CrowdStrike (NASDAQ:CRWD) Q3 Sales Beat Estimates, Provides Encouraging Quarterly Guidance

Kayode Omotosho /
2021/12/01 4:18 pm EST

Cybersecurity company CrowdStrike (NASDAQ:CRWD) reported Q3 FY2022 results that beat analyst expectations, with revenue up 63.4% year on year to $380 million. Guidance for next quarter's revenue was $409.4 million at the midpoint, 2% above the average of analyst estimates. CrowdStrike made a GAAP loss of $50.4 million, greater than its loss of $24.5 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) Q3 FY2022 Highlights:

  • Revenue: $380 million vs analyst estimates of $364.1 million (4.35% beat)
  • EPS (non-GAAP): $0.17 vs analyst estimates of $0.10 ($0.07 beat)
  • Revenue guidance for Q4 2022 is $409.4 million at the midpoint, above analyst estimates of $401 million
  • Free cash flow of $123.5 million, up 67.7% from previous quarter
  • Customers: 14,687, up from 13,080 in previous quarter
  • Gross Margin (GAAP): 73.2%, in line with same quarter last year

"CrowdStrike delivered a robust third quarter with broad-based strength across multiple areas of the business leading to net new ARR growth accelerating and ending ARR growing 67% year-over-year to surpass the $1.5 billion milestone. Our outstanding results this quarter demonstrate the flywheel effect of our platform and reflect continued strong customer adoption for our core products in addition to the growing success of our newer product initiatives including identity protection, log management and cloud. With our leading technology, unmatched platform and approach to stopping breaches, we continue to eclipse our competitors and extend our leadership position," 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.

Sales Growth

As you can see below, CrowdStrike's revenue growth has been incredible over the last year, growing from quarterly revenue of $232.4 million, to $380 million.

CrowdStrike Total Revenue

This was another standout quarter with the revenue up a splendid 63.4% year on year. On top of that, revenue increased $42.3 million quarter on quarter, a very strong improvement on the $34.8 million increase in Q2 2022, and a sign of acceleration of growth, which is very nice to see indeed.

Analysts covering the company are expecting the revenues to grow 41.4% over the next twelve months, although estimates are likely to change post earnings.

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.

Customer Growth

You can see below that CrowdStrike reported 14,687 customers at the end of the quarter, an increase of 1,607 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 Q3 Results

With a market capitalization of $49.5 billion, more than $1.9 billion in cash and with free cash flow over the last twelve months being positive, the company is in a very strong position to invest in growth.

We were impressed by the exceptional revenue growth CrowdStrike delivered this quarter. And we were also excited to see that it outperformed Wall St’s revenue expectations. Overall, we think this was a strong quarter, that should leave shareholders feeling very positive. The company is up 2.85% on the results and currently trades at $207.25 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.