Numbers as a percentage of Revenue
Q119 Q219 Q319 Q419 Q120 Q220 Q320 Q420 Q121
Cost Rev 41% 33% 34% 34% 30% 29% 30% 29% 26%
GM (59%) (67%) (66%) (66%) (70%) (71%) (70%) (71%) (74%)
S&M 77% 72% 70% 61% 59% 60% 55% 50% 49%
R&D 37% 34% 39% 27% 25% 29% 29% 25% 23%
G&A 14% 15% 21% 17% 12% 28% 17% 17% 14%
OM (70%) (55%) (63%) (39%) (27%) (47%) (31%) (20%) (13%)
Balance Sheet:
Their Balance sheet improved this quarter. They grew their cash by $92.927 million this quarter and they do not have any debt. They cashed in all their Marketable securities to Cash and Cash equivalent to strengthen their Balance Sheet.
All numbers in Thousands
Q120 Q220 Q320 Q420 Q121
Cash $175,059 $826,811 $833,688 $912,064 $1,004,991
Debt $0 $0 $0 $0 $0
Cashflow Statement:
Their FCF this quarter was very strong coming in at $87 Million. They had $23.369 Million of stock compensation.
All numbers in Thousands
Q119 Q219 Q319 Q419 Q120 Q220 Q320 Q420 Q121
FCF (16,749) (35,657) (13,076) (3,131) (16,110) (29,158) 7,048 50,676 87,001
Stock Comp 1,719 2,224 13,460 3,102 3,752 29,859 21,966 24,363 23,369
Conclusion
This was a really good quarter for Crowdstrike. This was the biggest quarter yet for FCF. They grew their customer count by 105% going from 3,059 to 6,261 YoY. They are disrupting Symantec and taking market share from 2nd gen players. George Kurtz claimed that the 2nd gen players built their product to be on site and are now trying to move it to the cloud as a hybrid product, claiming that they are a cloud market but their data is still on the endpoint, where Crowdstrike made their product as a cloud product from the ground up. George Kurtz had this to say “Another way we are helping customers is with the two initiatives we launched to help our customers quickly onboard new remote workers without sacrificing protection or having to worry about a procurement cycle as we discussed in March. This included a surge relief plan that allows our customers to search the number of endpoints for a limited time. Additionally, we launched a Falcon Prevent for Home Use program that allows company administrators to install Falcon Prevent on their employees’ home systems. These free-of-charge offerings have been well received with over 250 customers taking advantage of these work-from-home and search programs, which have led to significant new opportunities for CrowdStrike.”
They expect their Gross Margins to fluctuate quarter to quarter because they are building out their data centers and they raised their guidance. They expect to be operating income break even by the fourth quarter and they expect to be FCF positive for the full year.
George Kurtz claimed that he was talking to a CIO and he stated that their 2 year road map to going digital was condensed down to March of 2020. He claimed that customers were struggling stuck behind their firewalls and that their product opened up the It departments eyes to what they could do. He feels that this was a tipping point for their product.
Finally, I will leave you with what George Kurtz said on the Conference Call. “You have got the incumbents losing market share and abandoning the market. You have got work from home. You have got cloud adoption, digital transformation. There is a lot of opportunity for us and some of it is white space and the cloud workload is total Greenfield opportunity. There is just nobody there in this cloud workload.”
Q419 Q120 Q220 Q320 Q420 Q121
Customers 2515 3059 3789 4561 5431 6261
July 18th, 2019 1Q:2020 earnings highlights:
** Revenue was $96.077 million up 94% From $47.289 million
**TTM Revenue was $351.019 million or $7.44 per share
** Earnings per share ($…55) up from ($.77)
** TTM earnings (loss) ($2.90)
** Diluted share count 47,205 million
** Cash $175.059 Million; debt 0
** Free Cash flow for the quarter was ($16.110) million up from ($16.749) million yoy
** TTM Free cash flow was Negative ($67.794) million or ($1.43) per share
** Stock based compensation for the quarter was $3.752 million up from $1.719 million
** TTM stock based compensation was $22.538 Million
** Gross profits were $66,804 million up 139% from $27,895 million
** Total operating expenses were $92,579 million up 52% from $61,009 million
** Net Income loss ($25,977) Million down from ($33,617) Million
** Trading range between June 12th, 2019 and July 19th, 2019 was $56 to $85.85 : PE ratio range NA: PS ratio range was 7.53 to 11.55
**Crwd IPO’d on 06/12/2019
**Added 543 net new subscription customers in the quarter for a total of 3,059 subscription customers as of April 30, 2019.
**Raised $659.1 million in net proceeds from our initial public offering, which closed on June 14, 2019.
**Announced the availability of the CrowdStrike Store, that opens the CrowdStrike Falcon® platform to third-party applications.
