CRWD
$197.05
Crowdstrike Holdings
($12.30)
(5.88%)
Earnings Details
3rd Quarter October 2021
Wednesday, December 1, 2021 4:05:00 PM
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Summary

Crowdstrike Holdings Misses

Crowdstrike Holdings (CRWD) reported 3rd Quarter October 2021 earnings of $0.05 per share on revenue of $380.1 million. The consensus earnings estimate was $0.11 per share on revenue of $363.5 million. The Earnings Whisper number was $0.14 per share. Revenue grew 63.5% on a year-over-year basis.

The company said it expects fourth quarter non-GAAP earnings of $0.19 to $0.21 per share on revenue of $406.5 million to $412.3 million. The current consensus earnings estimate is $0.16 per share on revenue of $399.95 million for the quarter ending January 31, 2022.

CrowdStrike provides cloud-delivered endpoint and cloud workload protection. Leveraging artificial intelligence (AI), the CrowdStrike Falcon® platform protects customers against cyberattacks on endpoints and workloads on or off the network by offering visibility and protection across the enterprise.

Results
Reported Earnings
$0.05
Earnings Whisper
$0.14
Consensus Estimate
$0.11
Reported Revenue
$380.1 Mil
Revenue Estimate
$363.5 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

CrowdStrike Reports Third Quarter Fiscal Year 2022 Financial Results

  • Net new ARR growth accelerates
  • Ending ARR grows 67% year-over-year to surpass $1.5 billion
  • Adds over 1,600 net new subscription customers for the second consecutive quarter
  • Delivers record operating and free cash flow

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

"CrowdStrike delivered a robust third quarter with broad-based strength across multiple areas of the business leading to net new ARR growth accelerating and ending ARR growing 67% year-over-year to surpass the $1.5 billion milestone. Our outstanding results this quarter demonstrate the flywheel effect of our platform and reflect continued strong customer adoption for our core products in addition to the growing success of our newer product initiatives including identity protection, log management and cloud. With our leading technology, unmatched platform and approach to stopping breaches, we continue to eclipse our competitors and extend our leadership position," 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, “CrowdStrike once again delivered exceptional results, maintained very high unit economics, drove leverage and generated strong operating and free cash flow as we expanded our leadership across the market from large enterprises to small businesses. Given the growth drivers of our business, as well as our exceptional third quarter performance and momentum into the fourth quarter, we are once again raising our guidance for the fiscal year 2022.”

Third Quarter Fiscal 2022 Financial Highlights

  • Revenue: Total revenue was $380.1 million, a 63% increase, compared to $232.5 million in the third quarter of fiscal 2021. Subscription revenue was $357.0 million, a 67% increase, compared to $213.5 million in the third quarter of fiscal 2021.
  • Annual Recurring Revenue (ARR) increased 67% year-over-year and grew to $1.51 billion as of October 31, 2021, of which $170.0 million was net new ARR added in the quarter. Net new ARR year-over-year growth accelerated to 46% on an as reported basis and 55% on an organic basis.
  • Subscription Gross Margin: GAAP subscription gross margin was 76%, compared to 77% in the third quarter of fiscal 2021. Non-GAAP subscription gross margin was 79%, compared to 78% in the third quarter of fiscal 2021.
  • Income/Loss from Operations: GAAP loss from operations was $40.3 million, compared to $24.2 million in the third quarter of fiscal 2021. Non-GAAP income from operations was $50.7 million, compared to $18.9 million in the third quarter of fiscal 2021.
  • Net Income/Loss Attributable to CrowdStrike: GAAP net loss attributable to CrowdStrike was $50.5 million, compared to $24.5 million in the third quarter of fiscal 2021. GAAP net loss per share attributable to CrowdStrike common stockholders was $0.22, compared to $0.11 in the third quarter of fiscal 2021. Non-GAAP net income attributable to CrowdStrike was $41.1 million, compared to $18.6 million in the third quarter of fiscal 2021. Non-GAAP net income per share attributable to CrowdStrike common stockholders, diluted, was $0.17, compared to $0.08 in the third quarter of fiscal 2021.
  • Cash Flow: Net cash generated from operations was $159.1 million, compared to $88.5 million in the third quarter of fiscal 2021. Free cash flow was $123.5 million, compared to $76.1 million in the third quarter of fiscal 2021.
  • Cash and Cash Equivalents grew to $1.91 billion as of October 31, 2021.

