Cybersecurity company Crowdstrike (NASDAQ:CRWD) announced better-than-expected results in the Q2 FY2022 quarter, with revenue up 69.7% year on year to $337.6 million. Crowdstrike made a GAAP loss of $57.3 million, down on its loss of $29.8 million, in the same quarter last year.
Is now the time to buy Crowdstrike? Access our full analysis of the earnings results here, it's free.
Crowdstrike (CRWD) Q2 FY2022 Highlights:
- Revenue: $337.6 million vs analyst estimates of $323.5 million (4.37% beat)
- EPS (non-GAAP): $0.11 vs analyst estimates of $0.09 (28.9% beat)
- Revenue guidance for Q3 2022 is $361.6 million at the midpoint, above analyst estimates of $351.7 million
- The company lifted revenue guidance for the full year, from $1.35 billion to $1.4 billion at the midpoint, a 3.24% increase
- Free cash flow of $73.6 million, down 37.2% from previous quarter
- Customers: 13,080, up from 11,420 in previous quarter
- Gross Margin (GAAP): 73.2%, down from 74% previous quarter
"CrowdStrike delivered an outstanding second quarter with rapid subscription revenue growth and record net new ARR generated in the quarter. We saw strength in multiple areas of the business, added $151 million in net new ARR and grew ending ARR 70% year-over-year to exceed $1.34 billion. The success of our platform strategy and our growing brand leadership have led to a groundswell of customers turning to CrowdStrike as their trusted security platform of record. We believe that our extensible Falcon platform, purpose-built to leverage the power of the cloud, collecting data once and reusing it many times, is a fundamental cornerstone to building a durable growth business over the long-term," said George Kurtz, CrowdStrike’s co-founder and chief executive officer.
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.
Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks. The migration of businesses to the cloud and employees working remotely in insecure environments are also contributing to increasing demand for modern cybersecurity software.
As you can see below, Crowdstrike's revenue growth has been incredible over the last year, growing from quarterly revenue of $198.9 million, to $337.6 million.
This was another standout quarter with the revenue up a splendid 69.7% year on year. Quarter on quarter the revenue increased by $34.8 million in Q2, which was roughly in line with the Q1 2022 increase. This steady quarter-on-quarter growth shows the company is able to maintain a strong growth trajectory.
Analysts covering the company are expecting the revenues to grow 41.8% over the next twelve months, although we would expect them to review their estimates once they get to read these results.
There are others doing even better than Crowdstrike. Founded by ex-Google engineers, a small company making software for banks has been growing revenue 90% year on year and is already up more than 400% since the IPO in December. You can find it on our platform for free.
You can see below that Crowdstrike reported 13,080 customers at the end of the quarter, an increase of 1,660 on last quarter. That's about the same customer growth as what we seen last quarter and quite a bit above what we have typically seen over the last year, confirming the company is sustaining a good pace of sales.
Key Takeaways from Crowdstrike's Q2 Results
Sporting a market capitalization of $64.6 billion, more than $1.78 billion in cash and with positive free cash flow over the last twelve months, we're confident that Crowdstrike has the resources it needs to pursue a high growth business strategy.
We were impressed by the exceptional revenue growth Crowdstrike delivered this quarter. And we were also glad that the revenue guidance for the next quarter exceeded analysts' expectations. On the other hand, there was a deterioration in gross margin. Overall, we think this was a strong quarter, that should leave shareholders feeling very positive. The company is down -3.35% on the results and currently trades at $271.55 per share.
Should you invest in Crowdstrike right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.
One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.
The author has no position in any of the stocks mentioned.