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press release

Aug. 31, 2021, 4:05 p.m. EDT

CrowdStrike Reports Second Quarter Fiscal Year 2022 Financial Results

Achieves ending ARR of $1.34 billion driven by record net new ARR of $151 million and adds a record 1,660 net new subscription customers in the quarter

SUNNYVALE, Calif., (BUSINESS WIRE) -- CrowdStrike Holdings, Inc. /zigman2/quotes/212513426/composite CRWD -0.25% , a leader in cloud-delivered endpoint and workload protection, today announced financial results for the second quarter fiscal year 2022, ended July 31, 2021.

"CrowdStrike delivered an outstanding second quarter with rapid subscription revenue growth and record net new ARR generated in the quarter. We saw strength in multiple areas of the business, added $151 million in net new ARR and grew ending ARR 70% year-over-year to exceed $1.34 billion. The success of our platform strategy and our growing brand leadership have led to a groundswell of customers turning to CrowdStrike as their trusted security platform of record. We believe that our extensible Falcon platform, purpose-built to leverage the power of the cloud, collecting data once and reusing it many times, is a fundamental cornerstone to building a durable growth business over the long-term," said George Kurtz, CrowdStrike’s co-founder and chief executive officer.

Commenting on the company's financial results, Burt Podbere, CrowdStrike’s chief financial officer, added, “In the second quarter we once again achieved strong growth at scale and delivered exceptional unit economics, drove leverage and remained capital efficient, generating strong operating and free cash flow. Given our strong performance and growing momentum in the market, and reflecting our view of a continued robust demand environment, we are raising our guidance for fiscal year 2022.”

Second Quarter Fiscal 2022 Financial Highlights

  • Revenue: Total revenue was $337.7 million, a 70% increase, compared to $199.0 million in the second quarter of fiscal 2021. Subscription revenue was $315.8 million, a 71% increase, compared to $184.3 million in the second quarter of fiscal 2021.

  • Annual Recurring Revenue (ARR) increased 70% year-over-year and grew to $1.34 billion as of July 31, 2021, of which $150.6 million was net new ARR added in the quarter.

  • Subscription Gross Margin: GAAP subscription gross margin was 76%, compared to 76% in the second quarter of fiscal 2021. Non-GAAP subscription gross margin was 78%, compared to 78% in the second quarter of fiscal 2021.

  • Income/Loss from Operations: GAAP loss from operations was $47.4 million, compared to $30.0 million in the second quarter of fiscal 2021. Non-GAAP income from operations was $35.3 million, compared to $7.8 million in the second quarter of fiscal 2021.

  • Net Income/Loss Attributable to CrowdStrike: GAAP net loss attributable to CrowdStrike was $57.3 million, compared to $29.9 million in the second quarter of fiscal 2021. GAAP net loss per share attributable to CrowdStrike common stockholders was $0.25, compared to $0.14 in the second quarter of fiscal 2021. Non-GAAP net income attributable to CrowdStrike was $25.9 million, compared to $7.9 million in the second quarter of fiscal 2021. Non-GAAP net income per share attributable to CrowdStrike common stockholders, diluted, was $0.11, compared to $0.03 in the second quarter of fiscal 2021.

  • Cash Flow: Net cash generated from operations was $108.5 million, compared to $55.0 million in the second quarter of fiscal 2021. Free cash flow was $73.6 million, compared to $32.4 million in the second quarter of fiscal 2021.

  • Cash and Cash Equivalents was $1.79 billion as of July 31, 2021.

Recent Highlights

  • Added 1,660 net new subscription customers in the quarter for a total of 13,080 subscription customers as of July 31, 2021, representing 81% growth year-over-year.

  • CrowdStrike’s subscription customers that have adopted four or more modules, five or more modules and six or more modules increased to 66%, 53%, and 29%, respectively, as of July 31, 2021.

  • Ranked number one for Modern Endpoint Security 2020 revenue market share in IDC’s Worldwide Corporate Endpoint Security Market Shares, 2020 report and named as a Leader in the IDC MarketScape report for U.S. Managed Detection & Response Services 2021 Vendor Assessment.

  • Announced Falcon X Recon+, a new managed solution that simplifies the process of hunting and mitigating external threats to brands, employees and sensitive data.

  • Added multiple new CrowdStrike Store partner integrations in the quarter, including Rapid7, Google Cloud, ExtraHop and Siemplify.

  • Launched Falcon Complete for GovCloud, a U.S. FedRAMP compliant program, which provides cloud-native managed detection and response for the public sector.