Recent Highlights

  • Added 1,607 net new subscription customers in the quarter for a total of 14,687 subscription customers as of October 31, 2021, representing 75% growth year-over-year.
  • CrowdStrike’s subscription customers that have adopted four or more modules, five or more modules and six or more modules increased to 68%, 55%, and 32%, respectively, as of October 31, 2021.
  • Unveiled a series of new offerings and partnerships during the fifth annual Fal.Con cybersecurity conference. Announcements included Falcon XDR, the CrowdXDR Alliance, Humio Community Edition, Falcon Fusion, Falcon FileVantage, Falcon CWP Complete, a joint initiative with Google to launch the Work Safer program, and a partnership with leading enterprise automation software company, UIPath.
  • Acquired SecureCircle, a SaaS-based cybersecurity service that extends Zero Trust security to data on the endpoint. CrowdStrike intends to leverage SecureCircle’s revolutionary technology and team to extend its industry leading Zero Trust endpoint security device and identity capabilities to include data.
  • Named a leader in IDC MarketScape: Worldwide Modern Endpoint Security for Enterprise 20211.
  • Won Best Endpoint Detection and Response Product for the second year in a row in SE Labs’ 2021 Annual Report.
  • Announced that the Cybersecurity and Infrastructure Security Agency (CISA) has worked with multiple federal agencies to select CrowdStrike as one of the major platforms to support the Executive Order endpoint detection and response initiative.
  • Enhanced the technology integration between CrowdStrike and AWS to offer additional features to help joint customers protect against ransomware attacks and identity-based threats.
  • Announced Falcon Horizon support for Google Cloud environments, extending CrowdStrike’s Cloud Security Posture Management solution to protect the three largest cloud providers.
  • Achieved FedRAMP authorization of CrowdStrike Falcon Forensics. Hosted within GovCloud, Falcon Forensics speeds the response time and remediation of critical security incidents for agencies by providing increased visibility and automated analysis.
  • Humio was awarded the Enterprise Management Associates Top 3 Award in the Log Management and Observability category of their Enterprise Decision Guide 2021 report.

1

IDC MarketScape: Worldwide Modern Endpoint Security for Enterprise 2021 Vendor Assessment Doc #US48306021, November 2021.

Financial Outlook

CrowdStrike is providing the following guidance for the fourth quarter of fiscal 2022 (ending January 31, 2022) and increasing its guidance for fiscal year 2022 (ending January 31, 2022):

 

Q4 FY22

Guidance

 

Full Year FY22

Guidance

Total revenue

$406.5 - $412.3 million

 

$1,427.1 - $1,432.9 million

Non-GAAP income from operations

$55.2 - $59.5 million

 

$171.0 - $175.3 million

Non-GAAP net income attributable to CrowdStrike

$45.2 - $49.4 million

 

$135.4 - $139.7 million

Non-GAAP net income per share attributable to CrowdStrike common stockholders, diluted

$0.19 - $0.21

 

$0.57 - $0.59

Weighted average shares used in computing non-GAAP net income per share attributable to CrowdStrike common stockholders, diluted

241 million

 

238 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 our 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, acquisition-related expenses, and tax costs for intellectual property integration relating to the Humio acquisition. We have not provided the most directly comparable GAAP measures because certain items are out of our 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 2022 and outlook for its fiscal third quarter and year 2022 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:

December 1, 2021

Time:

2:00 p.m. Pacific time / 5:00 p.m. Eastern time

Dial-in number:

409-937-8967, conference ID: 9767096

Webcast:

ir.crowdstrike.com

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding our future growth, and future financial and operating performance, including our financial outlook for the fiscal fourth quarter and fiscal year 2022. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: our limited operating history; risks associated with our growth; our ability to identify and effectively implement the necessary changes to address execution challenges; the impact of the COVID-19 pandemic on our and our customers’ business; our 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; our ability to attract new and retain existing customers; our 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; our ability to collaborate and integrate our products with offerings from other parties to deliver benefits to customers; rapidly evolving technological developments in the market for security products and subscription and support offerings; length of sales cycles; and general market, political, economic, and business conditions, including those related to COVID-19.

Further information on risks, uncertainties and other factors that could affect our financial results are included in the filings we make with the Securities and Exchange Commission (“SEC”) from time to time, including our 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 us as of the date hereof, and we do 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

We believe that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to our 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

We intend 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. We use these channels, as well as social media and our blog, to communicate with our investors, customers, and the public about our company, our offerings, and other issues. It is possible that the information we post on social media and our blog could be deemed to be material information. As such, we encourage investors, the media, and others to follow the channels listed above, including the social media channels listed on our investor relations website, and to review the information disclosed through such channels. Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.

About CrowdStrike Holdings

CrowdStrike provides cloud-delivered endpoint and cloud workload protection. Leveraging artificial intelligence (AI), the CrowdStrike Falcon® platform protects customers against cyberattacks on endpoints on or off the network by offering visibility and protection across the enterprise.

