Business Wire | Dec 1, 2021 04:06PM EST

CrowdStrike Reports Third Quarter Fiscal Year 2022 Financial Results

Dec. 01, 2021

SUNNYVALE, Calif.--(BUSINESS WIRE)--Dec. 01, 2021--CrowdStrike Holdings, Inc. (Nasdaq: CRWD), a leader in cloud-delivered endpoint and workload protection, today announced financial results for the third quarter fiscal year 2022, ended October 31, 2021.

"CrowdStrike delivered a robust third quarter with broad-based strength across multiple areas of the business leading to net new ARR growth accelerating and ending ARR growing 67% year-over-year to surpass the $1.5 billion milestone. Our outstanding results this quarter demonstrate the flywheel effect of our platform and reflect continued strong customer adoption for our core products in addition to the growing success of our newer product initiatives including identity protection, log management and cloud. With our leading technology, unmatched platform and approach to stopping breaches, we continue to eclipse our competitors and extend our leadership position," 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, "CrowdStrike once again delivered exceptional results, maintained very high unit economics, drove leverage and generated strong operating and free cash flow as we expanded our leadership across the market from large enterprises to small businesses. Given the growth drivers of our business, as well as our exceptional third quarter performance and momentum into the fourth quarter, we are once again raising our guidance for the fiscal year 2022."

Third Quarter Fiscal 2022 Financial Highlights

* Revenue: Total revenue was $380.1 million, a 63% increase, compared to $232.5 million in the third quarter of fiscal 2021. Subscription revenue was $357.0 million, a 67% increase, compared to $213.5 million in the third quarter of fiscal 2021. * Annual Recurring Revenue (ARR) increased 67% year-over-year and grew to $1.51 billion as of October 31, 2021, of which $170.0 million was net new ARR added in the quarter. Net new ARR year-over-year growth accelerated to 46% on an as reported basis and 55% on an organic basis. * Subscription Gross Margin: GAAP subscription gross margin was 76%, compared to 77% in the third quarter of fiscal 2021. Non-GAAP subscription gross margin was 79%, compared to 78% in the third quarter of fiscal 2021. * Income/Loss from Operations: GAAP loss from operations was $40.3 million, compared to $24.2 million in the third quarter of fiscal 2021. Non-GAAP income from operations was $50.7 million, compared to $18.9 million in the third quarter of fiscal 2021. * Net Income/Loss Attributable to CrowdStrike: GAAP net loss attributable to CrowdStrike was $50.5 million, compared to $24.5 million in the third quarter of fiscal 2021. GAAP net loss per share attributable to CrowdStrike common stockholders was $0.22, compared to $0.11 in the third quarter of fiscal 2021. Non-GAAP net income attributable to CrowdStrike was $41.1 million, compared to $18.6 million in the third quarter of fiscal 2021. Non-GAAP net income per share attributable to CrowdStrike common stockholders, diluted, was $0.17, compared to $0.08 in the third quarter of fiscal 2021. * Cash Flow: Net cash generated from operations was $159.1 million, compared to $88.5 million in the third quarter of fiscal 2021. Free cash flow was $123.5 million, compared to $76.1 million in the third quarter of fiscal 2021. * Cash and Cash Equivalents grew to $1.91 billion as of October 31, 2021.

Recent Highlights

* Added 1,607 net new subscription customers in the quarter for a total of 14,687 subscription customers as of October 31, 2021, representing 75% 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 68%, 55%, and 32%, respectively, as of October 31, 2021. * Unveiled a series of new offerings and partnerships during the fifth annual Fal.Con cybersecurity conference. Announcements included Falcon XDR, the CrowdXDR Alliance, Humio Community Edition, Falcon Fusion, Falcon FileVantage, Falcon CWP Complete, a joint initiative with Google to launch the Work Safer program, and a partnership with leading enterprise automation software company, UIPath. * Acquired SecureCircle, a SaaS-based cybersecurity service that extends Zero Trust security to data on the endpoint. CrowdStrike intends to leverage SecureCircle's revolutionary technology and team to extend its industry leading Zero Trust endpoint security device and identity capabilities to include data. * Named a leader in IDC MarketScape: Worldwide Modern Endpoint Security for Enterprise 20211. * Won Best Endpoint Detection and Response Product for the second year in a row in SE Labs' 2021 Annual Report. * Announced that the Cybersecurity and Infrastructure Security Agency (CISA) has worked with multiple federal agencies to select CrowdStrike as one of the major platforms to support the Executive Order endpoint detection and response initiative. * Enhanced the technology integration between CrowdStrike and AWS to offer additional features to help joint customers protect against ransomware attacks and identity-based threats. * Announced Falcon Horizon support for Google Cloud environments, extending CrowdStrike's Cloud Security Posture Management solution to protect the three largest cloud providers. * Achieved FedRAMP authorization of CrowdStrike Falcon Forensics. Hosted within GovCloud, Falcon Forensics speeds the response time and remediation of critical security incidents for agencies by providing increased visibility and automated analysis. * Humio was awarded the Enterprise Management Associates Top 3 Award in the Log Management and Observability category of their Enterprise Decision Guide 2021 report.

