- Revenue grows 53% year-over-year to reach $581 million
- Ending ARR grows 54% year-over-year to reach $2.34 billion
- Achieves record cash flow from operations of $243 million
and record free cash flow of $174 million
CrowdStrike Holdings, Inc. (Nasdaq: CRWD), a global
cybersecurity leader that provides cloud-delivered protection of
endpoints, cloud workloads, identity and data, today announced
financial results for the third quarter fiscal year 2023, ended
October 31, 2022.
“CrowdStrike delivered robust growth at scale, strong retention
rates, growing module adoption, record net new ARR from emerging
products and a record number of customers contributing at least $1
million to net new ARR,” said George Kurtz, CrowdStrike’s
co-founder and chief executive officer. “However, total net new ARR
was below our expectations as increased macroeconomic headwinds
elongated sales cycles with smaller customers and caused some
larger customers to pursue multi-phase subscription start dates,
which delays ARR recognition until future quarters. As a platform
consolidator with industry leading efficacy, we differentiate
ourselves from the competition and empower customers, which we
believe positions us to capture enduring industry trends and
generate durable long-term growth.”
Commenting on the company's financial results, Burt Podbere,
CrowdStrike’s chief financial officer, added, “In the face of
increased macroeconomic headwinds, CrowdStrike delivered revenue
and earnings results ahead of our guidance. We will continue to
focus on delivering strong unit economics as we balance growth with
profitability and free cash flow.”
Third Quarter Fiscal 2023 Financial Highlights
- Revenue: Total revenue was $580.9 million, a 53%
increase, compared to $380.1 million in the third quarter of fiscal
2022. Subscription revenue was $547.4 million, a 53% increase,
compared to $357.0 million in the third quarter of fiscal
2022.
- Annual Recurring Revenue (ARR) increased 54%
year-over-year and grew to $2.34 billion as of October 31, 2022, of
which $198.1 million was net new ARR added in the quarter. The
acquisition of Reposify contributed less than $1.0 million to net
new ARR in the third quarter of fiscal 2023.
- Subscription Gross Margin: GAAP subscription gross
margin was 75%, compared to 76% in the third quarter of fiscal
2022. Non-GAAP subscription gross margin was 78%, compared to 79%
in the third quarter of fiscal 2022.
- Income/Loss from Operations: GAAP loss from operations
was $56.4 million, compared to $40.3 million in the third quarter
of fiscal 2022. Non-GAAP income from operations was $89.7 million,
compared to $50.7 million in the third quarter of fiscal 2022.
- Net Income/Loss Attributable to CrowdStrike: GAAP net
loss attributable to CrowdStrike was $55.0 million, compared to
$50.5 million in the third quarter of fiscal 2022. GAAP net loss
per share attributable to CrowdStrike, basic and diluted was $0.24,
compared to $0.22 in the third quarter of fiscal 2022. Non-GAAP net
income attributable to CrowdStrike was $96.1 million, compared to
$41.1 million in the third quarter of fiscal 2022. Non-GAAP net
income attributable to CrowdStrike per share, diluted, was $0.40,
compared to $0.17 in the third quarter of fiscal 2022.
- Cash Flow: Net cash generated from operations was $242.9
million, compared to $159.1 million in the third quarter of fiscal
2022. Free cash flow was $174.1 million, compared to $123.5 million
in the third quarter of fiscal 2022.
- Cash and Cash Equivalents was $2.47 billion as of
October 31, 2022.
Recent Highlights
- Added 1,460 net new subscription customers in the quarter for a
total of 21,146 subscription customers as of October 31, 2022,
representing 44% growth year-over-year.
- CrowdStrike’s subscription customers that have adopted five or
more, six or more and seven or more modules was 60%, 36% and 21%,
respectively, as of October 31, 2022.
- Acquired Reposify, an external attack surface management (EASM)
platform, to help CrowdStrike's customers bolster visibility and
reduce the risk exposure of external assets.
- Highlights of the sixth annual Fal.Con cybersecurity conference
included Falcon Insight XDR, Falcon Discover for IoT, Falcon
LogScale, Falcon Complete LogScale and new Cloud Native Application
Protection Platform (CNAPP) capabilities.
- Expanded the CrowdStrike and EY global alliance to deliver
Cloud Security and Observability services.
- Achieved 99% detection coverage of adversary behavior in the
MITRE Engenuity ATT&CK Evaluations for Security Service
Providers.
