CrowdStrike (NASDAQ:CRWD) Q2: Beats On Revenue

Radek Strnad /
2022/08/31 3:11 am EDT

Cybersecurity company CrowdStrike (NASDAQ:CRWD) beat analyst expectations in Q2 FY2023 quarter, with revenue up 58.4% year on year to $535.1 million. The company expects that next quarter's revenue would be around $572.5 million, which is the midpoint of the guidance range. That was in roughly line with analyst expectations. CrowdStrike made a GAAP loss of $48.3 million, improving on its loss of $57.3 million, in the same quarter last year.

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CrowdStrike (CRWD) Q2 FY2023 Highlights:

  • Revenue: $535.1 million vs analyst estimates of $516.4 million (3.62% beat)
  • EPS (non-GAAP): $0.36 vs analyst estimates of $0.27 (31.8% beat)
  • Revenue guidance for Q3 2023 is $572.5 million at the midpoint, roughly in line with what analysts were expecting
  • The company lifted revenue guidance for the full year, from $2.19 billion to $2.22 billion at the midpoint, a 1.33% increase
  • Free cash flow of $135.7 million, down 13.8% from previous quarter
  • Customers: 19,686, up from 17,945 in previous quarter
  • Gross Margin (GAAP): 73.7%, in line with same quarter last year

As organizations respond to macroeconomic conditions, they are prioritizing investments and looking to standardize with a security partner they can trust to achieve better protection with less time, fewer resources and lower total cost of ownership. Our ability to deliver immediate ROI and consolidate the security and IT stack significantly sets us apart from the competition,” 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. 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 incredible over the last year, growing from quarterly revenue of $337.6 million, to $535.1 million.

CrowdStrike Total Revenue

This was another standout quarter with the revenue up a splendid 58.4% year on year. But the growth did slow down a little compared to last quarter, as CrowdStrike increased revenue by $47.3 million in Q2, compared to $56.8 million revenue add in Q1 2023. So while the growth is overall still impressive, we will be keeping an eye on the slowdown.

Guidance for the next quarter indicates CrowdStrike is expecting revenue to grow 50.6% year on year to $572.5 million, slowing down from the 63.4% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 42.3% over the next twelve months.

In volatile times like these we look for robust businesses with strong pricing power. Unknown to most investors, this company is one of the highest-quality software companies in the world, and their software products have been the default standard in critical industries for decades. The result is an impressive business that is up an incredible 18,152% since the IPO. You can find it on our platform for free.

Customer Growth

You can see below that CrowdStrike reported 19,686 customers at the end of the quarter, an increase of 1,741 on last quarter. That's in line with the customer growth we have seen over the last couple of quarters, suggesting that the company can maintain its current sales momentum.

CrowdStrike Customers

Key Takeaways from CrowdStrike's Q2 Results

Sporting a market capitalization of $44.8 billion, more than $2.31 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 excited to see that it outperformed analysts' revenue expectations. Overall, this quarter's results seemed pretty positive and shareholders can feel optimistic. The company is flat on the results and currently trades at $192.5 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.