CrowdStrike Holdings, Inc., (Nasdaq: CRWD), a leader in
cloud-delivered endpoint protection, today announced financial
results for the second quarter of its fiscal 2020, ended July 31,
2019.
“We delivered a strong second quarter with rapid subscription
revenue growth and record net new ARR generated in the quarter,”
said George Kurtz, CrowdStrike’s co-founder and
chief executive officer. “Customer growth accelerated as an
increasing number of organizations recognize the power of
CrowdStrike’s cloud-native Falcon platform to effectively stop
breaches and simplify their security stack with our single-agent
architecture. We secured a record number of net new subscription
customers in the quarter. In addition, as of July 31, 2019, 50% of
our subscription customers had adopted four or more cloud modules,
underscoring the continued success of our platform strategy.”
Second Quarter Fiscal 2020 Financial
Highlights
- Revenue: Total revenue was $108.1 million, a
94% increase, compared to $55.7 million in the second quarter of
fiscal 2019. Subscription revenue was $97.6 million, a 98%
increase, compared to $49.2 million in the second quarter of fiscal
2019.
- Annual Recurring Revenue (ARR) increased 104%
year-over-year and grew to $423.8 million as of July 31,
2019, of which $59.2 million was net new ARR added in the quarter.
- Subscription Gross Margin: GAAP subscription
gross margin was 74%, compared to 70% in the second quarter of
fiscal 2019. Non-GAAP subscription gross margin was 76%, compared
to 71% in the second quarter of fiscal 2019.
- Loss from Operations: GAAP loss from
operations was $50.6 million, compared to $30.4 million in the
second quarter of fiscal 2019. Non-GAAP loss from operations was
$20.6 million, compared to $28.0 million in the second quarter of
fiscal 2019.
- Net Loss: GAAP net loss was $51.9 million,
compared to $32.9 million in the second quarter of fiscal 2019.
GAAP net loss per share was $0.40, compared to $0.75 in the second
quarter of fiscal 2019. Non-GAAP net loss was $23.1 million,
compared to $30.4 million in the second quarter of fiscal 2019.
Non-GAAP net loss per share was $0.18, compared to $0.69 in the
second quarter of fiscal 2019.
- Cash Flow: Net cash used in operations was
$6.2 million, compared to a use of $28.7 million in the second
quarter of fiscal 2019. Free cash flow was negative $29.2 million,
compared to negative $35.7 million in the second quarter of fiscal
2019.
- Cash, cash equivalents and marketable
securities were $826.8 million as
of July 31, 2019.
Recent Highlights
- Added a record 730 net new subscription customers in the
quarter for a total of 3,789 subscription customers as of July 31,
2019.
- 50% of CrowdStrike’s subscription customers have adopted four
or more cloud modules as of July 31, 2019.
- CrowdStrike positioned as a Leader in the Magic Quadrant for
Endpoint Protection Platforms by Gartner, Inc.
- Launched Falcon Fund, an early stage investment fund started by
CrowdStrike in partnership with Accel.
- Introduced CrowdScore, which leverages cloud-based analytics
and AI to enable executives to instantly see the real-time threat
level their organizations are facing, allowing customers to quickly
mobilize resources to respond.
Financial Outlook
CrowdStrike is providing the following guidance for the third
quarter of fiscal 2020 (ending October 31, 2019) and is raising its
guidance for fiscal year 2020 (ending January 31, 2020):
|
Q3 FY20Guidance |
Full Year FY20Guidance |
Total revenue |
$117.1 – $119.5 million |
$445.4 – $451.8 million |
Non-GAAP loss from
operations |
$(27.7) – $(26.1) million |
$(97.9) – $(93.5) million |
Non-GAAP net loss |
$(24.8) – $(23.2) million |
$(95.3) – $(90.8) million |
Non-GAAP net loss per share,
basic and diluted |
$(0.12) – $(0.11) |
$(0.65) – $(0.62) |
Weighted average shares used in
computing Non-GAAP net loss per share attributable to common
stockholders, basic and diluted |
204.1 million |
147.3 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 our actual results to differ materially
from these forward-looking statements.