Copyright © 2021 CrowdStrike, Inc. All rights reserved. CrowdStrike and CrowdStrike Falcon® are the registered trademarks of CrowdStrike, Inc. CrowdStrike owns other trademarks and service marks, and may use the brands of third parties to identify their products and services.

 

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,

 

2021

 

2020

 

2021

 

2020

Revenue

 

 

 

 

 

 

 

Subscription

$

357,030

 

 

$

213,530

 

 

$

954,094

 

 

$

560,008

 

Professional services

23,021

 

 

18,930

 

 

66,490

 

 

49,501

 

Total revenue

380,051

 

 

232,460

 

 

1,020,584

 

 

609,509

 

Cost of revenue

 

 

 

 

 

 

 

Subscription (1)(2)

85,464

 

 

49,583

 

 

226,360

 

 

130,864

 

Professional services (1)

16,200

 

 

11,944

 

 

44,241

 

 

31,949

 

Total cost of revenue

101,664

 

 

61,527

 

 

270,601

 

 

162,813

 

Gross profit

278,387

 

 

170,933

 

 

749,983

 

 

446,696

 

Operating expenses

 

 

 

 

 

 

 

Sales and marketing (1)(2)

164,960

 

 

105,602

 

 

453,952

 

 

288,867

 

Research and development (1)(2)

97,630

 

 

57,539

 

 

266,265

 

 

148,600

 

General and administrative (1)(2)(3)(4)

56,061

 

 

31,951

 

 

148,780

 

 

85,955

 

Total operating expenses

318,651

 

 

195,092

 

 

868,997

 

 

523,422

 

Loss from operations

(40,264)

 

 

(24,159)

 

 

(119,014)

 

 

(76,726)

 

Interest expense(5)

(6,403)

 

 

(193)

 

 

(18,929)

 

 

(510)

 

Other income, net(6)

690

 

 

272

 

 

6,077

 

 

5,537

 

Loss before provision for income taxes

(45,977)

 

 

(24,080)

 

 

(131,866)

 

 

(71,699)

 

Provision for income taxes(7)

4,473

 

 

451

 

 

58,773

 

 

1,928

 

Net loss

(50,450)

 

 

(24,531)

 

 

(190,639)

 

 

(73,627)

 

Net income attributable to noncontrolling interest

5

 

 

 

 

2,183

 

 

 

Net loss attributable to CrowdStrike

$

(50,455)

 

 

$

(24,531)

 

 

$

(192,822)

 

 

$

(73,627)

 

Net loss per share attributable to CrowdStrike common stockholders, basic and diluted

$

(0.22)

 

 

$

(0.11)

 

 

$

(0.85)

 

 

$

(0.34)

 

Weighted-average shares used in computing net loss per share attributable to CrowdStrike common stockholders, basic and diluted

228,293

 

 

219,401

 

 

226,292

 

 

216,432

 

_____________________________

(1)

Includes stock-based compensation expense as follows:

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

(in thousands)

 

(in thousands)

Subscription cost of revenue

$

5,969

 

 

$

3,226

 

 

$

15,548

 

 

$

7,856

 

Professional services cost of revenue

2,546

 

 

1,551

 

 

6,963

 

 

3,947

 

Sales and marketing

25,499

 

 

12,811

 

 

68,178

 

 

35,101

 

Research and development

27,333

 

 

11,771

 

 

70,942

 

 

25,700

 

General and administrative

25,319

 

 

11,251

 

 

55,684

 

 

29,357

 

Total stock-based compensation expense

$

86,666

 

 

$

40,610

 

 

$

217,315

 

 

$

101,961

 

_____________________________

(2)

Includes amortization of acquired intangible assets, including purchased patents, as follows:

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

(in thousands)

 

(in thousands)

Subscription cost of revenue

$

2,784

 

 

$

272

 

 

$

7,550

 

 

$

397

 

Sales and marketing

540

 

 

91

 

 

1,509

 

 

153

 

Research and development

 

 

9

 

 

 

 

29

 

General and administrative

13

 

 

 

 

13

 

 

 

Total amortization of acquired intangible assets

$

3,337

 

 

$

372

 

 

$

9,072

 

 

$

579

 

_____________________________

(3)

Includes acquisition-related expenses as follows:

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

(in thousands)

 

(in thousands)

General and administrative

$

971

 

 

$

2,119

 

 

$

5,912

 

 

$

2,119

 

Total acquisition-related expenses

$

971

 

 

$

2,119

 

 

$

5,912

 

 

$

2,119

 

_____________________________

(4)

Includes legal reserve and settlement charges as follows:

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

(in thousands)

 

(in thousands)

General and administrative

$

 

 

$

 

 

$

2,500

 

 

$

 

Total legal reserve and settlement charges

$

 

 

$

 

 

$

2,500

 

 

$

 

_____________________________

(5)

Includes amortization of debt issuance costs and discount as follows:

