- Ending ARR grows 32% year-over-year to reach $3.86 billion,
adding $218 million in net new ARR
- Grows GAAP net income more than 5x year-over-year and record
non-GAAP net income grows 45% year-over-year
- Delivers record Q2 operating cash flow of $327 million and
record Q2 free cash flow of $272 million
CrowdStrike Holdings, Inc. (Nasdaq: CRWD), today announced
financial results for the second quarter fiscal year 2025, ended
July 31, 2024.
“Working with customers to recover from the July 19th incident,
we emerge as an even more resilient and even more customer-obsessed
CrowdStrike, continuing to aggressively invest in innovation. Our
second quarter demonstrates the resilience of our business and
platform – with LogScale Next-Gen SIEM, Identity Protection, and
Cloud Security eclipsing $1 billion in combined ending ARR,” said
George Kurtz, CrowdStrike’s chief executive officer and co-founder.
“In response to rising point product complexity and an elevated
threat environment, organizations are increasingly focused on
consolidating their cybersecurity vendors into a streamlined
platform that delivers better security outcomes, which is
CrowdStrike Falcon. Our vision and mission of stopping breaches
remains unchanged.”
Commenting on the company’s financial results, Burt Podbere,
CrowdStrike’s chief financial officer, added, “For the second
quarter we delivered strong growth in revenue, operating profit and
net income demonstrating our focused execution. Our market
opportunity remains unchanged, and we believe our continued
commitment to customers and innovation will drive even more Falcon
platform adoption, protecting our customers from rapidly evolving
cyber threats and enabling us to achieve our long-term
targets.”
Second Quarter Fiscal 2025 Financial Highlights
- Revenue: Total revenue was $963.9 million, a 32%
increase, compared to $731.6 million in the second quarter of
fiscal 2024. Subscription revenue was $918.3 million, a 33%
increase, compared to $690.0 million in the second quarter of
fiscal 2024.
- Annual Recurring Revenue (ARR) grew 32% year-over-year
to $3.86 billion as of July 31, 2024, of which $217.6 million was
net new ARR added in the quarter.
- Subscription Gross Margin: GAAP subscription gross
margin was 78% in the second quarter of fiscal 2025 and fiscal
2024. Non-GAAP subscription gross margin was 81%, compared to 80%
in the second quarter of fiscal 2024.
- Income/Loss from Operations: GAAP income from operations
was $13.7 million, compared to a loss of $15.4 million in the
second quarter of fiscal 2024. Non-GAAP income from operations was
$226.8 million, compared to $155.7 million in the second quarter of
fiscal 2024.
- Net Income Attributable to CrowdStrike: GAAP net income
attributable to CrowdStrike was $47.0 million, compared to $8.5
million in the second quarter of fiscal 2024. GAAP net income per
share attributable to CrowdStrike, diluted, was $0.19, compared to
$0.03 in the second quarter of fiscal 2024. Non-GAAP net income
attributable to CrowdStrike was $260.8 million, compared to $180.0
million in the second quarter of fiscal 2024. Non-GAAP net income
attributable to CrowdStrike per share, diluted, was $1.04, compared
to $0.74 in the second quarter of fiscal 2024.
- Cash Flow: Net cash generated from operations was $326.6
million, compared to $244.8 million in the second quarter of fiscal
2024. Free cash flow was $272.2 million, compared to $188.7 million
in the second quarter of fiscal 2024.
- Cash and Cash Equivalents was $4.04 billion as of July
31, 2024.
Recent Highlights
- CrowdStrike’s module adoption rates were 65%, 45% and 29% for
five or more, six or more and seven or more modules, respectively,
as of July 31, 20241.
- Exceeded $1 billion in total sales over the lifetime of its
partnership with CDW Corporation, and achieved CDW’s Diamond Level
Partner Status.
- Set a new speed benchmark for cybersecurity threat detection,
identifying and alerting on a sophisticated eCrime adversary attack
in just four minutes during the closed-book MITRE Engenuity's
ATT&CK Evaluations: Managed Services-Round 2.
- Named a Leader in The Forrester Wave: Cybersecurity Incident
Response Services, Q2 2024 report2.
- Announced a strategic partnership with Hewlett Packard
Enterprise to secure end-to-end AI innovation, including large
language models, accelerated by NVIDIA.
- Partnered with technology distributors Ingram Micro, M3Corp and
Tecnología Especializada Asociada de México to accelerate adoption
of the AI-native CrowdStrike Falcon platform across Latin
America.
- Won five awards in the SC Awards Europe 2024, the most of any
vendor in this year’s competition; Won for Best Cloud Security
Solution, Best Endpoint Solution, Best AI Solution, Best Threat
Intelligence Technology and Best Incident Response Solution.