^ IDC MarketScape: Worldwide Modern Endpoint Security for Enterprise 20211 Vendor Assessment Doc #US48306021, November 2021.

Financial Outlook

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

Q4 FY22 Full Year FY22 Guidance Guidance

$406.5 - $1,427.1 -Total revenue $412.3 $1,432.9 million million

$55.2 - $171.0 -Non-GAAP income from operations $59.5 $175.3 million million

$45.2 - $135.4 -Non-GAAP net income attributable to CrowdStrike $49.4 $139.7 million million

Non-GAAP net income per share attributable to $0.19 - $0.57 -CrowdStrike common stockholders, diluted $0.21 $0.59

Weighted average shares used in computing non-GAAP 241net income per share attributable to CrowdStrike million 238 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, including purchased patents, amortization of debt issuance costs and discount, legal reserve and settlement charges or benefits, gain (loss) and other income from 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 third quarter of fiscal 2022 and outlook for its fiscal third 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: December 1, 2021

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

Dial-in number: 409-937-8967, conference ID: 9767096

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 fourth 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 our 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 Quarterly Report on Form 10-Q 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.

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 October Nine Months Ended October 31, 31,

2021 2020 2021 2020

Revenue

Subscription $ 357,030 $ 213,530 $ 954,094 $ 560,008

Professional 23,021 18,930 66,490 49,501 services

Total revenue 380,051 232,460 1,020,584 609,509

Cost of revenue

Subscription ^(1)(2) 85,464 49,583 226,360 130,864

Professional 16,200 11,944 44,241 31,949 services^ (1)

Total cost of 101,664 61,527 270,601 162,813 revenue

Gross profit 278,387 170,933 749,983 446,696

Operating expenses

Sales and marketing^ 164,960 105,602 453,952 288,867 (1)(2)

Research and 97,630 57,539 266,265 148,600 development ^(1)(2)

General andadministrative ^(1) 56,061 31,951 148,780 85,955 (2)(3)(4)

Total operating 318,651 195,092 868,997 523,422 expenses

Loss from operations (40,264) (24,159) (119,014) (76,726)

Interest expense^(5) (6,403) (193) (18,929) (510)

Other income, net^ 690 272 6,077 5,537 (6)

Loss beforeprovision for income (45,977) (24,080) (131,866) (71,699) taxes

Provision for income 4,473 451 58,773 1,928 taxes^(7)

Net loss (50,450) (24,531) (190,639) (73,627)

Net incomeattributable to 5 - 2,183 - noncontrollinginterest

Net lossattributable to $ (50,455) $ (24,531) $ (192,822) $ (73,627) CrowdStrike

Net loss per shareattributable toCrowdStrike common $ (0.22) $ (0.11) $ (0.85) $ (0.34) stockholders, basicand diluted

Weighted-averageshares used incomputing net lossper share 228,293 219,401 226,292 216,432 attributable toCrowdStrike commonstockholders, basicand diluted

_____________________________(1)

Includes stock-based compensation expense as follows:

_____________________________(1) Includes stock-based compensation expense as follows:

Three Months Ended October 31,

Nine Months Ended October 31,

2021

2020

2021

2020

(in thousands)

(in thousands)

Subscription cost of revenue

$

5,969

$

3,226

$

15,548

$

7,856

Professional services cost of revenue

2,546

1,551

6,963

3,947

Sales and marketing

25,499

12,811

68,178

35,101

Research and development

27,333

11,771

70,942

25,700

General and administrative

25,319

11,251

55,684

29,357

Total stock-based compensation expense

$

86,666

$

40,610

$

217,315

$

101,961

Three Months Ended Nine Months Ended October October 31, 31,

2021 2020 2021 2020



(in thousands) (in thousands)

