- Customer growth dropped from 70% YOY last quarter to 55% YOY this Q1’23
Customer growth for S is a red flag. Especially when they are going for smaller customers vs back when CRWD was at similar scale.
If S adds only ~700 customers again next Q, then the total customer growth continues to push lower in the 50% range YoY in the future.
For reference, the last time CRWD grew total customers at a triple digit rate, which was 105% YoY, was in Q1 2021 (April 2020), while pulling in subscription revenue at 162M.
SentinelOne doing 78M revenue (less than HALF of CRWD) and an anemic total customer growth of 55% YoY (nearly HALF that of CRWD’s) today looks terrible in comparison.
Something else to think about: CRWD grew customers at 65% YoY last quarter while taking in 405M in subscription revenue. That’s faster than S at 5x scale!!
Unless S is picking up much larger enterprises moving forward, the revenue growth seems destined to decelerate significantly. This is no time to think about slowing down at such small scale and with deep, deep operating losses.
S is not a SNOW who can justify slower growth at large revenue run rate. S is not in a position to be focusing only on expanding current customer spend.
I have learned many harsh lessons and becoming enamored with topline growth ‘at all costs’ is one of them. I hope S will do well for those holding, but boy am I glad to have sold it and jumped ship to CRWD a while back (oops, saying that probably jinxed CRWD’s report today!)