01—Abstract
Summary
Summary of the 10-Q filed June 3, 2020. Cited figures are marked; the original filing is the authoritative source.
CrowdStrike Holdings, Inc. (CRWD) filed its 10-Q for the period ending April 29, 2020, on June 2, 2020.
As an emerging growth company, CrowdStrike continues to leverage certain exemptions from public company reporting requirements, which may impact comparability with other companies. Investors should be aware of potential dilution from future stock issuances, as the company has significant authorized but unissued shares. The report also highlights structural provisions within the company's charter documents that could influence control and governance, including its dual-class stock structure, which grants considerable voting power to Class B stockholders.
02—Key points
Key Highlights
- CrowdStrike is operating as an emerging growth company and is utilizing exemptions that may affect reporting comparability.
- The company has significant authorized but unissued share capital, raising the potential for future stock issuances and dilution to existing stockholders.
- Dual-class stock structure provides Class B shareholders with substantial influence over matters requiring stockholder approval.
- No unregistered sales of equity securities occurred during the reporting period.
- There were no purchases of the company's common stock during the three months ended April 30, 2020.
- The use of proceeds from the IPO remains consistent with the initial prospectus filed in June 2019.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q1 FY2021, CrowdStrike Holdings, Inc. lost $0.11.
- Revenue$178.1M100.0%
- Cost of revenue−$46.9M26.3%
- Gross profit$131.2M73.7%
- Operating costs−$153.8M86.3%
- Operating income−$22.6M12.7%
- Interest, other & tax$3.4M1.9%
- Net income−$19.2M10.8%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2021filed June 3, 2020Financial Statements
Q1 FY2021 against Q1 FY2020
| Line item | Q1 FY2021Q1 FY2020 | Change |
|---|---|---|
| Revenue | $178.08M$96.08M | +85.3% |
| Cost of Revenue | $46.90M$29.27M | +60.2% |
| Gross Profit | $131.18M$66.80M | +96.4% |
| R&D Expenses | $40.58M$23.88M | +70.0% |
| Operating Expenses | $153.76M$92.58M | +66.1% |
| Operating Income | -$22.58M-$25.77M | +12.4% |
| Interest Expense | $143K$1K | +14200.0% |
| Net Income | -$19.22M-$25.98M | +26.0% |
| EPS (Basic) | $-0.02$-0.14 | +83.6% |
| EPS (Diluted) | $-0.02— | — |
| Shares Outstanding (Basic) | 852.52M188.82M | +351.5% |
| Shares Outstanding (Diluted) | 852.52M— | — |
05—Questions
Frequently Asked Questions
What is an 'emerging growth company' and how does it affect CrowdStrike's reporting?
An 'emerging growth company' (EGC) is a status granted by the JOBS Act, allowing companies to take advantage of exemptions from certain public company reporting requirements. For CrowdStrike, this means reduced disclosures regarding executive compensation and exemptions from auditor attestation requirements for internal controls (Section 404 of Sarbanes-Oxley). This can make it harder to compare CrowdStrike's financial and governance disclosures directly with companies that are not EGCs.
What is the risk of dilution for CrowdStrike shareholders?
The company has authorized a substantial number of shares (up to 2 billion Class A, 300 million Class B, and 100 million preferred shares). The issuance of additional stock for financings, acquisitions, investments, or stock incentive plans could significantly dilute existing stockholders' ownership and potentially decrease the market price of Class A common stock.
How does CrowdStrike's dual-class stock structure impact governance?
CrowdStrike has a dual-class common stock structure. This means that holders of Class B common stock possess significantly more voting power relative to their economic ownership compared to Class A common stock holders. Consequently, Class B shareholders can heavily influence the outcome of matters requiring stockholder approval, even if they own a minority of the total outstanding shares.
06—Continue