Business Wire | Jun 3, 2021 04:05PM EDT

CrowdStrike Reports First Quarter Fiscal Year 2022 Financial Results

Jun. 03, 2021

SUNNYVALE, Calif.--(BUSINESS WIRE)--Jun. 03, 2021--CrowdStrike Holdings, Inc. (Nasdaq: CRWD), a leader in cloud-delivered endpoint and cloud workload protection, today announced financial results for the first quarter fiscal year 2022, ended April 30, 2021.

"CrowdStrike kicked off the new fiscal year with strong momentum and delivered outstanding first quarter results that exceeded our expectations. We saw strength in multiple areas of the business, added $144 million in net new ARR in the quarter and grew ending ARR 74% year-over-year to exceed $1.19 billion. The CrowdStrike name has become synonymous with best-in-class cybersecurity protection and a platform that just works. Customers of all sizes are increasingly choosing CrowdStrike as their security platform of record with 1,524 net new subscription customers added in the quarter and half of total subscription customers now adopting at least five cloud modules. We believe the robust demand environment driven by secular trends, such as digital and security transformation, cloud adoption and a heightened threat environment, provides a runway for long-term sustainable growth," said George Kurtz, CrowdStrike's co-founder and chief executive officer.

Commenting on the company's financial results, Burt Podbere, CrowdStrike's chief financial officer, added, "In the first quarter, we continued to recognize strong operating leverage in our SaaS model and delivered record operating and free cash flow even as we increased investments in our global reach and cloud platform. We believe the investments we are making today will lead to sustained growth over the long-term and maintain our pole position as the trusted security partner of choice."

First Quarter Fiscal 2022 Financial Highlights

* Revenue: Total revenue was $302.8 million, a 70% increase, compared to $178.1 million in the first quarter of fiscal 2021. Subscription revenue was $281.2 million, a 73% increase, compared to $162.2 million in the first quarter of fiscal 2021.

* Annual Recurring Revenue (ARR) increased 74% year-over-year and grew to $1.19 billion as of April 30, 2021, of which $143.8 million was net new ARR added in the quarter, including $3.6 million from the acquisition of Humio.

* Subscription Gross Margin: GAAP subscription gross margin was 77% in the first quarter of fiscal 2022 and fiscal 2021. Non-GAAP subscription gross margin was 79%, compared to 78% in the first quarter of fiscal 2021.

* Income/Loss from Operations: GAAP loss from operations was $31.3 million, compared to $22.6 million in the first quarter of fiscal 2021. Non-GAAP income from operations was $29.8 million, compared to $1.2 million in the first quarter of fiscal 2021.

* Net Income/Loss Attributable to CrowdStrike: GAAP net loss attributable to CrowdStrike was $85.0 million, including $48.8 million in tax costs related to the intellectual property integration from the Humio acquisition. This compares to $19.2 million in the first quarter of fiscal 2021. GAAP net loss per share attributable to CrowdStrike common stockholders was $0.38, compared to $0.09 in the first quarter of fiscal 2021. Non-GAAP net income attributable to CrowdStrike was $23.3 million, compared to $4.5 million in the first quarter of fiscal 2021. Non-GAAP net income per share attributable to CrowdStrike common stockholders, diluted, was $0.10, compared to $0.02 in the first quarter of fiscal 2021.

* Cash Flow: Net cash generated from operations was a record $147.5 million, compared to $98.6 million in the first quarter of fiscal 2021. Free cash flow was a record $117.3 million, compared to $87.0 million in the first quarter of fiscal 2021.

* Cash and Cash Equivalents was $1.68 billion as of April 30, 2021.

Recent Highlights

* Added 1,524 net new subscription customers in the quarter, including 119 from the acquisition of Humio, for a total of 11,420 subscription customers as of April 30, 2021, representing 82% growth year-over-year.

* CrowdStrike's subscription customers that have adopted four or more modules, five or more modules and six or more modules increased to 64%, 50%, and 27%, respectively, as of April 30, 2021.

* Recognized by Gartner, Inc. as a Leader for the second time and placed furthest for Completeness of Vision in the 2021 Magic Quadrant for Endpoint Protection Platforms.

* Named a Leader in The Forrester Wave(tm): Managed Detection and Response (MDR), Q1 2021, External Threat Intelligence Services, Q1 2021 and Endpoint Security Software As A Service, Q2 2021 reports.

* Announced Falcon Fusion, a unified and extensible framework purpose-built on the CrowdStrike Falcon(r) platform to orchestrate and automate complex workflows improving security operation center efficiency.

* Announced new features for CrowdStrike Falcon Horizon Cloud Security Posture Management including continuous threat detection, monitoring and correlation across cloud and on-premises environments.

* Added new unique Zero Trust, macOS and threat hunting updates to the CrowdStrike Falcon platform.

* Strengthened the alliance between CrowdStrike and EY and announced that CrowdStrike Falcon was selected as one of the EY preferred cybersecurity technology platforms, introducing new joint offerings and expanding into new geographies.

* Announced new product integrations with Zscaler, including cross-platform workflow and data sharing to shorten response times and help combat the increasing volume and sophistication of attacks.