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

(in thousands)

 

(in thousands)

Interest expense

$

546

 

 

$

 

 

$

1,639

 

 

$

 

Total amortization of debt issuance costs and discount

$

546

 

 

$

 

 

$

1,639

 

 

$

 

_____________________________

(6)

Includes gains and other income from strategic investment as follows:

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

(in thousands)

 

(in thousands)

Other income, net

$

10

 

 

$

 

 

$

4,366

 

 

$

 

Total gains and other income from strategic investments

$

10

 

 

$

 

 

$

4,366

 

 

$

 

(7)

Includes tax costs for intellectual property integration relating to the Humio acquisition as follows:

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

(in thousands)

 

(in thousands)

Provision for income taxes

$

 

 

$

 

 

$

48,824

 

 

$

 

Total provision for income taxes

$

 

 

$

 

 

$

48,824

 

 

$

 

 

CROWDSTRIKE HOLDINGS, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

October 31,

 

January 31,

 

2021

 

2021

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

1,907,508

 

 

$

1,918,608

 

Accounts receivable, net of allowance for credit losses

283,272

 

 

239,199

 

Deferred contract acquisition costs, current

108,636

 

 

80,850

 

Prepaid expenses and other current assets

60,670

 

 

53,617

 

Total current assets

2,360,086

 

 

2,292,274

 

Strategic investments

22,665

 

 

2,500

 

Property and equipment, net

242,224

 

 

167,014

 

Operating lease right-of-use assets

33,893

 

 

36,484

 

Deferred contract acquisition costs, noncurrent

162,309

 

 

117,906

 

Goodwill

373,889

 

 

83,566

 

Intangible assets, net

82,870

 

 

15,677

 

Other long-term assets

21,681

 

 

17,112

 

Total assets

$

3,299,617

 

 

$

2,732,533

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

7,167

 

 

$

12,065

 

Accrued expenses

76,758

 

 

51,117

 

Accrued payroll and benefits

94,738

 

 

71,907

 

Operating lease liabilities, current

9,706

 

 

8,977

 

Deferred revenue

974,571

 

 

701,988

 

Other current liabilities

78,607

 

 

17,499

 

Total current liabilities

1,241,547

 

 

863,553

 

Long-term debt

739,145

 

 

738,029

 

Deferred revenue, noncurrent

313,625

 

 

209,907

 

Operating lease liabilities, noncurrent

27,895

 

 

31,986

 

Other liabilities, noncurrent

17,835

 

 

17,184

 

Total liabilities

2,340,047

 

 

1,860,659

 

Commitments and contingencies

 

 

 

Stockholders’ Equity

 

 

 

Common stock, Class A and Class B

115

 

 

112

 

Additional paid-in capital

1,870,120

 

 

1,598,259

 

Accumulated deficit

(922,938)

 

 

(730,116)

 

Accumulated other comprehensive income

885

 

 

2,319

 

Total CrowdStrike Holdings, Inc. stockholders’ equity

948,182

 

 

870,574

 

Non-controlling interest

11,388

 

 

1,300

 

Total stockholders’ equity

959,570

 

 

871,874

 

Total liabilities and stockholders’ equity

$

3,299,617

 

 

$

2,732,533

 

 

CROWDSTRIKE HOLDINGS, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

Nine Months Ended October 31,

 

2021

 

2020

Operating activities

 

 

 

Net loss

$

(190,639)

 

 

$

(73,627)

 

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

Depreciation and amortization

39,247

 

 

27,728

 

Loss on disposal of property and equipment

259

 

 

 

Amortization of intangible assets

9,072

 

 

579

 

Amortization of deferred contract acquisition costs

79,712

 

 

44,940

 

Non-cash operating lease costs

6,727

 

 

7,666

 

Stock-based compensation expense

217,315

 

 

101,961

 

Gain on sale of debt securities, net

 

 

(1,347)

 

Amortization of marketable securities purchased at a premium

 

 

578

 

Non-cash interest expense

1,824

 

 

506

 

Change in fair value of strategic investments

(4,356)

 

 

 

Changes in operating assets and liabilities, net of impact of acquisitions

 

 

 

Accounts receivable, net

(40,644)

 

 

(6,603)

 

Deferred contract acquisition costs

(151,901)

 

 

(84,741)

 

Prepaid expenses and other assets

(9,788)

 

 

1,487

 

Accounts payable

(7,033)

 

 

6,556

 

Accrued expenses and other current liabilities

81,826

 

 

1,643

 

Accrued payroll and benefits

22,258

 

 

18,712

 

Operating lease liabilities

(7,394)

 

 

(1,434)

 

Deferred revenue

375,582

 

 

189,582

 

Other liabilities, noncurrent

(7,001)

 

