CRWD Q2 results

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Link to full press release: https://ir.crowdstrike.com/news-releases/news-release-detail…

CrowdStrike Reports Second Quarter Fiscal Year 2022 Financial Results
August 31, 2021 at 4:05 PM EDT
PDF Version
Achieves ending ARR of $1.34 billion driven by record net new ARR of $151 million and adds a record 1,660 net new subscription customers in the quarter

SUNNYVALE, Calif.–(BUSINESS WIRE)–Aug. 31, 2021-- CrowdStrike Holdings, Inc. (Nasdaq: CRWD), a leader in cloud-delivered endpoint and workload protection, today announced financial results for the second quarter fiscal year 2022, ended July 31, 2021.

“CrowdStrike delivered an outstanding second quarter with rapid subscription revenue growth and record net new ARR generated in the quarter. We saw strength in multiple areas of the business, added $151 million in net new ARR and grew ending ARR 70% year-over-year to exceed $1.34 billion. The success of our platform strategy and our growing brand leadership have led to a groundswell of customers turning to CrowdStrike as their trusted security platform of record. We believe that our extensible Falcon platform, purpose-built to leverage the power of the cloud, collecting data once and reusing it many times, is a fundamental cornerstone to building a durable growth business over the long-term,” said George Kurtz, CrowdStrike’s co-founder and chief executive officer.

Commenting on the company’s financial results, Burt Podbere, CrowdStrike’s chief financial officer, added, “In the second quarter we once again achieved strong growth at scale and delivered exceptional unit economics, drove leverage and remained capital efficient, generating strong operating and free cash flow. Given our strong performance and growing momentum in the market, and reflecting our view of a continued robust demand environment, we are raising our guidance for fiscal year 2022.”

Second Quarter Fiscal 2022 Financial Highlights

Revenue: Total revenue was $337.7 million, a 70% increase, compared to $199.0 million in the second quarter of fiscal 2021. Subscription revenue was $315.8 million, a 71% increase, compared to $184.3 million in the second quarter of fiscal 2021.
Annual Recurring Revenue (ARR) increased 70% year-over-year and grew to $1.34 billion as of July 31, 2021, of which $150.6 million was net new ARR added in the quarter.
Subscription Gross Margin: GAAP subscription gross margin was 76%, compared to 76% in the second quarter of fiscal 2021. Non-GAAP subscription gross margin was 78%, compared to 78% in the second quarter of fiscal 2021.
Income/Loss from Operations: GAAP loss from operations was $47.4 million, compared to $30.0 million in the second quarter of fiscal 2021. Non-GAAP income from operations was $35.3 million, compared to $7.8 million in the second quarter of fiscal 2021.
Net Income/Loss Attributable to CrowdStrike: GAAP net loss attributable to CrowdStrike was $57.3 million, compared to $29.9 million in the second quarter of fiscal 2021. GAAP net loss per share attributable to CrowdStrike common stockholders was $0.25, compared to $0.14 in the second quarter of fiscal 2021. Non-GAAP net income attributable to CrowdStrike was $25.9 million, compared to $7.9 million in the second quarter of fiscal 2021. Non-GAAP net income per share attributable to CrowdStrike common stockholders, diluted, was $0.11, compared to $0.03 in the second quarter of fiscal 2021.
Cash Flow: Net cash generated from operations was $108.5 million, compared to $55.0 million in the second quarter of fiscal 2021. Free cash flow was $73.6 million, compared to $32.4 million in the second quarter of fiscal 2021.
Cash and Cash Equivalents was $1.79 billion as of July 31, 2021.

Lee

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Added 1,660 net new subscription customers in the quarter for a total of 13,080 subscription customers as of July 31, 2021, representing 81% growth year-over-year. (that’s almost 15% growth here)
CrowdStrike’s subscription customers that have adopted four or more modules, five or more modules and six or more modules increased to 66%, 53%, and 29%, respectively, as of July 31, 2021.
Ranked number one for Modern Endpoint Security 2020 revenue market share in IDC’s Worldwide Corporate Endpoint Security Market Shares, 2020 report and named as a Leader in the IDC MarketScape report for U.S. Managed Detection & Response Services 2021 Vendor Assessment.
Announced Falcon X Recon+, a new managed solution that simplifies the process of hunting and mitigating external threats to brands, employees and sensitive data.
Added multiple new CrowdStrike Store partner integrations in the quarter, including Rapid7, Google Cloud, ExtraHop and Siemplify.
Launched Falcon Complete for GovCloud, a U.S. FedRAMP compliant program, which provides cloud-native managed detection and response for the public sector.
Won a fourth consecutive Approved Security Product award from leading independent testing organization AV-Comparatives. Within the AV-Comparatives Malware Protection Test, Falcon Pro for Mac achieved 99.8% malware protection.
Named the winner of multiple partner-focused awards including the 2021 AWS Global Public Sector Partner Award for best cybersecurity solution, 2021 Canada AWS Partner Award as the ISV Partner of the Year and the Go-to-Market Technology Partner of the Year Award at Zscaler’s 2021 ZenithLive Cloud Summit.

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Raising Guidance:

Q3 2022 Outlook: Total revenue $358.0 - $365.3 million vs. consensus of $351.72M; Non-GAAP EPS $0.08 - $0.10 vs. consensus of $0.09.