Subscription cost of revenue $ 5,969 $ 3,226 $ 15,548 $ 7,856

Professional services cost 2,546 1,551 6,963 3,947 of revenue

Sales and marketing 25,499 12,811 68,178 35,101

Research and development 27,333 11,771 70,942 25,700

General and administrative 25,319 11,251 55,684 29,357

Total stock-based $ 86,666 $ 40,610 $ 217,315 $ 101,961 compensation expense

_____________________________(2)

Includes amortization of acquired intangible assets, including purchased patents, as follows:

_____________________________(2) Includes amortization of acquired intangible assets, including purchased patents, as follows:

Three Months Ended October 31,

Nine Months Ended October 31,

2021

2020

2021

2020

(in thousands)

(in thousands)

Subscription cost of revenue

$

2,784

$

272

$

7,550

$

397

Sales and marketing

540

91

1,509

153

Research and development

-

9

-

29

General and administrative

13

-

13

-

Total amortization of acquired intangible assets

$

3,337

$

372

$

9,072

$

579

Three Months Ended Nine Months Ended October 31, October 31,

2021 2020 2021 2020



(in thousands) (in thousands)

Subscription cost of revenue $ 2,784 $ 272 $ 7,550 $ 397

Sales and marketing 540 91 1,509 153

Research and development - 9 - 29

General and administrative 13 - 13 -

Total amortization of acquired $ 3,337 $ 372 $ 9,072 $ 579 intangible assets

_____________________________(3)

Includes acquisition-related expenses as follows:

_____________________________(3) Includes acquisition-related expenses as follows:

Three Months Ended October 31,

Nine Months Ended October 31,

2021

2020

2021

2020

(in thousands)

(in thousands)

General and administrative

$

971

$

2,119

$

5,912

$

2,119

Total acquisition-related expenses

$

971

$

2,119

$

5,912

$

2,119

Three Months Ended Nine Months Ended October 31, October 31,

2021 2020 2021 2020



(in thousands) (in thousands)

General and administrative $ 971 $ 2,119 $ 5,912 $ 2,119

Total acquisition-related $ 971 $ 2,119 $ 5,912 $ 2,119 expenses

_____________________________(4)

Includes legal reserve and settlement charges as follows:

_____________________________(4) Includes legal reserve and settlement charges as follows:

Three Months Ended October 31,

Nine Months Ended October 31,

2021

2020

2021

2020

(in thousands)

(in thousands)

General and administrative

$

-

$

-

$

2,500

$

-

Total legal reserve and settlement charges

$

-

$

-

$

2,500

$

-

Three Months Ended Nine Months Ended October 31, October 31,

2021 2020 2021 2020



(in thousands) (in thousands)

General and administrative $ - $ - $ 2,500 $ -

Total legal reserve and $ - $ - $ 2,500 $ - settlement charges

_____________________________(5)

Includes amortization of debt issuance costs and discount as follows:

_____________________________(5) Includes amortization of debt issuance costs and discount as follows:

Three Months Ended October 31,

Nine Months Ended October 31,

2021

2020

2021

2020

(in thousands)

(in thousands)

Interest expense

$

546

$

-

$

1,639

$

-

Total amortization of debt issuance costs and discount

$

546

$

-

$

1,639

$

-

Three Months Ended Nine Months Ended October 31, October 31,

2021 2020 2021 2020



(in thousands) (in thousands)

Interest expense $ 546 $ - $ 1,639 $ -

Total amortization of debt $ 546 $ - $ 1,639 $ - issuance costs and discount

_____________________________(6)

Includes gains and other income from strategic investment as follows:

_____________________________(6) Includes gains and other income from strategic investment as follows:

Three Months Ended October 31,

Nine Months Ended October 31,

2021

2020

2021

2020

(in thousands)

(in thousands)

Other income, net

$

10

$

-

$

4,366

$

-

Total gains and other income from strategic investments

$

10

$

-

$

4,366

$

-

Three Months Ended Nine Months Ended October 31, October 31,

2021 2020 2021 2020



(in thousands) (in thousands)

Other income, net $ 10 $ - $ 4,366 $ -

Total gains and other income from $ 10 $ - $ 4,366 $ - strategic investments

(7)