 

7,917

 

Net cash provided by operating activities

415,066

 

 

242,103

 

Investing activities

 

 

 

Purchases of property and equipment

(85,420)

 

 

(40,245)

 

Capitalized internal-use software and website development

(15,201)

 

 

(6,345)

 

Purchase of strategic investments

(15,809)

 

 

(1,500)

 

Business acquisitions, net of cash acquired

(353,746)

 

 

(85,469)

 

Purchase of intangible assets

(680)

 

 

 

Purchases of marketable securities

 

 

(84,904)

 

Proceeds from sales of marketable securities

 

 

639,586

 

Maturities of marketable securities

 

 

91,605

 

Net cash (used in) provided by investing activities

(470,856)

 

 

512,728

 

Financing activities

 

 

 

Payment of debt issuance costs related to revolving line of credit

(219)

 

 

 

Payment of debt issuance costs related to Senior Notes

(1,581)

 

 

 

Proceeds from issuance of common stock upon exercise of stock options

12,796

 

 

21,522

 

Proceeds from issuance of common stock under the employee stock purchase plan

27,452

 

 

17,284

 

Capital contributions from non-controlling interest holders

7,905

 

 

800

 

Net cash provided by financing activities

46,353

 

 

39,606

 

 

 

 

 

Effect of foreign exchange rates on cash and cash equivalents

(1,663)

 

 

691

 

 

 

 

 

Net (decrease) increase in cash and cash equivalents

(11,100)

 

 

795,128

 

 

 

 

 

Cash and cash equivalents, beginning of period

1,918,608

 

 

264,798

 

Cash and cash equivalents, end of period

$

1,907,508

 

 

$

1,059,926

 

 

CROWDSTRIKE HOLDINGS, INC.

 

 

 

 

Non-GAAP Financial Measures with Reconciliation to GAAP

(in thousands, except percentages)

(unaudited)

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2021

 

2020

 

2021

 

2020

GAAP subscription revenue

$

357,030

 

 

$

213,530

 

 

$

954,094

 

 

$

560,008

 

 

 

 

 

 

 

 

 

GAAP subscription gross profit

$

271,566

 

 

$

163,947

 

 

$

727,734

 

 

$

429,144

 

Add: Stock-based compensation expense

5,969

 

 

3,226

 

 

15,548

 

 

7,856

 

Add: Amortization of acquired intangible assets

2,784

 

 

272

 

 

7,550

 

 

397

 

Non-GAAP subscription gross profit

$

280,319

 

 

$

167,445

 

 

$

750,832

 

 

$

437,397

 

 

 

 

 

 

 

 

 

GAAP subscription gross margin

76

%

 

77

%

 

76

%

 

77

%

 

 

 

 

 

 

 

 

Non-GAAP subscription gross margin

79

%

 

78

%

 

79

%

 

78

%

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2021

 

2020

 

2021

 

2020

GAAP total revenue

$

380,051

 

 

$

232,460

 

 

$

1,020,584

 

 

$

609,509

 

 

 

 

 

 

 

 

 

GAAP loss from operations

$

(40,264)

 

 

$

(24,159)

 

 

$

(119,014)

 

 

$

(76,726)

 

Add: Stock-based compensation expense

86,666

 

 

40,610

 

 

217,315

 

 

101,961

 

Add: Amortization of acquired intangible assets

3,337

 

 

372

 

 

9,072

 

 

579

 

Add: Acquisition-related expenses

971

 

 

2,119

 

 

5,912

 

 

2,119

 

Add: Legal reserve and settlement charges

 

 

 

 

2,500

 

 

 

Non-GAAP income from operations

$

50,710

 

 

$

18,942

 

 

$

115,785

 

 

$

27,933

 

 

 

 

 

 

 

 

 

GAAP operating margin

(11)

%

 

(10)

%

 

(12)

%

 

(13)

%

 

 

 

 

 

 

 

 

Non-GAAP operating margin

13

%

 

8

%

 

11

%

 

5

%

 

CROWDSTRIKE HOLDINGS, INC.

 

 

 

 

Non-GAAP Financial Measures with Reconciliation to GAAP (Continued)

(in thousands, except percentages and per share amounts)

(unaudited)

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2021

 

2020

 

2021

 

2020

GAAP net loss attributable to CrowdStrike

$

(50,455)

 

 

$

(24,531)

 

 

$

(192,822)

 

 

$

(73,627)

 

 

 

 

 

 

 

 

 

Add: Stock-based compensation expense

$

86,666

 

 

$

40,610

 

 

$

217,315

 

 

$

101,961

 

Add: Amortization of acquired intangible assets

3,337

 

 

372

 

 

9,072

 

 

579

 

Add: Acquisition-related expenses

971

 

 

2,119

 