* Announced new product integrations with Google Cloud, enabling more seamless sharing of telemetry and data between the two security platforms.

* Achieved 100% detection coverage in all 20 steps of the MITRE ATT&CK evaluations and achieved 100% Protection Rate in the AV Comparatives Business Real-World Protection Test for the March-April 2021 period and the highest AAA rating in the Q1 Enterprise Endpoint Protection evaluation from independent testing organization SE Labs.

* Awarded Best Cloud Computing Security Solution and Best Managed Security Service at the 2021 SC Awards. Additionally, Shawn Henry, president of CrowdStrike Services and chief security officer, was awarded the inaugural Security Executive of the Year award.

Financial Outlook

CrowdStrike is providing the following guidance for the second quarter of fiscal 2022 (ending July 31, 2021) and increasing its guidance for fiscal year 2022 (ending January 31, 2022):

Q2 FY22 Full Year Guidance FY22 Guidance

$318.3 - $1,347.0 -Total revenue $324.4 $1,365.7 million million

$26.3 - $115.7-Non-GAAP income from operations $30.7 $129.6 million million

$17.7 - $83.1 -Non-GAAP net income attributable to CrowdStrike $22.1 $97.0 million million

Non-GAAP net income per share attributable to $0.07 - $0.35 -CrowdStrike common stockholders, diluted $0.09 $0.41

Weighted average shares used in computing non-GAAP 238net income per share attributable to CrowdStrike million 239 millioncommon stockholders, diluted

These statements are forward-looking and actual results may differ materially as a result of many factors. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Guidance for non-GAAP financial measures excludes stock-based compensation expense, amortization expense of acquired intangible assets, amortization of debt issuance costs and discount, gain (loss) on strategic investments, acquisition-related expenses, and tax costs for intellectual property integration relating to the Humio acquisition. We have not provided the most directly comparable GAAP measures because certain items are out of our control or cannot be reasonably predicted. Accordingly, a reconciliation for non-GAAP income from operations, non-GAAP net income attributable to CrowdStrike, and non-GAAP net income per share attributable to CrowdStrike common stockholders is not available without unreasonable effort.

Conference Call Information

CrowdStrike will host a conference call for analysts and investors to discuss its earnings results for the first quarter of fiscal 2022 and outlook for its fiscal second quarter and year 2022 today at 2:00 p.m. Pacific time (5:00 p.m. Eastern time). A recorded webcast of the event will also be available for one year on the CrowdStrike Investor Relations website ir.crowdstrike.com.

Date: June 3, 2021

Time: 2:00 p.m. Pacific time / 5:00 p.m. Eastern time

Dial-in number: 409-937-8967, conference ID: 3054026

Webcast: ir.crowdstrike.com

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding our future growth, and future financial and operating performance, including our financial outlook for the fiscal second quarter and fiscal year 2022. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: our limited operating history; risks associated with managing our rapid growth; our ability to identify and effectively implement the necessary changes to address execution challenges; the impact of the COVID-19 pandemic on our and our customers' business; our limited experience with new product and subscription and support introductions and the risks associated with new products and subscription and support offerings, including the risk of defects, errors, or vulnerabilities; our ability to attract new and retain existing customers; our ability to successfully integrate acquisitions; the failure to timely develop and achieve market acceptance of new products and subscriptions as well as existing products and subscriptions and support; our ability to collaborate and integrate our products with offerings from other parties to deliver benefits to customers; rapidly evolving technological developments in the market for security products and subscription and support offerings; length of sales cycles; and general market, political, economic, and business conditions, including those related to COVID-19.

Further information on risks, uncertainties and other factors that could affect our financial results are included in the filings we make with the Securities and Exchange Commission ("SEC") from time to time, including our most recently filed Annual Report on Form 10-K and subsequent filings.

You should not rely on these forward-looking statements, as actual outcomes and results may differ materially from those contemplated by these forward-looking statements as a result of such risks and uncertainties. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

Use of Non-GAAP Financial Information

We believe that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to our financial condition and results of operations. For further information regarding these non-GAAP measures, including the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, please refer to the financial tables below, as well as the "Explanation of Non-GAAP Financial Measures" section of this press release.

Channels for Disclosure of Information

We intend to announce material information to the public through the CrowdStrike Investor Relations website ir.crowdstrike.com, SEC filings, press releases, public conference calls, and public webcasts. We use these channels, as well as social media and our blog, to communicate with our investors, customers, and the public about our company, our offerings, and other issues. It is possible that the information we post on social media and our blog could be deemed to be material information. As such, we encourage investors, the media, and others to follow the channels listed above, including the social media channels listed on our investor relations website, and to review the information disclosed through such channels. Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.

Disclaimer

Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

Gartner Peer Insights reviews constitute the subjective opinions of individual end users based on their own experiences and do not represent the views of Gartner or its affiliates.

About CrowdStrike Holdings

CrowdStrike provides cloud-delivered endpoint and cloud workload protection. Leveraging artificial intelligence (AI), the CrowdStrike Falcon(r) platform protects customers against cyberattacks on endpoints on or off the network by offering visibility and protection across the enterprise.