- Received a AAA rating in SE Labs Enterprise Advanced Security
Ransomware Test and achieved 100% Protection with zero false
positives.
- Chosen as a winner for the 2022 CRN Tech Innovator Awards for
CrowdStrike Cloud Security, a Cloud Native Application Protection
Platform (CNAPP) solution.
- Named One of the Best Workplaces for Women by Great Place to
Work® and Fortune Magazine 2022.
- Expanded charitable giving strategy to include a partnership
with Operation Motorsport Foundation and NextGen Scholarship
awards.
Financial Outlook
CrowdStrike is providing the following
guidance for the fourth quarter and the full fiscal year 2023
(ending January 31, 2023):
Q4 FY23
Guidance
Full Year FY23
Guidance
Total revenue
$619.1 - $628.2 million
$2,223.0 - $2,232.0 million
Non-GAAP income from operations
$87.2 - $93.7 million
$347.2 - $353.8 million
Non-GAAP net income attributable to
CrowdStrike
$100.9 - $107.5 million
$357.6 - $364.4 million
Non-GAAP net income per share attributable
to CrowdStrike common stockholders, diluted
$0.42 - $0.45
$1.49 - $1.52
Weighted average shares used in computing
Non-GAAP net income per share attributable to common stockholders,
diluted
241 million
240 million
These statements are forward-looking and actual results may
differ materially as a result of many factors. Refer to the
Forward-Looking Statements safe harbor below for information on the
factors that could cause the company's actual results to differ
materially from these forward-looking statements.
Guidance for non-GAAP financial measures excludes stock-based
compensation expense, amortization expense of acquired intangible
assets, including purchased patents, amortization of debt issuance
costs and discount, legal reserve and settlement charges or
benefits, gain (loss) and other income from strategic investments,
and acquisition-related expenses. The company has not provided the
most directly comparable GAAP measures because certain items are
out of the company's control or cannot be reasonably predicted.
Accordingly, a reconciliation for non-GAAP income from operations,
non-GAAP net income attributable to CrowdStrike, and non-GAAP net
income per share attributable to CrowdStrike common stockholders is
not available without unreasonable effort.
Conference Call Information
CrowdStrike will host a conference call for analysts and
investors to discuss its earnings results for the third quarter of
fiscal 2023 and outlook for its fiscal fourth quarter and fiscal
year 2023 today at 2:00 p.m. Pacific time (5:00 p.m. Eastern time).
A recorded webcast of the event will also be available for one year
on the CrowdStrike Investor Relations website
ir.crowdstrike.com.
Date:
November 29, 2022
Time:
2:00 p.m. Pacific time / 5:00 p.m. Eastern
time
Pre-registration link for dial-in
access:
register.vevent.com/register/BI484fb19cb3404f508c39eccfd03a1e86
Webcast:
ir.crowdstrike.com
Forward-Looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties, including statements regarding
CrowdStrike’s future growth, and future financial and operating
performance, including CrowdStrike’s financial outlook for the
fiscal fourth quarter and fiscal year 2023. There are a significant
number of factors that could cause actual results to differ
materially from statements made in this press release, including:
risks associated with managing CrowdStrike’s rapid growth;
CrowdStrike’s ability to identify and effectively implement
necessary changes to address execution challenges; CrowdStrike’s
limited experience with new product and subscription and support
introductions and the risks associated with new products and
subscription and support offerings, including the risk of defects,
errors, or vulnerabilities; length and unpredictability of sales
cycles; CrowdStrike’s ability to attract new and retain existing
customers; CrowdStrike’s ability to successfully integrate
acquisitions; the failure to timely develop and achieve market
acceptance of new products and subscriptions as well as existing
products and subscriptions and support; CrowdStrike’s ability to
collaborate and integrate its products with offerings from other
parties to deliver benefits to customers; industry trends; rapidly
evolving technological developments in the market for security
products and subscription and support offerings; and general
market, political, economic, and business conditions, including
those related to a deterioration in macroeconomic conditions,
inflation, geopolitical uncertainty and COVID-19.
Additional risks and uncertainties that could affect
CrowdStrike’s financial results are included in the filings
CrowdStrike makes with the Securities and Exchange Commission
(“SEC”) from time to time, particularly under the captions “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations”, including CrowdStrike’s most
recently filed Annual Report on Form 10-K, most recently filed
Quarterly Report on Form 10-Q and subsequent filings.
