CrowdStrike(CRWD) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Ending ARR reached $3.86 billion, growing 32% year-over-year [10][28] - Q2 net new ARR was$ 218 million, up 11% year-over-year [10][28] - Q2 revenue was $964 million, exceeding guidance [10][30] - Non-GAAP operating income was$ 227 million, growing 46% year-over-year [10][31] - Free cash flow was $272 million, representing 28% of revenue [10][31] Business Line Data and Key Metrics Changes - LogScale next-gen SIEM, identity protection, and cloud security businesses surpassed$ 1 billion in ending ARR, growing more than 85% year-over-year [12] - Cloud Security business reached over $515 million in ARR, growing faster than 80% year-over-year [12][13] - Identity Protection ARR surpassed$ 350 million, growing over 70% year-over-year [13] - LogScale next-gen SIEM ARR exceeded $220 million, growing more than 140% year-over-year [14] Market Data and Key Metrics Changes - 66% of new logo business was sourced by partners, indicating strong partner engagement [17] - Systems Integrator business grew over 100% year-over-year [17] Company Strategy and Development Direction - Focus on enhancing the Falcon platform's resilience and security following the July 19 incident [9][10] - Emphasis on customer commitment packages to drive long-term loyalty and platform adoption [22][25] - Continued investment in innovation and R&D to maintain competitive edge [36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the July 19 incident but expressed confidence in the company's resilience and customer trust [10][19] - Anticipated extended sales cycles and increased scrutiny from customers in the near term [33] - Long-term goal remains to reach$ 10 billion in ending ARR by the end of fiscal year 2031 [36][38] Other Important Information - The company has engaged independent third-party vendors to review its security processes post-incident [8] - The Falcon Flex subscription model has gained traction, representing over $700 million in total deal value [22] Q&A Session Summary Question: Will CrowdStrike need to rearchitect the Falcon agent due to the incident? - Management clarified that the issue was a configuration update, not a kernel update, and emphasized the robustness of their architecture [40][42] Question: Insights on the pipeline and competitive landscape? - Management noted that customer trust has remained strong, with many expressing a desire to expand their relationship with CrowdStrike [45] Question: Details on the Falcon Flex model and its impact? - Management indicated that Falcon Flex was developed in response to customer demand for flexibility and ease of procurement [47][67] Question: How will the customer commitment packages affect future growth? - Management expects these packages to lead to higher platform adoption and deeper customer partnerships over time [34][68] Question: Update on federal momentum and potential impacts from the incident? - Management expressed confidence in federal momentum, noting that while the sales cycle may be longer, opportunities remain strong [77] Question: Clarification on customer commitment packages and their financial implications? - Management explained that the packages would have a short-term impact on revenue but are expected to enhance long-term customer relationships and revenue growth [59][66]