Copyright (c) 2021 CrowdStrike, Inc. All rights reserved. CrowdStrike and CrowdStrike Falcon(r) are the registered trademarks of CrowdStrike, Inc. CrowdStrike owns other trademarks and service marks, and may use the brands of third parties to identify their products and services.

CROWDSTRIKE HOLDINGS, INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

Three Months Ended April 30,

2021 2020

Revenue

Subscription $ 281,228 $ 162,222

Professional services 21,615 15,856

Total revenue 302,843 178,078

Cost of revenue

Subscription ^(1)(2) 64,903 37,244

Professional services^ (1) 13,602 9,651

Total cost of revenue 78,505 46,895

Gross profit 224,338 131,183

Operating expenses

Sales and marketing^ (1)(2) 135,131 88,138

Research and development ^(1)(2) 78,180 40,578

General and administrative ^(1)(3) 42,374 25,043

Total operating expenses 255,685 153,759

Loss from operations (31,347 ) (22,576 )

Interest expense^(4) (6,230 ) (143 )

Other income, net^(5) 4,768 4,533

Loss before provision for income taxes (32,809 ) (18,186 )

Provision for income taxes 50,062 1,036

Net loss (82,871 ) (19,222 )

Net income attributable to noncontrolling interest 2,178 -

Net loss attributable to CrowdStrike $ (85,049 ) $ (19,222 )

Net loss per share attributable to CrowdStrike common $ (0.38 ) $ (0.09 )shareholders, basic and diluted

Weighted-average shares used in computing net lossper share attributable to CrowdStrike common 224,153 213,129 shareholders, basic and diluted

_____________________________

(1) Includes stock-based compensation expense asfollows:

Three Months Ended April 30,

2021

2020

(in thousands)

Subscription cost of revenue

$

4,285

$

1,995

Professional services cost of revenue

2,028

971

Sales and marketing

17,414

8,687

Research and development

17,801

4,900

General and administrative

12,834

7,085

Total stock-based compensation expense

$

54,362

$

23,638

(2) Includes amortization of acquired intangible assets as follows:

Three Months Ended April 30,

2021 2020



(in thousands)

Subscription cost of revenue $ 4,285 $ 1,995

Professional services cost of revenue 2,028 971

Sales and marketing 17,414 8,687

Research and development 17,801 4,900

General and administrative 12,834 7,085

Total stock-based compensation expense $ 54,362 $ 23,638

(2) Includes amortization of acquired intangible assetsas follows:

Three Months Ended April 30,

2021

2020

(in thousands)

Subscription cost of revenue

$

1,995

$

62

Sales and marketing

422

31

Research and development

-

10

Total amortization of purchased intangibles

$

2,417

$

103

(3) Includes acquisition-related expenses as follows:

Three Months Ended April 30,

2021 2020



(in thousands)

Subscription cost of revenue $ 1,995 $ 62

Sales and marketing 422 31

Research and development - 10

Total amortization of purchased intangibles $ 2,417 $ 103

(3) Includes acquisition-related expenses asfollows:

Three Months Ended April 30,

2021

2020

(in thousands)

General and administrative

$

4,345

$

-

Total acquisition-related expenses

$

4,345

$

-

(4) Includes amortization of debt issuance costs and discount as follows:

Three Months Ended April 30,

2021 2020



(in thousands)

General and administrative $ 4,345 $ -

Total acquisition-related expenses $ 4,345 $ -

(4) Includes amortization of debt issuance costs anddiscount as follows:

Three Months Ended April 30,

2021

2020

(in thousands)

Interest expense

$

547

$

-

Total amortization of debt issuance costs and discount

$

547

$

-

(5) Includes gain from strategic investment as follows:

Three Months Ended April 30,

2021 2020



(in thousands)

Interest expense $ 547 $ -

Total amortization of debt issuance costs and $ 547 $ - discount

(5) Includes gain from strategic investment asfollows:

Three Months Ended April 30,

2021

2020

(in thousands)

Other income, net

$

4,356

$

-

Total gain from strategic investments

$

4,356

$

-

Three Months Ended April 30,

2021 2020



(in thousands)

Other income, net $ 4,356 $ -

Total gain from strategic investments $ 4,356 $ -

CROWDSTRIKE HOLDINGS, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

April 30,

January 31,

2021

2021

Assets

Current assets:

Cash and cash equivalents

$

1,684,997

$

1,918,608

Accounts receivable, net

211,233

239,199

Deferred contract acquisition costs, current

85,388

80,850

Prepaid expenses and other current assets

56,385

53,617

Total current assets

2,038,003

2,292,274

Strategic investments

8,165

2,500

Property and equipment, net

191,310

167,014

Operating lease right-of-use assets

36,683

36,484

Deferred contract acquisition costs, noncurrent

125,392

117,906

Goodwill

374,581

83,566

Intangible assets, net

88,851

15,677

Other assets

18,186

17,112

Total assets

$

2,881,171

$

2,732,533

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

3,468

$

12,065

Accrued expenses

49,627

51,117

Accrued payroll and benefits

79,099

71,907

Operating lease liabilities, current

9,333

8,977

Deferred revenue

786,793

701,988

Other current liabilities

54,445

17,499

Total current liabilities

982,765

863,553

Long-term debt

738,400

738,029

Deferred revenue, noncurrent

235,198

209,907

Operating lease liabilities, noncurrent

31,458

31,986

Other liabilities, noncurrent

39,953

17,184

Total liabilities

2,027,774

1,860,659

Commitments and contingencies

Stockholders' Equity

Common stock, Class A and Class B

113

112

Additional paid-in capital

1,662,199

1,598,259

Accumulated deficit

(815,165

)