  • Won a fourth consecutive Approved Security Product award from leading independent testing organization AV-Comparatives. Within the AV-Comparatives Malware Protection Test, Falcon Pro for Mac achieved 99.8% malware protection.

  • Named the winner of multiple partner-focused awards including the 2021 AWS Global Public Sector Partner Award for best cybersecurity solution, 2021 Canada AWS Partner Award as the ISV Partner of the Year and the Go-to-Market Technology Partner of the Year Award at Zscaler’s 2021 ZenithLive Cloud Summit.

Financial Outlook

CrowdStrike is providing the following guidance for the third quarter of fiscal 2022 (ending October 31, 2021) and increasing its guidance for fiscal year 2022 (ending January 31, 2022):

  Q3 FY22
Guidance
  Full Year FY22
Guidance
Total revenue $358.0 - $365.3 million   $1,391.2 - $1,409.4 million
Non-GAAP income from operations $29.4 - $34.7 million   $138.5 - $152.1 million
Non-GAAP net income attributable to CrowdStrike $19.7 - $25.0 million   $102.9 - $116.5 million
Non-GAAP net income per share attributable to CrowdStrike common stockholders, diluted $0.08 - $0.10   $0.43 - $0.49
Weighted average shares used in computing non-GAAP net income per share attributable to CrowdStrike common stockholders, diluted 240 million   239 million

These statements are forward-looking and actual results may differ materially as a result of many factors. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Guidance for non-GAAP financial measures excludes stock-based compensation expense, amortization expense of acquired intangible assets, amortization of debt issuance costs and discount, legal reserve and settlement charges or benefits, gain (loss) on strategic investments, acquisition-related expenses, and tax costs for intellectual property integration relating to the Humio acquisition. We have not provided the most directly comparable GAAP measures because certain items are out of our control or cannot be reasonably predicted. Accordingly, a reconciliation for non-GAAP income from operations, non-GAAP net income attributable to CrowdStrike, and non-GAAP net income per share attributable to CrowdStrike common stockholders is not available without unreasonable effort.

Conference Call Information

CrowdStrike will host a conference call for analysts and investors to discuss its earnings results for the second quarter of fiscal 2022 and outlook for its fiscal third quarter and year 2022 today at 2:00 p.m. Pacific time (5:00 p.m. Eastern time). A recorded webcast of the event will also be available for one year on the CrowdStrike Investor Relations website ir.crowdstrike.com .

Date:         August 31, 2021
Time:         2:00 p.m. Pacific time / 5:00 p.m. Eastern time
Dial-in number:         409-937-8967, conference ID: 9695498
Webcast:         ir.crowdstrike.com

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding our future growth, and future financial and operating performance, including our financial outlook for the fiscal third quarter and fiscal year 2022. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: our limited operating history; risks associated with managing our rapid growth; our ability to identify and effectively implement the necessary changes to address execution challenges; the impact of the COVID-19 pandemic on our and our customers’ business; our limited experience with new product and subscription and support introductions and the risks associated with new products and subscription and support offerings, including the risk of defects, errors, or vulnerabilities; our ability to attract new and retain existing customers; our ability to successfully integrate acquisitions; the failure to timely develop and achieve market acceptance of new products and subscriptions as well as existing products and subscriptions and support; our ability to collaborate and integrate our products with offerings from other parties to deliver benefits to customers; rapidly evolving technological developments in the market for security products and subscription and support offerings; length of sales cycles; and general market, political, economic, and business conditions, including those related to COVID-19.

Further information on risks, uncertainties and other factors that could affect our financial results are included in the filings we make with the Securities and Exchange Commission (“SEC”) from time to time, including our most recently filed Quarterly Report on Form 10-Q and subsequent filings.

You should not rely on these forward-looking statements, as actual outcomes and results may differ materially from those contemplated by these forward-looking statements as a result of such risks and uncertainties. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

Use of Non-GAAP Financial Information

We believe that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to our financial condition and results of operations. For further information regarding these non-GAAP measures, including the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, please refer to the financial tables below, as well as the “Explanation of Non-GAAP Financial Measures" section of this press release.

Channels for Disclosure of Information

We intend to announce material information to the public through the CrowdStrike Investor Relations website ir.crowdstrike.com , SEC filings, press releases, public conference calls, and public webcasts. We use these channels, as well as social media and our blog , to communicate with our investors, customers, and the public about our company, our offerings, and other issues. It is possible that the information we post on social media and our blog could be deemed to be material information. As such, we encourage investors, the media, and others to follow the channels listed above, including the social media channels listed on our investor relations website, and to review the information disclosed through such channels. Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.

