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Cybersecurity firm CrowdStrike reported first-quarter earnings Tuesday swinging to a profit with stronger revenue $CRWD also raised earnings guidance above expectations, sending shares up. Cloud-based security software customers include Amazon Web Services and Credit Suisse.

Strike Ware
 

Crowdstrike Holdings Inc NASDAQ: CRWD Reported Earnings After Close Tuesday

$0.02 Beat ($0.06) EPS AND $178.1 Billion Beat $165.4 Billion Revenue Forecast

Earnings

CrowdStrike reported earnings of 2 cents an adjusted share on revenue that jumped 85% to $178.1 million. A year earlier, the cybersecurity firm lost 47 cents a share. Analysts had forecast a loss of 6 cents a share on revenue of $165.4 million for the quarter ended April 30.

GAAP loss from operations was $22.6 million, compared to $25.8 million in the first quarter of fiscal 2020. Non-GAAP income from operations was $1.2 million, compared to a loss of $21.9 million in the first quarter of fiscal 2020.  GAAP net loss was $19.2 million, compared to $26.0 million in the first quarter of fiscal 2020. GAAP net loss per share was $0.09, compared to $0.55 in the first quarter of fiscal 2020.

Non-GAAP net income was $4.5 million, compared to a loss of $22.1 million in the first quarter of fiscal 2020. Non-GAAP net income per share, was $0.02, compared to a loss of $0.47 in the first quarter of fiscal 2020.I

 

Crowdstrike Holdings Inc NASDAQ: CRWD

Reaction After hours $100.25 +8.00 (+8.67%)

After Closing $92.25  −2.59 (-2.73%) on Day

Highlights

  • Annual Recurring Revenue (ARR) increased 88% year-over-year and grew to $686.1 million as of April 30, 2020, of which $85.7 million was net new ARR added in the quarter.
  • Subscription Gross Margin: GAAP subscription gross margin was 77%, compared to 72% in the first quarter of fiscal 2020. Non-GAAP subscription gross margin was 78%, compared to 73% in the first quarter of fiscal 2020.
  • Cash Flow: Net cash generated from operations was $98.6 million, compared to $1.4 million in the first quarter of fiscal 2020.
  • Free cash flow was $87.0 million, compared to negative $16.1 million in the first quarter of fiscal 2020.
  • Cash and Cash Equivalents increased to $1,005 million as of April 30, 2020. 
  • Added 830 net new subscription customers in the quarter for a total of 6,261 subscription customers as of April 30, 2020, representing 105% growth year-over-year.
  • CrowdStrike’s subscription customers that have adopted four or more cloud modules increased to 55% and those with five or more cloud modules increased to over 35% as of April 30, 2020.
  • CrowdStrike Announced partnerships with Computacenter, a technology partner trusted by large corporate and public sector organizations, and Veronym, a cloud-managed security service provider that specializes in small and medium-sized enterprises (SME). These partnerships make the CrowdStrike Falcon® platform widely available for enterprise customers across Germany and to SMEs across Germany, Austria, and Switzerland.
  • CrowdStrike successfully completed its second MITRE ATT&CK® evaluation. The MITRE ATT&CK evaluation tests a vendor’s ability to detect attacker activity across the full spectrum of sophisticated attacks. CrowdStrike’s results indicate once again that CrowdStrike Falcon® delivers best-in-class visibility and detection.

Outlook

For the current quarter ending in July, CrowdStrike projected revenue of $188 million at the midpoint of its guidance. Analysts had projected $173.1 million. The company said it expects a 1-cent loss vs. estimates of a 6-cent los

IPO First Day

CrowdStrike soared as high as 97% on its first day of trading on the NASDAQ Wednesday.

CRWD opened trading at $63.50 well above the IPO price of $34 a share, which was above the high end of its expected range of $28 to $30 per share. The stock's market cap is now over $11 billion, nearly quadruple the valuation from its last private round in June 2018.

CrowdStrike Debut

The IPO

Class A shares were offered to the public, while Class B shares with voting rights will mostly be controlled by current investors and executive directors. Warburg Pincus, a private equity firm, is the largest Class B shareholder with around 30% stake at the time of the offering.

  • CrowdStrike priced 18 million shares at $34 late Tuesday,
  • Goldman Sachs, J.P. Morgan, Bank of America Merrill Lynch and Barclays led Crowdstrike’s IPO.

CrowdStrike Debut

About CrowdStrike

The company uses cloud-based technology to detect and prevent breaches. CrowdStrike was founded in 2011 in Sunnyvale, California. It launched its first end-point security product two years later. As of Jan. 31, it had more than 2,500 subscription customers worldwide. That includes 37 of the top 100 global companies, and nine of the top 20 major banks, it said.Credit Suisse, Tribune Media and Amazon Web Services are among its customers.

CrowdStrike may be best known for its role in investigating the now infamous 2016 breach of the Democratic National Committee’s servers.

CRWD recorded a net loss of $140 million for the year ended Jan. 31, while revenue more than doubled to $249.8 million according to the company’s prospectus.

CEO George Kurtz told CNBC’s “Squawk Alley ” he thinks his company stands out from other security stocks because it’s been built up using cloud technology. “There’s been no Salesforce of security, ” Kurtz said. “And we think we’ve taken the right approach and created the right architecture to be that fourth pillar of cloud computing.”

High Profile Cases and Marketing

High-profile hack incidents tracked by CrowdStrike include tracing the 2016 Democratic National Committee email leak to Russia. CRWD also uncovered the he source of a 2014 Sony Pictures hack to North Korea. Lately is has been involved wit law enforcement agencies watching Chinese espionage in the US. Analysts say this helped cut the firm's sales and marketing costs as a percent of total revenue to 69% in fiscal 2019 from 88% a year ago.

CrowdStrike’s sales and marketing spend increased 66% last year to $172.7 million, according to the company’s prospectus.

“Security, and in our particular area, it’s really a greenfield opportunity,” he said. “There’s a lot of frustration with the incumbent vendors. So our sales and marketing spend has really been focused on capturing market share and delivering our solution into geographies that we haven’t been in and into verticals that we didn’t have the penetration when we first started the company. So we feel comfortable with the unit economics and we feel comfortable with the marketing spend given where we are as a company.”

Competitors

Crowdstrike’s competitors include Blackberry-owned Cyclance, Zscaler Inc (NASDAQ: ZS) and Tenable Holdings (NASDAQ: TENB) and Carbon Black (NASDAQ: CBLK), McAfee

Source:CrowdStrike SEC Crowdstrike Earnings

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