Guidance for non-GAAP financial measures excludes stock-based
compensation expense and amortization expense of acquired
intangible assets. We have not provided the most directly
comparable GAAP measures because certain items are out of our
control or cannot be reasonably predicted. Accordingly, a
reconciliation for non-GAAP loss from operations, non-GAAP net
loss, and non-GAAP net loss per share is not available without
unreasonable effort.
Conference Call Information
CrowdStrike will host a conference call for analysts and
investors to discuss its earnings results for the second quarter of
fiscal 2020 and outlook for its fiscal third quarter and year 2020
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: |
Thursday, September 5, 2019 |
Time: |
2:00 p.m. Pacific time / 5:00
p.m. Eastern time |
Dial-in number: |
800-525-5356 or 409-937-8967,
conference ID: 7382028 |
Webcast: |
ir.crowdstrike.com |
Forward-Looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties, including statements regarding our
future financial and operating performance, including our financial
outlook for the fiscal third quarter and year 2020. There are a
significant number of factors that could cause actual results to
differ materially from statements made in this press release,
including: our limited operating history; our ability to identify
and effectively implement the necessary changes to address
execution challenges; risks associated with managing our rapid
growth; our limited experience with new product and subscription
and support introductions and the risks associated with new
products and subscription and support offerings, including the risk
of defects, errors, or vulnerabilities; our ability to attract new
and retain existing customers; the failure to timely develop and
achieve market acceptance of new products and subscriptions as well
as existing products and subscriptions and support; rapidly
evolving technological developments in the market for security
products and subscription and support offerings; length of sales
cycles; and general market, political, economic, and business
conditions.
Additional risks and uncertainties that could affect our
financial results are included under the captions “Risk Factors”
and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” set forth from time to time in our
filings and reports with the Securities and Exchange Commission
(“SEC”), including our prospectus filed with the SEC pursuant to
Rule 424(b), dated June 11, 2019, copies of which are available on
our website at ir.crowdstrike.com and on the SEC’s website at
www.sec.gov.
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 us as of
the date hereof, and we do 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
We believe that the presentation of non-GAAP financial
information provides important supplemental information to
management and investors regarding financial and business trends
relating to our 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.
About CrowdStrike Holdings
CrowdStrike provides cloud-delivered endpoint protection.
Leveraging artificial intelligence (AI), the CrowdStrike Falcon
platform protects customers against cyberattacks on endpoints on or
off the network by offering visibility and protection across the
enterprise.
2019 CrowdStrike, Inc. All rights reserved. CrowdStrike® and
CrowdStrike Falcon are among the trademarks of CrowdStrike,
Inc.
Investor Relations ContactCrowdStrike Holdings,
Inc. Maria Riley, Senior Director of Investor Relations
investors@crowdstrike.com 669-721-0742