Reports Referenced

Worldwide Corporate Endpoint Security Market Shares, 2020: Pandemic and Expanding Functionality Propelled Market Growth, (# US47768021), Jun 2021

IDC MarketScape: U.S. Managed Detection and Response Services 2021 Vendor Assessment, (Doc #US48129921), August 2021

About CrowdStrike Holdings

CrowdStrike provides cloud-delivered endpoint and cloud workload protection. Leveraging artificial intelligence (AI), the CrowdStrike Falcon® platform protects customers against cyberattacks on endpoints on or off the network by offering visibility and protection across the enterprise.

Copyright © 2021 CrowdStrike, Inc. All rights reserved. CrowdStrike and CrowdStrike Falcon® are the registered trademarks of CrowdStrike, Inc. CrowdStrike owns other trademarks and service marks, and may use the brands of third parties to identify their products and services.

 
CROWDSTRIKE HOLDINGS, INC. Condensed Consolidated Statements of Operations
 
  Three Months Ended July 31,   Six Months Ended July 31,
  2021     2020     2021     2020  
Revenue              
Subscription $ 315,836       $ 184,256       $ 597,064       $ 346,478    
Professional services 21,854       14,715       43,469       30,571    
Total revenue 337,690       198,971       640,533       377,049    
Cost of revenue              
Subscription [(1)(2)] 75,993       44,037       140,896       81,281    
Professional services [ (1)] 14,439       10,354       28,041       20,005    
Total cost of revenue 90,432       54,391       168,937       101,286    
Gross profit 247,258       144,580       471,596       275,763    
Operating expenses              
Sales and marketing [ (1)(2)] 153,861       95,127       288,992       183,265    
Research and development [(1)(2)] 90,455       50,483       168,635       91,061    
General and administrative [(1)(3)(4)] 50,345       28,961       92,719       54,004    
Total operating expenses 294,661       174,571       550,346       328,330    
Loss from operations (47,403 )     (29,991 )     (78,750 )     (52,567 )  
Interest expense [(5)] (6,296 )     (174 )     (12,526 )     (317 )  
Other income, net [(6)] 619       732       5,387       5,265    
Loss before provision for income taxes (53,080 )     (29,433 )     (85,889 )     (47,619 )  
Provision for income taxes [(7)] 4,238       441       54,300       1,477    
Net loss (57,318 )     (29,874 )     (140,189 )     (49,096 )  
Net income attributable to noncontrolling interest             2,178          
Net loss attributable to CrowdStrike $ (57,318 )     $ (29,874 )     $ (142,367 )     $ (49,096 )  
Net loss per share attributable to CrowdStrike common shareholders, basic and diluted $ (0.25 )     $ (0.14 )     $ (0.63 )     $ (0.23 )  
Weighted-average shares used in computing net loss per share attributable to CrowdStrike common shareholders, basic and diluted 226,362       216,695       225,276       214,932    

_____________________________

(1) Includes stock-based compensation expense as follows:

  Three Months Ended July 31,   Six Months Ended July 31,
  2021   2020   2021   2020
               
  (in thousands)   (in thousands)
Subscription cost of revenue $ 5,294     $ 2,635     $ 9,579     $ 4,630  
Professional services cost of revenue 2,389     1,425     4,417     2,396  
Sales and marketing 25,265     13,603     42,679     22,290  
Research and development 25,808     9,029     43,609     13,929  
General and administrative 17,531     11,021     30,365     18,106  
Total stock-based compensation expense $ 76,287     $ 37,713     $ 130,649     $ 61,351  

(2) Includes amortization of acquired intangible assets as follows:

  Three Months Ended July 31,   Six Months Ended July 31,
  2021   2020   2021   2020
               
  (in thousands)   (in thousands)
Subscription cost of revenue $ 2,771     $ 63     $ 4,766     $ 125  
Sales and marketing 547     31     969     62  
Research and development     10         20  
Total amortization of acquired intangible assets $ 3,318     $ 104     $ 5,735     $ 207  

(3) Includes acquisition-related expenses as follows:

  Three Months Ended July 31,   Six Months Ended July 31,
  2021   2020   2021   2020
               
  (in thousands)   (in thousands)
General and administrative $ 596     $     $ 4,941     $  
Total acquisition-related expenses $ 596     $     $ 4,941     $  