(730,116

)

Accumulated other comprehensive income

2,117

2,319

Total CrowdStrike Holdings, Inc. stockholders' equity

849,264

870,574

Non-controlling interest

4,133

1,300

Total stockholders' equity

853,397

871,874

Total liabilities and stockholders' equity

$

2,881,171

$

2,732,533

CROWDSTRIKE HOLDINGS, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

April 30, January 31,

2021 2021

Assets

Current assets:

Cash and cash equivalents $ 1,684,997 $ 1,918,608

Accounts receivable, net 211,233 239,199

Deferred contract acquisition costs, current 85,388 80,850

Prepaid expenses and other current assets 56,385 53,617

Total current assets 2,038,003 2,292,274

Strategic investments 8,165 2,500

Property and equipment, net 191,310 167,014

Operating lease right-of-use assets 36,683 36,484

Deferred contract acquisition costs, noncurrent 125,392 117,906

Goodwill 374,581 83,566

Intangible assets, net 88,851 15,677

Other assets 18,186 17,112

Total assets $ 2,881,171 $ 2,732,533

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $ 3,468 $ 12,065

Accrued expenses 49,627 51,117

Accrued payroll and benefits 79,099 71,907

Operating lease liabilities, current 9,333 8,977

Deferred revenue 786,793 701,988

Other current liabilities 54,445 17,499

Total current liabilities 982,765 863,553

Long-term debt 738,400 738,029

Deferred revenue, noncurrent 235,198 209,907

Operating lease liabilities, noncurrent 31,458 31,986

Other liabilities, noncurrent 39,953 17,184

Total liabilities 2,027,774 1,860,659

Commitments and contingencies

Stockholders' Equity

Common stock, Class A and Class B 113 112

Additional paid-in capital 1,662,199 1,598,259

Accumulated deficit (815,165 ) (730,116 )

Accumulated other comprehensive income 2,117 2,319

Total CrowdStrike Holdings, Inc. stockholders' 849,264 870,574 equity

Non-controlling interest 4,133 1,300

Total stockholders' equity 853,397 871,874

Total liabilities and stockholders' equity $ 2,881,171 $ 2,732,533

CROWDSTRIKE HOLDINGS, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three Months Ended April 30,

2021

2020

Operating activities

Net loss

$

(82,871

)

$

(19,222

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

11,955

8,202

Loss on disposal of fixed assets

19

-

Amortization of intangible assets

2,417

103

Amortization of deferred contract acquisition costs

24,376

13,451

Non-cash operating lease costs

2,180

2,283

Provision for bad debts

274

149

Stock-based compensation expense

54,362

23,638

Gain on sale of debt securities, net

-

(1,347

)

Accretion of marketable securities purchased at a discount

-

578

Non-cash interest expense

595

151

Change in fair value of strategic investments

(4,356

)

-

Changes in operating assets and liabilities

Accounts receivable

31,466

20,651

Deferred contract acquisition costs

(36,400

)

(22,563

)

Prepaid expenses and other assets

(769

)

5,332

Accounts payable

(10,562

)

4,736

Accrued expenses and other current liabilities

29,229

(1,095

)

Accrued payroll and benefits

5,969

648

Operating lease liabilities

(2,555

)

(2,975

)

Deferred revenue

109,376

64,805

Other liabilities

12,828

1,052

Net cash provided by operating activities

147,533

98,577

Investing activities

Purchases of property and equipment

(25,796

)

(9,694

)

Capitalized internal-use software and website development

(4,434

)

(1,882

)

Purchase of strategic investments

(1,309

)

-

Business acquisition, net of cash acquired

(353,407

)

-

Purchases of marketable securities

-

(84,904

)

Proceeds from sales of marketable securities

-

639,586

Maturities of marketable securities

-

91,605

Net cash (used in) provided by investing activities

(384,946

)

634,711

Financing activities

Payment of debt issuance costs related to revolving line of credit

(219

)

-

Payment of debt issuance costs related to Senior Notes

(1,581

)

-

Proceeds from issuance of common stock upon exercise of stock options

3,754

6,393

Capital contributions from non-controlling interest holders

655

500

Net cash provided by financing activities

2,609

6,893

Effect of foreign exchange rates on cash and cash equivalents

1,193

12

Net (decrease) increase in cash and cash equivalents

(233,611

)

740,193

Cash and cash equivalents, beginning of period

1,918,608

264,798

Cash and cash equivalents, end of period

$

1,684,997

$

1,004,991

CROWDSTRIKE HOLDINGS, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three Months Ended April 30,

2021 2020

Operating activities

Net loss $ (82,871 ) $ (19,222 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 11,955 8,202