Financial Outlook
CrowdStrike is providing the following guidance for the fiscal
third quarter of fiscal 2025 (ending October 31, 2024) and full
fiscal year 2025 (ending January 31, 2025). CrowdStrike’s revenue
guidance for the fiscal year 2025 includes an estimated $30 million
subscription revenue impact in each of the remaining fiscal
quarters as a result of incentives related to our customer
commitment package. In addition, fiscal year 2025 revenue guidance
includes an estimated impact in the high-single digit millions to
professional services revenue in the second half of fiscal year
2025 as a result of incentives related to our customer commitment
package.
Guidance for non-GAAP financial measures excludes stock-based
compensation expense, amortization expense of acquired intangible
assets (including purchased patents), amortization of debt issuance
costs and discount, mark-to-market adjustments on deferred
compensation liabilities, legal reserve and settlement charges or
benefits, Channel File 291 Incident related costs,
acquisition-related provision (benefit) for income taxes, losses
(gains) and other income from strategic investments,
acquisition-related expenses (credits), net, and losses (gains)
from deferred compensation assets. The company has not provided the
most directly comparable GAAP measures because certain items are
out of the company's control or cannot be reasonably predicted.
Accordingly, a reconciliation for non-GAAP income from operations,
non-GAAP net income attributable to CrowdStrike, and non-GAAP net
income per share attributable to CrowdStrike common stockholders is
not available without unreasonable effort.
Q3 FY25
Guidance
Full Year FY25
Guidance
Total revenue
$979.2 - $984.7 million
$3,890.0 - $3,902.2 million
Non-GAAP income from operations
$166.7 - $170.8 million
$774.7 - $783.9 million
Non-GAAP net income attributable to
CrowdStrike
$201.2 - $205.2 million
$908.8 - $918.0 million
Non-GAAP net income per share attributable
to CrowdStrike common stockholders, diluted
$0.80 - $0.81
$3.61 - $3.65
Weighted average shares used in computing
non-GAAP net income per share attributable to common stockholders,
diluted
252 million
252 million
These statements are forward-looking and actual results may
differ materially as a result of many factors. Refer to the
Forward-Looking Statements safe harbor below for information on the
factors that could cause the company's actual results to differ
materially from these forward-looking statements.
Conference Call Information
CrowdStrike will host a conference call for analysts and
investors to discuss its earnings results for the second quarter of
fiscal 2025 and outlook for its fiscal third quarter and fiscal
year 2025 today at 2:00 p.m. Pacific time (5:00 p.m. Eastern time).
A recorded webcast of the event will also be available for one year
on the CrowdStrike Investor Relations website
ir.crowdstrike.com.
Date:
August 28, 2024
Time:
2:00 p.m. Pacific time / 5:00 p.m. Eastern
time
Webcast link:
crowdstrike-fiscal-second-quarter-2025-results-conference-call.open-exchange.net/registration
Forward-Looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties, including statements regarding
CrowdStrike’s future growth, and future financial and operating
performance, including CrowdStrike’s financial outlook for the
third quarter fiscal 2025, fiscal year 2025, and beyond. There are
a significant number of factors that could cause actual results to
differ materially from statements made in this press release,
including: risks associated with the Channel File 291 Incident,
which occurred on July 19, 2024; risks associated with managing
CrowdStrike’s rapid growth; CrowdStrike’s ability to identify and
effectively implement necessary changes to address execution
challenges; risks associated with new products and subscription and
support offerings, including the risk of defects, errors, or
vulnerabilities; CrowdStrike's ability to respond to an intensely
competitive market; length and unpredictability of sales cycles;
CrowdStrike’s ability to attract new and retain existing customers;
CrowdStrike’s ability to successfully integrate acquisitions; the
failure to timely develop and achieve market acceptance of new
products and subscriptions as well as existing products and
subscriptions and support; CrowdStrike’s ability to collaborate and
integrate its products with offerings from other parties to deliver
benefits to customers; industry trends; rapidly evolving
technological developments in the market for security products and
subscription and support offerings; and general market, political,
economic, and business conditions, including those related to a
deterioration in macroeconomic conditions, inflation, geopolitical
uncertainty and conflicts, public health crises and volatility in
the banking and financial services sector.
Additional risks and uncertainties that could affect
CrowdStrike’s financial results are included in the filings
CrowdStrike makes with the Securities and Exchange Commission
(“SEC”) from time to time, particularly under the captions “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations”, including CrowdStrike’s most
recently filed Annual Report on Form 10-K, most recently filed
Quarterly Report on Form 10-Q and subsequent filings.
You should not rely on these forward-looking statements, as
actual outcomes and results may differ materially from those
contemplated by these forward-looking statements as a result of
such risks and uncertainties. All forward-looking statements in
this press release are based on information available to
CrowdStrike as of the date hereof, and CrowdStrike does not assume
any obligation to update the forward-looking statements provided to
reflect events that occur or circumstances that exist after the
date on which they were made.