(4) Includes legal reserve and settlement charges as follows:

  Three Months Ended July 31,   Six Months Ended July 31,
  2021   2020   2021   2020
               
  (in thousands)   (in thousands)
General and administrative $ 2,500     $     $ 2,500     $  
Total legal reserve and settlement charges $ 2,500     $     $ 2,500     $  

(5) Includes amortization of debt issuance costs and discount as follows:

  Three Months Ended July 31,   Six Months Ended July 31,
  2021   2020   2021   2020
               
  (in thousands)   (in thousands)
Interest expense $ 546     $     $ 1,093     $  
Total amortization of debt issuance costs and discount $ 546     $     $ 1,093     $  

(6) Includes gains from strategic investment as follows:

  Three Months Ended July 31,   Six Months Ended July 31,
  2021   2020   2021   2020
               
  (in thousands)   (in thousands)
Other income, net $     $     $ 4,356     $  
Total gains from strategic investments $     $     $ 4,356     $  

(7) Includes tax costs for intellectual property integration relating to the Humio acquisition as follows:

  Three Months Ended July 31,   Six Months Ended July 31,
  2021   2020   2021   2020
               
  (in thousands)   (in thousands)
Provision for income taxes $     $     $ 48,824     $  
Total provision for income taxes $     $     $ 48,824     $  
 
CROWDSTRIKE HOLDINGS, INC. Condensed Consolidated Balance Sheets
 
  July 31,   January 31,
  2021   2021
Assets      
Current assets:      
Cash and cash equivalents $ 1,787,051     $ 1,918,608  
Accounts receivable, net of allowance for credit losses 266,540     239,199  
Deferred contract acquisition costs, current 95,470     80,850  
Prepaid expenses and other current assets 102,964     53,617  
Total current assets 2,252,025     2,292,274  
Strategic investments 14,165     2,500  
Property and equipment, net 215,832     167,014  
Operating lease right-of-use assets 34,854     36,484  
Deferred contract acquisition costs, noncurrent 140,443     117,906  
Goodwill 374,310     83,566  
Intangible assets, net 85,580     15,677  
Other assets 18,836     17,112  
Total assets $ 3,136,045     $ 2,732,533  
Liabilities and Stockholders’ Equity      
Current liabilities:      
Accounts payable $ 19,642     $ 12,065  
Accrued expenses 70,162     51,117  
Accrued payroll and benefits 95,462     71,907  
Operating lease liabilities, current 9,374     8,977  
Deferred revenue 882,969     701,988  
Other current liabilities 59,219     17,499  
Total current liabilities 1,136,828     863,553  
Long-term debt 738,772     738,029  
Deferred revenue, noncurrent 281,388     209,907  
Operating lease liabilities, noncurrent 29,378     31,986  
Other liabilities, noncurrent 38,278     17,184  
Total liabilities 2,224,644     1,860,659  
Commitments and contingencies      
Stockholders’ Equity      
Common stock, Class A and Class B 114     112  
Additional paid-in capital 1,775,087     1,598,259  
Accumulated deficit (872,483 )   (730,116 )
Accumulated other comprehensive income 1,550     2,319  
Total CrowdStrike Holdings, Inc. stockholders’ equity 904,268     870,574  
Non-controlling interest 7,133     1,300  
Total stockholders’ equity 911,401     871,874  
Total liabilities and stockholders’ equity $ 3,136,045     $ 2,732,533  
 