** Announced the industry’s first endpoint detection and response solution for mobile devices, Falcon for Mobile.
**Named a Leader in The Forrester Wave™: for Cybersecurity Incident Response Services, an independent assessment of today’s incident response market.
September 5th, 2019 2Q:2020 earnings’ highlights:
** Revenue was $108.108 million up 94% From $55.701 million
**TTM Revenue was $351.019 million or $2.70 per share
** Earnings per share ($.40) up from ($.75)
** TTM earnings Loss (-$2.55)
** Diluted share count 130,091 million
** Cash $826.811 Million; debt 0
** Free Cash flow for the quarter was loss ($29.158) million down from ($35,657) million yoy
** TTM Free cash flow was Negative ($61.475) million or ($.47) per share
** Stock based compensation for the quarter was $19.859 million up from $2.224 million
** TTM stock based compensation was $50.2 Million
** Gross profits were $76.526 million up 196% from $37.126 million
** Total operating expenses were $127.165 million up 88% from $67.553 million
** Net Income loss ($51.889) Million up from ($32.877) Million
** Trading range between July 19th, 2019 and September 6th, 2019 was $75.31 to $101.88 : PE ratio range NA: PS ratio range was 27.91 to 37.76
**Added a record 730 net new subscription customers in the quarter for a total of 3,789 subscription customers as of July 31, 2019
**50% of CrowdStrike’s subscription customers have adopted four or more cloud modules as of July 31, 2019.
**CrowdStrike positioned as a Leader in the Magic Quadrant for Endpoint Protection Platforms by Gartner, Inc.
**Launched Falcon Fund, an early stage investment fund started by CrowdStrike in partnership with Accel.
**Introduced CrowdScore, which leverages cloud-based analytics and AI to enable executives to instantly see the real-time threat level their organizations are facing, allowing customers to quickly mobilize resources to respond.
December 5th, 2019 3Q:2020 earnings’ highlights:
** Revenue was $125,119 million up 89% From $66,379 million
** TTM Revenue was $409,769 million or $2.01 per share
** Earnings per share Loss ($.17) up from ($.93)
** TTM earnings (loss) ($1.79)
** Diluted share count 204,096 million
** Cash $833,688 Million; debt 0
** Free Cash flow for the quarter was $7.048 million up from loss ($13.076) million yoy
** TTM Free cash flow was Loss ($41,351) Million or Loss ($.20) per share
** Stock based compensation for the quarter was $21.966 million up from $13.460 million
** TTM stock based compensation was $58.679 Million
** Gross profits were $87.764 million up 99% from $44.105 million
** Total operating expenses were $126.282 million up 47% from $86.196 million
** Net Income Loss($35,505) Million down from ($42,323) Million
** Trading range between September 6th, 2019 and December 6th, 2019 was $44.58 to $81.50 : PE ratio range NA: PS ratio range was 22.20 to 40.59
**Added a record 772 net new subscription customers in the quarter for a total of 4,561 subscription customers as of October 31, 2019, representing 112% growth year-over-year.
**CrowdStrike’s subscription customers that have adopted four or more cloud modules increased to over 50% and those with five or more cloud modules increased to 30% as of October 31, 2019.
**Expanded cloud-native Falcon Platform with the announcement of a new Firewall Management module that delivers simple, centralized host firewall management to help customers transition from legacy endpoint suites to CrowdStrike’s next-generation solution.
**Introduced Falcon for Amazon Web Services to simplify cloud workload protection and provide enhanced visibility. Falcon for AWS will be available in AWS Marketplace, allowing customers to easily purchase and deploy the solution with integrated metered billing.
**Partnered with Wipro, a leading global information technology consulting and business process services company, to bring the CrowdStrike Falcon platform for comprehensive, real-time endpoint protection to Wipro’s global customers.
**Announced seven new third-party applications for the CrowdStrike Store that will extend the power of the CrowdStrike Falcon platform, addressing additional use cases to strengthen the security posture of customers.
**Industry Recognition: Received highest score for “Lean Forward” Organizations (Type A Use Cases) in Gartner’s Second Critical Capabilities for Endpoint Protection Platforms Report. Named by Forrester Research, Inc. as a Leader in Endpoint Security in The Forrester Wave: Endpoint Security Suites (ESS), Q3 2019 report. Named Best New Endpoint Solution by SE Labs in annual report.