You should not rely on these forward-looking statements, as
actual outcomes and results may differ materially from those
contemplated by these forward-looking statements as a result of
such risks and uncertainties. All forward-looking statements in
this press release are based on information available to
CrowdStrike as of the date hereof, and CrowdStrike does not assume
any obligation to update the forward-looking statements provided to
reflect events that occur or circumstances that exist after the
date on which they were made.
Use of Non-GAAP Financial Information
CrowdStrike believes that the presentation of non-GAAP financial
information provides important supplemental information to
management and investors regarding financial and business trends
relating to CrowdStrike’s financial condition and results of
operations. For further information regarding these non-GAAP
measures, including the reconciliation of these non-GAAP financial
measures to their most directly comparable GAAP financial measures,
please refer to the financial tables below, as well as the
“Explanation of Non-GAAP Financial Measures” section of this press
release.
Channels for Disclosure of Information
CrowdStrike intends to announce material information to the
public through the CrowdStrike Investor Relations website
ir.crowdstrike.com, SEC filings, press releases, public conference
calls, and public webcasts. CrowdStrike uses these channels, as
well as social media and its blog, to communicate with its
investors, customers, and the public about the company, its
offerings, and other issues. It is possible that the information
CrowdStrike posts on social media and its blog could be deemed to
be material information. As such, CrowdStrike encourages investors,
the media, and others to follow the channels listed above,
including the social media channels listed on CrowdStrike’s
investor relations website, and to review the information disclosed
through such channels. Any updates to the list of disclosure
channels through which CrowdStrike will announce information will
be posted on the investor relations page on CrowdStrike’s
website.
About CrowdStrike Holdings
CrowdStrike Holdings, Inc. is a global cybersecurity leader that
provides cloud-delivered protection of endpoints, cloud workloads,
identity and data.
Powered by the CrowdStrike Security Cloud and advanced
artificial intelligence, the CrowdStrike Falcon® platform delivers
better outcomes to customers through rapid and scalable deployment,
superior protection and performance, reduced complexity and
immediate time-to-value.
CrowdStrike Falcon leverages a single lightweight-agent
architecture with integrated cloud modules spanning multiple
security markets, including corporate workload security, managed
security services, security and vulnerability management, IT
operations management, threat intelligence services, identity
protection and log management.
For more information, please visit: ir.crowdstrike.com
CrowdStrike, the CrowdStrike logo, and other CrowdStrike marks
are trademarks and/or registered trademarks of CrowdStrike, Inc.,
or its affiliates or licensors. Other words, symbols, and company
product names may be trademarks of the respective companies with
which they are associated.
CROWDSTRIKE HOLDINGS,
INC.
Condensed Consolidated
Statements of Operations
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2022
2021
2022
2021
Revenue
Subscription
$
547,376
$
357,030
$
1,513,397
$
954,094
Professional services
33,506
23,021
90,472
66,490
Total revenue
580,882
380,051
1,603,869
1,020,584
Cost of revenue
Subscription (1)(2)
134,229
85,464
362,258
226,360
Professional services (1)
23,999
16,200
63,369
44,241
Total cost of revenue
158,228
101,664
425,627
270,601
Gross profit
422,654
278,387
1,178,242
749,983
Operating expenses
Sales and marketing (1)(2)
239,672
164,960
657,970
453,952
Research and development (1)(2)
155,256
97,630
416,519
266,265
General and administrative (1)(3)(4)
84,148
56,061
232,365
148,780
Total operating expenses
479,076
318,651
1,306,854
868,997
Loss from operations
(56,422)
(40,264)
(128,612)
(119,014)
Interest expense(5)
(6,334)
(6,403)
(18,967)
(18,929)
Interest income
16,245
1,019
25,479
2,654
Other income (expense), net(6)
750
(329)
5,835
3,423
Loss before provision for income taxes
(45,761)
(45,977)
(116,265)
(131,866)
Provision for income taxes(7)
8,870
4,473
17,088
58,773
Net loss
(54,631)
