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CrowdStrike Reports Second Quarter Fiscal Year 2025 Financial Results

  • 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.

Contacts

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

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