CrowdStrike Holdings ( CRWD Quick Quote CRWD - Free Report) reported third-quarter fiscal 2022 results, wherein non-GAAP earnings jumped over two fold to 17 cents per share from 8 cents posted in the year-ago quarter. The bottom-line figure surpassed the Zacks Consensus Estimate of 10 cents.
CrowdStrike added $170 million to its net new annual recurring revenue (ARR) in the quarter, reaching total ARR to $1.51 billion, up 67% from the year-ago quarter’s levels.
During the third quarter, CrowdStrike witnessed growing demand for its identity protection and Zero Trust, Humio and cloud security modules.
CrowdStrike’s fiscal third-quarter revenues of $380.1 million surged 63% year over year and beat the consensus mark of $364.8 million. Subscription revenues jumped 67% year over year to $357 million.
The company added 1,607 net new subscription customers during the reported quarter. It had a total of 14,687 subscription customers as of Oct 31, 2021, reflecting year-over-year growth of 75%.
CrowdStrike’s subscription customers who adopted four or more cloud modules increased to 68%, and those with five or more cloud modules rose to 55%, and those with six or more cloud modules jumped to 32% as of Oct 31, 2021.
Revenues from professional services climbed 21.6% year over year to $23.0 million.
Geographically, 73% of total revenues stemmed from the United States, 13% from Europe, Middle East and Africa, 10% from Asia Pacific and 4% from others.
CrowdStrike’s non-GAAP gross margin remained flat year over year to 76%. Non-GAAP subscription gross margin was 79%, up 100 bps from the previous year’s reported figure.
Total non-GAAP operating expenses as a percentage of revenues were 63% compared with the prior-year quarter’s 68%.
Non-GAAP operating income was $50.7 million compared with $18.9 million in the year-ago quarter. Non-GAAP operating margin for the quarter was 13%, up 500 bps year over year.
Balance Sheet & Cash Flow
As of Oct 31, 2021, cash and cash equivalents were $1.91 billion compared with $1.79 billion as of Jul 31, 2021. CrowdStrike has a long-term debt of $739.1 million.
During the fiscal third quarter, the company generated operating and free cash flows of $159.1 million and $123.5 million, respectively. In the first nine months of fiscal 2022, free cash flow accounted for 31% of revenues. CrowdStrike generated operating cash flow of $415.1 million in the first nine months of fiscal 2022.
Buoyed by the stellar third-quarter performance, CrowdStrike raised its revenue guidance for fiscal 2022 to $1,427.1-$1,432.9 million from the previous range of $1,391-$1,409.4 million. CrowdStrike now anticipates non-GAAP EPS of 57-59 cents instead of 43-49 cents. Non-GAAP operating income for full fiscal 2022 is expected to be $171.0-$175.3 million.
For fourth-quarter fiscal 2022, management anticipates revenues between $406.5 million and $412.3 million. As far as the bottom line is concerned, the company expects to report non-GAAP earnings per share between 19 cents and 21 cents.
Non-GAAP operating income is anticipated to be $55.2-$59.5 million.
Management expects Humio acquisition related expenses to impact operating and free cash flow during the fourth quarter. It expects the net new ARR contribution from its newly acquired SaaS-based cybersecurity service business, SecureCircle, to be lower than $1 million in the fourth quarter.
Zacks Rank & Stocks to Consider
CrowdStrike currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are
Advanced Micro Devices ( AMD Quick Quote AMD - Free Report) , Qualcomm ( QCOM Quick Quote QCOM - Free Report) and CDW Corporation ( CDW Quick Quote CDW - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
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