Use of Non-GAAP Financial Information
CrowdStrike believes that the presentation of non-GAAP financial
information provides important supplemental information to
management and investors regarding financial and business trends
relating to CrowdStrike’s financial condition and results of
operations. For further information regarding these non-GAAP
measures, including the reconciliation of these non-GAAP financial
measures to their most directly comparable GAAP financial measures,
please refer to the financial tables below, as well as the
“Explanation of Non-GAAP Financial Measures” section of this press
release.
Channels for Disclosure of Information
CrowdStrike intends to announce material information to the
public through the CrowdStrike Investor Relations website
ir.crowdstrike.com, SEC filings, press releases, public conference
calls, and public webcasts. CrowdStrike uses these channels, as
well as social media and its blog, to communicate with its
investors, customers, and the public about the company, its
offerings, and other issues. It is possible that the information
CrowdStrike posts on social media and its blog could be deemed to
be material information. As such, CrowdStrike encourages investors,
the media, and others to follow the channels listed above,
including the social media channels listed on CrowdStrike’s
investor relations website, and to review the information disclosed
through such channels. Any updates to the list of disclosure
channels through which CrowdStrike will announce information will
be posted on the investor relations page on CrowdStrike’s
website.
Definition of Module Adoption Rates
1.
Module adoption rates are calculated by
taking the total number of customers with five or more, six or
more, and seven or more modules, respectively, divided by the total
number of subscription customers (excluding Falcon Go customers).
Falcon Go customers are defined as customers who have subscribed
with the Falcon Go bundle, a package designed for organizations
with 100 endpoints or less.
Reports Referenced
2.
The Forrester Wave™: Cybersecurity
Incident Response Services, Q2 2024
About CrowdStrike Holdings
CrowdStrike (Nasdaq: CRWD), a global cybersecurity leader, has
redefined modern security with the world’s most advanced
cloud-native platform for protecting critical areas of enterprise
risk – endpoints and cloud workloads, identity and data.
Powered by the CrowdStrike Security Cloud and world-class AI,
the CrowdStrike Falcon® platform leverages real-time indicators of
attack, threat intelligence, evolving adversary tradecraft and
enriched telemetry from across the enterprise to deliver
hyper-accurate detections, automated protection and remediation,
elite threat hunting and prioritized observability of
vulnerabilities.
Purpose-built in the cloud with a single lightweight-agent
architecture, the Falcon platform delivers rapid and scalable
deployment, superior protection and performance, reduced complexity
and immediate time-to-value.
CrowdStrike: We stop breaches.
For more information, please visit: ir.crowdstrike.com
CrowdStrike, the CrowdStrike logo, and other CrowdStrike marks
are trademarks and/or registered trademarks of CrowdStrike, Inc.,
or its affiliates or licensors. Other words, symbols, and company
product names may be trademarks of the respective companies with
which they are associated.
CROWDSTRIKE HOLDINGS,
INC.
Condensed Consolidated
Statements of Operations
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended July
31,
Six Months Ended July
31,
2024
2023
2024
2023
Revenue
Subscription
$
918,257
$
689,972
$
1,790,429
$
1,341,147
Professional services
45,615
41,654
94,479
83,059
Total revenue
963,872
731,626
1,884,908
1,424,206
Cost of revenue
Subscription (1)(2)
199,910
153,306
389,567
295,406
Professional services (1)
37,491
29,611
72,837
56,741
Total cost of revenue
237,401
182,917
462,404
352,147
Gross profit
726,471
548,709
1,422,504
1,072,059
Operating expenses
Sales and marketing (1)(2)(4)(6)
355,471
282,916
705,585
564,023
Research and development (1)(3)(4)(6)
250,908
179,362
486,157
358,427
General and administrative
(1)(2)(3)(4)(5)(6)
106,434
101,804
210,168
184,438
