CrowdStrike Delivered A Phenomenal Q4 Result

George Kurtz, CEO, and Co-Founder began his address with a very suiting comment for anyone who might have been anticipating the Q4 earnings report. He said, “We delivered a phenomenal fourth quarter with results exceeding our expectations across the board, as customers of all sizes are increasingly choosing CrowdStrike as their security cloud platform of record.”

It is one thing for analysts’ estimates to be beaten; they do not run the business hence, they may not be able to reliably provide an estimate. However, it is another thing for the result of a business operation to exceed the manager’s expectations across the board. The latter is impressive.

CrowdStike is a company in the Rise stock portfolio. We have held for more than a year and we intend to continue holding it. CrowdStrike is a cybersecurity technology company that provides endpoint security, threat intelligence, and cyber-attack response services to different customer categories, governments to corporations.

It delivered its earnings report this week and it beats all estimates and expectations. Let’s run you through the numbers.

CrowdStrike shares gain 2.9% after Q4 result beats with record new ARR (average recurring revenue) and upside forecasts for the next quarter and fiscal year. ARR topped $1B, driven by a record net new ARR of $143M.

Revenue was up 74% on the year to $264.93M and EPS was $0.14, six cents above consensus. And subscription revenue was up 77% to $244.7M. 

On profitability, subscription gross margin improved from 77% in last year’s quarter to 80%. Showing the sign of efficiency as gross improves with increasing subscription revenue.

Cash from operating activities totalled $114.5M with an FCF of $97.4M. “Throughout the fiscal year,” Burt Podbere the CFO said, “our record topline performance and strong execution resulted in significant gains in operating leverage and profitability on both a GAAP and non-GAAP basis. We are exiting the year with record subscription gross margin at the high end of our target model and record operating and free cash flow.” 

For its guidance for the next quarter, in Q1, CrowdStrike expects revenue of $287.8-292.1M of revenue, above the $268.44M estimate, and $0.05-0.06 EPS versus the $0.04 consensus. And for the year, CrowdStrike sees revenue of $1.31-1.32B, above the $1.22B estimates, and EPS of $0.27-0.30, below the $0.33 estimate.

Largely, the market responded positively to these numbers. CrowdStrike stock price was up about 6% on Wednesday, post-earnings report.

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