CROWDSTRIKE HOLDINGS, INC. Condensed Consolidated Statements of Cash Flows
 
  Six Months Ended July 31,
  2021   2020
Operating activities      
Net loss $ (140,189 )   $ (49,096 )
Adjustments to reconcile net loss to net cash provided by operating activities:      
Depreciation and amortization 24,725     17,621  
Loss on disposal of property and equipment 244      
Amortization of intangible assets 5,735     207  
Amortization of deferred contract acquisition costs 50,419     28,171  
Non-cash operating lease costs 4,469     4,939  
Provision for credit losses 354     (269 )
Stock-based compensation expense 130,649     61,351  
Gain on sale of debt securities, net     (1,347 )
Accretion of marketable securities purchased at a premium     578  
Non-cash interest expense 1,199     320  
Change in fair value of strategic investments (4,356 )    
Changes in operating assets and liabilities, net of impact of acquisition      
Accounts receivable (24,257 )   16,020  
Deferred contract acquisition costs (87,576 )   (48,988 )
Prepaid expenses and other assets (47,883 )   (1,953 )
Accounts payable 5,383     9,634  
Accrued expenses and other current liabilities 55,242     (8,112 )
Accrued payroll and benefits 22,853     (711 )
Operating lease liabilities (5,022 )   1,315  
Deferred revenue 251,742     118,672  
Other liabilities 12,277     5,250  
Net cash provided by operating activities 256,008     153,602  
Investing activities      
Purchases of property and equipment (55,793 )   (30,334 )
Capitalized internal-use software and website development (9,273 )   (3,850 )
Purchase of strategic investments (7,309 )   (1,000 )
Business acquisition, net of cash acquired (353,746 )    
Purchases of marketable securities     (84,904 )
Proceeds from sales of marketable securities     639,586  
Maturities of marketable securities     91,605  
Net cash (used in) provided by investing activities (426,121 )   611,103  
Financing activities      
Payment of debt issuance costs related to revolving line of credit (219 )    
Payment of debt issuance costs related to Senior Notes (1,581 )    
Proceeds from issuance of common stock upon exercise of stock options 9,492     16,601  
Proceeds from issuance of common stock under the employee stock purchase plan 27,452     17,284  
Capital contributions from non-controlling interest holders 3,655     550  
Net cash provided by financing activities 38,799     34,435  
       
Effect of foreign exchange rates on cash and cash equivalents (243 )   796  
       
Net (decrease) increase in cash and cash equivalents (131,557 )   799,936  
       
Cash and cash equivalents, beginning of period 1,918,608     264,798  
Cash and cash equivalents, end of period $ 1,787,051     $ 1,064,734  
 
CROWDSTRIKE HOLDINGS, INC. Non-GAAP Financial Measures with Reconciliation to GAAP
 
  Three Months Ended July 31,   Six Months Ended July 31,
  2021   2020   2021   2020
GAAP subscription revenue $ 315,836     $ 184,256     $ 597,064     $ 346,478  
               
GAAP subscription gross profit $ 239,843     $ 140,219     $ 456,168     $ 265,197  
Add: Stock-based compensation expense 5,294     2,635     9,579     4,630  
Add: Amortization of acquired intangible assets 2,771     63     4,766     125  
Non-GAAP subscription gross profit $ 247,908     $ 142,917     $ 470,513     $ 269,952  
               
GAAP subscription gross margin 76 %   76 %   76 %   77 %
               
Non-GAAP subscription gross margin 78 %   78 %   79 %   78 %
 
  Three Months Ended July 31,   Six Months Ended July 31,
  2021   2020   2021   2020
GAAP total revenue $ 337,690     $ 198,971     $ 640,533     $ 377,049  
               
GAAP loss from operations $ (47,403 )   $ (29,991 )   $ (78,750 )   $ (52,567 )
Add: Stock-based compensation expense 76,287     37,713     130,649     61,351  
Add: Amortization of acquired intangible assets 3,318     104     5,735     207  
Add: Acquisition-related expenses 596         4,941      
Add: Legal reserve and settlement charges 2,500         2,500      
Non-GAAP income from operations $ 35,298     $ 7,826     $ 65,075     $ 8,991  
               
GAAP operating margin (14 )%   (15 )%   (12 )%   (14 )%
               
Non-GAAP operating margin 10 %   4 %   10 %   2 %
 
CROWDSTRIKE HOLDINGS, INC. Non-GAAP Financial Measures with Reconciliation to GAAP (Continued)
 
  Three Months Ended July 31,   Six Months Ended July 31,
  2021     2020     2021     2020  
GAAP net loss attributable to CrowdStrike $ (57,318 )     $ (29,874 )     $ (142,367 )     $ (49,096 )  
               
Add: Stock-based compensation expense $ 76,287       $ 37,713       $ 130,649       $ 61,351    
Add: Amortization of acquired intangible assets 3,318       104       5,735       207    
Add: Acquisition-related expenses 596             4,941          
Add: Amortization of debt issuance costs and discount 546             1,093          
Add: Legal reserve and settlement charges 2,500             2,500          
Add: Provision for income taxes [(1)]             48,824          
Less: Gain on strategic investments attributable to CrowdStrike             (2,178 )        
               
Non-GAAP net income attributable to CrowdStrike $ 25,929       $ 7,943       $ 49,197       $ 12,462    
               