Total operating expenses
712,813
564,082
1,401,910
1,106,888
Income (loss) from operations
13,658
(15,373
)
20,594
(34,829
)
Interest expense(7)
(6,549
)
(6,444
)
(13,060
)
(12,831
)
Interest income
51,526
36,638
97,376
67,159
Other income (expense), net(8)(9)
(1,031
)
(1,734
)
6,625
(1,504
)
Income before provision for income
taxes
57,604
13,087
111,535
17,995
Provision for income taxes
10,914
4,611
18,581
9,020
Net income
46,690
8,476
92,954
8,975
Net income (loss) attributable to
non-controlling interest
(323
)
4
3,121
12
Net income attributable to CrowdStrike
$
47,013
$
8,472
$
89,833
$
8,963
Net income per share attributable to
CrowdStrike common stockholders:
Basic
$
0.19
$
0.04
$
0.37
$
0.04
Diluted
$
0.19
$
0.03
$
0.36
$
0.04
Weighted-average shares used in computing
net income per share attributable to CrowdStrike common
stockholders:
Basic
244,091
237,911
243,249
237,174
Diluted
251,265
242,144
250,724
241,383
____________________________
(1) Includes stock-based compensation expense as follows (in
thousands):
Three Months Ended July
31,
Six Months Ended July
31,
2024
2023
2024
2023
Subscription cost of revenue
$
16,732
$
10,132
$
30,648
$
19,098
Professional services cost of revenue
7,344
5,745
13,617
10,375
Sales and marketing
57,405
51,442
109,663
87,181
Research and development
75,851
46,985
142,593
91,366
General and administrative
43,545
50,473
87,481
87,613
Total stock-based compensation expense
$
200,877
$
164,777
$
384,002
$
295,633
(2) Includes amortization of acquired intangible assets,
including purchased patents, as follows (in thousands):
Three Months Ended July
31,
Six Months Ended July
31,
2024
2023
2024
2023
Subscription cost of revenue
$
5,389
$
3,581
$
10,434
$
7,161
Sales and marketing
602
446
1,205
977
General and administrative
346
75
693
138
Total amortization of acquired intangible
assets
$
6,337
$
4,102
$
12,332
$
8,276
(3) Includes acquisition-related expenses (credit), net as
follows (in thousands):
Three Months Ended July
31,
Six Months Ended July
31,
2024
2023
2024
2023
Research and development
$
—
$
—
$
477
$
371
General and administrative
535
(3
)
2,682
(73
)
Total acquisition-related expenses
(credits), net
$
535
$
(3
)
$
3,159
$
298
(4) Includes mark-to-market adjustments on deferred compensation
liabilities as follows (in thousands):
Three Months Ended July
31,
Six Months Ended July
31,
2024
2023
2024
2023
Sales and marketing
$
108
$
32
$
143
$
35
Research and development
134
13
146
14
General and administrative
8
7
21
7
Total mark-to-market adjustments on
deferred compensation liabilities
$
250
$
52
$
310
$
56
(5) Includes legal reserve and settlement charges as follows (in
thousands):
Three Months Ended July
31,
Six Months Ended July
31,
2024
2023
2024
2023
General and administrative
$
—
$
2,097
$
—
$
2,097
Total legal reserve and settlement
charges
$
—
$
2,097
$
—
$
2,097
(6) Includes Channel File 291 Incident related costs such as
legal fees, remediation costs, and sensor testing costs, among
others, as follows (in thousands):
Three Months Ended July
31,
Six Months Ended July
31,
2024
2023
2024
2023
Sales and marketing
$
3,093
$
—
$
3,093
$
—
Research and development
1,001
—
1,001
—
General and administrative
1,038
—
1,038
—
Total Channel File 291 Incident related
costs
$
5,132
$
—
$
5,132
$
—
(7) Includes amortization of debt issuance costs and discount as
follows (in thousands):
Three Months Ended July
31,
Six Months Ended July
31,
2024
2023
2024
2023
Interest expense
$
547
$
547
$
1,093
$
1,093
Total amortization of debt issuance costs
and discount
$
547
$
547
$
1,093
$
1,093
(8) Includes gains (losses) and other income from strategic
investments as follows (in thousands):
Three Months Ended July
31,
Six Months Ended July
31,
2024
2023
2024
2023
Other income (expense), net
$
(646
)
$
8
$
6,242
$
24
Total gains (losses) and other income from
strategic investments
$
(646
)
$
8
$
6,242
$
24
(9) Includes gains on deferred compensation assets as follows
(in thousands):
Three Months Ended July
31,
Six Months Ended July
31,
2024
2023
2024
2023
Other income, net
$
250
$
52
$
310
$
56
Total gains on deferred compensation
assets
$
250
$
52
$
310
$
56
CROWDSTRIKE HOLDINGS,
INC.