Press ContactCrowdStrike Holdings, Inc. Ilina
Cashiola, Director of Public Relations
ilina.cashiola@crowdstrike.com 202-340-0517
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, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription |
|
$ |
97,575 |
|
|
$ |
49,161 |
|
|
$ |
183,566 |
|
|
$ |
88,919 |
|
|
Professional services |
|
|
10,533 |
|
|
|
6,540 |
|
|
|
20,619 |
|
|
|
14,071 |
|
|
Total revenue |
|
|
108,108 |
|
|
|
55,701 |
|
|
|
204,185 |
|
|
|
102,990 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription (1) |
|
|
24,946 |
|
|
|
14,604 |
|
|
|
48,637 |
|
|
|
29,775 |
|
|
Professional services (1) |
|
|
6,636 |
|
|
|
3,971 |
|
|
|
12,219 |
|
|
|
8,194 |
|
|
Total cost of revenue |
|
|
31,582 |
|
|
|
18,575 |
|
|
|
60,856 |
|
|
|
37,969 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
76,526 |
|
|
|
37,126 |
|
|
|
143,329 |
|
|
|
65,021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing (1) |
|
|
65,274 |
|
|
|
40,113 |
|
|
|
122,117 |
|
|
|
76,730 |
|
|
Research and development (1) |
|
|
31,630 |
|
|
|
18,963 |
|
|
|
55,505 |
|
|
|
36,578 |
|
|
General and administrative (1) |
|
|
30,261 |
|
|
|
8,477 |
|
|
|
42,122 |
|
|
|
15,254 |
|
|
Total operating expenses |
|
|
127,165 |
|
|
|
67,553 |
|
|
|
219,744 |
|
|
|
128,562 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(50,639 |
) |
|
|
(30,427 |
) |
|
|
(76,415 |
) |
|
|
(63,541 |
) |
|
Interest expense |
|
|
(164 |
) |
|
|
(236 |
) |
|
|
(165 |
) |
|
|
(428 |
) |
|
Other expense, net |
|
|
(451 |
) |
|
|
(1,852 |
) |
|
|
(56 |
) |
|
|
(2,042 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before provision for income taxes |
|
|
(51,254 |
) |
|
|
(32,515 |
) |
|
|
(76,636 |
) |
|
|
(66,011 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
(635 |
) |
|
|
(362 |
) |
|
|
(1,230 |
) |
|
|
(483 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(51,889 |
) |
|
$ |
(32,877 |
) |
|
$ |
(77,866 |
) |
|
$ |
(66,494 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share attributable to Class A and Class B common
stockholders, basic and diluted |
|
$ |
(0.40 |
) |
|
$ |
(0.75 |
) |
|
$ |
(0.87 |
) |
|
$ |
(1.52 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in computing net loss per share
attributable to Class A and Class B common stockholders, basic and
diluted |
|
|
130,091 |
|
|
|
44,105 |
|
|
|
89,335 |
|
|
|
43,864 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes stock-based
compensation expense as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
(in thousands) |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription cost of revenue |
|
$ |
1,233 |
|
|
$ |
88 |
|
|
$ |
1,498 |
|
|
$ |
151 |
|
|
Professional services cost of revenue |
|
|
644 |
|
|
|
57 |
|
|
|
747 |
|
|
|
103 |
|
|
Sales and marketing |
|
|
6,638 |
|
|
|
1,031 |
|
|
|
8,156 |
|
|
|
1,804 |
|
|
Research and development |
|
|
4,976 |
|
|
|
539 |
|
|
|
5,657 |
|
|
|
987 |
|
|
General and administrative |
|
|
16,368 |
|
|
|
509 |
|
|
|
17,553 |
|
|
|
898 |
|
|
Total stock-based compensation expense |
|
$ |
29,859 |
|
|
$ |
2,224 |
|
|
$ |
33,611 |
|
|
$ |
3,943 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CROWDSTRIKE HOLDINGS, INC. |
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets |
|
(in thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 31, |
|
January 31, |
|
|
|
2019 |
|
|
2019 |
|
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
732,808 |
|
|
$ |
88,408 |
|
|
Marketable securities |
|
|
94,003 |
|
|
|
103,247 |
|
|
Accounts receivable, net |
|
|
115,256 |
|
|
|
92,476 |
|
|
