Back to top

Image: Shutterstock

CrowdStrike (CRWD) Q3 Earnings & Revenues Top Estimates, Up Y/Y

Read MoreHide Full Article

CrowdStrike Holdings (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 Price, Consensus and EPS Surprise CrowdStrike Price, Consensus and EPS Surprise

CrowdStrike price-consensus-eps-surprise-chart | CrowdStrike Quote

Top-Line Details

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.

Operating Details

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.

Outlook

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 - Free Report) , Qualcomm (QCOM - Free Report) and CDW Corporation (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.

The Zacks Consensus Estimate for Advanced Micro Devices’ fourth-quarter 2021 earnings has been revised upward by 7 cents to 75 cents per share over the past 60 days. For 2021, earnings estimates have moved north by 1 cent to $2.64 per share in the last 60 days.

Advanced Micro Devices’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 14%. Shares of AMD have rallied 62.6% in the YTD period.

The consensus mark for Qualcomm’s first-quarter fiscal 2022 earnings has been raised to $3.01 per share from $2.63 in the past 30 days. For fiscal 2022, earnings estimates have been revised upward by 14.1% to $10.49 per share in the past 30 days.

Qualcomm’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 11.2%. Shares of QCOM stock have gained 15.3% YTD.

CDW’s consensus estimate for fourth-quarter fiscal 2021 earnings has been raised to $1.87 per share from $1.83 in the past 30 days. For fiscal 2021, earnings estimates have moved north by 1.4% to $7.81 per share over the past 30 days.

CDW’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 12.2%. Shares of CDW stock have appreciated 40.2% YTD.