Condensed Consolidated Balance
Sheets
(in thousands)
(unaudited)
July 31, 2024
January 31, 2024
Assets
Current assets:
Cash and cash equivalents
$
4,038,536
$
3,375,069
Short-term investments
—
99,591
Accounts receivable, net of allowance for
credit losses
661,045
853,105
Deferred contract acquisition costs,
current
251,246
246,370
Prepaid expenses and other current
assets
230,821
183,172
Total current assets
5,181,648
4,757,307
Strategic investments
58,246
56,244
Property and equipment, net
648,474
620,172
Operating lease right-of-use assets
45,897
48,211
Deferred contract acquisition costs,
noncurrent
341,539
335,933
Goodwill
721,996
638,041
Intangible assets, net
115,686
114,518
Other long-term assets
88,988
76,094
Total assets
$
7,202,474
$
6,646,520
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
21,067
$
28,180
Accrued expenses
101,300
125,896
Accrued payroll and benefits
205,429
234,624
Operating lease liabilities, current
17,031
14,150
Deferred revenue
2,348,464
2,270,757
Other current liabilities
35,028
23,672
Total current liabilities
2,728,319
2,697,279
Long-term debt
743,238
742,494
Deferred revenue, noncurrent
744,733
783,342
Operating lease liabilities,
noncurrent
31,704
36,230
Other liabilities, noncurrent
63,890
50,086
Total liabilities
4,311,884
4,309,431
Commitments and contingencies
Stockholders’ Equity
Common stock, Class A and Class B
123
121
Additional paid-in capital
3,824,897
3,364,328
Accumulated deficit
(969,003
)
(1,058,836
)
Accumulated other comprehensive loss
(3,102
)
(1,663
)
Total CrowdStrike Holdings, Inc.
stockholders’ equity
2,852,915
2,303,950
Non-controlling interest
37,675
33,139
Total stockholders’ equity
2,890,590
2,337,089
Total liabilities and stockholders’
equity
$
7,202,474
$
6,646,520
CROWDSTRIKE HOLDINGS,
INC.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended July
31,
2024
2023
Operating activities
Net income
$
92,954
$
8,975
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
88,936
56,184
Amortization of intangible assets
12,332
8,276
Amortization of deferred contract
acquisition costs
147,851
112,877
Non-cash operating lease cost
7,167
6,331
Stock-based compensation expense
384,002
295,633
Deferred income taxes
(1,929
)
(352
)
Realized gains on strategic
investments
(6,227
)
—
Non-cash interest expense
1,785
1,531
Accretion of short-term investments
purchased at a discount
2,285
—
Changes in operating assets and
liabilities, net of impact of acquisitions
Accounts receivable, net
192,060
86,718
Deferred contract acquisition costs
(158,333
)
(122,007
)
Prepaid expenses and other assets
(63,224
)
(26,338
)
Accounts payable
(72
)
(2,982
)
Accrued expenses and other liabilities
7,968
4,935
Accrued payroll and benefits
(29,432
)
(30,161
)
Operating lease liabilities
(7,113
)
(6,475
)
Deferred revenue
38,859
152,528
Net cash provided by operating
activities
709,869
545,673
Investing activities
Purchases of property and equipment
(88,937
)
(102,681
)
Capitalized internal-use software and
website development costs
(24,995
)
(25,975
)
Purchases of strategic investments
(2,702
)
(12,177
)
Proceeds from sales of strategic
investments
10,895
—
Business acquisitions, net of cash
acquired
(96,381
)
—
Purchases of intangible assets
—
(500
)
Proceeds from maturities and sales of
short-term investments
97,300
250,000
Purchases of deferred compensation
investments
(1,209
)
(876
)
Proceeds from sales of deferred
compensation investments
41
—
Net cash (used in) provided by investing
activities
(105,988
)
107,791
Financing activities
Proceeds from issuance of common stock
upon exercise of stock options
2,464
4,125
Proceeds from issuance of common stock
under the employee stock purchase plan
56,099
45,432
Distributions to non-controlling interest
holders
(4,085
)
—
Capital contributions from non-controlling
interest holders
5,500
8,088
Net cash provided by financing
activities
59,978
57,645
Effect of foreign exchange rates on cash,
cash equivalents and restricted cash
(1,040
)
1,083
Net increase in cash, cash equivalents and
restricted cash
662,819
712,192
Cash, cash equivalents and restricted
cash, at beginning of period
3,377,597
2,456,924
Cash, cash equivalents and restricted
cash, at end of period
$
4,040,416
$
3,169,116
CROWDSTRIKE HOLDINGS,
INC.
