01—Abstract
Summary
Summary of the 10-Q filed November 30, 2022. Cited figures are marked; the original filing is the authoritative source.
CrowdStrike Holdings, Inc. reported strong year-over-year revenue growth of 53% for the third quarter of fiscal year 2023, reaching $580.9 milliona.
Subscription revenue, which forms the vast majority of their income, increased by 53% to $547.4 millionb, driven by new customer acquisition and expansion of existing customer contracts. The company continues to invest heavily in sales and marketing, and research and development, leading to an operating loss of $56.4 million for the quarter, an increase from the prior year's loss of $40.3 million. Despite the ongoing net loss, CrowdStrike's cash position remains robust, with $2.5 billion in cash and cash equivalents at the end of the quarter, and a significant increase in net cash provided by operating activities to $667.7 million for the first nine months of the fiscal year.
The company added 1,460 net new subscription customers, bringing the total to 21,146, a 44% increase year-over-year. Annual Recurring Revenue (ARR) grew by 54% to $2.3 billionc. The dollar-based net retention rate remained strong, exceeding 120%.
These key metrics indicate continued market traction and effective customer expansion strategies. Management remains focused on investing in growth and expanding its cloud-native cybersecurity platform, which positions the company for continued long-term expansion in the cybersecurity market.
02—Key points
Key Highlights
- Total revenue for the third quarter of fiscal 2023 increased 53% year-over-year to $580.9 million.
- Subscription revenue, comprising 94% of total revenue, grew 53% year-over-year to $547.4 million.
- The company added 1,460 net new subscription customers in the quarter, reaching a total of 21,146, a 44% year-over-year increase.
- Annual Recurring Revenue (ARR) grew 54% year-over-year to $2.3 billion.
- Dollar-based net retention rate exceeded 120%, indicating strong customer loyalty and expansion.
- Operating expenses increased significantly, leading to a wider operating loss of $56.4 million compared to $40.3 million in the prior year's quarter, reflecting continued investment in growth.
- Cash and cash equivalents stood at $2.5 billion as of October 31, 2022, demonstrating a strong liquidity position.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q3 FY2023, CrowdStrike Holdings, Inc. lost $0.09.
- Revenue$580.9M100.0%
- Cost of revenue−$158.2M27.2%
- Gross profit$422.7M72.8%
- Operating costs−$479.1M82.5%
- Operating income−$56.4M9.7%
- Interest, other & tax$1.5M0.3%
- Net income−$55.0M9.5%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2023filed November 30, 2022Financial Statements
Q3 FY2023 against Q3 FY2022
| Line item | Q3 FY2023Q3 FY2022 | Change |
|---|---|---|
| Revenue | $580.88M$380.05M | +52.8% |
| Cost of Revenue | $158.23M$101.66M | +55.6% |
| Gross Profit | $422.65M$278.39M | +51.8% |
| R&D Expenses | $155.26M$97.63M | +59.0% |
| Operating Expenses | $479.08M$318.65M | +50.3% |
| Operating Income | -$56.42M-$40.26M | −40.1% |
| Interest Expense | $6.33M$6.40M | −1.1% |
| Net Income | -$54.96M-$50.45M | −8.9% |
| EPS (Basic) | $-0.06$-0.06 | −9.1% |
| EPS (Diluted) | $-0.06$-0.06 | −9.1% |
| Shares Outstanding (Basic) | 935.14M913.17M | +2.4% |
| Shares Outstanding (Diluted) | 935.14M913.17M | +2.4% |
05—Questions
Frequently Asked Questions
What is CrowdStrike's financial performance in this quarter?
CrowdStrike reported a 53% year-over-year increase in total revenue to $580.9 million for the third quarter of fiscal year 2023. Subscription revenue, the primary driver, grew by 53% to $547.4 million. Despite robust revenue growth and strong ARR and customer acquisition, the company posted an operating loss of $56.4 million due to significant investments in sales, marketing, and R&D.
How is CrowdStrike acquiring new customers and retaining existing ones?
CrowdStrike added 1,460 net new subscription customers in the quarter, a 44% increase year-over-year, reaching 21,146 total customers. The company's dollar-based net retention rate remained strong, exceeding 120%, indicating that existing customers are renewing and expanding their use of CrowdStrike's platform and cloud modules.
What is the outlook for CrowdStrike's profitability, given the operating loss?
CrowdStrike continues to prioritize investment in growth and market expansion, which has resulted in increased operating expenses and a wider operating loss compared to the prior year. While the company is not yet profitable on an operating basis, its strong revenue growth, expanding customer base, and solid ARR suggest a path towards future profitability as these investments mature and economies of scale are realized. The company maintains a healthy cash position of $2.5 billion, providing flexibility for continued investment.
06—Continue