Loss on disposal of fixed assets 19 -

Amortization of intangible assets 2,417 103

Amortization of deferred contract acquisition 24,376 13,451 costs

Non-cash operating lease costs 2,180 2,283

Provision for bad debts 274 149

Stock-based compensation expense 54,362 23,638

Gain on sale of debt securities, net - (1,347 )

Accretion of marketable securities purchased at a - 578 discount

Non-cash interest expense 595 151

Change in fair value of strategic investments (4,356 ) -

Changes in operating assets and liabilities

Accounts receivable 31,466 20,651

Deferred contract acquisition costs (36,400 ) (22,563 )

Prepaid expenses and other assets (769 ) 5,332

Accounts payable (10,562 ) 4,736

Accrued expenses and other current liabilities 29,229 (1,095 )

Accrued payroll and benefits 5,969 648

Operating lease liabilities (2,555 ) (2,975 )

Deferred revenue 109,376 64,805

Other liabilities 12,828 1,052

Net cash provided by operating activities 147,533 98,577

Investing activities

Purchases of property and equipment (25,796 ) (9,694 )

Capitalized internal-use software and website (4,434 ) (1,882 )development

Purchase of strategic investments (1,309 ) -

Business acquisition, net of cash acquired (353,407 ) -

Purchases of marketable securities - (84,904 )

Proceeds from sales of marketable securities - 639,586

Maturities of marketable securities - 91,605

Net cash (used in) provided by investing (384,946 ) 634,711 activities

Financing activities

Payment of debt issuance costs related to (219 ) - revolving line of credit

Payment of debt issuance costs related to Senior (1,581 ) - Notes

Proceeds from issuance of common stock upon 3,754 6,393 exercise of stock options

Capital contributions from non-controlling 655 500 interest holders

Net cash provided by financing activities 2,609 6,893



Effect of foreign exchange rates on cash and cash 1,193 12 equivalents



Net (decrease) increase in cash and cash (233,611 ) 740,193 equivalents



Cash and cash equivalents, beginning of period 1,918,608 264,798

Cash and cash equivalents, end of period $ 1,684,997 $ 1,004,991

CROWDSTRIKE HOLDINGS, INC.

Non-GAAP Financial Measures with Reconciliation to GAAP

(in thousands, except percentages)

(unaudited)

Three Months Ended April 30,

2021

2020

GAAP subscription revenue

$

281,228

$

162,222

GAAP subscription gross profit

$

216,325

$

124,978

Add: Stock-based compensation expense

4,285

1,995

Add: Amortization of acquired intangible assets

1,995

62

Non-GAAP subscription gross profit

$

222,605

$

127,035

GAAP subscription gross margin

77

%

77

%

Non-GAAP subscription gross margin

79

%

78

%

CROWDSTRIKE HOLDINGS, INC.

Non-GAAP Financial Measures with Reconciliation to GAAP

(in thousands, except percentages)

(unaudited)

Three Months Ended April 30,

2021 2020

GAAP subscription revenue $ 281,228 $ 162,222



GAAP subscription gross profit $ 216,325 $ 124,978

Add: Stock-based compensation expense 4,285 1,995

Add: Amortization of acquired intangible assets 1,995 62

Non-GAAP subscription gross profit $ 222,605 $ 127,035



GAAP subscription gross margin 77 % 77 %



Non-GAAP subscription gross margin 79 % 78 %

Three Months Ended April 30,

2021

2020

GAAP total revenue

$

302,843

$

178,078

GAAP loss from operations

$

(31,347

)

$

(22,576

)

Add: Stock-based compensation expense

54,362

23,638

Add: Amortization of acquired intangible assets

2,417

103

Add: Acquisition-related expenses

4,345

-

Non-GAAP income from operations

$

29,777

$

1,165

GAAP operating margin

(10

)%

(13

)%

Non-GAAP operating margin

10

%

1

%

Three Months Ended April 30,

2021 2020

GAAP total revenue $ 302,843 $ 178,078



GAAP loss from operations $ (31,347 ) $ (22,576 )

Add: Stock-based compensation expense 54,362 23,638

Add: Amortization of acquired intangible assets 2,417 103

Add: Acquisition-related expenses 4,345 -

Non-GAAP income from operations $ 29,777 $ 1,165



GAAP operating margin (10 )% (13 )%



Non-GAAP operating margin 10 % 1 %

CROWDSTRIKE HOLDINGS, INC.

Non-GAAP Financial Measures with Reconciliation to GAAP (Continued)

(in thousands, except percentages and per share amounts)

(unaudited)

Three Months Ended April 30,

2021

2020

GAAP net loss attributable to CrowdStrike

$

(85,049

)

$

(19,222

)

Add: Stock-based compensation expense

$

54,362

$

23,638

Add: Amortization of acquired intangible assets

2,417

103

Add: Acquisition-related expenses

4,345

-

Add: Amortization of debt issuance costs and discount

547

-

Add: Provision for income taxes(1)

48,824

-

Less: Gain on strategic investments attributable to CrowdStrike

(2,178

)

-

Non-GAAP net income attributable to CrowdStrike

$

23,268

$

4,519

Weighted-average shares used in computing GAAP net loss per share attributable to CrowdStrike common stockholders, basic and diluted

224,153

213,129

Weighted-average shares used in computing Non-GAAP net income per share attributable to CrowdStrike common stockholders, basic

224,153

213,129

Weighted-average shares used in computing Non-GAAP net income per share attributable to CrowdStrike common stockholders, diluted

237,363

229,796

GAAP net loss per share attributable to CrowdStrike common stockholders, basic and diluted

$

(0.38

)

$

(0.09

)

Non-GAAP net income per share attributable to CrowdStrike common stockholders, basic

$

0.10

$

0.02

Non-GAAP net income per share attributable to CrowdStrike common stockholders, diluted

$

0.10

$

0.02

CROWDSTRIKE HOLDINGS, INC.