March 19th, 2020 4Q:2020 earnings’ highlights:
** Revenue was $152,109 million up 89% From $80,455 million
**TTM Revenue was $481,413 million or $2.32 per share
** Earnings per share Loss ($.14) up from ($.67)
** TTM earnings (loss) ($1.26)
** Diluted share count 207,565 million
** Cash $912,964 Million; debt 0
** Free Cash flow for the quarter was $50.7 million up from ($3.131) Million yoy
** TTM Free cash flow was $12.5 million or $.06 per share
** Stock based compensation for the quarter was $24.363 million up from $3.1 million
** TTM stock based compensation was $79.940 Million
** Gross profits were $108,692 million up 103% from $53,460 million
** Total operating expenses were $139,825 million up 65% from $84,692 million
** Net Income ($28,408) Million up from ($31,260) Million
** Trading range between December 6th, 2019 and March 20th, 2020 was $31.95 to $67.56 : PE ratio range NA: PS ratio range was 13.78 to 29.13: FCF Yield was .19% to .089%
**The day of the report the stock closed at $41.74 the next day the stock closed at $49.01 up 17%
**Added a record 870 net new subscription customers in the quarter for a total of 5,431 subscription customers as of January 31, 2020, representing 116% growth year-over-year.
**CrowdStrike’s subscription customers that have adopted five or more cloud modules increased to 33% as of January 31, 2020.
**Launched CrowdStrike Falcon Spotlight™ App for Security Operations, which integrates real-time endpoint vulnerability data and patch validation with prioritization and response workflows provided by ServiceNow and is available in the ServiceNow Store.
**Announced extending the capabilities of the CrowdStrike Falcon® platform’s award-winning endpoint protection and endpoint detection and response (EDR) to provide visibility specific to workloads hosted on Google Cloud Platform (GCP) and Microsoft Azure and to provide EDR and run-time protection for containers. Falcon will now provide comprehensive visibility into all three leading public clouds.
**Introduced Endpoint Recovery Services to accelerate incident response and remediation. This new offering combines the power of the CrowdStrike Falcon platform, threat intelligence, and real-time response to accelerate business recovery from cyber intrusions.
**Promoted Michael Sentonas to chief technology officer. Sentonas joined CrowdStrike in 2016 and most recently served as the company’s vice president of technology strategy.
June 2nd, 2020 1Q:2021 earnings’ highlights:
** Revenue was $178,078 million up 85% From $96,077 million
** TTM Revenue was $563,414 million or $2.64 per share
** Earnings per share loss ($.09) up from ($.55)
** TTM earnings (loss) ($.80)
** Diluted share count 213.129 million
** Cash $1,004,991 Million; debt 0
** Cash flow for the quarter was $87 million up from ($16,110) Million yoy
** TTM cash flow was $115,567 million or $.54 per share
** Stock based compensation for the quarter was $23,369 million up from $3,752 million
** TTM stock based compensation was $99,557 Million
** Gross profits were $131,183 million up 96% from $66,804 million
** Total operating expenses were $153,759 million up 66% from $92,579 million
** Net Income loss ($19,222) Million up from ($25,977) Million
** Trading range between March 20th, 2020 and June 3rd, 2020 was $46.01 to $103.80 : PE ratio range NA: PS ratio range was 17.40 to 39.26: FCF Yield was 1.17% to .52%
** The day of the report 6/2/2020 the stock closed at $92.25 on June 3rd it opened at $99.98 and went to a high of $103.80 to close at $98.10 an increase of 6.3%.
Highlights:
**Added 830 net new subscription customers in the quarter for a total of 6,261 subscription customers as of April 30, 2020, representing 105% growth year-over-year.
**CrowdStrike’s subscription customers that have adopted four or more cloud modules increased to 55% and those with five or more cloud modules increased to over 35% as of April 30, 2020.
**The CrowdStrike Falcon® endpoint protection platform was named a Leader in The Forrester Wave™: Enterprise Detection And Response, Q1 2020. CrowdStrike received the highest possible score in 11 criteria.
**For the second consecutive year, CrowdStrike earned the highest overall rating among vendors named in 2020 Gartner Peer Insights Customers’ Choice for Endpoint Detection and Response (EDR) with an overall rating of 4.9 out of 5 from 106 verified customer reviews.
**Announced partnerships with Computacenter, a technology partner trusted by large corporate and public sector organizations, and Veronym, a cloud-managed security service provider that specializes in small and medium-sized enterprises (SME). These partnerships make the CrowdStrike Falcon® platform widely available for enterprise customers across Germany and to SMEs across Germany, Austria, and Switzerland.
**CrowdStrike successfully completed its second MITRE ATT&CK® evaluation. The MITRE ATT&CK evaluation tests a vendor’s ability to detect attacker activity across the full spectrum of sophisticated attacks. CrowdStrike’s results indicate once again that CrowdStrike Falcon® delivers best-in-class visibility and detection.
**In March 2020, we implemented several measures to help ensure the health and safety of all our employees around the globe including restricting all travel and transitioning 100% of our workforce to be remote. In addition, in response to the uncertain macroeconomic environment, we converted all of our marketable securities to cash and cash equivalents as of April 30, 2020.
Andy