(50,450)
(133,353)
(190,639)
Net income attributable to non-controlling
interest
325
5
2,411
2,183
Net loss attributable to CrowdStrike
$
(54,956)
$
(50,455)
$
(135,764)
$
(192,822)
Net loss per share attributable to
CrowdStrike common stockholders, basic and diluted
$
(0.24)
$
(0.22)
$
(0.58)
$
(0.85)
Weighted-average shares used in computing
net loss per share attributable to CrowdStrike common stockholders,
basic and diluted
233,785
228,293
232,502
226,292
_____________________________
(1) Includes stock-based compensation expense as follows (in
thousands):
Three Months Ended October
31,
Nine Months Ended October
31,
2022
2021
2022
2021
Subscription cost of revenue
$
8,108
$
5,969
$
21,957
$
15,548
Professional services cost of revenue
4,093
2,546
10,596
6,963
Sales and marketing
41,895
25,499
109,172
68,178
Research and development
46,268
27,333
120,347
70,942
General and administrative
39,749
25,319
112,085
55,684
Total stock-based compensation expense
$
140,113
$
86,666
$
374,157
$
217,315
(2) Includes amortization of acquired intangible assets,
including purchased patents, as follows (in thousands):
Three Months Ended October
31,
Nine Months Ended October
31,
2022
2021
2022
2021
Subscription cost of revenue
$
3,484
$
2,784
$
10,336
$
7,550
Sales and marketing
641
540
1,938
1,509
General and administrative
22
13
65
13
Total amortization of acquired intangible
assets
$
4,147
$
3,337
$
12,339
$
9,072
(3) Includes acquisition-related expenses as follows (in
thousands):
Three Months Ended October
31,
Nine Months Ended October
31,
2022
2021
2022
2021
General and administrative
$
1,886
$
971
$
2,187
$
5,912
Total acquisition-related expenses
$
1,886
$
971
$
2,187
$
5,912
(4) Includes legal reserve and settlement charges as follows (in
thousands):
Three Months Ended October
31,
Nine Months Ended October
31,
2022
2021
2022
2021
General and administrative
$
—
$
—
$
—
$
2,500
Total legal reserve and settlement
charges
$
—
$
—
$
—
$
2,500
(5) Includes amortization of debt issuance costs and discount as
follows (in thousands):
Three Months Ended October
31,
Nine Months Ended October
31,
2022
2021
2022
2021
Interest expense
$
546
$
546
$
1,639
$
1,639
Total amortization of debt issuance costs
and discount
$
546
$
546
$
1,639
$
1,639
(6) Includes gains and other income from strategic investments
as follows (in thousands):
Three Months Ended October
31,
Nine Months Ended October
31,
2022
2021
2022
2021
Other income, net
$
652
$
10
$
4,824
$
4,366
Total gains and other income from
strategic investments
$
652
$
10
$
4,824
$
4,366
(7) Includes tax costs for intellectual property integration
relating to acquisitions as follows (in thousands):
Three Months Ended October
31,
Nine Months Ended October
31,
2022
2021
2022
2021
Provision for income taxes
$
4,658
$
—
$
4,658
$
48,824
Total provision for income taxes
$
4,658
$
—
$
4,658
$
48,824
CROWDSTRIKE HOLDINGS,
INC.
Condensed Consolidated Balance
Sheets
(in thousands)
(unaudited)
October 31,
January 31,
2022
2022
Assets
Current assets:
Cash and cash equivalents
$
2,466,551
$
1,996,633
Accounts receivable, net of allowance for
credit losses
485,313
368,145
Deferred contract acquisition costs,
current
162,260
126,822
Prepaid expenses and other current
assets
89,489
79,352
Total current assets
3,203,613
2,570,952
Strategic investments
46,395
23,632
Property and equipment, net
430,030
260,577
Operating lease right-of-use assets
25,621
31,735
Deferred contract acquisition costs,
noncurrent
218,635
192,358
Goodwill
430,285
416,445
Intangible assets, net
89,500
97,336
Other long-term assets
25,364
25,346
Total assets
$
4,469,443
$
3,618,381
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
89,289
$
47,634
Accrued expenses
88,918
83,382
Accrued payroll and benefits
122,558
104,563
Operating lease liabilities, current
10,423
9,820
Deferred revenue
1,483,223
1,136,502
Other current liabilities
22,642
24,929
Total current liabilities
1,817,053
1,406,830
Long-term debt
740,633
739,517
Deferred revenue, noncurrent
532,316
392,819
Operating lease liabilities,
noncurrent
17,984
25,379
Other liabilities, noncurrent
23,825
16,193
Total liabilities
3,131,811
2,580,738
Commitments and contingencies
Stockholders’ Equity
Common stock, Class A and Class B
117
115
Additional paid-in capital
2,424,038
1,991,807
Accumulated deficit
(1,100,682)
(964,918)
Accumulated other comprehensive loss
(9,184)
(1,240)
Total CrowdStrike Holdings, Inc.