Non-GAAP Financial Measures with Reconciliation to GAAP (Continued)

(in thousands, except percentages and per share amounts)

(unaudited)

Three Months Ended April 30,

2021 2020

GAAP net loss attributable to CrowdStrike $ (85,049 ) $ (19,222 )



Add: Stock-based compensation expense $ 54,362 $ 23,638

Add: Amortization of acquired intangible assets 2,417 103

Add: Acquisition-related expenses 4,345 -

Add: Amortization of debt issuance costs and discount 547 -

Add: Provision for income taxes^(1) 48,824 -

Less: Gain on strategic investments attributable to (2,178 ) - CrowdStrike



Non-GAAP net income attributable to CrowdStrike $ 23,268 $ 4,519



Weighted-average shares used in computing GAAP netloss per share attributable to CrowdStrike common 224,153 213,129 stockholders, basic and diluted

Weighted-average shares used in computing Non-GAAPnet income per share attributable to CrowdStrike 224,153 213,129 common stockholders, basic

Weighted-average shares used in computing Non-GAAPnet income per share attributable to CrowdStrike 237,363 229,796 common stockholders, diluted



GAAP net loss per share attributable to CrowdStrike $ (0.38 ) $ (0.09 )common stockholders, basic and diluted



Non-GAAP net income per share attributable to $ 0.10 $ 0.02 CrowdStrike common stockholders, basic

Non-GAAP net income per share attributable to $ 0.10 $ 0.02 CrowdStrike common stockholders, diluted

Three Months Ended April 30,

2021

2020

GAAP total revenue

$

302,843

$

178,078

GAAP net cash provided by operating activities

147,533

98,577

Less: Purchases of property and equipment

(25,796

)

(9,694

)

Less: Capitalized internal-use software and website development

(4,434

)

(1,882

)

Free cash flow

$

117,303

$

87,001

GAAP net cash (used in) provided by investing activities

$

(384,946

)

$

634,711

GAAP net cash provided by financing activities

$

2,609

$

6,893

GAAP net cash provided by operating activities as a percentage of revenue

49

%

55

%

Less: Purchases of property and equipment as a percentage of revenue

(9

)%

(5

)%

Less: Capitalized internal-use software and website development as a percentage of revenue

(1

)%

(1

)%

Free cash flow margin

39

%

49

%

_____________________________

(1) We use our GAAP provision for income taxes for the purpose of determining our non-GAAP income tax expense. The tax costs for intellectual property integration relating to the Humio acquisition is included in the GAAP provision for income taxes during the first quarter of fiscal 2022. The income tax benefits related to stock-based compensation, amortization of intangibles, acquisition related expenses, amortization of debt issuance costs and discount, and gain on strategic investments attributable to CrowdStrike included in the GAAP provision for income taxes was not material for all periods presented.

Three Months Ended April 30,

2021 2020

GAAP total revenue $ 302,843 $ 178,078



GAAP net cash provided by operating activities 147,533 98,577

Less: Purchases of property and equipment (25,796 ) (9,694 )

Less: Capitalized internal-use software and (4,434 ) (1,882 )website development

Free cash flow $ 117,303 $ 87,001



GAAP net cash (used in) provided by investing $ (384,946 ) $ 634,711 activities

GAAP net cash provided by financing activities $ 2,609 $ 6,893



GAAP net cash provided by operating activities 49 % 55 %as a percentage of revenue

Less: Purchases of property and equipment as a (9 )% (5 )%percentage of revenue

Less: Capitalized internal-use software and (1 )% (1 )%website development as a percentage of revenue

Free cash flow margin 39 % 49 %

_____________________________

(1) We use our GAAP provision for income taxes for the purpose of determiningour non-GAAP income tax expense. The tax costs for intellectual propertyintegration relating to the Humio acquisition is included in the GAAP provisionfor income taxes during the first quarter of fiscal 2022. The income taxbenefits related to stock-based compensation, amortization of intangibles,acquisition related expenses, amortization of debt issuance costs and discount,and gain on strategic investments attributable to CrowdStrike included in theGAAP provision for income taxes was not material for all periods presented.

CROWDSTRIKE HOLDINGS, INC.