Deferred contract acquisition costs, current |
|
|
34,017 |
|
|
|
28,847 |
|
|
Prepaid expenses and other current assets |
|
|
29,348 |
|
|
|
18,410 |
|
|
Total current assets |
|
|
1,005,432 |
|
|
|
331,388 |
|
|
Property and equipment, net |
|
|
107,989 |
|
|
|
73,735 |
|
|
Deferred contract acquisition costs, noncurrent |
|
|
41,766 |
|
|
|
9,918 |
|
|
Goodwill |
|
|
7,780 |
|
|
|
7,947 |
|
|
Intangible assets, net |
|
|
738 |
|
|
|
1,048 |
|
|
Other assets |
|
|
7,881 |
|
|
|
9,183 |
|
|
Total assets |
|
$ |
1,171,586 |
|
|
$ |
433,219 |
|
|
Liabilities, Redeemable Convertible Preferred Stock, and
Stockholders’ Equity (Deficit) |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,126 |
|
|
$ |
6,855 |
|
|
Accrued expenses |
|
|
32,568 |
|
|
|
32,541 |
|
|
Accrued payroll and benefits |
|
|
20,057 |
|
|
|
19,284 |
|
|
Deferred revenue |
|
|
279,951 |
|
|
|
218,700 |
|
|
Other current liabilities |
|
|
8,079 |
|
|
|
4,040 |
|
|
Total current liabilities |
|
|
341,781 |
|
|
|
281,420 |
|
|
Deferred revenue, noncurrent |
|
|
89,811 |
|
|
|
71,367 |
|
|
Other liabilities, noncurrent |
|
|
11,897 |
|
|
|
10,313 |
|
|
Total liabilities |
|
|
443,489 |
|
|
|
363,100 |
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
Redeemable Convertible Preferred Stock |
|
|
|
|
|
|
|
Redeemable convertible preferred stock |
|
|
— |
|
|
|
557,912 |
|
|
Stockholders’ Equity (Deficit) |
|
|
|
|
|
|
|
Preferred stock |
|
|
— |
|
|
|
— |
|
|
Common stock |
|
|
— |
|
|
|
24 |
|
|
Common stock, Class A and Class B |
|
|
103 |
|
|
|
— |
|
|
Additional paid-in capital |
|
|
1,302,098 |
|
|
|
31,211 |
|
|
Accumulated deficit |
|
|
(573,574 |
) |
|
|
(519,126 |
) |
|
Accumulated other comprehensive income (loss) |
|
|
(530 |
) |
|
|
98 |
|
|
Total stockholders’ equity (deficit) |
|
|
728,097 |
|
|
|
(487,793 |
) |
|
Total liabilities, redeemable convertible preferred stock, and
stockholders’ equity (deficit) |
|
$ |
1,171,586 |
|
|
$ |
433,219 |
|
|
|
|
|
|
|
|
|
|
CROWDSTRIKE HOLDINGS, INC. |
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash
Flows |
|
(in thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended July 31, |
|
|
|
2019 |
|
|
2018 |
|
|
Operating
activities |
|
|
|
|
|
|
|
Net loss |
|
$ |
(77,866 |
) |
|
$ |
(66,494 |
) |
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
10,193 |
|
|
|
6,424 |
|
|
Amortization of intangible assets |
|
|
285 |
|
|
|
373 |
|
|
Amortization of deferred contract acquisition costs |
|
|
15,076 |
|
|
|
11,991 |
|
|
Change in fair value of redeemable convertible preferred stock
warrant liability |
|
|
6,022 |
|
|
|
2,055 |
|
|
Allowance for doubtful accounts |
|
|
22 |
|
|
|
203 |
|
|
Stock-based compensation expense |
|
|
33,611 |
|
|
|
3,943 |
|
|
Accretion of marketable securities purchased at a discount |
|
|
(960 |
) |
|
|
(169 |
) |
|
Non-cash interest expense |
|
|
163 |
|
|
|
187 |
|
|
Changes in operating assets and liabilities |
|
|
|
|
|
|
|
Accounts receivable |
|
|
(22,802 |
) |
|
|
2,116 |
|
|
Deferred contract acquisition costs |
|
|
(27,788 |
) |
|
|
(14,298 |
) |
|
Prepaid expenses and other assets |
|
|
(12,505 |
) |
|
|
(91 |
) |
|
Accounts payable |
|
|
(5,897 |
) |
|
|
(7,703 |
) |
|
Accrued expenses and other current liabilities |
|
|
(2,095 |
) |
|
|
(9,058 |
) |
|
Accrued payroll and benefits |
|
|
773 |
|
|
|
(1,647 |
) |
|
Deferred revenue |
|
|
79,362 |
|
|
|
37,246 |
|
|
Other liabilities, noncurrent |
|
|
(393 |
) |
|
|
(215 |
) |
|
Net cash used in operating activities |
|
|
(4,799 |
) |
|
|
(35,137 |
) |
|
Investing activities |