stockholders’ equity
1,314,289
1,025,764
Non-controlling interest
23,343
11,879
Total stockholders’ equity
1,337,632
1,037,643
Total liabilities and stockholders’
equity
$
4,469,443
$
3,618,381
CROWDSTRIKE HOLDINGS,
INC.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended October
31,
2022
2021
Operating activities
Net loss
$
(133,353)
$
(190,639)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
53,622
39,506
Amortization of intangible assets
12,338
9,072
Amortization of deferred contract
acquisition costs
121,550
79,712
Non-cash operating lease costs
6,818
6,727
Stock-based compensation expense
374,157
217,315
Deferred income taxes
2,286
(1,338)
Non-cash interest expense
2,077
1,824
Change in fair value of strategic
investments
(4,757)
(4,356)
Changes in operating assets and
liabilities, net of impact of acquisitions
Accounts receivable, net
(117,240)
(40,644)
Deferred contract acquisition costs
(183,265)
(151,901)
Prepaid expenses and other assets
(14,121)
(8,051)
Accounts payable
25,007
(7,033)
Accrued expenses and other liabilities
21,820
74,426
Accrued payroll and benefits
21,635
22,258
Operating lease liabilities
(7,037)
(7,394)
Deferred revenue
486,177
375,582
Net cash provided by operating
activities
667,714
415,066
Investing activities
Purchases of property and equipment
(179,609)
(85,420)
Capitalized internal-use software and
website development costs
(20,739)
(15,201)
Purchases of strategic investments
(18,006)
(15,809)
Business acquisitions, net of cash
acquired
(18,464)
(353,746)
Purchases of intangible assets
(700)
(680)
Net cash used in investing activities
(237,518)
(470,856)
Financing activities
Payments of debt issuance costs related to
revolving line of credit
—
(219)
Payment of debt issuance costs related to
Senior Notes
—
(1,581)
Repayment of loan payable
(1,591)
—
Proceeds from issuance of common stock
upon exercise of stock options
6,396
12,796
Proceeds from issuance of common stock
under the employee stock purchase plan
34,445
27,452
Capital contributions from non-controlling
interest holders
9,053
7,905
Net cash provided by financing
activities
48,303
46,353
Effect of foreign exchange rates on cash,
cash equivalents and restricted cash
(7,074)
(1,663)
Net increase (decrease) in cash, cash
equivalents and restricted cash
471,425
(11,100)
Cash, cash equivalents and restricted
cash, beginning of period
1,996,633
1,918,608
Cash, cash equivalents and restricted
cash, end of period
$
2,468,058
$
1,907,508
CROWDSTRIKE HOLDINGS,
INC.
GAAP to Non-GAAP
Reconciliations
(in thousands, except
percentages)
(unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2022
2021
2022
2021
GAAP subscription revenue
$
547,376
$
357,030
$
1,513,397
$
954,094
GAAP professional services revenue
33,506
23,021
90,472
66,490
GAAP total revenue
$
580,882
$
380,051
$
1,603,869
$
1,020,584
GAAP subscription gross profit
$
413,147
$
271,566
$
1,151,139
$
727,734
Stock based compensation expense
8,108
5,969
21,957
15,548
Amortization of acquired intangible
assets
3,484
2,784
10,336
7,550
Non-GAAP subscription gross profit
$
424,739
$
280,319
$
1,183,432
$
750,832
GAAP subscription gross margin
75 %
76 %
76 %
76 %
Non-GAAP subscription gross margin
78 %
79 %
78 %
79 %
GAAP professional services gross
profit
$
9,507
$
6,821
$
27,103
$
22,249
Stock based compensation expense
4,093
2,546
10,596
6,963
Non-GAAP professional services gross
profit
$
13,600
$
9,367
$
37,699
$
29,212
GAAP professional services gross
margin
28 %
30 %
30 %
33 %
Non-GAAP professional services gross
margin
41 %
41 %
42 %
44 %
Total GAAP gross margin
73 %
73 %
73 %
73 %
Total Non-GAAP gross margin
75 %
76 %
76 %
76 %
GAAP sales and marketing operating
expenses
$
239,672
$
164,960
$
657,970
$
453,952
Stock based compensation expense
(41,895)
(25,499)
(109,172)
(68,178)
Amortization of acquired intangible
assets
(641)
(540)
(1,938)
(1,509)
Non-GAAP sales and marketing operating
expenses
$
197,136
$
138,921
$
546,860
$