Includes tax costs for intellectual property integration relating to the Humio acquisition as follows:

(7) Includes tax costs for intellectual property integration relating to the Humio acquisition as follows:

Three Months Ended October 31,

Nine Months Ended October 31,

2021

2020

2021

2020

(in thousands)

(in thousands)

Provision for income taxes

$

-

$

-

$

48,824

$

-

Total provision for income taxes

$

-

$

-

$

48,824

$

-

Three Months Ended Nine Months Ended October 31, October 31,

2021 2020 2021 2020



(in thousands) (in thousands)

Provision for income taxes $ - $ - $ 48,824 $ -

Total provision for income $ - $ - $ 48,824 $ - taxes

CROWDSTRIKE HOLDINGS, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

October 31,

January 31,

2021

2021

Assets

Current assets:

Cash and cash equivalents

$

1,907,508

$

1,918,608

Accounts receivable, net of allowance for credit losses

283,272

239,199

Deferred contract acquisition costs, current

108,636

80,850

Prepaid expenses and other current assets

60,670

53,617

Total current assets

2,360,086

2,292,274

Strategic investments

22,665

2,500

Property and equipment, net

242,224

167,014

Operating lease right-of-use assets

33,893

36,484

Deferred contract acquisition costs, noncurrent

162,309

117,906

Goodwill

373,889

83,566

Intangible assets, net

82,870

15,677

Other long-term assets

21,681

17,112

Total assets

$

3,299,617

$

2,732,533

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

7,167

$

12,065

Accrued expenses

76,758

51,117

Accrued payroll and benefits

94,738

71,907

Operating lease liabilities, current

9,706

8,977

Deferred revenue

974,571

701,988

Other current liabilities

78,607

17,499

Total current liabilities

1,241,547

863,553

Long-term debt

739,145

738,029

Deferred revenue, noncurrent

313,625

209,907

Operating lease liabilities, noncurrent

27,895

31,986

Other liabilities, noncurrent

17,835

17,184

Total liabilities

2,340,047

1,860,659

Commitments and contingencies

Stockholders' Equity

Common stock, Class A and Class B

115

112

Additional paid-in capital

1,870,120

1,598,259

Accumulated deficit

(922,938)

(730,116)

Accumulated other comprehensive income

885

2,319

Total CrowdStrike Holdings, Inc. stockholders' equity

948,182

870,574

Non-controlling interest

11,388

1,300

Total stockholders' equity

959,570

871,874

Total liabilities and stockholders' equity

$

3,299,617

$

2,732,533

CROWDSTRIKE HOLDINGS, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

October 31, January 31,

2021 2021

Assets

Current assets:

Cash and cash equivalents $ 1,907,508 $ 1,918,608

Accounts receivable, net of allowance for credit 283,272 239,199 losses

Deferred contract acquisition costs, current 108,636 80,850

Prepaid expenses and other current assets 60,670 53,617

Total current assets 2,360,086 2,292,274

Strategic investments 22,665 2,500

Property and equipment, net 242,224 167,014

Operating lease right-of-use assets 33,893 36,484

Deferred contract acquisition costs, noncurrent 162,309 117,906

Goodwill 373,889 83,566

Intangible assets, net 82,870 15,677

Other long-term assets 21,681 17,112

Total assets $ 3,299,617 $ 2,732,533

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $ 7,167 $ 12,065

Accrued expenses 76,758 51,117

Accrued payroll and benefits 94,738 71,907

Operating lease liabilities, current 9,706 8,977

Deferred revenue 974,571 701,988

Other current liabilities 78,607 17,499

Total current liabilities 1,241,547 863,553

Long-term debt 739,145 738,029

Deferred revenue, noncurrent 313,625 209,907

Operating lease liabilities, noncurrent 27,895 31,986

Other liabilities, noncurrent 17,835 17,184

Total liabilities 2,340,047 1,860,659

Commitments and contingencies

Stockholders' Equity

Common stock, Class A and Class B 115 112

Additional paid-in capital 1,870,120 1,598,259

Accumulated deficit (922,938) (730,116)

Accumulated other comprehensive income 885 2,319

Total CrowdStrike Holdings, Inc. stockholders' 948,182 870,574 equity

Non-controlling interest 11,388 1,300

Total stockholders' equity 959,570 871,874

Total liabilities and stockholders' equity $ 3,299,617 $ 2,732,533

CROWDSTRIKE HOLDINGS, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Nine Months Ended October 31,