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(37,159 |
) |
|
|
(14,068 |
) |
|
Capitalized internal-use software |
|
|
(3,310 |
) |
|
|
(3,201 |
) |
|
Purchases of marketable securities |
|
|
(117,572 |
) |
|
|
(80,204 |
) |
|
Proceeds from sales of marketable securities |
|
|
4,473 |
|
|
|
— |
|
|
Maturities of marketable securities |
|
|
123,314 |
|
|
|
2,600 |
|
|
Net cash used in investing activities |
|
|
(30,254 |
) |
|
|
(94,873 |
) |
|
Financing activities |
|
|
|
|
|
|
|
Proceeds from the issuance of common stock upon initial public
offering, net of underwriting discounts |
|
|
665,092 |
|
|
|
— |
|
|
Proceeds from the issuance of redeemable convertible preferred
stock, net of issuance costs |
|
|
— |
|
|
|
199,896 |
|
|
Repayment of loan payable |
|
|
— |
|
|
|
(6,158 |
) |
|
Proceeds from revolving line of credit |
|
|
— |
|
|
|
10,000 |
|
|
Repayment of revolving line of credit |
|
|
— |
|
|
|
(20,000 |
) |
|
Repayment of notes receivable from related parties |
|
|
— |
|
|
|
198 |
|
|
Payments of indemnity holdback |
|
|
— |
|
|
|
(500 |
) |
|
Repurchase of stock options |
|
|
— |
|
|
|
(2,330 |
) |
|
Payments of deferred offering costs |
|
|
(4,080 |
) |
|
|
— |
|
|
Proceeds from issuance of common stock upon exercise of stock
options |
|
|
8,526 |
|
|
|
1,514 |
|
|
Proceeds from the issuance of common stock upon exercise of early
exercisable stock options |
|
|
10,264 |
|
|
|
— |
|
|
Net cash provided by financing activities |
|
|
679,802 |
|
|
|
182,620 |
|
|
|
|
|
|
|
|
|
|
Effect of foreign exchange rates on cash and cash equivalents |
|
|
(349 |
) |
|
|
(255 |
) |
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
|
644,400 |
|
|
|
52,355 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period |
|
|
88,408 |
|
|
|
63,179 |
|
|
Cash and cash equivalents, end of period |
|
$ |
732,808 |
|
|
$ |
115,534 |
|
|
|
|
|
|
|
|
|
|
CROWDSTRIKE HOLDINGS, INC. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures with Reconciliation to
GAAP |
|
(in thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
(in thousands) |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP subscription revenue |
|
$ |
97,575 |
|
|
$ |
49,161 |
|
|
$ |
183,566 |
|
|
$ |
88,919 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP subscription gross
profit |
|
$ |
72,629 |
|
|
$ |
34,557 |
|
|
$ |
134,929 |
|
|
$ |
59,144 |
|
|
|
Add: Stock-based compensation expense |
|
|
1,233 |
|
|
|
88 |
|
|
|
1,498 |
|
|
|
151 |
|
|
|
Add: Amortization of acquired intangible assets |
|
|
97 |
|
|
|
106 |
|
|
|
201 |
|
|
|
202 |
|
|
|
Non-GAAP subscription gross
profit |
|
$ |
73,959 |
|
|
$ |
34,751 |
|
|
$ |
136,628 |
|
|
$ |
59,497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP subscription gross
margin |
|
|
74 |
|
% |
70 |
|
% |
|
74 |
|
% |
67 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP subscription gross
margin |
|
|
76 |
|
% |
71 |
|
% |
|
74 |
|
% |
67 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
(in thousands) |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP total revenue |
|
$ |
108,108 |
|
|
$ |
55,701 |
|
|
$ |
204,185 |
|
|
$ |
102,990 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP loss from operations |
|
$ |
(50,639 |
) |
|
$ |
(30,427 |
) |
|
$ |
(76,415 |
) |
|
$ |
(63,541 |
) |
|
|
Add: Stock-based compensation expense |
|
|
29,859 |
|
|
|
2,224 |
|
|
|
33,611 |
|
|
|
3,943 |
|
|
|
Add: Amortization of acquired intangible assets |
|
|
139 |
|
|
|
207 |
|
|
|
285 |
|
|
|
373 |
|
|
|
Non-GAAP loss from
operations |
|
$ |
(20,641 |
) |
|
$ |
(27,996 |
) |
|
