CrowdStrike (NASDAQ:CRWD) Posts Better-Than-Expected Sales In Q1

Adam Hejl /
2024/06/04 4:09 pm EDT

Cybersecurity company CrowdStrike (NASDAQ:CRWD) announced better-than-expected results in Q1 CY2024, with revenue up 33% year on year to $921 million. The company expects next quarter's revenue to be around $959.8 million, in line with analysts' estimates. It made a non-GAAP profit of $0.93 per share, improving from its profit of $0.57 per share in the same quarter last year.

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CrowdStrike (CRWD) Q1 CY2024 Highlights:

  • Revenue: $921 million vs analyst estimates of $904.8 million (1.8% beat)
  • EPS (non-GAAP): $0.93 vs analyst estimates of $0.89 (4.4% beat)
  • Revenue Guidance for Q2 CY2024 is $959.8 million at the midpoint, roughly in line with what analysts were expecting
  • The company lifted its revenue guidance for the full year from $3.96 billion to $3.99 billion at the midpoint, a 0.9% increase
  • Gross Margin (GAAP): 75.6%, in line with the same quarter last year
  • Free Cash Flow of $322.5 million, up 13.7% from the previous quarter
  • Annual Recurring Revenue: $3.65 billion at quarter end, up 33.5% year on year
  • Market Capitalization: $74.66 billion

“CrowdStrike started the fiscal year from a position of momentum and exceptional strength, with net new ARR of $212 million growing 22% year-over-year and ending ARR growing 33% year-over-year to reach $3.65 billion,” said George Kurtz, CrowdStrike's president, Chief Executive Officer and Co-Founder.

Founded by George Kurtz, the former CTO of the antivirus company McAfee, CrowdStrike (NASDAQ:CRWD) provides cybersecurity software that protects companies from breaches and helps them detect and respond to cyber attacks.

Endpoint Security

Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks. As the volume of internet enabled devices grows, every device that employees use to connect to business networks represents a potential risk. Endpoint security software enables businesses to protect devices (endpoints) that employees use for work purposes either on a network or in the cloud from cyber threats.

Sales Growth

As you can see below, CrowdStrike's revenue growth has been impressive over the last three years, growing from $302.8 million in Q1 2022 to $921 million this quarter.

CrowdStrike Total Revenue

Unsurprisingly, this was another great quarter for CrowdStrike with revenue up 33% year on year. On top of that, its revenue increased $75.7 million quarter on quarter, a very strong improvement from the $59.32 million increase in Q4 CY2023. This is a sign of re-acceleration of growth and great to see.

Next quarter's guidance suggests that CrowdStrike is expecting revenue to grow 31.2% year on year to $959.8 million, slowing down from the 36.7% year-on-year increase it recorded in the same quarter last year. Looking ahead, analysts covering the company were expecting sales to grow 28.3% over the next 12 months before the earnings results announcement.

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Cash Is King

If you've followed StockStory for a while, you know that we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. CrowdStrike's free cash flow came in at $322.5 million in Q1, up 41.8% year on year.

CrowdStrike Free Cash Flow

CrowdStrike has generated $1.03 billion in free cash flow over the last 12 months, an eye-popping 31.5% of revenue. This robust FCF margin stems from its asset-lite business model, scale advantages, and strong competitive positioning, giving it the option to return capital to shareholders or reinvest in its business while maintaining a healthy cash balance.

Key Takeaways from CrowdStrike's Q1 Results

It was encouraging to see CrowdStrike narrowly top analysts' revenue and ARR (annual recurring revenue) expectations this quarter, showing customers continue investing in its products. We were also glad it raised its full-year revenue and EPS guidance, which beat Wall Street's projections. Zooming out, we think this was a great quarter, showing that the company is staying on target. The stock is flat after reporting and trades at $305.83 per share.

So should you invest in CrowdStrike right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.