01—Abstract
Summary
Summary of the 10-Q filed August 31, 2023. Cited figures are marked; the original filing is the authoritative source.
CrowdStrike Holdings, Inc. reported strong performance for the second quarter of fiscal year 2024, with total revenue reaching $731.6 milliona, a significant increase of 37% year-over-year.
Subscription revenue, the primary driver of growth, was up 36% to $690.0 millionb, indicating continued strong demand for its cloud-native cybersecurity platform. The company demonstrated improved operational efficiency, with gross profit increasing by 39% and gross margin expanding to 75%. While operating expenses also increased, driven by investments in sales, marketing, and R&D to support growth, the company managed to reduce its operating loss from $48.3 million in the prior year's quarter to $15.4 million.
This indicates a positive trend towards profitability as revenue growth outpaces expense growth. Financially, CrowdStrike maintained a healthy liquidity position with $3.2 billionc in cash and cash equivalents. The company also reported positive cash flow from operations of $545.7 million for the first six months of the fiscal year.
The increase in interest income was a notable contributor to the company's improved net income, which turned positive at $8.5 milliond for the quarter, a significant improvement from a net loss of $49.3 million in the same quarter last year. Overall, the report signals robust top-line growth, improving profitability metrics, and a strong financial foundation for future expansion.
02—Key points
Key Highlights
- Total revenue increased by 37% year-over-year to $731.6 million for the three months ended July 31, 2023.
- Subscription revenue, representing 94% of total revenue, grew by 36% to $690.0 million.
- Gross profit increased by 39% to $548.7 million, with total gross margin improving to 75%.
- Operating expenses grew by 27% across sales and marketing, R&D, and G&A, but at a slower pace than revenue, leading to a reduced operating loss.
- Net income turned positive at $8.5 million for the quarter, a substantial improvement from a net loss of $49.3 million in the prior year's comparable period.
- Cash and cash equivalents stood at $3.2 billion as of July 31, 2023, reflecting a strong liquidity position.
- Annual Recurring Revenue (ARR) reached $2.9 billion, up 37% year-over-year.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, CrowdStrike Holdings, Inc. kept $0.01.
- Revenue$731.6M100.0%
- Cost of revenue−$182.9M25.0%
- Gross profit$548.7M75.0%
- Operating costs−$564.1M77.1%
- Operating income−$15.4M2.1%
- Interest, other & tax$23.8M3.3%
- Net income$8.5M1.2%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 31, 2023Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $731.63M$535.15M | +36.7% |
| Cost of Revenue | $182.92M$140.57M | +30.1% |
| Gross Profit | $548.71M$394.59M | +39.1% |
| R&D Expenses | $179.36M$137.86M | +30.1% |
| Operating Expenses | $564.08M$442.89M | +27.4% |
| Operating Income | -$15.37M-$48.31M | +68.2% |
| Interest Expense | $6.44M$6.33M | +1.7% |
| Net Income | $8.47M-$49.28M | +117.2% |
| EPS (Basic) | $0.01$-0.05 | +119.0% |
| EPS (Diluted) | $0.01$-0.05 | +114.3% |
| Shares Outstanding (Basic) | 951.64M930.22M | +2.3% |
| Shares Outstanding (Diluted) | 968.58M930.22M | +4.1% |
05—Questions
Frequently Asked Questions
What was CrowdStrike's revenue performance in the reported quarter?
CrowdStrike reported a total revenue of $731.6 million for the three months ended July 31, 2023, representing a 37% increase compared to $535.2 million in the same period last year. Subscription revenue, the primary revenue stream, increased by 36% to $690.0 million.
Did CrowdStrike achieve profitability in this quarter?
Yes, CrowdStrike reported a net income of $8.5 million for the three months ended July 31, 2023, a significant turnaround from a net loss of $49.3 million in the prior year's comparable quarter. This indicates a positive trend towards profitability.
How did CrowdStrike manage its expenses relative to its revenue growth?
CrowdStrike's operating expenses increased by 27% in total for the quarter. While sales and marketing, R&D, and G&A expenses grew, they did so at a slower rate than revenue. This expense management contributed to a reduced operating loss and an improvement in the operating loss margin.
What is CrowdStrike's financial health and liquidity position?
CrowdStrike maintained a strong liquidity position, with $3.2 billion in cash and cash equivalents as of July 31, 2023. The company also generated $545.7 million in net cash from operating activities for the six months ended July 31, 2023, indicating solid operational cash generation.
What was the growth in Annual Recurring Revenue (ARR)?
CrowdStrike's Annual Recurring Revenue (ARR) increased by 37% year-over-year, reaching $2.9 billion as of July 31, 2023. This metric reflects the annualized value of customer subscription contracts and highlights the company's sustained growth in recurring revenue.
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