$ |
(42,519 |
) |
|
$ |
(59,225 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating margin |
|
|
(47 |
) |
% |
(55 |
) |
% |
|
(37 |
) |
% |
(62 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating margin |
|
|
(19 |
) |
% |
(50 |
) |
% |
|
(21 |
) |
% |
(58 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
(in thousands) |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss |
|
$ |
(51,889 |
) |
|
$ |
(32,877 |
) |
|
$ |
(77,866 |
) |
|
$ |
(66,494 |
) |
|
|
Add: Stock-based compensation expense |
|
|
29,859 |
|
|
|
2,224 |
|
|
|
33,611 |
|
|
|
3,943 |
|
|
|
Add: Amortization of acquired intangible assets |
|
|
139 |
|
|
|
207 |
|
|
|
285 |
|
|
|
373 |
|
|
|
Less: Gain on settlement of lawsuit |
|
|
(1,250 |
) |
|
|
— |
|
|
|
(1,250 |
) |
|
|
— |
|
|
|
Non-GAAP net loss |
|
$ |
(23,141 |
) |
|
$ |
(30,446 |
) |
|
$ |
(45,220 |
) |
|
$ |
(62,178 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used
in computing net loss per share attributable to common
stockholders, basic and diluted |
|
|
130,091 |
|
|
|
44,105 |
|
|
|
89,335 |
|
|
|
43,864 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss per share
attributable to common stockholders, basic and diluted |
|
$ |
(0.40 |
) |
|
$ |
(0.75 |
) |
|
$ |
(0.87 |
) |
|
$ |
(1.52 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non- GAAP net loss per share
attributable to common stockholders, basic and diluted |
|
$ |
(0.18 |
) |
|
$ |
(0.69 |
) |
|
$ |
(0.51 |
) |
|
$ |
(1.42 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
(in thousands) |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP total revenue |
|
$ |
108,108 |
|
|
$ |
55,701 |
|
|
$ |
204,185 |
|
|
$ |
102,990 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net cash used in operating activities |
|
|
(6,214 |
) |
|
|
(28,744 |
) |
|
|
(4,799 |
) |
|
|
(35,137 |
) |
|
|
Less: Purchases of property and equipment |
|
|
(21,618 |
) |
|
|
(5,419 |
) |
|
|
(37,159 |
) |
|
|
(14,068 |
) |
|
|
Less: Capitalized internal-use software |
|
|
(1,326 |
) |
|
|
(1,494 |
) |
|
|
(3,310 |
) |
|
|
(3,201 |
) |
|
|
Free cash flow |
|
$ |
(29,158 |
) |
|
$ |
(35,657 |
) |
|
$ |
(45,268 |
) |
|
$ |
(52,406 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net cash used in investing activities |
|
$ |
(34,392 |
) |
|
$ |
(87,117 |
) |
|
$ |
(30,254 |
) |
|
$ |
(94,873 |
) |
|
|
GAAP net cash provided by financing activities |
|
$ |
680,684 |
|
|
$ |
182,171 |
|
|
$ |
679,802 |
|
|
$ |
182,620 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net cash used in operating activities as a percentage of
revenue |
|
|
(6 |
) |
% |
|
(52 |
) |
% |
|
(2 |
) |
% |
|
(34 |
) |
% |
Less: Purchases of property and equipment as a percentage of
revenue |
|
|
(20 |
) |
% |
|
(10 |
) |
% |
|
(18 |
) |
% |
|
(14 |
) |
% |
Less: Capitalized internal-use software as a percentage of
revenue |
|
|
(1 |
) |
% |
|
(3 |
) |
% |
|
(2 |
) |
% |
|
(3 |
) |
% |
Free cash flow margin |
|
|
(27 |
) |
% |
|
(64 |
) |
% |
|
(22 |
) |
% |
|
(51 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CROWDSTRIKE HOLDINGS, INC. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Statements of Operations: GAAP to Non-GAAP
Reconciliation |
(in thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
(in thousands) |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of revenue |
|
$ |
31,582 |
|
|
$ |
18,575 |
|
|
$ |
60,856 |
|
|
$ |
37,969 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation expense |
|
|
1,877 |
|
|
|
145 |
|
|
|
2,245 |
|
|
|
254 |
|
Amortization of acquired intangible assets |