2021

2020

Operating activities

Net loss

$

(190,639)

$

(73,627)

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

Depreciation and amortization

39,247

27,728

Loss on disposal of property and equipment

259

-

Amortization of intangible assets

9,072

579

Amortization of deferred contract acquisition costs

79,712

44,940

Non-cash operating lease costs

6,727

7,666

Stock-based compensation expense

217,315

101,961

Gain on sale of debt securities, net

-

(1,347)

Amortization of marketable securities purchased at a premium

-

578

Non-cash interest expense

1,824

506

Change in fair value of strategic investments

(4,356)

-

Changes in operating assets and liabilities, net of impact of acquisitions

Accounts receivable, net

(40,644)

(6,603)

Deferred contract acquisition costs

(151,901)

(84,741)

Prepaid expenses and other assets

(9,788)

1,487

Accounts payable

(7,033)

6,556

Accrued expenses and other current liabilities

81,826

1,643

Accrued payroll and benefits

22,258

18,712

Operating lease liabilities

(7,394)

(1,434)

Deferred revenue

375,582

189,582

Other liabilities, noncurrent

(7,001)

7,917

Net cash provided by operating activities

415,066

242,103

Investing activities

Purchases of property and equipment

(85,420)

(40,245)

Capitalized internal-use software and website development

(15,201)

(6,345)

Purchase of strategic investments

(15,809)

(1,500)

Business acquisitions, net of cash acquired

(353,746)

(85,469)

Purchase of intangible assets

(680)

-

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

(470,856)

512,728

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

12,796

21,522

Proceeds from issuance of common stock under the employee stock purchase plan

27,452

17,284

Capital contributions from non-controlling interest holders

7,905

800

Net cash provided by financing activities

46,353

39,606

Effect of foreign exchange rates on cash and cash equivalents

(1,663)

691

Net (decrease) increase in cash and cash equivalents

(11,100)

795,128

Cash and cash equivalents, beginning of period

1,918,608

264,798

Cash and cash equivalents, end of period

$

1,907,508

$

1,059,926

CROWDSTRIKE HOLDINGS, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Nine Months Ended October 31,

2021 2020

Operating activities

Net loss $ (190,639) $ (73,627)

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

Depreciation and amortization 39,247 27,728

Loss on disposal of property and equipment 259 -

Amortization of intangible assets 9,072 579

Amortization of deferred contract acquisition 79,712 44,940 costs

Non-cash operating lease costs 6,727 7,666

Stock-based compensation expense 217,315 101,961

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

Amortization of marketable securities purchased - 578 at a premium

Non-cash interest expense 1,824 506

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

Changes in operating assets and liabilities, net of impact of acquisitions

Accounts receivable, net (40,644) (6,603)

Deferred contract acquisition costs (151,901) (84,741)

Prepaid expenses and other assets (9,788) 1,487

Accounts payable (7,033) 6,556

Accrued expenses and other current liabilities 81,826 1,643

Accrued payroll and benefits 22,258 18,712

Operating lease liabilities (7,394) (1,434)

Deferred revenue 375,582 189,582

Other liabilities, noncurrent (7,001) 7,917

Net cash provided by operating activities 415,066 242,103

Investing activities

Purchases of property and equipment (85,420) (40,245)

Capitalized internal-use software and website (15,201) (6,345) development

Purchase of strategic investments (15,809) (1,500)

Business acquisitions, net of cash acquired (353,746) (85,469)

Purchase of intangible assets (680) -

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 (470,856) 512,728 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 12,796 21,522 exercise of stock options

Proceeds from issuance of common stock under the 27,452 17,284 employee stock purchase plan

Capital contributions from non-controlling 7,905 800 interest holders

Net cash provided by financing activities 46,353 39,606



Effect of foreign exchange rates on cash and cash (1,663) 691 equivalents



Net (decrease) increase in cash and cash (11,100) 795,128 equivalents



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

Cash and cash equivalents, end of period $ 1,907,508 $ 1,059,926

CROWDSTRIKE HOLDINGS, INC.