 

5,912

 

 

2,119

 

Add: Amortization of debt issuance costs and discount

546

 

 

 

 

1,639

 

 

 

Add: Legal reserve and settlement charges

 

 

 

 

2,500

 

 

 

Add: Provision for income taxes(1)

 

 

 

 

48,824

 

 

 

Less: Gains and other income from strategic investments attributable to CrowdStrike

(5)

 

 

 

 

(2,183)

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income attributable to CrowdStrike

$

41,060

 

 

$

18,570

 

 

$

90,257

 

 

$

31,032

 

 

 

 

 

 

 

 

 

Weighted-average shares used in computing GAAP net loss per share attributable to CrowdStrike common stockholders, basic and diluted

228,293

 

 

219,401

 

 

226,292

 

 

216,432

 

Weighted-average shares used in computing Non-GAAP net income per share attributable to CrowdStrike common stockholders, basic

228,293

 

 

219,401

 

 

226,292

 

 

216,432

 

Weighted-average shares used in computing Non-GAAP net income per share attributable to CrowdStrike common stockholders, diluted

238,563

 

 

234,626

 

 

238,194

 

 

232,969

 

 

 

 

 

 

 

 

 

GAAP net loss per share attributable to CrowdStrike common stockholders, basic and diluted

$

(0.22)

 

 

$

(0.11)

 

 

$

(0.85)

 

 

$

(0.34)

 

 

 

 

 

 

 

 

 

Non-GAAP net income per share attributable to CrowdStrike common stockholders, basic

$

0.18

 

 

$

0.08

 

 

$

0.40

 

 

$

0.14

 

Non-GAAP net income per share attributable to CrowdStrike common stockholders, diluted

$

0.17

 

 

$

0.08

 

 

$

0.38

 

 

$

0.13

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2021

 

2020

 

2021

 

2020

GAAP total revenue

$

380,051

 

 

$

232,460

 

 

$

1,020,584

 

 

$

609,509

 

 

 

 

 

 

 

 

 

GAAP net cash provided by operating activities

159,058

 

 

88,501

 

 

415,066

 

 

242,103

 

Less: Purchases of property and equipment

(29,627)

 

 

(9,911)

 

 

(85,420)

 

 

(40,245)

 

Less: Capitalized internal-use software and website development

(5,928)

 

 

(2,495)

 

 

(15,201)

 

 

(6,345)

 

Free cash flow

$

123,503

 

 

$

76,095

 

 

$

314,445

 

 

$

195,513

 

 

 

 

 

 

 

 

 

GAAP net cash (used in) provided by investing activities

$

(44,735)

 

 

$

(98,375)

 

 

$

(470,856)

 

 

$

512,728

 

GAAP net cash provided by financing activities

$

7,554

 

 

$

5,171

 

 

$

46,353

 

 

$

39,606

 

 

 

 

 

 

 

 

 

GAAP net cash provided by operating activities as a percentage of revenue

42

%

 

38

%

 

41

%

 

40

%

Less: Purchases of property and equipment as a percentage of revenue

(8)

%

 

(4)

%

 

(8)

%

 

(7)

%

Less: Capitalized internal-use software and website development as a percentage of revenue

(2)

%

 

(1)

%

 

(1)

%

 

(1)

%

Free cash flow margin

32

%

 

33

%

 

31

%

 

32

%

_____________________________

(1)

We use our GAAP provision for income taxes for the purpose of determining our non-GAAP income tax expense. The tax costs for intellectual property integration relating to the Humio acquisition is included in the GAAP provision for income taxes during the first quarter of fiscal 2022. The income tax benefits related to stock-based compensation, amortization of intangibles, including purchased patents, acquisition related expenses, amortization of debt issuance costs and discount, and gains and other income from strategic investments attributable to CrowdStrike included in the GAAP provision for income taxes was not material for all periods presented.

 

CROWDSTRIKE HOLDINGS, INC.

 

Statements of Operations: GAAP to Non-GAAP Reconciliations

(in thousands)

(unaudited)

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2021

 

2020

 

2021

 

2020

GAAP cost of revenue

$

101,664

 

 

$

61,527

 

 

$

270,601

 

 

$

162,813

 

Less:

 

 

 

 

 

 

 

Stock based compensation expense

8,515

 

 

4,777

 

 

22,511

 

 

11,803

 

Amortization of acquired intangible assets

2,784

 

 

272

 

 

7,550

 

 

397

 

Non-GAAP cost of revenue

$

90,365

 

 

$

56,478

 

 

$

240,540

 

 

$

150,613

 

 

 

 

 

 

 

 

 

GAAP subscription gross profit

$

271,566

 

 

$

163,947

 

 

$

727,734

 

 

$

429,144

 

Add:

 

 

 