|
|
97 |
|
|
|
106 |
|
|
|
201 |
|
|
|
202 |
|
Non-GAAP cost of revenue |
|
$ |
29,608 |
|
|
$ |
18,324 |
|
|
$ |
58,410 |
|
|
$ |
37,513 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP subscription gross
profit |
|
$ |
72,629 |
|
|
$ |
34,557 |
|
|
$ |
134,929 |
|
|
$ |
59,144 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation expense |
|
|
1,233 |
|
|
|
88 |
|
|
|
1,498 |
|
|
|
151 |
|
Amortization of acquired intangible assets |
|
|
97 |
|
|
|
106 |
|
|
|
201 |
|
|
|
202 |
|
Non-GAAP subscription gross
profit |
|
$ |
73,959 |
|
|
$ |
34,751 |
|
|
$ |
136,628 |
|
|
$ |
59,497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP professional services
gross profit |
|
$ |
3,897 |
|
|
$ |
2,569 |
|
|
$ |
8,400 |
|
|
$ |
5,877 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation expense |
|
|
644 |
|
|
|
57 |
|
|
|
747 |
|
|
|
103 |
|
Non-GAAP professional services
gross profit |
|
$ |
4,541 |
|
|
$ |
2,626 |
|
|
$ |
9,147 |
|
|
$ |
5,980 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Sales and marketing
operating expenses |
|
$ |
65,274 |
|
|
$ |
40,113 |
|
|
$ |
122,117 |
|
|
$ |
76,730 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation expense |
|
|
6,638 |
|
|
|
1,031 |
|
|
|
8,156 |
|
|
|
1,804 |
|
Amortization of acquired intangible assets |
|
|
32 |
|
|
|
62 |
|
|
|
63 |
|
|
|
79 |
|
Non-GAAP sales and marketing
operating expenses |
|
$ |
58,604 |
|
|
$ |
39,020 |
|
|
$ |
113,898 |
|
|
$ |
74,847 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development
operating expenses |
|
$ |
31,630 |
|
|
$ |
18,963 |
|
|
$ |
55,505 |
|
|
$ |
36,578 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation expense |
|
|
4,976 |
|
|
|
539 |
|
|
|
5,657 |
|
|
|
987 |
|
Amortization of acquired intangible assets |
|
|
10 |
|
|
|
39 |
|
|
|
21 |
|
|
|
92 |
|
Non-GAAP research and
development operating expenses |
|
$ |
26,644 |
|
|
$ |
18,385 |
|
|
$ |
49,827 |
|
|
$ |
35,499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general and
administrative operating expenses |
|
$ |
30,261 |
|
|
$ |
8,477 |
|
|
$ |
42,122 |
|
|
$ |
15,254 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation expense |
|
|
16,368 |
|
|
|
509 |
|
|
|
17,553 |
|
|
|
898 |
|
Non-GAAP general and
administrative operating expenses |
|
$ |
13,893 |
|
|
$ |
7,968 |
|
|
$ |
24,569 |
|
|
$ |
14,356 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP loss from operations |
|
$ |
(50,639 |
) |
|
$ |
(30,427 |
) |
|
$ |
(76,415 |
) |
|
$ |
(63,541 |
) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation expense |
|
|
29,859 |
|
|
|
2,224 |
|
|
|
33,611 |
|
|
|
3,943 |
|
Amortization of acquired intangible assets |
|
|
139 |
|
|
|
207 |
|
|
|
285 |
|
|
|
373 |
|
Non-GAAP loss from
operations |
|
$ |
(20,641 |
) |
|
$ |
(27,996 |
) |
|
$ |
(42,519 |
) |
|
$ |
(59,225 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss |
|
$ |
(51,889 |
) |
|
$ |
(32,877 |
) |
|
$ |
(77,866 |
) |
|
$ |
(66,494 |
) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation expense |
|
|
29,859 |
|
|
|
2,224 |
|
|
|
33,611 |
|
|
|
3,943 |
|
Amortization of acquired intangible assets |
|
|
139 |
|
|
|
207 |
|
|
|
285 |
|
|
|
373 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
Gain on settlement of lawsuit |
|
|
1,250 |
|
|
|
— |
|
|
|
1,250 |
|
|
|
— |
|
Non-GAAP net loss |
|
$ |
(23,141 |
) |
|
$ |
(30,446 |
) |
|
$ |
(45,220 |
) |
|
$ |
(62,178 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Explanation of Non-GAAP Financial Measures
In addition to our results determined in accordance with U.S.
