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CrowdStrike (CRWD) Q4 Earnings Beat Estimates, Revenues Up Y/Y

CrowdStrike Holdings CRWD reported fourth-quarter fiscal 2023 non-GAAP earnings of 47 cents per share, beating the Zacks Consensus Estimate by 9.3% and jumping 56.7% year over year.

The company’s fiscal fourth-quarter revenues of $637.4 million rose 48% year over year and surpassed the consensus mark by 2.03%.

Subscription revenues (94% of total revenues) jumped 47.6% year over year to $598.3 million. Professional services revenues (6% of total revenues) rose 52.9% year over year to $39.1 million.

Annual recurring revenues (ARR) increased 48% year over year to $2.56 billion. Net new ARR added in the reported quarter was $221.7 million.

CrowdStrike Price, Consensus and EPS Surprise

 

CrowdStrike price-consensus-eps-surprise-chart | CrowdStrike Quote

Quarter Details

CrowdStrike added 1,873 net new subscription customers in the reported quarter. It had a total of 23,019 subscription customers as of Jan 31, 2023, reflecting year-over-year growth of 41%.

CrowdStrike’s subscription customers, who adopted five or more cloud modules, soared to 62%, those with six or more cloud modules rose to 39%, and those with seven or more cloud modules jumped to 22% as of Jan 31, 2023.

CrowdStrike’s non-GAAP gross margin contracted 140 basis points (bps) on a year-over-year basis to 80.3%.

The non-GAAP subscription gross margin contracted 150 bps to 77.3% on a year-over-year basis. The non-GAAP professional gross margin expanded 20 bps to 3%.

Non-GAAP sales and marketing expenses jumped 44.5% year over year to $203.1 million. Non-GAAP research and development expenses surged 86% year over year to $137.5 million.

The non-GAAP operating income was $95.6 million, up 18.9% year over year. The non-GAAP operating margin for the quarter was 15%, down 370 bps year over year.

Balance Sheet & Cash Flow

As of Jan 31, 2023, cash and cash equivalents were $2.46 billion compared with $2.47 billion as of Oct 31, 2022. CrowdStrike had long-term debt of $741 million.

In the fiscal fourth quarter, CRWD generated operating and free cash flows of $273.3 million and $209.5 million, respectively.

Outlook

For fiscal 2024, CrowdStrike expects revenues of $2.96-$3.01 billion. Non-GAAP earnings are anticipated to be $2.21-$2.39 per share.

The non-GAAP operating income for fiscal 2023 is projected to be $474-$518.7 million.

For the fiscal first quarter, CrowdStrike anticipates revenues between $674.9 million and $678.2 million. For the bottom line, the company expects non-GAAP earnings between 50 cents and 51 cents per share.

The non-GAAP operating income is expected to be $107.1-$109.5 million.

Zacks Rank & Stocks to Consider

CrowdStrike currently carries a Zacks Rank #3 (Hold).

Shares of CrowdStrike have lost 20.3% in the past year compared with the Zacks Computer & Technology sector’s decline of 10.9%.

MongoDB MDB, PagerDuty PD, and Methode Electronics MEI are some better-ranked stocks that investors can consider in the broader sector. All three companies carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MongoDB shares have declined 20.6% in the past year. MDB is set to report its fourth-quarter fiscal 2023 results on Mar 8.

PagerDuty shares have gained 6.6% in the past year. PD is set to report its fourth-quarter fiscal 2023 results on Mar 15.

Methode Electronics shares have gained 14.4% in the past year. MEI is set to report its third-quarter fiscal 2023 results on Mar 9.

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