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CrowdStrike's (NASDAQ:CRWD) Q1 Sales Top Estimates, Provides Optimistic Full Year Guidance


Radek Strnad /
2022/06/02 4:14 pm EDT
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Cybersecurity company CrowdStrike (NASDAQ:CRWD) reported results ahead of analyst expectations in the Q1 FY2023 quarter, with revenue up 61% year on year to $487.8 million. The company expects that next quarter's revenue would be around $514.7 million, which is the midpoint of the guidance range. That was in roughly line with analyst expectations. CrowdStrike made a GAAP loss of $30.4 million, improving on its loss of $82.8 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) Q1 FY2023 Highlights:

  • Revenue: $487.8 million vs analyst estimates of $464.3 million (5.05% beat)
  • EPS (non-GAAP): $0.31 vs analyst estimates of $0.23 (33.1% beat)
  • Revenue guidance for Q2 2023 is $514.7 million at the midpoint, above analyst estimates of $509.9 million
  • The company lifted revenue guidance for the full year, from $2.14 billion to $2.19 billion at the midpoint, a 2.32% increase
  • Free cash flow of $157.5 million, up 23.7% from previous quarter
  • Customers: 17,945, up from 16,325 in previous quarter
  • Gross Margin (GAAP): 74%, in line with same quarter last year

“CrowdStrike delivered an exceptional first quarter to kick off the fiscal year with $190 million in net new ARR, 61% ending ARR growth at scale and record cash flow. We saw strength across the platform including a record quarter for modules deployed in the public cloud, and over 100% year-over-year ending ARR growth for our emerging product group, which includes our Discover, Spotlight, Identity Protection and Log Management modules. We believe our single agent architecture, frictionless go-to-market, and rapid innovation engine provide CrowdStrike a wide competitive moat along with multiple avenues to drive long-term sustainable growth in both our core and expansion markets,” 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 $302.8 million, to $487.8 million.

CrowdStrike Total Revenue

This was another standout quarter with the revenue up a splendid 61% year on year. On top of that, revenue increased $56.8 million quarter on quarter, a solid improvement on the $50.9 million increase in Q4 2022, and happily, a slight re-acceleration of growth.

Guidance for the next quarter indicates CrowdStrike is expecting revenue to grow 52.4% year on year to $514.7 million, slowing down from the 69.7% 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 43.9% 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 17,945 customers at the end of the quarter, an increase of 1,620 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 Q1 Results

With a market capitalization of $37.4 billion, more than $2.15 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 guidance outperformed Wall St’s expectations. Overall, we think this was still a really good quarter, that should leave shareholders feeling very positive. But the market was likely expecting more and the company is down 2.73% on the results and currently trades at $168 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.