CrowdStrike(US:CRWD)2024-11-27 02:24Revenue Growth and Performance - Annual Recurring Revenue (ARR) grew to $4.0 billion as of October 31, 2024, with a year-over-year growth of 27%[193] - Total revenue increased by $224.2 million, or 29%, for the three months ended October 31, 2024 compared to the same period in 2023, driven by subscription growth[221] - Subscription revenue increased by $229.3 million, or 31%, for the three months ended October 31, 2024, primarily due to new customer additions and increased sales of sensors and modules to existing customers[222] - Total revenue increased by $684.9 million, or 31%, for the nine months ended October 31, 2024 compared to the nine months ended October 31, 2023[237] - Revenue for the nine months ended October 31, 2024 was $2,891,704 thousand, with a net income of $63,365 thousand[272] Subscription Revenue and Metrics - Subscription revenue is driven by the number of subscription customers, endpoints per customer, and cloud modules included in the subscription[199] - Subscription revenue accounted for 95% of total revenue for the three months ended October 31, 2024, up from 93% in the same period in 2023[221] - Subscription gross profit increased by $527.9 million (33%) to $2,147.3 million for the nine months ended October 31, 2024, compared to the same period in 2023[243] - Dollar-Based Net Retention Rate was 115% as of October 31, 2024, reflecting customer renewals, expansion, contraction, and churn[196] Professional Services Revenue and Costs - Professional services revenue includes incident response, proactive services, forensic and malware analysis, and attribution analysis[200] - Professional services revenue decreased by $5.1 million, or 10%, for the three months ended October 31, 2024, due to a reduction in billable and non-billable hours[224] - Professional services revenue accounted for 5% of total revenue for the three months ended October 31, 2024, down from 7% in the same period in 2023[221] - Professional services gross margin decreased by 15% for the three months ended October 31, 2024, compared to the three months ended October 31, 2023[228] - Professional services gross profit decreased by $13.4 million (31%) to $30.3 million for the nine months ended October 31, 2024, primarily due to increased consulting expenses and decreased utilization[243][244] Cost of Revenue and Gross Profit - Subscription cost of revenue includes cloud hosting costs, employee-related costs, and software license fees[201] - Professional services cost of revenue consists primarily of employee-related costs and consulting expenses[203] - Total cost of revenue increased by $60.1 million, or 31%, for the three months ended October 31, 2024 compared to the three months ended October 31, 2023[225] - Subscription cost of revenue increased by $56.5 million, or 35%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023[225] - Professional services cost of revenue increased by $3.6 million, or 10%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023[226] - Total gross profit increased by $164.1 million, or 28%, for the three months ended October 31, 2024 compared to the three months ended October 31, 2023[227] - Total gross profit increased by $514.5 million (31%) to $2,177.6 million for the nine months ended October 31, 2024, compared to the same period in 2023[243] Operating Expenses - Sales and marketing expenses are expected to increase in dollar amount but decrease as a percentage of total revenue over time[208] - Sales and marketing expenses increased by $122.1 million, or 43%, for the three months ended October 31, 2024, as the company expanded its market presence[218] - Sales and marketing expenses increased by $122.1 million, or 43%, for the three months ended October 31, 2024 compared to the three months ended October 31, 2023[230] - Sales and marketing expenses increased by $263.6 million (31%) to $1,113.9 million for the nine months ended October 31, 2024, driven by a 13% increase in average headcount and higher marketing programs[247] - Research and development expenses increased by $79.5 million, or 41%, for the three months ended October 31, 2024, reflecting higher investments in technology architecture and software platforms[218] - Research and development expenses increased by $79.5 million, or 41%, for the three months ended October 31, 2024 compared to the three months ended October 31, 2023[231] - Research and development expenses increased by $207.3 million (37%) to $761.8 million for the nine months ended October 31, 2024, primarily due to a 15% increase in average headcount and higher stock-based compensation[248] - General and administrative expenses increased by $21.4 million, or 20%, for the three months ended October 31, 2024, driven by higher employee-related costs[218] - General and administrative expenses increased by $21.4 million, or 20%, for the three months ended October 31, 2024 compared to the three months ended October 31, 2023[232] - General and administrative expenses increased by $47.1 million (16%) to $337.1 million for the nine months ended October 31, 2024, driven by a 17% increase in average headcount and expenses related to the July 19 Incident[249] Net Income and Profitability - Net income attributable to CrowdStrike decreased by $43.5 million, or 163%, for the three months ended October 31, 2024, compared to the same period in 2023[218] - Provision for income taxes increased by $6.2 million (34%) to $24.9 million for the nine months ended October 31, 2024, primarily due to higher pre-tax earnings and withholding taxes in foreign jurisdictions[254] Liquidity and Financial Position - The company had $4.3 billion in cash and cash equivalents as of October 31, 2024, along with a $750.0 million Revolving Facility, providing sufficient liquidity for at least the next 12 months[256] - Deferred revenue as of October 31, 2024, was $3.2 billion, with $2.4 billion expected to be recognized as revenue within the next 12 months[260] - Current assets (excluding current intercompany receivables from non-Guarantors) as of October 31, 2024 were $5,403,852 thousand[272] - Noncurrent assets (excluding noncurrent intercompany receivables from non-Guarantors) as of October 31, 2024 were $1,796,543 thousand[272] - Current liabilities (excluding current intercompany payables to non-Guarantors) as of October 31, 2024 were $2,882,966 thousand[272] - Noncurrent liabilities (excluding noncurrent intercompany payables to non-Guarantors) as of October 31, 2024 were $1,663,028 thousand[272] - The company has non-cancellable purchase commitments totaling $2.8 billion as of October 31, 2024[277] - Unrecognized tax benefits as of October 31, 2024 were $12.3 million[278] - Non-cancellable unfunded commitments from financing arrangements as of October 31, 2024 were approximately $49.3 million[278] - Backlog as of October 31, 2024 was approximately $2.2 billion[286] Strategic Initiatives and Investments - The company's go-to-market strategy focuses on a low friction land-and-expand model, targeting organizations of all sizes worldwide[179][180] - The company expects research and development expenses to increase in dollar amount but decrease as a percentage of total revenue over time as the business grows[210] - The company acquired A.S. Adaptive Shield Ltd. for a total consideration of $213.8 million in cash, net of $13.8 million of cash acquired[279] Impact of the July 19 Incident - The July 19 Incident resulted in increased legal and professional services expenses, elongated sales cycles, and potential future customer churn[188] - General and administrative expenses increased by $47.1 million (16%) to $337.1 million for the nine months ended October 31, 2024, driven by a 17% increase in average headcount and expenses related to the July 19 Incident[249] Interest Income and Other Financial Metrics - Interest income increased by $12.1 million, or 30%, for the three months ended October 31, 2024 compared to the three months ended October 31, 2023[234] - Interest income increased by $42.3 million (39%) to $149.6 million for the nine months ended October 31, 2024, due to higher market interest rates and increased cash and cash equivalents[252]