Statements of Operations: GAAP to Non-GAAP Reconciliations

(in thousands)

(unaudited)

Three Months Ended April 30,

2021

2020

GAAP cost of revenue

$

78,505

$

46,895

Less:

Stock based compensation expense

6,313

2,966

Amortization of acquired intangible assets

1,995

62

Non-GAAP cost of revenue

$

70,197

$

43,867

GAAP subscription gross profit

$

216,325

$

124,978

Add:

Stock based compensation expense

4,285

1,995

Amortization of acquired intangible assets

1,995

62

Non-GAAP subscription gross profit

$

222,605

$

127,035

GAAP professional services gross profit

$

8,013

$

6,205

Add:

Stock based compensation expense

2,028

971

Non-GAAP professional services gross profit

$

10,041

$

7,176

GAAP sales and marketing operating expenses

$

135,131

$

88,138

Less:

Stock based compensation expense

17,414

8,687

Amortization of acquired intangible assets

422

31

Non-GAAP sales and marketing operating expenses

$

117,295

$

79,420

GAAP research and development operating expenses

$

78,180

$

40,578

Less:

Stock based compensation expense

17,801

4,900

Amortization of acquired intangible assets

-

10

Non-GAAP research and development operating expenses

$

60,379

$

35,668

GAAP general and administrative operating expenses

$

42,374

$

25,043

Less:

Stock based compensation expense

12,834

7,085

Acquisition-related expenses

4,345

-

Non-GAAP general and administrative operating expenses

$

25,195

$

17,958

GAAP loss from operations

$

(31,347

)

$

(22,576

)

Add:

Stock based compensation expense

54,362

23,638

Amortization of acquired intangible assets

2,417

103

Acquisition-related expenses

4,345

-

Non-GAAP income from operations

$

29,777

$

1,165

CROWDSTRIKE HOLDINGS, INC.

Statements of Operations: GAAP to Non-GAAP Reconciliations

(in thousands)

(unaudited)

Three Months Ended April 30,

2021 2020

GAAP cost of revenue $ 78,505 $ 46,895

Less:

Stock based compensation expense 6,313 2,966

Amortization of acquired intangible assets 1,995 62

Non-GAAP cost of revenue $ 70,197 $ 43,867



GAAP subscription gross profit $ 216,325 $ 124,978

Add:

Stock based compensation expense 4,285 1,995

Amortization of acquired intangible assets 1,995 62

Non-GAAP subscription gross profit $ 222,605 $ 127,035



GAAP professional services gross profit $ 8,013 $ 6,205

Add:

Stock based compensation expense 2,028 971

Non-GAAP professional services gross profit $ 10,041 $ 7,176



GAAP sales and marketing operating expenses $ 135,131 $ 88,138

Less:

Stock based compensation expense 17,414 8,687

Amortization of acquired intangible assets 422 31

Non-GAAP sales and marketing operating expenses $ 117,295 $ 79,420



GAAP research and development operating expenses $ 78,180 $ 40,578

Less:

Stock based compensation expense 17,801 4,900

Amortization of acquired intangible assets - 10

Non-GAAP research and development operating $ 60,379 $ 35,668 expenses



GAAP general and administrative operating expenses $ 42,374 $ 25,043

Less:

Stock based compensation expense 12,834 7,085

Acquisition-related expenses 4,345 -

Non-GAAP general and administrative operating $ 25,195 $ 17,958 expenses



GAAP loss from operations $ (31,347 ) $ (22,576 )

Add:

Stock based compensation expense 54,362 23,638

Amortization of acquired intangible assets 2,417 103

Acquisition-related expenses 4,345 -

Non-GAAP income from operations $ 29,777 $ 1,165

CROWDSTRIKE HOLDINGS, INC.

Statements of Operations: GAAP to Non-GAAP Reconciliations (continued)

(in thousands, except per share amounts)

(unaudited)

Three Months Ended April 30,

2021

2020

GAAP net loss attributable to CrowdStrike

$

(85,049

)

$

(19,222

)

Add:

Stock based compensation expense

54,362

23,638

Amortization of acquired intangible assets

2,417

103

Acquisition-related expenses

4,345

-

Amortization of debt issuance costs and discount

547

-

Provision for income taxes(1)

48,824

-

Less:

Gain on strategic investments attributable to CrowdStrike

(2,178

)

-

Non-GAAP net income attributable to CrowdStrike

$

23,268

$

4,519

Weighted-average shares used in computing basic net income (loss) per share attributable to CrowdStrike common stockholders (GAAP and Non-GAAP)

224,153

213,129

GAAP basic net loss per share attributable to CrowdStrike common stockholders

$

(0.38

)

$

(0.09

)

Non-GAAP basic net income per share attributable to CrowdStrike common stockholders

$

0.10

$

0.02

GAAP diluted net loss per share attributable to CrowdStrike common stockholders

$

(0.38

)

$

(0.09

)

Add:

Stock-based compensation

0.23

0.10

Amortization of acquired intangible assets

0.01

-

Acquisition-related expenses

0.02

-

Provision for income taxes (1)

0.21

-

Adjustment to fully diluted earnings per share (2)

0.02

0.01

Less:

Gain on strategic investments attributable to CrowdStrike

(0.01

)

-

Non-GAAP diluted net income per share attributable to CrowdStrike common stockholders

$

0.10

$

0.02

Weighted-average shares used in diluted net income (loss) per share attributable to CrowdStrike common stockholders calculation:

GAAP

224,153

213,129

Non-GAAP

237,363

229,796

_____________________________

(1) We use our GAAP provision for income taxes for the purpose of determining our non-GAAP income tax expense. The tax costs for intellectual property integration relating to the Humio acquisition is included in the GAAP provision for income taxes during the first quarter of fiscal 2022. The income tax benefits related to stock-based compensation, amortization of intangibles, acquisition related expenses, amortization of debt issuance costs and discount, and gain on strategic investments attributable to CrowdStrike included in the GAAP provision for income taxes was not material for all periods presented.