384,265
GAAP sales and marketing operating
expenses as a percentage of revenue
41 %
43 %
41 %
44 %
Non-GAAP sales and marketing operating
expenses as a percentage of revenue
34 %
37 %
34 %
38 %
GAAP research and development operating
expenses
$
155,256
$
97,630
$
416,519
$
266,265
Stock based compensation expense
(46,268)
(27,333)
(120,347)
(70,942)
Non-GAAP research and development
operating expenses
$
108,988
$
70,297
$
296,172
$
195,323
GAAP research and development operating
expenses as a percentage of revenue
27 %
26 %
26 %
26 %
Non-GAAP research and development
operating expenses as a percentage of revenue
19 %
18 %
18 %
19 %
GAAP general and administrative operating
expenses
$
84,148
$
56,061
$
232,365
$
148,780
Stock based compensation expense
(39,749)
(25,319)
(112,085)
(55,684)
Acquisition-related expenses
(1,886)
(971)
(2,187)
(5,912)
Amortization of acquired intangible
assets
(22)
(13)
(65)
(13)
Legal reserve and settlement charges
—
—
—
(2,500)
Non-GAAP general and administrative
operating expenses
$
42,491
$
29,758
$
118,028
$
84,671
GAAP general and administrative operating
expenses as a percentage of revenue
14 %
15 %
14 %
15 %
Non-GAAP general and administrative
operating expenses as a percentage of revenue
7 %
8 %
7 %
8 %
CROWDSTRIKE HOLDINGS,
INC.
GAAP to Non-GAAP
Reconciliations (continued)
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2022
2021
2022
2021
GAAP loss from operations
$
(56,422)
$
(40,264)
$
(128,612)
$
(119,014)
Stock based compensation expense
140,113
86,666
374,157
217,315
Amortization of acquired intangible
assets
4,147
3,337
12,339
9,072
Acquisition-related expenses
1,886
971
2,187
5,912
Legal reserve and settlement charges
—
—
—
2,500
Non-GAAP income from operations
$
89,724
$
50,710
$
260,071
$
115,785
GAAP operating margin
(10) %
(11) %
(8) %
(12) %
Non-GAAP operating margin
15 %
13 %
16 %
11 %
GAAP net loss attributable to
CrowdStrike
$
(54,956)
$
(50,455)
$
(135,764)
$
(192,822)
Stock based compensation expense
140,113
86,666
374,157
217,315
Amortization of acquired intangible
assets
4,147
3,337
12,339
9,072
Acquisition-related expenses
1,886
971
2,187
5,912
Amortization of debt issuance costs and
discount
546
546
1,639
1,639
Legal reserve and settlement charges
—
—
—
2,500
Provision for income taxes(1)
4,658
—
4,658
48,824
Gains and other income from strategic
investments attributable to CrowdStrike
(325)
(5)
(2,411)
(2,183)
Non-GAAP net income attributable to
CrowdStrike
$
96,069
$
41,060
$
256,805
$
90,257
Weighted-average shares used in computing
basic net loss per share attributable to CrowdStrike common
stockholders (GAAP)
233,785
228,293
232,502
226,292
GAAP basic net loss per share attributable
to CrowdStrike common stockholders
$
(0.24)
$
(0.22)
$
(0.58)
$
(0.85)
GAAP diluted net loss per share
attributable to CrowdStrike common stockholders
$
(0.24)
$
(0.22)
$
(0.58)
$
(0.85)
Stock-based compensation
0.59
0.36
1.57
0.91
Amortization of acquired intangible
assets
0.02
0.01
0.05
0.04
Acquisition-related expenses
0.01
—
0.01
0.02
Amortization of debt issuance costs and
discount
—
—
0.01
0.01
Legal reserve and settlement charges
—
—
—
0.01
Provision for income taxes (1)
0.02
—
0.02
0.20
Adjustment to fully diluted earnings per
share (2)
—
0.02
—
0.05
Gains and other income from strategic
investments attributable to CrowdStrike
—
—
(0.01)
(0.01)
Non-GAAP diluted net income per share
attributable to CrowdStrike common stockholders
$
0.40
$
0.17
$
1.07
$
0.38
Weighted-average shares used in diluted
net income (loss) per share attributable to CrowdStrike common
stockholders calculation:
GAAP
233,785
228,293
232,502
226,292
Non-GAAP
239,502
238,563
238,957
238,194
____________________________
(1) CrowdStrike uses its GAAP provision for income taxes for the
purpose of determining its non-GAAP income tax expense. The tax
costs for intellectual property integration relating to
acquisitions are included in the GAAP provision for income taxes.