 

 

 

 

Stock based compensation expense

5,969

 

 

3,226

 

 

15,548

 

 

7,856

 

Amortization of acquired intangible assets

2,784

 

 

272

 

 

7,550

 

 

397

 

Non-GAAP subscription gross profit

$

280,319

 

 

$

167,445

 

 

$

750,832

 

 

$

437,397

 

 

 

 

 

 

 

 

 

GAAP professional services gross profit

$

6,821

 

 

$

6,986

 

 

$

22,249

 

 

$

17,552

 

Add:

 

 

 

 

 

 

 

Stock based compensation expense

2,546

 

 

1,551

 

 

6,963

 

 

3,947

 

Non-GAAP professional services gross profit

$

9,367

 

 

$

8,537

 

 

$

29,212

 

 

$

21,499

 

 

 

 

 

 

 

 

 

GAAP sales and marketing operating expenses

$

164,960

 

 

$

105,602

 

 

$

453,952

 

 

$

288,867

 

Less:

 

 

 

 

 

 

 

Stock based compensation expense

25,499

 

 

12,811

 

 

68,178

 

 

35,101

 

Amortization of acquired intangible assets

540

 

 

91

 

 

1,509

 

 

153

 

Non-GAAP sales and marketing operating expenses

$

138,921

 

 

$

92,700

 

 

$

384,265

 

 

$

253,613

 

 

 

 

 

 

 

 

 

GAAP research and development operating expenses

$

97,630

 

 

$

57,539

 

 

$

266,265

 

 

$

148,600

 

Less:

 

 

 

 

 

 

 

Stock based compensation expense

27,333

 

 

11,771

 

 

70,942

 

 

25,700

 

Amortization of acquired intangible assets

 

 

9

 

 

 

 

29

 

Non-GAAP research and development operating expenses

$

70,297

 

 

$

45,759

 

 

$

195,323

 

 

$

122,871

 

 

 

 

 

 

 

 

 

GAAP general and administrative operating expenses

$

56,061

 

 

$

31,951

 

 

$

148,780

 

 

$

85,955

 

Less:

 

 

 

 

 

 

 

Stock based compensation expense

25,319

 

 

11,251

 

 

55,684

 

 

29,357

 

Acquisition-related expenses

971

 

 

2,119

 

 

5,912

 

 

2,119

 

Amortization of acquired intangible assets

13

 

 

 

 

13

 

 

 

Legal reserve and settlement charges

 

 

 

 

2,500

 

 

 

Non-GAAP general and administrative operating expenses

$

29,758

 

 

$

18,581

 

 

$

84,671

 

 

$

54,479

 

 

 

 

 

 

 

 

 

GAAP loss from operations

$

(40,264)

 

 

$

(24,159)

 

 

$

(119,014)

 

 

$

(76,726)

 

Add:

 

 

 

 

 

 

 

Stock based compensation expense

86,666

 

 

40,610

 

 

217,315

 

 

101,961

 

Amortization of acquired intangible assets

3,337

 

 

372

 

 

9,072

 

 

579

 

Acquisition-related expenses

971

 

 

2,119

 

 

5,912

 

 

2,119

 

Legal reserve and settlement charges

 

 

 

 

2,500

 

 

 

Non-GAAP income from operations

$

50,710

 

 

$

18,942

 

 

$

115,785

 

 

$

27,933

 

 

CROWDSTRIKE HOLDINGS, INC.

 

Statements of Operations: GAAP to Non-GAAP Reconciliations (continued)

(in thousands, except per share amounts)

(unaudited)

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2021

 

2020

 

2021

 

2020

GAAP net loss attributable to CrowdStrike

$

(50,455)

 

 

$

(24,531)

 

 

$

(192,822)

 

 

$

(73,627)

 

Add:

 

 

 

 

 

 

 

Stock based compensation expense

86,666

 

 

40,610

 

 

217,315

 

 

101,961

 

Amortization of acquired intangible assets

3,337

 

 

372

 

 

9,072

 

 

579

 

Acquisition-related expenses

971

 

 

2,119

 

 

5,912

 

 

2,119

 

Amortization of debt issuance costs and discount

546

 

 

 

 

1,639

 

 

 

Legal reserve and settlement charges

 

 

 

 

2,500

 

 

 

Provision for income taxes(1)

 

 

 

 

48,824

 

 

 

Less:

 

 

 

 

 

 

 

Gains and other income from strategic investments attributable to CrowdStrike

(5)

 

 

 

 

(2,183)

 

 

 

Non-GAAP net income attributable to CrowdStrike

$

41,060

 

 

$

18,570

 

 

$

90,257

 

 

$

31,032

 

 

 

 

 

 

 

 

 