2022 Outlook: Total revenue $1,391.2 - $1,409.4 million vs. consensus of $1,360M; Non-GAAP EPS $0.43 - $0.49 vs. consensus of $0.39.

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Decent report:

  • $337.7 M in revenue, 69.7% YoY, 11.5% QoQ, in line with previous Q2 slight decels the past 3 years
  • $315.8 M in subscription revenue, 71.4% YoY, 12.3% QoQ
  • Improving operating margins to 10.5% vs. 3.9% LY
  • FCF margin 21.8% vs. 16.3% LY
  • Customers grew to 13,080 up 80.9% YoY, 14.5% sequentially, most customer additions ever
  • ARR up to $1.34 B, 69.4% YoY, 12.6% sequentially
  • Guidance was actually really strong, guided for $365.3 M on the high end which is 8% sequentially and better than the 7% QoQ guide they gave in Q1. I would expect some acceleration in revenue next quarter.

Given the reopening and whatnot, I think this was a reasonably good quarter. Nothing earth-shattering which is likely why the stock is only slightly down (probably due to valuation concerns) AH.

DataDog and Upstart had much better reports obviously, but this was still a good report IMO. I’ll probably add opportunistically.

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It actually decelerated quite a bit less in Q2 2022 vs. prior Q2 decelerations.

2020
Q1: 20%
Q2: 12.5%

2021
Q1: 17.1%
Q2: 11.8%

2022:
Q1: 14%
Q2: 11.3%

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Services is likely the biggest culprit for the drop in Q2 revenue, since subscription revenue was decent QoQ, but services was 1.1%. Either way, something to watch.

CrowdStrike attached a supplemental data report that was interesting:

https://ir.crowdstrike.com/static-files/6532bc31-92e3-4a7b-b…

RPO actually accelerated in Q2 from 8.2% to 14%

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Yea, RPO accelerated which was good. The other numbers I thought were good were the continued increase in customers using modules (4+ @ 66%, 5+ @ 53%, 6+ @ 29%), and their net additions to Subscription Customers (1,660). Most of the other numbers were “in-line” with my expectations, if not slightly below.

For context, I had almost exactly the same modeling that Bear did from his “Crowdstrike Priors” post - https://discussion.fool.com/crowdstrike-priors-34916902.aspx.

If you take CRWD’s average guidance beat (which by the way has been fading a bit recently, so the average gives them benefit of the doubt), their estimated revenue for next quarter would be 385.94 million, which is exactly 66% revenue growth YoY.

This isn’t a major slowdown, but the numbers are coming down now on a YoY basis the past 4 quarters, from 85%, 74%, 70%, 70%, and if next quarter modeling is correct, around 66%.

I still feel like they are easily a “best idea”, “best performer”, whatever you want to label them, and they are remarkably consistent on almost every level. It’s fair to say, however, especially based on Palo Alto’s numbers, that I was expecting a little bit more from CWRD this quarter.

If anything I will just trim the position (currently I’m at 25% CRWD allocation), but will continue to hold a large stake in this one.

-Chris

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Kurtz just called Crowdstrike a “Ferrari” vs. Sentinel One’s “Fiero.” Burn.

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Hi FallingWallenda,

I hope all is well.

Saul’s board has thousands of readers and we really discourage one liner posts like this. Can you imagine if a couple of hundred readers posted these sorts of little missives? The board would descend into chaos and we’d all lose this incredible resource. Please refrain from this sort of post in the future.

Here is a link to a recent Monday morning rules post to help you for future posts.

https://discussion.fool.com/monday-morning-rules-of-the-board-34…

All the best,
Lennie
Assistant board manager

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I will not worry too much about the service revenue because in the last 3 years from 2018 to 2021, the QoQ of service revenue is -13.2%, 4.4%, -7.2%, 1.1% (this year), respectively.
Also, it contributes only around 6% of total revenue.

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TMFedyboom223 did an outstanding job with the call and notes on the $CRWD board. Definitely worth your time to read thru if you’re a subscriber.

R4M (long CRWD ~%12, UPST %15)

https://discussion.fool.com/4056/earnings-conference-notes-34921…

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I apologize for posting what Kurtz said during the conference call, but I thought a quote that showed how dismissive he was of Sentinel One was not “drivel,” as some Twitter escapee from this board just emailed me.

Having edited several books on leaders and corporate psychology, the almost visceral reaction to Sentinel on the conference call is as important to understanding the edge Crowdstrike has in terms of leadership as the numbers. Success doesn’t happen without personality and Crowdstrike is mopping the floor with the others because of Kurtz’s ultra-competitive style. And when he goes on the record with such a comparison (Crowdstrike is a Ferrari compared to Sentinel’s Fiero), I think it’s something we should know.

In the future, I will not post. I will just read. Thanks for all the great info on this site, but don’t lose sight of the intangibles that fill out the picture of these companies. It’s as important as anything otherwise Malcolm Gladwell wouldn’t be a millionaire.

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Hi Falling Wallenda

I, for one, appreciated your post. Short though it was, it had value for me as I would have missed that otherwise and it is helpful to have the non-numerical human/psychological context.

With apologies to board management if MY post clutters the board, which is not at all my intention. I appreciate the wisdom and expertise I find here as the greatest teaching I could hope for.

LJVinci

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