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CrowdStrike Holdings, Inc. (NASDAQ:CRWD) - Cybersecurity's AI-Native Platform Consolidator Delivers Exceptional Q1 Results
Published on September 24, 2024 | Ticker: CRWD

CrowdStrike Holdings, Inc. (NASDAQ:CRWD) has delivered an exceptional start to fiscal year 2025, reporting record quarterly results that showcase the company's ability to consolidate the cybersecurity market on its AI-native Falcon platform.

Financials

In the first quarter of fiscal 2025, CrowdStrike reported net income of $42.8 million, a significant increase from the $0.5 million reported in the same period last year. Annual net income for the prior fiscal year was $89.3 million. Revenue for the quarter reached $921.0 million, up 33% year-over-year, with annual revenue for the prior fiscal year coming in at $3.06 billion. Operating cash flow for the quarter was $383.2 million, and annual operating cash flow for the prior fiscal year was $1.17 billion. Free cash flow for the quarter was a record $322.5 million, and annual free cash flow for the prior fiscal year was $929.1 million.

The company's strong performance was driven by increased platform adoption as customers prioritize consolidating their cybersecurity solutions on CrowdStrike's Falcon platform. CrowdStrike reported net new annual recurring revenue (ARR) of $212 million in the quarter, up 22% year-over-year, bringing total ending ARR to $3.65 billion, a 33% increase compared to the prior year period.

CEO Commentary

"CrowdStrike delivered a record Q1, record Q1 net new ARR of $212 million, growing 22% year-over-year. Record ending ARR of $3.65 billion, growing 33% year-over-year. Record subscription gross margin of 80% and record free cash flow of $322 million, reaching 35% of revenue and a free cash flow Rule of 68, making us the only cybersecurity vendor of scale delivering this level of growth and profitability," said George Kurtz, CrowdStrike's President and Chief Executive Officer.

Revenue Breakdown

The geographic mix of revenue in the first quarter consisted of approximately 68% from the United States and 32% from international markets. Subscription revenue grew 34% year-over-year to $872.2 million, while professional services revenue increased 18% to $48.9 million.

Business Overview

CrowdStrike's platform strategy continues to drive strong results, with the number of deals involving cloud, identity or Falcon next-gen SIEM modules more than doubling year-over-year. The company also saw a 95% increase in the number of deals with eight or more modules, as customers embrace CrowdStrike's ability to consolidate multiple vendors on a single platform.

"Deals with eight plus modules grew 95% year-over-year. Our 28 modules are best-in-class on a standalone basis as rated by applicable leading industry analysts. Yet combined and natively built into the single Falcon platform, our solution modules work even better together, unlocking customer value characteristics of a virtuous flywheel," Kurtz explained.

The company's Falcon Flex subscription model, which allows customers to easily adopt additional Falcon modules, has also been a key driver of platform expansion. In the three quarters since launching Falcon Flex, the customers who have subscribed to this new licensing model represent over $500 million in deal value.

CrowdStrike's innovation engine continues to deliver new solutions that expand the platform's capabilities and drive further consolidation. The company's Falcon Cloud Security, Identity Protection, and LogScale next-gen SIEM offerings have all seen strong momentum, with Falcon Cloud Security being selected by 62 of the Fortune 100 companies.

Outlook

Looking ahead, CrowdStrike provided guidance for the second quarter of fiscal 2025, expecting total revenue between $958.3 million and $961.2 million, representing year-over-year growth of 31%. The company also raised its full-year fiscal 2025 guidance, now expecting total revenue between $3.98 billion and $4.01 billion, an increase of 30% to 31% over the prior fiscal year.

Conclusion

CrowdStrike's exceptional performance in the first quarter, driven by its platform strategy and ability to consolidate the cybersecurity market, positions the company well to continue its strong momentum and deliver on its long-term growth objectives, including reaching $10 billion in ending ARR.

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