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CrowdStrike's (CRWD) Q2 Earnings & Revenues Top Estimates

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CrowdStrike (CRWD - Free Report) reported second-quarter fiscal 2020 non-GAAP earnings of 3 cents per share against the Zacks Consensus Estimate of a loss of a penny as well as the year-ago quarter’s loss per share of 18 cents. Moreover, revenues of $199 million surged 84% year over year and beat the consensus mark of $188.6 million.

Top-Line Details

Subscription revenues jumped a whopping 89% year over year to $184.3 million. A 91% increase in subscription customers led to this impressive growth. CrowdStrike added 969 net new subscription customers in the quarter under review. The company had a total of 7,230 subscription customers as of Jul 31, 2020.

Moreover, CrowdStrike’s subscription customers that adopted four or more cloud modules increased to 57% and those with five or more cloud modules rose to more than 39% as of Jul 31, 2020.

CrowdStrike Holdings Inc. Price, Consensus and EPS Surprise

CrowdStrike Holdings Inc. Price, Consensus and EPS Surprise

CrowdStrike Holdings Inc. price-consensus-eps-surprise-chart | CrowdStrike Holdings Inc. Quote

Revenues from professional services soared 40% year over year to $14.7 million.

The company added $104.5 million to its net new average run rate (ARR) year over year, achieving $790.6 million, up 87% from the year-ago quarter.

Dollar-based net retention rate exceeded 120% in the reported quarter.

Operating Details

CrowdStrike’s non-GAAP gross margin expanded 200 basis points (bps) on a year-over-year basis to 75%. Subscription gross margin expanded 200 bps to 78%. However, professional services gross margin contracted 380 bps to 39.3%.

Research & development (R&D) expenses as a percentage of revenues decreased 380 bps on a year-over-year basis to 20.8%. Moreover, general & administrative (G&A) expense declined 390 bps to 9%.

Further, sales & marketing (S&M) expenses as a percentage of revenues were 41%, significantly down from 54.2% reported in the year-ago quarter.

Total operating expenses as a percentage of revenues were 71% compared with 92% in the year-ago quarter.

Non-GAAP operating income was $7.8 million against loss of $20.6 million reported in the year-ago quarter. Non-GAAP operating margin for the quarter was 3.9%.

Balance Sheet & Cash Flow

As of Jul 31, 2020, cash and cash equivalents were $1.07 billion compared with $1 billion as of Apr 30, 2020.

During the quarter, the company generated operating and free cash flows of $55 million and $32.4 million, respectively.


For third-quarter fiscal 2021, CrowdStrike anticipates revenues between $210.6 million and $215 million. As far as the bottom line is concerned, the company expects to report between loss of 1 cent per share and break-even.

For fiscal 2021, CrowdStrike raised its revenue guidance range to $809.1-$826.7 million from $761.2-$772.6 million projected earlier. The company now anticipates non-GAAP earnings per share of 2-8 cents compared with the previous expectations of non-GAAP loss per share in the band of 8-5 cents.

Zacks Rank and Key Picks

Currently, CrowdStrike carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector include Apple (AAPL - Free Report) , Lam Research Corporation (LRCX - Free Report) and Synaptics (SYNA - Free Report) , all sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Apple, Lam Research and Synaptics is currently pegged at 10.7%, 15.4%, and 10%, respectively.

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