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CrowdStrike's (CRWD) Q1 Earnings & Revenues Beat Estimates

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CrowdStrike (CRWD - Free Report) reported first-quarter fiscal 2020 non-GAAP earnings of 2 cents per share, which surpassed the Zacks Consensus Estimate by 133.3%. Notably, the company reported loss of 55 cents per share in the year-ago quarter.

Moreover, revenues of $178.1 million surged 85.3% year over year and also beat the consensus mark by 7.3%.

Geographically, the United States contributed 74% of revenues, 14% came from Europe, the Middle East and Africa markets, 8% from Asia-Pacific and 5% from other markets.

Top-Line Details

Subscription revenues jumped a whopping 88.7% year over year to $162.2 million. A 105% increase in subscription customers led to this impressive growth.
 

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

 

CrowdStrike added 830 net new subscription customers in the quarter under review. The company had a total of 6,261 subscription customers as of Apr 30, 2020.

Notably, CrowdStrike launched a Falcon Prevent for Home Use program that allowed company administrators to install Falcon Prevent on their employees’ home systems. These free-of-cost offerings were adopted by more than 250 customers in the reported quarter.

Moreover, CrowdStrike’s subscription customers that adopted four or more cloud modules increased to 55% and those with five or more cloud modules rose to more than 35% as of Apr 30, 2020.

Revenues from professional services soared 57.2% year over year to $15.9 million.

The company added $85.7 million to its net new Average Run Rate (ARR) year over year, achieving $600 million, up 88% 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 530 basis points (bps) on a year-over-year basis to 75.4%. Subscription gross margin expanded 540 bps to 78.3%. However, professional services gross margin contracted 40 bps to 45.3%.

Research & development (R&D) expenses as a percentage of revenues decreased 410 bps on a year-over-year basis to 20%. Moreover, general & administrative (G&A) expense declined 100 bps to 10.1%.

Further, sales & marketing (S&M) expenses as a percentage of revenues were 44.6%, significantly down from 57.6% reported in the year-ago quarter.

Total operating expenses as a percentage of revenues were 74.7% compared with 92.8% in the year-ago quarter

Non-GAAP operating income was $1.2 million against loss of $21.9 million reported in the year-ago quarter.

Balance Sheet & Cash Flow

As of Apr 30, 2020, cash and cash equivalents were $1 billion compared with $264.8 million as of Jan 31, 2020. The company converted its marketable securities to cash in the reported quarter.

Free cash flow was $87 million in the quarter under review against free cash outflow of $16.1 million in the year-ago quarter.

Key Q1 Highlights

The CrowdStrike Falcon endpoint protection platform was named a Leader in The Forrester Wave: Enterprise Detection And Response, Q1 2020 list.

Moreover, CrowdStrike earned the highest overall rating among vendors including VMware , Microsoft (MSFT - Free Report) and Broadcom (AVGO - Free Report) in 2020 Gartner Peer Insights Customers’ Choice for Endpoint Detection and Response (EDR). CrowdStrike earned an overall rating of 4.9 out of 5 from 106 verified customer reviews.

Additionally, the Zacks Rank #3 (Hold) company inked partnership deals with Computacenter and Veronym. These collaborations make the CrowdStrike Falcon platform widely available for enterprise customers across Germany and to small and medium-sized enterprises (SMEs) across Germany, Austria and Switzerland.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CrowdStrike successfully completed its second MITRE ATT&CK evaluation, which tests a vendor’s ability to detect attacker activity across the full spectrum of sophisticated attacks.

Guidance

For second-quarter fiscal 2021, CrowdStrike anticipates revenues between $185.8 million and $190.3 million. The company expects to report between 2 cents of loss per share and a break-even.

For fiscal 2021, CrowdStrike estimates revenues between $761.2 million and $772.6 million. Non-GAAP loss per share is estimated in the band of 8-5 cents per share.


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