The income tax benefits related to stock-based compensation,
amortization of acquired intangibles assets, including purchased
patents, acquisition related expenses, amortization of debt
issuance costs and discount, gains and other income from strategic
investments attributable to CrowdStrike and legal reserve and
settlement charges or benefits included in the GAAP provision for
income taxes were not material for all periods presented.
(2) For periods in which CrowdStrike had diluted non-GAAP net
income per share attributable to CrowdStrike common stockholders,
the sum of the impact of individual reconciling items may not total
to diluted Non-GAAP net income per share attributable to
CrowdStrike common stockholders because the basic share counts used
to calculate GAAP net loss per share attributable to CrowdStrike
common stockholders differ from the diluted share counts used to
calculate non-GAAP net income per share attributable to CrowdStrike
common stockholders and because of rounding differences. The GAAP
net loss per share attributable to CrowdStrike common stockholders
calculation uses a lower share count as it excludes dilutive shares
which are included in calculating the non-GAAP net income per share
attributable to CrowdStrike common stockholders.
CROWDSTRIKE HOLDINGS,
INC.
GAAP to Non-GAAP
Reconciliations (continued)
(in thousands, except
percentages)
(unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2022
2021
2022
2021
GAAP net cash provided by operating
activities
$
242,851
$
159,058
$
667,714
$
415,066
Purchases of property and equipment
(61,270)
(29,627)
(179,609)
(85,420)
Capitalized internal-use software and
website development costs
(7,504)
(5,928)
(20,739)
(15,201)
Free cash flow
$
174,077
$
123,503
$
467,366
$
314,445
GAAP net cash used in investing
activities
$
(97,419)
$
(44,735)
$
(237,518)
$
(470,856)
GAAP net cash provided by financing
activities
$
4,976
$
7,554
$
48,303
$
46,353
GAAP net cash provided by operating
activities as a percentage of revenue
42 %
42 %
42 %
41 %
Purchases of property and equipment as a
percentage of revenue
(11) %
(8) %
(11) %
(8) %
Capitalized internal-use software and
website development costs as a percentage of revenue
(1) %
(2) %
(1) %
(1) %
Free cash flow margin
30 %
32 %
29 %
31 %
Explanation of Non-GAAP Financial Measures
In addition to determining results in accordance with U.S.
generally accepted accounting principles (“GAAP”), CrowdStrike
believes the following non-GAAP measures are useful in evaluating
our operating performance. CrowdStrike uses the following non-GAAP
financial information to evaluate its ongoing operations and for
internal planning and forecasting purposes. CrowdStrike believes
that non-GAAP financial information, when taken collectively, may
be helpful to investors because it provides consistency and
comparability with past financial performance and facilitates
period-to-period comparisons of operations, as these measures
eliminate the effects of certain variables unrelated to
CrowdStrike’s overall operating performance. However, non-GAAP
financial information is presented for supplemental informational
purposes only, has limitations as an analytical tool, and should
not be considered in isolation or as a substitute for financial
information presented in accordance with GAAP.
Other companies, including companies in CrowdStrike’s industry,
may calculate similarly titled non-GAAP measures differently or may
use other measures to evaluate their performance, all of which
could reduce the usefulness of CrowdStrike’s non-GAAP financial
measures as tools for comparison. In addition, the utility of free
cash flow as a measure of the company’s financial performance and
liquidity is limited as it does not represent the total increase or
decrease in our cash balance for a given period.
Investors are encouraged to review the related GAAP financial
measures and the reconciliation of these non-GAAP financial
measures to their most directly comparable GAAP financial measures
and not rely on any single financial measure to evaluate
CrowdStrike’s business.