Weighted-average shares used in computing GAAP net loss per share attributable to CrowdStrike common stockholders, basic and diluted 226,362       216,695       225,276       214,932    
Weighted-average shares used in computing Non-GAAP net income per share attributable to CrowdStrike common stockholders, basic 226,362       216,695       225,276       214,932    
Weighted-average shares used in computing Non-GAAP net income per share attributable to CrowdStrike common stockholders, diluted 238,043       233,169       237,753       231,720    
               
GAAP net loss per share attributable to CrowdStrike common stockholders, basic and diluted $ (0.25 )     $ (0.14 )     $ (0.63 )     $ (0.23 )  
               
Non-GAAP net income per share attributable to CrowdStrike common stockholders, basic $ 0.11       $ 0.04       $ 0.22       $ 0.06    
Non-GAAP net income per share attributable to CrowdStrike common stockholders, diluted $ 0.11       $ 0.03       $ 0.21       $ 0.05    
  Three Months Ended July 31,   Six Months Ended July 31,
  2021   2020   2021   2020
GAAP total revenue $ 337,690     $ 198,971     $ 640,533     $ 377,049  
               
GAAP net cash provided by operating activities 108,475     55,025     256,008     153,602  
Less: Purchases of property and equipment (29,997 )   (20,640 )   (55,793 )   (30,334 )
Less: Capitalized internal-use software and website development (4,839 )   (1,968 )   (9,273 )   (3,850 )
Free cash flow $ 73,639     $ 32,417     $ 190,942     $ 119,418  
               
GAAP net cash (used in) provided by investing activities $ (41,175 )   $ (23,608 )   $ (426,121 )   $ 611,103  
GAAP net cash provided by financing activities $ 36,190     $ 27,542     $ 38,799     $ 34,435  
               
GAAP net cash provided by operating activities as a percentage of revenue 32 %   28 %   40 %   41 %
Less: Purchases of property and equipment as a percentage of revenue (9 )%   (10 )%   (9 )%   (8 )%
Less: Capitalized internal-use software and website development as a percentage of revenue (1 )%   (1 )%   (1 )%   (1 )%
Free cash flow margin 22 %   16 %   30 %   32 %

_____________________________

(1) We use our GAAP provision for income taxes for the purpose of determining our non-GAAP income tax expense. The tax costs for intellectual property integration relating to the Humio acquisition is included in the GAAP provision for income taxes during the first quarter of fiscal 2022. The income tax benefits related to stock-based compensation, amortization of intangibles, acquisition related expenses, amortization of debt issuance costs and discount, and gain on strategic investments attributable to CrowdStrike included in the GAAP provision for income taxes was not material for all periods presented.
 
CROWDSTRIKE HOLDINGS, INC. Statements of Operations: GAAP to Non-GAAP Reconciliations
 
  Three Months Ended July 31,   Six Months Ended July 31,
  2021   2020   2021   2020
GAAP cost of revenue $ 90,432     $ 54,391     $ 168,937     $ 101,286  
Less:              
Stock based compensation expense 7,683     4,060     13,996     7,026  
Amortization of acquired intangible assets 2,771     63     4,766     125  
Non-GAAP cost of revenue $ 79,978     $ 50,268     $ 150,175     $ 94,135  
               
GAAP subscription gross profit $ 239,843     $ 140,219     $ 456,168     $ 265,197  
Add:              
Stock based compensation expense 5,294     2,635     9,579     4,630  
Amortization of acquired intangible assets 2,771     63     4,766     125  
Non-GAAP subscription gross profit $ 247,908     $ 142,917     $ 470,513     $ 269,952  
               
GAAP professional services gross profit $ 7,415     $ 4,361     $ 15,428     $ 10,566  
Add:              
Stock based compensation expense 2,389     1,425     4,417     2,396  
Non-GAAP professional services gross profit $ 9,804     $ 5,786     $ 19,845     $ 12,962  
               
GAAP sales and marketing operating expenses $ 153,861     $ 95,127     $ 288,992     $ 183,265  
Less:              
Stock based compensation expense 25,265     13,603     42,679     22,290  
Amortization of acquired intangible assets 547     31     969     62  
Non-GAAP sales and marketing operating expenses $ 128,049     $ 81,493     $ 245,344     $ 160,913  
               
GAAP research and development operating expenses $ 90,455     $ 50,483     $ 168,635     $ 91,061  
Less:              
Stock based compensation expense 25,808     9,029     43,609     13,929  
Amortization of acquired intangible assets     10         20  
Non-GAAP research and development operating expenses $ 64,647     $ 41,444     $ 125,026     $ 77,112  
               
