CrowdStrike(US:CRWD)2023-06-01 00:29Financial Data and Key Metrics Changes - Total revenue grew 42% year-over-year to reach $692.6 million, with subscription revenue also increasing by 42% to $651.2 million [22] - Professional services revenue reached $41.4 million, marking a record for the 11th consecutive quarter and representing 48% year-over-year growth [22] - GAAP profitability was achieved for the first time in company history, with non-GAAP net income attributable to CrowdStrike growing to a record $136.4 million or $0.57 per diluted share [23][42] - Non-GAAP gross margin reached 78%, with subscription gross margin exceeding 80% for the first time [41] Business Line Data and Key Metrics Changes - The Falcon platform saw significant adoption, with new Fortune 100 customers consolidating on it and purchasing multiple modules [15] - The managed services team contributed to CrowdStrike's leadership position in the Forrester Wave for managed detection and response [17] - Net-new ARR from million-dollar-plus customers grew year-over-year, with $174.2 million in net-new ARR for the quarter [33] Market Data and Key Metrics Changes - International revenue grew 53% year-over-year, with notable strength in Europe, the Middle East, and Japan [22] - The public sector saw wins including a Falcon Complete win at a top 20 US government contractor and a major US federal agency [19] - The competitive environment remains strong, with CrowdStrike winning 8 out of 10 tests against Microsoft [19] Company Strategy and Development Direction - The company is focused on leveraging AI to drive better customer outcomes and efficiencies, with initiatives like Charlotte AI aimed at addressing the cybersecurity skills gap [10][31] - There is a strong emphasis on consolidation within the security stack, with customers seeking to reduce vendor sprawl and costs [32] - The company is expanding its partner ecosystem, including a strategic partnership with Pax8 to enhance market reach [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a challenging macro environment, with strong growth and exceptional margins [27] - The company anticipates continued demand for its services, particularly in light of the increasing complexity of cybersecurity threats [30] - Management noted that while deal scrutiny and longer sales cycles are present, the overall health of the business remains strong [51][84] Other Important Information - The company raised its revenue guidance for the fiscal year, expecting total revenue to be in the range of $3,000.5 million to $3,036.7 million, reflecting a growth rate of 34% to 35% [61] - The company aims to maintain a free cash flow margin of 30% for the fiscal year [44] Q&A Session Summary Question: Impact of the banking crisis on ARR and billings - Management noted that there was not a material impact on ARR from the banking crisis, with overall gross retention remaining high [84] Question: Threats from generative AI - Management acknowledged the rise of adversarial AI, where malicious actors use AI to create sophisticated attacks, making cybersecurity more critical [52] Question: Demand in the SMB market - Management reported strong traction in the SMB market, with no observed slowdown, and highlighted the fragmented nature of the market as an opportunity [82][116] Question: Consolidation trends among customers - Management indicated that customers are increasingly looking to consolidate their security solutions with CrowdStrike, which is reflected in the growing pipeline [81] Question: Future of GAAP profitability - Management expressed commitment to maintaining GAAP profitability and managing stock-based compensation while retaining talent [118]