Non-GAAP Subscription Gross Profit and Non-GAAP Subscription
Gross Margin
CrowdStrike defines non-GAAP subscription gross profit and
non-GAAP subscription gross margin as GAAP subscription gross
profit and GAAP subscription gross margin, respectively, excluding
stock-based compensation expense and amortization of acquired
intangible assets.
Non-GAAP Income from Operations
CrowdStrike defines non-GAAP income from operations as GAAP loss
from operations excluding stock-based compensation expense,
amortization of acquired intangible assets, including purchased
patents, acquisition-related expenses and legal reserve and
settlement charges or benefits.
Non-GAAP Net Income Attributable to CrowdStrike
The company defines non-GAAP net income attributable to
CrowdStrike as GAAP net loss attributable to CrowdStrike excluding
stock-based compensation expense, amortization of acquired
intangible assets, including purchased patents, acquisition-related
expenses, amortization of debt issuance costs and discount, gains
and other income from strategic investments, legal reserve and
settlement charges or benefits and the tax costs for intellectual
property integration relating to acquisitions.
Non-GAAP Net Income per Share Attributable to CrowdStrike
Common Stockholders, Diluted
CrowdStrike defines non-GAAP net income per share attributable
to CrowdStrike common stockholders, as non-GAAP net income
attributable to CrowdStrike divided by the weighted-average shares
outstanding, which includes the dilutive effect of potentially
diluted common stock equivalents outstanding during the period.
CrowdStrike may periodically incur charges or receive payments in
connection with litigation settlements. The company excludes these
charges and payments received from non-GAAP net income attributable
to CrowdStrike when associated with a significant settlement
because CrowdStrike does not believe they are reflective of ongoing
business and operating results.
Free Cash Flow
Free cash flow is a non-GAAP financial measure that CrowdStrike
defines as net cash provided by operating activities less purchases
of property and equipment and capitalized internal-use software and
website development costs. CrowdStrike monitors free cash flow as
one measure of its overall business performance, which enables
CrowdStrike to analyze its future performance without the effects
of non-cash items and allow CrowdStrike to better understand the
cash needs of its business. While CrowdStrike believes that free
cash flow is useful in evaluating its business, free cash flow is a
non-GAAP financial measure that has limitations as an analytical
tool, and free cash flow should not be considered as an alternative
to, or substitute for, net cash provided by operating activities in
accordance with GAAP. The utility of free cash flow as a measure of
CrowdStrike’s liquidity is further limited as it does not represent
the total increase or decrease in CrowdStrike’s cash balance for
any given period. In addition, other companies, including companies
in our industry, may calculate free cash flow differently or not at
all, which reduces the usefulness of free cash flow as a tool for
comparison.
Explanation of Operational Measures
Annual Recurring Revenue
ARR is calculated as the annualized value of CrowdStrike’s
customer subscription contracts as of the measurement date,
assuming any contract that expires during the next 12 months is
renewed on its existing terms. To the extent that CrowdStrike is
negotiating a renewal with a customer after the expiration of the
subscription, CrowdStrike continues to include that revenue in ARR
if CrowdStrike is actively in discussion with such an organization
for a new subscription or renewal, or until such organization
notifies CrowdStrike that it is not renewing its subscription.
Magic Number
Magic Number is calculated by performing the following
calculation for the most recent four quarters and taking the
average: annualizing the difference between a quarter’s
Subscription Revenue and the prior quarter’s Subscription Revenue,
and then dividing the resulting number by the previous quarter’s
Non-GAAP Sales & Marketing Expense. Magic Number = Average of
previous four quarters: ((Quarter Subscription Revenue – Prior
Quarter Subscription Revenue) x 4) / Prior Quarter Non-GAAP Sales
& Marketing Expense.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221127005126/en/
Investor Relations Contact CrowdStrike Holdings, Inc.
Maria Riley, Vice President of Investor Relations
investors@crowdstrike.com 669-721-0742
Press Contact CrowdStrike Holdings, Inc. Kevin Benacci,
Sr. Director, Corporate Communications press@crowdstrike.com
216-409-5055
CrowdStrike (NASDAQ:CRWD)
Historical Stock Chart
From Mar 2024 to Apr 2024
CrowdStrike (NASDAQ:CRWD)
Historical Stock Chart
From Apr 2023 to Apr 2024