Non-GAAP Financial Measures with Reconciliation to GAAP

(in thousands, except percentages)

(unaudited)

Three Months Ended October 31,

Nine Months Ended October 31,

2021

2020

2021

2020

GAAP subscription revenue

$

357,030

$

213,530

$

954,094

$

560,008

GAAP subscription gross profit

$

271,566

$

163,947

$

727,734

$

429,144

Add: Stock-based compensation expense

5,969

3,226

15,548

7,856

Add: Amortization of acquired intangible assets

2,784

272

7,550

397

Non-GAAP subscription gross profit

$

280,319

$

167,445

$

750,832

$

437,397

GAAP subscription gross margin

76

%

77

%

76

%

77

%

Non-GAAP subscription gross margin

79

%

78

%

79

%

78

%

CROWDSTRIKE HOLDINGS, INC.



Non-GAAP Financial Measures with Reconciliation to GAAP

(in thousands, except percentages)

(unaudited)

Three Months Ended Nine Months Ended October October 31, 31,

2021 2020 2021 2020

GAAP subscription revenue $ 357,030 $ 213,530 $ 954,094 $ 560,008



GAAP subscription gross $ 271,566 $ 163,947 $ 727,734 $ 429,144 profit

Add: Stock-based 5,969 3,226 15,548 7,856 compensation expense

Add: Amortization ofacquired intangible 2,784 272 7,550 397 assets

Non-GAAP subscription $ 280,319 $ 167,445 $ 750,832 $ 437,397 gross profit



GAAP subscription gross 76 % 77 % 76 % 77 %margin



Non-GAAP subscription 79 % 78 % 79 % 78 %gross margin

Three Months Ended October 31,

Nine Months Ended October 31,

2021

2020

2021

2020

GAAP total revenue

$

380,051

$

232,460

$

1,020,584

$

609,509

GAAP loss from operations

$

(40,264)

$

(24,159)

$

(119,014)

$

(76,726)

Add: Stock-based compensation expense

86,666

40,610

217,315

101,961

Add: Amortization of acquired intangible assets

3,337

372

9,072

579

Add: Acquisition-related expenses

971

2,119

5,912

2,119

Add: Legal reserve and settlement charges

-

-

2,500

-

Non-GAAP income from operations

$

50,710

$

18,942

$

115,785

$

27,933

GAAP operating margin

(11)

%

(10)

%

(12)

%

(13)

%

Non-GAAP operating margin

13

%

8

%

11

%

5

%

Three Months Ended October Nine Months Ended October 31, 31,

2021 2020 2021 2020

GAAP total revenue $ 380,051 $ 232,460 $ 1,020,584 $ 609,509



GAAP loss from $ (40,264) $ (24,159) $ (119,014) $ (76,726) operations

Add: Stock-based 86,666 40,610 217,315 101,961 compensation expense

Add: Amortization ofacquired intangible 3,337 372 9,072 579 assets

Add:Acquisition-related 971 2,119 5,912 2,119 expenses

Add: Legal reserveand settlement - - 2,500 - charges

Non-GAAP income from $ 50,710 $ 18,942 $ 115,785 $ 27,933 operations



GAAP operating (11) % (10) % (12) % (13) %margin



Non-GAAP operating 13 % 8 % 11 % 5 %margin

CROWDSTRIKE HOLDINGS, INC.

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

(in thousands, except percentages and per share amounts)

(unaudited)

Three Months Ended October 31,

Nine Months Ended October 31,

2021

2020

2021

2020

GAAP net loss attributable to CrowdStrike

$

(50,455)

$

(24,531)

$

(192,822)

$

(73,627)

Add: Stock-based compensation expense

$

86,666

$

40,610

$

217,315

$

101,961

Add: Amortization of acquired intangible assets

3,337

372

9,072

579

Add: Acquisition-related expenses

971

2,119

5,912

2,119

Add: Amortization of debt issuance costs and discount

546

-

1,639

-

Add: Legal reserve and settlement charges

-

-

2,500

-

Add: Provision for income taxes(1)

-

-

48,824

-

Less: Gains and other income from strategic investments attributable to CrowdStrike

(5)

-

(2,183)

-

Non-GAAP net income attributable to CrowdStrike

$

41,060

$

18,570

$

90,257

$

31,032

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

228,293

219,401

226,292

216,432

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

228,293

219,401

226,292

216,432

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

238,563

234,626

238,194

232,969

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

$

(0.22)

$

(0.11)

$

(0.85)

$

(0.34)

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

$

0.18

$

0.08

$

0.40

$

0.14

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

$

0.17

$

0.08

$

0.38

$

0.13

CROWDSTRIKE HOLDINGS, INC.



