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CrowdStrike Reports Revenue Growth of 53% in Third Quarter FY2023

Annual Recurring Revenue (ARR) increased 54% year-over-year and grew to $2.34 billion as of October 31, 2022, of which $198.1 million was net new ARR added in the quarter.

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Global cybersecurity leader that provides cloud-delivered protection -CrowdStrike Holdings, Inc. announced financial results for the third quarter fiscal year 2023, ended October 31, 2022.

“CrowdStrike delivered robust growth at scale, strong retention rates, growing module adoption, record net new ARR from emerging products and a record number of customers contributing at least $1 million to net new ARR,” said George Kurtz, CrowdStrike’s co-founder and chief executive officer. “However, total net new ARR was below our expectations as increased macroeconomic headwinds elongated sales cycles with smaller customers and caused some larger customers to pursue multi-phase subscription start dates, which delays ARR recognition until future quarters. As a platform consolidator with industry leading efficacy, we differentiate ourselves from the competition and empower customers, which we believe positions us to capture enduring industry trends and generate durable long-term growth.”

Commenting on the company’s financial results, Burt Podbere, CrowdStrike’s chief financial officer, added, “In the face of increased macroeconomic headwinds, CrowdStrike delivered revenue and earnings results ahead of our guidance. We will continue to focus on delivering strong unit economics as we balance growth with profitability and free cash flow.”

Third Quarter Fiscal 2023 Financial Highlights

  • Revenue: Total revenue was $580.9 million, a 53% increase, compared to $380.1 million in the third quarter of fiscal 2022. Subscription revenue was $547.4 million, a 53% increase, compared to $357.0 million in the third quarter of fiscal 2022.
  • Annual Recurring Revenue (ARR) increased 54% year-over-year and grew to $2.34 billion as of October 31, 2022, of which $198.1 million was net new ARR added in the quarter. The acquisition of Reposify contributed less than $1.0 million to net new ARR in the third quarter of fiscal 2023.
  • Subscription Gross Margin: GAAP subscription gross margin was 75%, compared to 76% in the third quarter of fiscal 2022. Non-GAAP subscription gross margin was 78%, compared to 79% in the third quarter of fiscal 2022.
  • Income/Loss from Operations: GAAP loss from operations was $56.4 million, compared to $40.3 million in the third quarter of fiscal 2022. Non-GAAP income from operations was $89.7 million, compared to $50.7 million in the third quarter of fiscal 2022.
  • Net Income/Loss Attributable to CrowdStrike: GAAP net loss attributable to CrowdStrike was $55.0 million, compared to $50.5 million in the third quarter of fiscal 2022. GAAP net loss per share attributable to CrowdStrike, basic and diluted was $0.24, compared to $0.22 in the third quarter of fiscal 2022. Non-GAAP net income attributable to CrowdStrike was $96.1 million, compared to $41.1 million in the third quarter of fiscal 2022. Non-GAAP net income attributable to CrowdStrike per share, diluted, was $0.40, compared to $0.17 in the third quarter of fiscal 2022.
  • Cash Flow: Net cash generated from operations was $242.9 million, compared to $159.1 million in the third quarter of fiscal 2022. Free cash flow was $174.1 million, compared to $123.5 million in the third quarter of fiscal 2022.
  • Cash and Cash Equivalents was $2.47 billion as of October 31, 2022.

 

Recent Highlights

  • Added 1,460 net new subscription customers in the quarter for a total of 21,146 subscription customers as of October 31, 2022, representing 44% growth year-over-year.
  • CrowdStrike’s subscription customers that have adopted five or more, six or more and seven or more modules was 60%, 36% and 21%, respectively, as of October 31, 2022.
  • Acquired Reposify, an external attack surface management (EASM) platform, to help CrowdStrike’s customers bolster visibility and reduce the risk exposure of external assets.
  • Highlights of the sixth annual Fal.Con cybersecurity conference included Falcon Insight XDR, Falcon Discover for IoT, Falcon LogScale, Falcon Complete LogScale and new Cloud Native Application Protection Platform (CNAPP) capabilities.
  • Expanded the CrowdStrike and EY global alliance to deliver Cloud Security and Observability services.
  • Achieved 99% detection coverage of adversary behavior in the MITRE Engenuity ATT&CK Evaluations for Security Service Providers.
  • Received a AAA rating in SE Labs Enterprise Advanced Security Ransomware Test and achieved 100% Protection with zero false positives.
  • Chosen as a winner for the 2022 CRN Tech Innovator Awards for CrowdStrike Cloud Security, a Cloud Native Application Protection Platform (CNAPP) solution.
  • Named One of the Best Workplaces for Women by Great Place to Work® and Fortune Magazine 2022.
  • Expanded charitable giving strategy to include a partnership with Operation Motorsport Foundation and NextGen Scholarship awards.

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