GAAP general and administrative operating expenses $ 50,345     $ 28,961     $ 92,719     $ 54,004  
Less:              
Stock based compensation expense 17,531     11,021     30,365     18,106  
Acquisition-related expenses 596         4,941      
Legal reserve and settlement charges 2,500         2,500      
Non-GAAP general and administrative operating expenses $ 29,718     $ 17,940     $ 54,913     $ 35,898  
               
GAAP loss from operations $ (47,403 )   $ (29,991 )   $ (78,750 )   $ (52,567 )
Add:              
Stock based compensation expense 76,287     37,713     130,649     61,351  
Amortization of acquired intangible assets 3,318     104     5,735     207  
Acquisition-related expenses 596         4,941      
Legal reserve and settlement charges 2,500         2,500      
Non-GAAP income from operations $ 35,298     $ 7,826     $ 65,075     $ 8,991  
 
CROWDSTRIKE HOLDINGS, INC. Statements of Operations: GAAP to Non-GAAP Reconciliations (continued)
 
  Three Months Ended July 31,   Six Months Ended July 31,
  2021     2020     2021     2020  
GAAP net loss attributable to CrowdStrike $ (57,318   $ (29,874   $ (142,367   $ (49,096
Add:              
Stock based compensation expense 76,287     37,713     130,649     61,351  
Amortization of acquired intangible assets 3,318     104     5,735     207  
Acquisition-related expenses 596         4,941      
Amortization of debt issuance costs and discount 546         1,093      
Legal reserve and settlement charges 2,500         2,500      
Provision for income taxes [(1)]         48,824      
Less:              
Gain on strategic investments attributable to CrowdStrike         (2,178    
Non-GAAP net income attributable to CrowdStrike $ 25,929     $ 7,943     $ 49,197     $ 12,462  
               
Weighted-average shares used in computing basic net income (loss) per share attributable to CrowdStrike common stockholders (GAAP and Non-GAAP) 226,362     216,695     225,276     214,932  
               
GAAP basic net loss per share attributable to CrowdStrike common stockholders $ (0.25   $ (0.14   $ (0.63   $ (0.23
               
Non-GAAP basic net income per share attributable to CrowdStrike common stockholders $ 0.11     $ 0.04     $ 0.22     $ 0.06  
               
GAAP diluted net loss per share attributable to CrowdStrike common stockholders $ (0.25   $ (0.14   $ (0.63   $ (0.23
Add:              
Stock-based compensation 0.32     0.16     0.55     0.26  
Amortization of acquired intangible assets 0.01         0.02      
Acquisition-related expenses         0.02      
Amortization of debt issuance costs and discount              
Legal reserve and settlement charges 0.01         0.01      
Provision for income taxes [ (1)]         0.21      
Adjustment to fully diluted earnings per share [(2)] 0.02     0.01     0.04     0.02  
Less:              
Gain on strategic investments attributable to CrowdStrike         (0.01    
Non-GAAP diluted net income per share attributable to CrowdStrike common stockholders $ 0.11     $ 0.03     $ 0.21     $ 0.05  
               
Weighted-average shares used in diluted net income (loss) per share attributable to CrowdStrike common stockholders calculation:              
GAAP 226,362     216,695     225,276     214,932  
Non-GAAP 238,043     233,169     237,753     231,720  

____________________________

(1) We use our GAAP provision for income taxes for the purpose of determining our non-GAAP income tax expense. The tax costs for intellectual property integration relating to the Humio acquisition is included in the GAAP provision for income taxes during the first quarter of fiscal 2022. The income tax benefits related to stock-based compensation, amortization of intangibles, acquisition related expenses, amortization of debt issuance costs and discount, gain on strategic investments attributable to CrowdStrike and legal reserve and settlement charges or benefits included in the GAAP provision for income taxes was not material for all periods presented.
(2) For periods in which we had diluted non-GAAP net income per share attributable to CrowdStrike common stockholders, the sum of the impact of individual reconciling items may not total to diluted Non-GAAP net income per share attributable to CrowdStrike common stockholders because the basic share counts used to calculate GAAP net loss per share attributable to CrowdStrike common stockholders differ from the diluted share counts used to calculate non-GAAP net income per share attributable to CrowdStrike common stockholders and because of rounding differences. The GAAP net loss per share attributable to CrowdStrike common stockholders calculation uses a lower share count as it excludes dilutive shares which are included in calculating the non-GAAP net income per share attributable to CrowdStrike common stockholders.

Explanation of Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP.