generally accepted accounting principles (“GAAP”), we believe the
following non-GAAP measures are useful in evaluating our operating
performance. We use the following non-GAAP financial information to
evaluate our ongoing operations and for internal planning and
forecasting purposes. We believe that non-GAAP financial
information, when taken collectively, may be helpful to investors
because it provides consistency and comparability with past
financial 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 our 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 our non-GAAP financial measures as tools
for comparison. In addition, the utility of free cash flow as
a measure of our financial performance and liquidity is limited as
it does not represent the total increase or decrease in our cash
balance for a given period.
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 our
business.
Non-GAAP Subscription Gross Profit and Non-GAAP
Subscription Gross Margin
We define 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. We believe non-GAAP subscription gross profit and non-GAAP
subscription gross margin provide our management and investors
consistency and comparability with our past financial performance
and facilitate period-to-period comparisons of operations, as these
measures eliminate the effects of certain variables unrelated to
our overall operating performance.
Non-GAAP Loss from Operations
We define non-GAAP loss from operations as GAAP loss from
operations excluding stock-based compensation expense, amortization
of acquired intangible assets, and acquisition-related expenses. We
believe non-GAAP loss from operations provides our management and
investors consistency and comparability with our past financial
performance and facilitate period-to-period comparisons of
operations, as this metric generally eliminates the effects of
certain variables unrelated to our overall operating
performance.
Non-GAAP Net Loss per Share Attributable to Common
Stockholders, Basic and Diluted
We define non-GAAP net loss per share attributable to common
stockholders, as non-GAAP net loss divided by the weighted-average
shares outstanding, which includes the dilutive effect of
potentially diluted common stock equivalents outstanding during the
period. We may periodically incur charges or receive payments in
connection with litigation settlements. We exclude these charges
and payments received from non-GAAP net loss when associated with a
significant settlement because we do not believe they are
reflective of ongoing business and operating results.
Free Cash Flow
Free cash flow is a non-GAAP financial measure that we define as
net cash used in operating activities less purchases of property
and equipment, capitalized internal-use software, acquisition of
intangible assets, and cash used for business combinations.
We monitor free cash flow as one measure of our overall business
performance, which enables us to analyze our future performance
without the effects of non-cash items and allow us to better
understand the cash needs of our business. While we believe that
free cash flow is useful in evaluating our 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 used in operating
activities in accordance with GAAP. The utility of free cash flow
as a measure of our liquidity is further limited as it does not
represent the total increase or decrease in our cash balance for
any given period. In addition, other companies, including companies
in our 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 our 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 we are negotiating a renewal
with a customer after the expiration of the subscription, we
continue to include that revenue in ARR if we are actively in
discussion with such an organization for a new subscription or
renewal, or until such organization notifies us 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 Subscription Revenue – Prior
Quarter Subscription Revenue) x 4) / Prior Quarter Non-GAAP Sales
& Marketing Expense.
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