GAAP to Non-GAAP
Reconciliations
(in thousands, except
percentages)
(unaudited)
Three Months Ended July
31,
Six Months Ended July
31,
2024
2023
2024
2023
GAAP subscription revenue
$
918,257
$
689,972
$
1,790,429
$
1,341,147
GAAP professional services revenue
45,615
41,654
94,479
83,059
GAAP total revenue
$
963,872
$
731,626
$
1,884,908
$
1,424,206
GAAP subscription gross profit
$
718,347
$
536,666
$
1,400,862
$
1,045,741
Stock based compensation expense
16,732
10,132
30,648
19,098
Amortization of acquired intangible
assets
5,389
3,581
10,434
7,161
Non-GAAP subscription gross profit
$
740,468
$
550,379
$
1,441,944
$
1,072,000
GAAP subscription gross margin
78
%
78
%
78
%
78
%
Non-GAAP subscription gross margin
81
%
80
%
81
%
80
%
GAAP professional services gross
profit
$
8,124
$
12,043
$
21,642
$
26,318
Stock based compensation expense
7,344
5,745
13,617
10,375
Non-GAAP professional services gross
profit
$
15,468
$
17,788
$
35,259
$
36,693
GAAP professional services gross
margin
18
%
29
%
23
%
32
%
Non-GAAP professional services gross
margin
34
%
43
%
37
%
44
%
Total GAAP gross margin
75
%
75
%
75
%
75
%
Total Non-GAAP gross margin
78
%
78
%
78
%
78
%
GAAP sales and marketing operating
expenses
$
355,471
$
282,916
$
705,585
$
564,023
Stock based compensation expense
(57,405
)
(51,442
)
(109,663
)
(87,181
)
Amortization of acquired intangible
assets
(602
)
(446
)
(1,205
)
(977
)
Mark-to-market adjustments on deferred
compensation liabilities
(108
)
(32
)
(143
)
(35
)
Channel File 291 Incident related
costs
(3,093
)
—
(3,093
)
—
Non-GAAP sales and marketing operating
expenses
$
294,263
$
230,996
$
591,481
$
475,830
GAAP sales and marketing operating
expenses as a percentage of revenue
37
%
39
%
37
%
40
%
Non-GAAP sales and marketing operating
expenses as a percentage of revenue
31
%
32
%
31
%
33
%
CROWDSTRIKE HOLDINGS,
INC.
GAAP to Non-GAAP
Reconciliations (continued)
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended July
31,
Six Months Ended July
31,
2024
2023
2024
2023
GAAP research and development operating
expenses
$
250,908
$
179,362
$
486,157
$
358,427
Stock based compensation expense
(75,851
)
(46,985
)
(142,593
)
(91,366
)
Acquisition-related expenses, net
—
—
(477
)
(371
)
Mark-to-market adjustments on deferred
compensation liabilities
(134
)
(13
)
(146
)
(14
)
Channel File 291 Incident related
costs
(1,001
)
—
(1,001
)
—
Non-GAAP research and development
operating expenses
$
173,922
$
132,364
$
341,940
$
266,676
GAAP research and development operating
expenses as a percentage of revenue
26
%
25
%
26
%
25
%
Non-GAAP research and development
operating expenses as a percentage of revenue
18
%
18
%
18
%
19
%
GAAP general and administrative operating
expenses
$
106,434
$
101,804
$
210,168
$
184,438
Stock based compensation expense
(43,545
)
(50,473
)
(87,481
)
(87,613
)
Acquisition-related credits (expenses),
net
(535
)
3
(2,682
)
73
Amortization of acquired intangible
assets
(346
)
(75
)
(693
)
(138
)
Mark-to-market adjustments on deferred
compensation liabilities
(8
)
(7
)
(21
)
(7
)
Legal reserve and settlement charges
—
(2,097
)
—
(2,097
)
Channel File 291 Incident related
costs
(1,038
)
—
(1,038
)
—
Non-GAAP general and administrative
operating expenses
$
60,962
$
49,155
$
118,253
$
94,656
GAAP general and administrative operating
expenses as a percentage of revenue
11
%
14
%
11
%
13
%
Non-GAAP general and administrative
operating expenses as a percentage of revenue
6
%
7
%
6
%
7
%
GAAP income (loss) from operations
$
13,658
$
(15,373
)
$
20,594
$
(34,829
)
Stock based compensation expense
200,877
164,777
384,002
295,633
Amortization of acquired intangible
assets
6,337
4,102
12,332
8,276
Acquisition-related expenses (credits),
net
535
(3
)
3,159
298
Mark-to-market adjustments on deferred
compensation liabilities
250
52
310
56
Legal reserve and settlement charges
—
2,097
—
2,097
Channel File 291 Incident related
costs
5,132
—
5,132
—
Non-GAAP income from operations
$
226,789
$
155,652
$
425,529
$
271,531
GAAP operating margin
1
%
(2
)%
1
%
(2
)%
Non-GAAP operating margin
24
%
21
%
23
%
19
%
CROWDSTRIKE HOLDINGS,
INC.