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

(in thousands, except percentages and per share amounts)

(unaudited)

Three Months Ended October Nine Months Ended October 31, 31,

2021 2020 2021 2020

GAAP net lossattributable to $ (50,455) $ (24,531) $ (192,822) $ (73,627) CrowdStrike



Add: Stock-based $ 86,666 $ 40,610 $ 217,315 $ 101,961 compensation expense

Add: Amortization ofacquired intangible 3,337 372 9,072 579 assets

Add:Acquisition-related 971 2,119 5,912 2,119 expenses

Add: Amortization ofdebt issuance costs 546 - 1,639 - and discount

Add: Legal reserveand settlement - - 2,500 - charges

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

Less: Gains andother income fromstrategic (5) - (2,183) - investmentsattributable toCrowdStrike



Non-GAAP net incomeattributable to $ 41,060 $ 18,570 $ 90,257 $ 31,032 CrowdStrike



Weighted-averageshares used incomputing GAAP netloss per share 228,293 219,401 226,292 216,432 attributable toCrowdStrike commonstockholders, basicand diluted

Weighted-averageshares used incomputing Non-GAAPnet income per share 228,293 219,401 226,292 216,432 attributable toCrowdStrike commonstockholders, basic

Weighted-averageshares used incomputing Non-GAAPnet income per share 238,563 234,626 238,194 232,969 attributable toCrowdStrike commonstockholders,diluted



GAAP net loss pershare attributableto CrowdStrike $ (0.22) $ (0.11) $ (0.85) $ (0.34) common stockholders,basic and diluted



Non-GAAP net incomeper shareattributable to $ 0.18 $ 0.08 $ 0.40 $ 0.14 CrowdStrike commonstockholders, basic

Non-GAAP net incomeper shareattributable to $ 0.17 $ 0.08 $ 0.38 $ 0.13 CrowdStrike commonstockholders,diluted

Three Months Ended October 31,

Nine Months Ended October 31,

2021

2020

2021

2020

GAAP total revenue

$

380,051

$

232,460

$

1,020,584

$

609,509

GAAP net cash provided by operating activities

159,058

88,501

415,066

242,103

Less: Purchases of property and equipment

(29,627)

(9,911)

(85,420)

(40,245)

Less: Capitalized internal-use software and website development

(5,928)

(2,495)

(15,201)

(6,345)

Free cash flow

$

123,503

$

76,095

$

314,445

$

195,513

GAAP net cash (used in) provided by investing activities

$

(44,735)

$

(98,375)

$

(470,856)

$

512,728

GAAP net cash provided by financing activities

$

7,554

$

5,171

$

46,353

$

39,606

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

42

%

38

%

41

%

40

%

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

(8)

%

(4)

%

(8)

%

(7)

%

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

(2)

%

(1)

%

(1)

%

(1)

%

Free cash flow margin

32

%

33

%

31

%

32

%

Three Months Ended October Nine Months Ended October 31, 31,

2021 2020 2021 2020

GAAP total revenue $ 380,051 $ 232,460 $ 1,020,584 $ 609,509



GAAP net cashprovided by operating 159,058 88,501 415,066 242,103 activities

Less: Purchases ofproperty and (29,627) (9,911) (85,420) (40,245) equipment

Less: Capitalizedinternal-use software (5,928) (2,495) (15,201) (6,345) and websitedevelopment

Free cash flow $ 123,503 $ 76,095 $ 314,445 $ 195,513



GAAP net cash (usedin) provided by $ (44,735) $ (98,375) $ (470,856) $ 512,728 investing activities

GAAP net cashprovided by financing $ 7,554 $ 5,171 $ 46,353 $ 39,606 activities



GAAP net cashprovided by operating 42 % 38 % 41 % 40 %activities as apercentage of revenue

Less: Purchases ofproperty and (8) % (4) % (8) % (7) %equipment as apercentage of revenue

Less: Capitalizedinternal-use softwareand website (2) % (1) % (1) % (1) %development as apercentage of revenue

Free cash flow margin 32 % 33 % 31 % 32 %

_____________________________(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, including purchased patents, acquisition related expenses, amortization of debt issuance costs and discount, and gains and other income from strategic investments attributable to CrowdStrike included in the GAAP provision for income taxes was not material for all periods presented.