Weighted-average shares used in computing basic net income (loss) per share attributable to CrowdStrike common stockholders (GAAP and Non-GAAP)

228,293

 

219,401

 

226,292

 

216,432

 

 

 

 

 

 

 

 

GAAP basic net loss per share attributable to CrowdStrike common stockholders

$

(0.22)

 

 

$

(0.11)

 

 

$

(0.85)

 

 

$

(0.34)

 

 

 

 

 

 

 

 

 

Non-GAAP basic net income per share attributable to CrowdStrike common stockholders

$

0.18

 

 

$

0.08

 

 

$

0.40

 

 

$

0.14

 

 

 

 

 

 

 

 

 

GAAP diluted net loss per share attributable to CrowdStrike common stockholders

$

(0.22)

 

 

$

(0.11)

 

 

$

(0.85)

 

 

$

(0.34)

 

Add:

 

 

 

 

 

 

 

Stock-based compensation

0.36

 

 

0.17

 

 

0.91

 

 

0.44

 

Amortization of acquired intangible assets

0.01

 

 

 

 

0.04

 

 

 

Acquisition-related expenses

 

 

0.01

 

 

0.02

 

 

0.01

 

Amortization of debt issuance costs and discount

 

 

 

 

0.01

 

 

 

Legal reserve and settlement charges

 

 

 

 

0.01

 

 

 

Provision for income taxes (1)

 

 

 

 

0.20

 

 

 

Adjustment to fully diluted earnings per share (2)

0.02

 

 

0.01

 

 

0.05

 

 

0.02

 

Less:

 

 

 

 

 

 

 

Gains and other income from strategic investments attributable to CrowdStrike

 

 

 

 

(0.01)

 

 

 

Non-GAAP diluted net income per share attributable to CrowdStrike common stockholders

$

0.17

 

 

$

0.08

 

 

$

0.38

 

 

$

0.13

 

 

 

 

 

 

 

 

 

Weighted-average shares used in diluted net income (loss) per share attributable to CrowdStrike common stockholders calculation:

 

 

 

 

 

 

 

GAAP

228,293

 

 

219,401

 

 

226,292

 

 

216,432

 

Non-GAAP

238,563

 

 

234,626

 

 

238,194

 

 

232,969

 

____________________________

(1)

We use our GAAP provision for income taxes for the purpose of determining our non-GAAP income tax expense. The tax costs for intellectual property integration relating to the Humio acquisition is included in the GAAP provision for income taxes during the first quarter of fiscal 2022. The income tax benefits related to stock-based compensation, amortization of intangibles, 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 was not material for all periods presented.

 

 

(2)

For periods in which we 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.

Explanation of Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial 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 our 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 our non-GAAP financial measures as tools for comparison. In addition, the utility of free cash flow as a measure of our 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 our business.

Non-GAAP Subscription Gross Profit and Non-GAAP Subscription Gross Margin

We define 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. We believe non-GAAP subscription gross profit and non-GAAP subscription gross margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as these measures eliminate the effects of certain variables unrelated to our overall operating performance.

Non-GAAP Income from Operations

We define 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. We believe non-GAAP income from operations provides our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as this metric generally eliminates the effects of certain variables unrelated to our overall operating performance.

Non-GAAP Net Income Attributable to CrowdStrike

We define 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 the Humio acquisition. We believe non-GAAP net income attributable to CrowdStrike provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons, as this metric generally eliminates the effects of certain variables unrelated to our overall performance.

Non-GAAP Net Income per Share Attributable to CrowdStrike Common Stockholders, Basic and Diluted

We define 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. We may periodically incur charges or receive payments in connection with litigation settlements. We exclude these charges and payments received from non-GAAP net income attributable to CrowdStrike when associated with a significant settlement because we do not believe they are reflective of ongoing business and operating results.

Free Cash Flow

Free cash flow is a non-GAAP financial measure that we define as net cash provided by operating activities less purchases of property and equipment and capitalized internal-use software and website development. We monitor free cash flow as one measure of our overall business performance, which enables us to analyze our future performance without the effects of non-cash items and allow us to better understand the cash needs of our business. While we believe that free cash flow is useful in evaluating our 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 our liquidity is further limited as it does not represent the total increase or decrease in our 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 our 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 we are negotiating a renewal with a customer after the expiration of the subscription, we continue to include that revenue in ARR if we are actively in discussion with such an organization for a new subscription or renewal, or until such organization notifies us 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.

Investor Relations
CrowdStrike Holdings, Inc.
Maria Riley, Vice President of Investor Relations
investors@crowdstrike.com
669-721-0742

Media
CrowdStrike Holdings, Inc.
Kevin Benacci, Sr. Director, Corporate Communications
press@crowdstrike.com
216-409-5055

Source: CrowdStrike Holdings, Inc.