GAAP to Non-GAAP
Reconciliations (continued)
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended July
31,
Six Months Ended July
31,
2024
2023
2024
2023
GAAP net income attributable to
CrowdStrike
$
47,013
$
8,472
$
89,833
$
8,963
Stock based compensation expense
200,877
164,777
384,002
295,633
Amortization of acquired intangible
assets
6,337
4,102
12,332
8,276
Acquisition-related expenses (credits),
net
535
(3
)
3,159
298
Amortization of debt issuance costs and
discount
547
547
1,093
1,093
Mark-to-market adjustments on deferred
compensation liabilities
250
52
310
56
Legal reserve and settlement charges
—
2,097
—
2,097
Channel File 291 Incident related
costs
5,132
—
5,132
—
Gains (losses) and other income from
strategic investments attributable to CrowdStrike
323
(4
)
(3,121
)
(12
)
Gains on deferred compensation assets
(250
)
(52
)
(310
)
(56
)
Non-GAAP net income attributable to
CrowdStrike
$
260,764
$
179,988
$
492,430
$
316,348
Weighted-average shares used in computing
GAAP basic net income per share attributable to CrowdStrike common
stockholders
244,091
237,911
243,249
237,174
GAAP basic net income per share
attributable to CrowdStrike common stockholders
$
0.19
$
0.04
$
0.37
$
0.04
GAAP diluted net income per share
attributable to CrowdStrike common stockholders
$
0.19
$
0.03
$
0.36
$
0.04
Stock-based compensation
0.80
0.68
1.53
1.22
Amortization of acquired intangible
assets
0.03
0.02
0.05
0.03
Acquisition-related expenses (credits),
net
—
—
0.01
—
Amortization of debt issuance costs and
discount
—
—
—
—
Mark-to-market adjustments on deferred
compensation liabilities
—
—
—
—
Legal reserve and settlement charges
—
0.01
—
0.01
Channel File 291 Incident related
costs
0.02
—
0.02
—
Gains (losses) and other income from
strategic investments attributable to CrowdStrike
—
—
(0.01
)
—
Gains on deferred compensation assets
—
—
—
—
Other1
—
—
—
0.01
Non-GAAP diluted net income per share
attributable to CrowdStrike common stockholders
$
1.04
$
0.74
$
1.96
$
1.31
Weighted-average shares used to calculate
Non-GAAP diluted net income per share attributable to CrowdStrike
common stockholders
251,265
242,144
250,724
241,383
__________________________
1. For periods in which the Company had
diluted non-GAAP net income per share attributable to CrowdStrike
common stockholders, the sum of the impact of individual
reconciling items may not total to diluted Non-GAAP net income per
share attributable to CrowdStrike common stockholders because of
rounding differences.
CROWDSTRIKE HOLDINGS,
INC.
GAAP to Non-GAAP
Reconciliations (continued)
(in thousands, except
percentages)
(unaudited)
Three Months Ended July
31,
Six Months Ended July
31,
2024
2023
2024
2023
GAAP net cash provided by operating
activities
$
326,641
$
244,781
$
709,869
$
545,673
Purchases of property and equipment
(39,254
)
(40,417
)
(88,937
)
(102,681
)
Capitalized internal-use software and
website development costs
(14,516
)
(15,073
)
(24,995
)
(25,975
)
Purchases of deferred compensation
investments
(600
)
(586
)
(1,209
)
(876
)
Proceeds from sales of deferred
compensation investments
(41
)
—
(41
)
—
Free cash flow
$
272,230
$
188,705
$
594,687
$
416,141
GAAP net cash (used in) provided by
investing activities
$
(54,890
)
$
41,760
$
(105,988
)
$
107,791
GAAP net cash provided by financing
activities
$
62,496
$
49,737
$
59,978
$
57,645
GAAP net cash provided by operating
activities as a percentage of revenue
34
%
33
%
38
%
38
%
Purchases of property and equipment as a
percentage of revenue
(4
)%
(6
)%
(5
)%
(7
)%
Capitalized internal-use software and
website development costs as a percentage of revenue
(2
)%
(2
)%
(1
)%
(2
)%
Purchases of deferred compensation
investments as a percentage of revenue
—
%
—
%
—
%
—
%
Proceeds from sale of deferred
compensation investments
—
%
—
%
—
%
—
%
Free cash flow margin
28
%
26
%
32
%
29
%
Explanation of Non-GAAP Financial Measures
In addition to determining results in accordance with U.S.
generally accepted accounting principles (“GAAP”), CrowdStrike
believes the following non-GAAP measures are useful in evaluating
its operating performance. CrowdStrike uses the following non-GAAP
financial information to evaluate its ongoing operations and for
internal planning and forecasting purposes. CrowdStrike believes
that non-GAAP financial information, when taken collectively, may
be helpful to investors because it provides consistency and
comparability with past financial performance and facilitates
period-to-period comparisons of operations, as these measures
eliminate the effects of certain variables unrelated to
CrowdStrike’s overall operating performance. However, non-GAAP
financial information is presented for supplemental informational
purposes only, has limitations as an analytical tool, and should
not be considered in isolation or as a substitute for financial
information presented in accordance with GAAP.
Other companies, including companies in CrowdStrike’s industry,
may calculate similarly titled non-GAAP measures differently or may
use other measures to evaluate their performance, all of which
could reduce the usefulness of CrowdStrike’s non-GAAP financial
measures as tools for comparison.