(2) For periods in which we had diluted non-GAAP net income per share attributable to CrowdStrike common stockholders, the sum of the impact of individual reconciling items may not total to diluted Non-GAAP net income per share attributable to CrowdStrike common stockholders because the basic share counts used to calculate GAAP net loss per share attributable to CrowdStrike common stockholders differ from the diluted share counts used to calculate non-GAAP net income per share attributable to CrowdStrike common stockholders and because of rounding differences. The GAAP net loss per share attributable to CrowdStrike common stockholders calculation uses a lower share count as it excludes dilutive shares which are included in calculating the non-GAAP net income per share attributable to CrowdStrike common stockholders.

Explanation of Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. generally accepted accounting principles ("GAAP"), we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP.

Other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. In addition, the utility of free cash flow as a measure of our financial performance and liquidity is limited as it does not represent the total increase or decrease in our cash balance for a given period.

Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business.

Non-GAAP Subscription Gross Profit and Non-GAAP Subscription Gross Margin

We define non-GAAP subscription gross profit and non-GAAP subscription gross margin as GAAP subscription gross profit and GAAP subscription gross margin, respectively, excluding stock-based compensation expense and amortization of acquired intangible assets. We believe non-GAAP subscription gross profit and non-GAAP subscription gross margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as these measures eliminate the effects of certain variables unrelated to our overall operating performance.

Non-GAAP Income from Operations

We define non-GAAP income from operations as GAAP loss from operations excluding stock-based compensation expense, amortization of acquired intangible assets, and acquisition-related expenses. We believe non-GAAP income from operations provides our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as this metric generally eliminates the effects of certain variables unrelated to our overall operating performance.

Non-GAAP Net Income Attributable to CrowdStrike

We define non-GAAP net income attributable to CrowdStrike as GAAP net loss attributable to CrowdStrike excluding stock-based compensation expense, amortization of acquired intangible assets, acquisition-related expenses, amortization of debt issuance costs and discount, gain on strategic investments, and the tax costs for intellectual property integration relating to the Humio acquisition. We believe non-GAAP net income attributable to CrowdStrike provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons, as this metric generally eliminates the effects of certain variables unrelated to our overall performance.

Non-GAAP Net Income per Share Attributable to CrowdStrike Common Stockholders, Basic and Diluted

We define non-GAAP net income per share attributable to CrowdStrike common stockholders, as non-GAAP net income attributable to CrowdStrike divided by the weighted-average shares outstanding, which includes the dilutive effect of potentially diluted common stock equivalents outstanding during the period. We may periodically incur charges or receive payments in connection with litigation settlements. We exclude these charges and payments received from non-GAAP net income attributable to CrowdStrike when associated with a significant settlement because we do not believe they are reflective of ongoing business and operating results.

Free Cash Flow

Free cash flow is a non-GAAP financial measure that we define as net cash provided by operating activities less purchases of property and equipment and capitalized internal-use software and website development. We monitor free cash flow as one measure of our overall business performance, which enables us to analyze our future performance without the effects of non-cash items and allow us to better understand the cash needs of our business. While we believe that free cash flow is useful in evaluating our business, free cash flow is a non-GAAP financial measure that has limitations as an analytical tool, and free cash flow should not be considered as an alternative to, or substitute for, net cash provided by operating activities in accordance with GAAP. The utility of free cash flow as a measure of our liquidity is further limited as it does not represent the total increase or decrease in our cash balance for any given period. In addition, other companies, including companies in our industry, may calculate free cash flow differently or not at all, which reduces the usefulness of free cash flow as a tool for comparison.

Explanation of Operational Measures

Annual Recurring Revenue

ARR is calculated as the annualized value of our customer subscription contracts as of the measurement date, assuming any contract that expires during the next 12 months is renewed on its existing terms. To the extent that we are negotiating a renewal with a customer after the expiration of the subscription, we continue to include that revenue in ARR if we are actively in discussion with such an organization for a new subscription or renewal, or until such organization notifies us that it is not renewing its subscription.

Magic Number

Magic Number is calculated by performing the following calculation for the most recent four quarters and taking the average: annualizing the difference between a quarter's Subscription Revenue and the prior quarter's Subscription Revenue, and then dividing the resulting number by the previous quarter's Non-GAAP Sales & Marketing Expense. Magic Number = Average of previous four quarters: ((Quarter Subscription Revenue - Prior Quarter Subscription Revenue) x 4) / Prior Quarter Non-GAAP Sales & Marketing Expense.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210603005806/en/

CONTACT: Investor Relations Contact CrowdStrike Holdings, Inc. Maria Riley, Vice President of Investor Relations investors@crowdstrike.com 669-721-0742

CONTACT: Press Contact CrowdStrike Holdings, Inc. Craig VerColen, Chief Communications Officer press@crowdstrike.com 617-599-2180