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CrowdStrike's (CRWD) Subscription Growth to Aid Q4 Earnings
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CrowdStrike Holdings, Inc. (CRWD - Free Report) is slated to report fourth-quarter fiscal 2024 results on Mar 5. The cloud-based cybersecurity solution provider’s fourth-quarter performance is expected to have benefited from a positive demand environment, which is likely to have boosted the company’s subscription revenues.
Click here to know how CRWD’s overall fiscal fourth-quarter results are likely to be.
Subscription Growth to Boost Q4 Revenues
Stellar revenue growth in subscriptions might have contributed significantly to CrowdStrike’s fourth-quarter top line. The increasing number of people logging into employers' networks has triggered a greater need for security and might have spurred the demand for CRWD’s products in the fiscal fourth quarter. A strong pipeline of deals indicates the same.
CrowdStrike’s portfolio strength, mainly the Falcon platform’s 10 cloud modules, is likely to have helped the company add new clients during the to-be-reported quarter. The AI-enabled Falcon Platform is the industry’s first multi-tenant, cloud-native, intelligent security solution that protects workloads across on-premise, cloud-based and virtualized environments running on a variety of endpoints such as desktops, laptops, servers, virtual machines and IoT devices.
CrowdStrike’s cloud-based Falcon platform currently provides 10 cloud modules via a software-as-a-service subscription model. The modules are separated into three categories — Endpoint Security, Security & IT Operations and Threat Intelligence.
As a result of its wide-scale offerings, CrowdStrike is one shop for almost all types of security solutions. This provides a competitive advantage over other rivals that have mostly limited types of solutions, such as Proofpoint, which specializes in identity theft protection, and FireEye and F5 Networks, which offer cloud-based proxy, firewall, sandboxing and advanced threat protection.
At the end of the third quarter of fiscal 2024, CrowdStrike’s subscription customers, who adopted five or more cloud modules, represented 63% of the total subscription customers, those with six or more cloud modules accounted for 42% and those with seven or more cloud modules represented 26%.
CrowdStrike’s subscription-based business model is expected to boost profitability in the fourth quarter. This business model generates recurring revenues and higher margins for the company (more than 70%) than the hardware-centric model. In the third quarter, contributions of subscription-based sales to the company’s total revenues were approximately 93%. The non-GAAP gross margin improved 230 basis points (bps) on a year-over-year basis to 77.8% in the third quarter.
Our fourth-quarter estimate for Subscription revenues is pegged at $788.9 million, indicating a year-over-year improvement of 31.9%. The company’s fourth-quarter non-GAAP gross margin is anticipated to improve 200 bps year over year to 77.4%, per our model.
Zacks Rank & Other Stocks to Consider
CrowdStrike currently sports a Zacks Rank #1 (Strong Buy). Shares of CRWD have soared 23.2% year to date (YTD).
The Zacks Consensus Estimate for NVIDIA’s fiscal 2025 earnings has been revised 16.4% upward to $23.22 per share in the past 30 days, suggesting year-over-year growth of 79.2%. The long-term estimated earnings growth rate for the stock stands at 29.7%. Shares of NVDA have jumped 66.1% YTD.
The Zacks Consensus Estimate for Amazon’s 2024 earnings has been revised upward by 39 cents to $4.06 per share in the past 30 days, which calls for an increase of 40% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 28.1%. AMZN stock has returned 17.2% YTD.
The consensus mark for Meta’s 2024 earnings has been revised upward by 13% to $19.94 per share over the past 30 days, indicating a 34.1% increase from 2023. It has a long-term earnings growth expectation of 19.5%. In the trailing 12 months, META stock has surged 41.9% YTD.
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CrowdStrike's (CRWD) Subscription Growth to Aid Q4 Earnings
CrowdStrike Holdings, Inc. (CRWD - Free Report) is slated to report fourth-quarter fiscal 2024 results on Mar 5. The cloud-based cybersecurity solution provider’s fourth-quarter performance is expected to have benefited from a positive demand environment, which is likely to have boosted the company’s subscription revenues.
Click here to know how CRWD’s overall fiscal fourth-quarter results are likely to be.
Subscription Growth to Boost Q4 Revenues
Stellar revenue growth in subscriptions might have contributed significantly to CrowdStrike’s fourth-quarter top line. The increasing number of people logging into employers' networks has triggered a greater need for security and might have spurred the demand for CRWD’s products in the fiscal fourth quarter. A strong pipeline of deals indicates the same.
CrowdStrike Price and EPS Surprise
CrowdStrike price-eps-surprise | CrowdStrike Quote
CrowdStrike’s portfolio strength, mainly the Falcon platform’s 10 cloud modules, is likely to have helped the company add new clients during the to-be-reported quarter. The AI-enabled Falcon Platform is the industry’s first multi-tenant, cloud-native, intelligent security solution that protects workloads across on-premise, cloud-based and virtualized environments running on a variety of endpoints such as desktops, laptops, servers, virtual machines and IoT devices.
CrowdStrike’s cloud-based Falcon platform currently provides 10 cloud modules via a software-as-a-service subscription model. The modules are separated into three categories — Endpoint Security, Security & IT Operations and Threat Intelligence.
As a result of its wide-scale offerings, CrowdStrike is one shop for almost all types of security solutions. This provides a competitive advantage over other rivals that have mostly limited types of solutions, such as Proofpoint, which specializes in identity theft protection, and FireEye and F5 Networks, which offer cloud-based proxy, firewall, sandboxing and advanced threat protection.
At the end of the third quarter of fiscal 2024, CrowdStrike’s subscription customers, who adopted five or more cloud modules, represented 63% of the total subscription customers, those with six or more cloud modules accounted for 42% and those with seven or more cloud modules represented 26%.
CrowdStrike’s subscription-based business model is expected to boost profitability in the fourth quarter. This business model generates recurring revenues and higher margins for the company (more than 70%) than the hardware-centric model. In the third quarter, contributions of subscription-based sales to the company’s total revenues were approximately 93%. The non-GAAP gross margin improved 230 basis points (bps) on a year-over-year basis to 77.8% in the third quarter.
Our fourth-quarter estimate for Subscription revenues is pegged at $788.9 million, indicating a year-over-year improvement of 31.9%. The company’s fourth-quarter non-GAAP gross margin is anticipated to improve 200 bps year over year to 77.4%, per our model.
Zacks Rank & Other Stocks to Consider
CrowdStrike currently sports a Zacks Rank #1 (Strong Buy). Shares of CRWD have soared 23.2% year to date (YTD).
Some other top-ranked stocks from the broader technology sector are NVIDIA Corporation (NVDA - Free Report) , Amazon.com (AMZN - Free Report) and Meta Platforms (META - Free Report) , each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2025 earnings has been revised 16.4% upward to $23.22 per share in the past 30 days, suggesting year-over-year growth of 79.2%. The long-term estimated earnings growth rate for the stock stands at 29.7%. Shares of NVDA have jumped 66.1% YTD.
The Zacks Consensus Estimate for Amazon’s 2024 earnings has been revised upward by 39 cents to $4.06 per share in the past 30 days, which calls for an increase of 40% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 28.1%. AMZN stock has returned 17.2% YTD.
The consensus mark for Meta’s 2024 earnings has been revised upward by 13% to $19.94 per share over the past 30 days, indicating a 34.1% increase from 2023. It has a long-term earnings growth expectation of 19.5%. In the trailing 12 months, META stock has surged 41.9% YTD.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.