CrowdStrike shares are up 37.6% year-to-date, while the Nasdaq Composite is up 12.7%. (Photo … [+]
Shares of CrowdStrike (CRWD) closed at a brand new record high of $351.47 on Friday. The stock is up 20% up to now this month. Shares are up 37.6% year-to-date, nearly thrice the Nasdaq Composite’s 12.7% gain.
CrowdStrike will report its first quarter (April) results on June 4. Since its fourth quarter (January) earnings report in early March, CrowdStrike shares have risen 18%. Expectations are high for the primary quarter release as the corporate’s enterprise value is high, at 20.8 times the consensus fiscal yr 2025 (January) revenue estimate of $3.97 billion (which represents 30% growth).
The cybersecurity industry is currently undergoing a profound transition from point solutions to platforms. In the past, firms bought the very best individual products for every security use case. But that is changing because of a number of top vendors which have assembled a big selection of high-quality products on their platforms. CrowdStrike, previously known primarily for securing endpoints, has change into one among the leading security platform providers.
CrowdStrike’s Falcon platform now consists of greater than 20 cloud-based modules covering every part from cloud workload protection and identity security to endpoint protection and security analytics. CrowdStrike offers its customers a real platform experience with a single agent and a single interface. All offerings are designed to work seamlessly together – the platform just isn’t only a hodgepodge of individual products. The average recent customer finally ends up with five products.
CrowdStrike co-founder and CEO George Kurtz has criticized competitors’ platform strategies. On the last conference call, he spoke about “multiplatform hardware vendors” touting their “stitched-together, more robust patchwork” of point products which can be “disguised as thinly veiled piecemeal platforms.” Kurtz believes that firms shouldn’t buy non-integrated point solutions that don’t work together as efficiently as those on the CrowdStrike platform.
CrowdStrike is seeing strong adoption of the platform – 64% of shoppers have five or more modules, 43% have six or more, and 27% have seven or more. The variety of FQ4 deals that included eight or more modules greater than doubled yr over yr.
Demand stays strong across the CrowdStrike platform. In the fourth quarter, total revenue increased 33% to $845.3 million, beating consensus of $839.0 million. Subscription revenue increased 33% to $795.9 million. Dollar-based net retention remained stable at 119% for the third consecutive quarter. Operating margin of 25% increased 300 basis points from the third quarter. EPS of 95 cents beat consensus by 13 cents. Free money flow was $283 million (margin of 33.5%).
In the fourth quarter, annual recurring revenue (ARR) increased 34% to $3.435 billion. CrowdStrike achieved recent net ARR of $281.9 million. The company closed greater than 1,900 deals with a complete contract value (TCV) of over $100,000 and over 490 deals with a TCV of over $500,000. There were over 250 deals with a TCV of over $1 million, a 30% increase yr over yr.
In addition to continued success in its core endpoint protection segment, CrowdStrike is experiencing excellent expansion in its cloud security, identity protection and LogScale (next-generation SIEM) businesses. In the fourth quarter, the combined ARR of those three recent products greater than doubled yr over yr to over $850 million. In cloud security, CrowdStrike delivered the very best net ARR gains of any vendor, in keeping with Morgan Stanley.
In Q4, CrowdStrike signed an eight-figure, multi-year cloud security take care of an AI company. CrowdStrike will protect this customer’s large language model development and cloud environment. It was CrowdStrike’s largest internal distribution deal ever. CrowdStrike also signed a seven-figure take care of a financial services company to switch Palo Alto Networks’ cloud security offering. Thanks to CrowdStrike’s automation, this customer was in a position to reduce annual security staff costs by over $5 million.
On Wall Street, CrowdStrike’s price targets have been rising. Oppenheimer recently raised its goal from $300 to $355, given the platform’s good reception and CrowdStrike’s ability to proceed to execute on its platform sales initiative. Morgan Stanley raised its goal from $304 to $372, saying the corporate has a robust pipeline of latest products and is seeing increasing success rates.
Barclays raised its goal to $400 from $340, citing excellent growth in CrowdStrike’s non-endpoint products. RBC Capital raised its goal to $420 from $357, citing CrowdStrike’s ability to consolidate cybersecurity spending.
For the primary quarter, CrowdStrike expects revenue of $902.2 million to $905.8 million, representing growth of 30 to 31 percent. The consensus estimate is $904.6 million. For fiscal yr 2025, the corporate forecasts revenue growth of 28 to 31 percent.