Other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. In addition, the utility of free cash flow as a measure of our financial performance and liquidity is limited as it does not represent the total increase or decrease in our cash balance for a given period.

Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business.

Non-GAAP Subscription Gross Profit and Non-GAAP Subscription Gross Margin

We define non-GAAP subscription gross profit and non-GAAP subscription gross margin as GAAP subscription gross profit and GAAP subscription gross margin, respectively, excluding stock-based compensation expense and amortization of acquired intangible assets. We believe non-GAAP subscription gross profit and non-GAAP subscription gross margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as these measures eliminate the effects of certain variables unrelated to our overall operating performance.

Non-GAAP Income from Operations

We define non-GAAP income from operations as GAAP loss from operations excluding stock-based compensation expense, amortization of acquired intangible assets, acquisition-related expenses and legal reserve and settlement charges or benefits. We believe non-GAAP income from operations provides our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as this metric generally eliminates the effects of certain variables unrelated to our overall operating performance.

Non-GAAP Net Income Attributable to CrowdStrike

We define non-GAAP net income attributable to CrowdStrike as GAAP net loss attributable to CrowdStrike excluding stock-based compensation expense, amortization of acquired intangible assets, acquisition-related expenses, amortization of debt issuance costs and discount, gain on strategic investments, legal reserve and settlement charges or benefits and the tax costs for intellectual property integration relating to the Humio acquisition. We believe non-GAAP net income attributable to CrowdStrike provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons, as this metric generally eliminates the effects of certain variables unrelated to our overall performance.

Non-GAAP Net Income per Share Attributable to CrowdStrike Common Stockholders, Basic and Diluted

We define non-GAAP net income per share attributable to CrowdStrike common stockholders, as non-GAAP net income attributable to CrowdStrike divided by the weighted-average shares outstanding, which includes the dilutive effect of potentially diluted common stock equivalents outstanding during the period. We may periodically incur charges or receive payments in connection with litigation settlements. We exclude these charges and payments received from non-GAAP net income attributable to CrowdStrike when associated with a significant settlement because we do not believe they are reflective of ongoing business and operating results.

Free Cash Flow

Free cash flow is a non-GAAP financial measure that we define as net cash provided by operating activities less purchases of property and equipment and capitalized internal-use software and website development. We monitor free cash flow as one measure of our overall business performance, which enables us to analyze our future performance without the effects of non-cash items and allow us to better understand the cash needs of our business. While we believe that free cash flow is useful in evaluating our business, free cash flow is a non-GAAP financial measure that has limitations as an analytical tool, and free cash flow should not be considered as an alternative to, or substitute for, net cash provided by operating activities in accordance with GAAP. The utility of free cash flow as a measure of our liquidity is further limited as it does not represent the total increase or decrease in our cash balance for any given period. In addition, other companies, including companies in our industry, may calculate free cash flow differently or not at all, which reduces the usefulness of free cash flow as a tool for comparison.

Explanation of Operational Measures

Annual Recurring Revenue

ARR is calculated as the annualized value of our customer subscription contracts as of the measurement date, assuming any contract that expires during the next 12 months is renewed on its existing terms. To the extent that we are negotiating a renewal with a customer after the expiration of the subscription, we continue to include that revenue in ARR if we are actively in discussion with such an organization for a new subscription or renewal, or until such organization notifies us that it is not renewing its subscription.

Magic Number

Magic Number is calculated by performing the following calculation for the most recent four quarters and taking the average: annualizing the difference between a quarter’s Subscription Revenue and the prior quarter’s Subscription Revenue, and then dividing the resulting number by the previous quarter’s Non-GAAP Sales & Marketing Expense. Magic Number = Average of previous four quarters: ((Quarter Subscription Revenue – Prior Quarter Subscription Revenue) x 4) / Prior Quarter Non-GAAP Sales & Marketing Expense.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210831005864/en/

SOURCE: CrowdStrike Holdings, Inc.

Investor Relations Contact
CrowdStrike Holdings, Inc.
Maria Riley, Vice President of Investor Relations
investors@crowdstrike.com
669-721-0742 Press Contact
CrowdStrike Holdings, Inc.
Craig VerColen, Chief Communications Officer
press@crowdstrike.com
617-599-2180

COMTEX_392515120/2456/2021-08-31T16:05:14

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/zigman2/quotes/212513426/composite
US : U.S.: Nasdaq
$ 283.39
-0.71 -0.25%
Volume: 2.55M
Oct. 22, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$64.68 billion
Rev. per Employee
$257,642
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