Investors are encouraged to review the related GAAP financial
measures and the reconciliation of these non-GAAP financial
measures to their most directly comparable GAAP financial measures
and not rely on any single financial measure to evaluate
CrowdStrike’s business.
Non-GAAP Subscription Gross Profit and Non-GAAP Subscription
Gross Margin
CrowdStrike defines non-GAAP subscription gross profit and
non-GAAP subscription gross margin as GAAP subscription gross
profit and GAAP subscription gross margin, respectively, excluding
stock-based compensation expense, and amortization of acquired
intangible assets.
Non-GAAP Income from Operations
CrowdStrike defines non-GAAP income from operations as GAAP
income (loss) from operations excluding stock-based compensation
expense, amortization of acquired intangible assets (including
purchased patents), acquisition-related expenses (credits), net,
mark-to-market adjustments on deferred compensation liabilities,
legal reserve and settlement charges or benefits, and Channel File
291 Incident related costs.
Non-GAAP Net Income Attributable to CrowdStrike
The company defines non-GAAP net income attributable to
CrowdStrike as GAAP net income attributable to CrowdStrike
excluding stock-based compensation expense, amortization of
acquired intangible assets (including purchased patents),
acquisition-related expenses (credits), net, amortization of debt
issuance costs and discount, mark-to-market adjustments on deferred
compensation liabilities, legal reserve and settlement charges or
benefits, Channel File 291 Incident related costs,
acquisition-related provision (benefit) for income taxes, losses
(gains) and other income from strategic investments, and losses
(gains) on deferred compensation assets.
Non-GAAP Net Income per Share Attributable to CrowdStrike
Common Stockholders, Diluted
CrowdStrike defines non-GAAP net income per share attributable
to CrowdStrike common stockholders, as non-GAAP net income
attributable to CrowdStrike divided by the weighted-average shares
outstanding, which includes the dilutive effect of potentially
dilutive common stock equivalents outstanding during the
period.
Free Cash Flow
Free cash flow is a non-GAAP financial measure that CrowdStrike
defines as net cash provided by operating activities less purchases
of property and equipment, capitalized internal-use software and
website development costs, purchases of deferred compensation
investments, and proceeds from sale of deferred compensation
investments. CrowdStrike monitors free cash flow as one measure of
its overall business performance, which enables CrowdStrike to
analyze its future performance without the effects of non-cash
items and allow CrowdStrike to better understand the cash needs of
its business. While CrowdStrike believes that free cash flow is
useful in evaluating its business, free cash flow is a non-GAAP
financial measure that has limitations as an analytical tool, and
free cash flow should not be considered as an alternative to, or
substitute for, net cash provided by operating activities in
accordance with GAAP. The utility of free cash flow as a measure of
CrowdStrike’s liquidity is further limited as it does not represent
the total increase or decrease in CrowdStrike’s cash balance for
any given period. In addition, other companies, including companies
in CrowdStrike's industry, may calculate free cash flow differently
or not at all, which reduces the usefulness of free cash flow as a
tool for comparison.
Explanation of Operational Measures
Annual Recurring Revenue
ARR is calculated as the annualized value of CrowdStrike’s
customer subscription contracts as of the measurement date,
assuming any contract that expires during the next 12 months is
renewed on its existing terms. To the extent that CrowdStrike is
negotiating a renewal with a customer after the expiration of the
subscription, CrowdStrike continues to include that revenue in ARR
if CrowdStrike is actively in discussion with such an organization
for a new subscription or renewal, or until such organization
notifies CrowdStrike that it is not renewing its subscription.
Magic Number
Magic Number is calculated by performing the following
calculation for the most recent four quarters and taking the
average: annualizing the difference between a quarter’s
Subscription Revenue and the prior quarter’s Subscription Revenue,
and then dividing the resulting number by the previous quarter’s
Non-GAAP Sales & Marketing Expense. Magic Number = Average of
previous four quarters: ((Quarter GAAP Subscription Revenue – Prior
Quarter GAAP Subscription Revenue) x 4) / Prior Quarter Non-GAAP
Sales & Marketing Expense.
Free Cash Flow Rule of 40
Free cash flow rule of 40 is calculated by taking the current
quarter total revenue year over year growth rate percentage and
summing it with the current quarter free cash flow margin
percentage.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240828420412/en/
Investor Relations Contact CrowdStrike Holdings, Inc.
Maria Riley, Vice President of Investor Relations
investors@crowdstrike.com 669-721-0742
Press Contact CrowdStrike Holdings, Inc. Jake Schuster,
Senior Director, Public Relations & Media Strategy
press@crowdstrike.com
CrowdStrike (NASDAQ:CRWD)
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