_____________________________ 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 (1) quarter of fiscal 2022. The income tax benefits related to stock-based compensation, amortization of intangibles, including purchased patents, acquisition related expenses, amortization of debt issuance costs and discount, and gains and other income from strategic investments attributable to CrowdStrike included in the GAAP 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 October 31,

Nine Months Ended October 31,

2021

2020

2021

2020

GAAP cost of revenue

$

101,664

$

61,527

$

270,601

$

162,813

Less:

Stock based compensation expense

8,515

4,777

22,511

11,803

Amortization of acquired intangible assets

2,784

272

7,550

397

Non-GAAP cost of revenue

$

90,365

$

56,478

$

240,540

$

150,613

GAAP subscription gross profit

$

271,566

$

163,947

$

727,734

$

429,144

Add:

Stock based compensation expense

5,969

3,226

15,548

7,856

Amortization of acquired intangible assets

2,784

272

7,550

397

Non-GAAP subscription gross profit

$

280,319

$

167,445

$

750,832

$

437,397

GAAP professional services gross profit

$

6,821

$

6,986

$

22,249

$

17,552

Add:

Stock based compensation expense

2,546

1,551

6,963

3,947

Non-GAAP professional services gross profit

$

9,367

$

8,537

$

29,212

$

21,499

GAAP sales and marketing operating expenses

$

164,960

$

105,602

$

453,952

$

288,867

Less:

Stock based compensation expense

25,499

12,811

68,178

35,101

Amortization of acquired intangible assets

540

91

1,509

153

Non-GAAP sales and marketing operating expenses

$

138,921

$

92,700

$

384,265

$

253,613

GAAP research and development operating expenses

$

97,630

$

57,539

$

266,265

$

148,600

Less:

Stock based compensation expense

27,333

11,771

70,942

25,700

Amortization of acquired intangible assets

-

9

-

29

Non-GAAP research and development operating expenses

$

70,297

$

45,759

$

195,323

$

122,871

GAAP general and administrative operating expenses

$

56,061

$

31,951

$

148,780

$

85,955

Less:

Stock based compensation expense

25,319

11,251

55,684

29,357

Acquisition-related expenses

971

2,119

5,912

2,119

Amortization of acquired intangible assets

13

-

13

-

Legal reserve and settlement charges

-

-

2,500

-

Non-GAAP general and administrative operating expenses

$

29,758

$

18,581

$

84,671

$

54,479

GAAP loss from operations

$

(40,264)

$

(24,159)

$

(119,014)

$

(76,726)

Add:

Stock based compensation expense

86,666

40,610

217,315

101,961

Amortization of acquired intangible assets

3,337

372

9,072

579

Acquisition-related expenses

971

2,119

5,912

2,119

Legal reserve and settlement charges

-

-

2,500

-

Non-GAAP income from operations

$

50,710

$

18,942

$

115,785

$

27,933

CROWDSTRIKE HOLDINGS, INC.

Statements of Operations: GAAP to Non-GAAP Reconciliations

(in thousands)

(unaudited)

Three Months Ended October Nine Months Ended October 31, 31,

2021 2020 2021 2020

GAAP cost of revenue $ 101,664 $ 61,527 $ 270,601 $ 162,813

Less:

Stock based 8,515 4,777 22,511 11,803 compensation expense

Amortization ofacquired intangible 2,784 272 7,550 397 assets

Non-GAAP cost of $ 90,365 $ 56,478 $ 240,540 $ 150,613 revenue



GAAP subscription $ 271,566 $ 163,947 $ 727,734 $ 429,144 gross profit

Add:

Stock based 5,969 3,226 15,548 7,856 compensation expense

Amortization ofacquired intangible 2,784 272 7,550 397 assets

Non-GAAPsubscription gross $ 280,319 $ 167,445 $ 750,832 $ 437,397 profit



GAAP professionalservices gross $ 6,821 $ 6,986 $ 22,249 $ 17,552 profit

Add:

Stock based 2,546 1,551 6,963 3,947 compensation expense

Non-GAAPprofessional $ 9,367 $ 8,537 $ 29,212 $ 21,499 services grossprofit



GAAP sales andmarketing operating $ 164,960 $ 105,602 $ 453,952 $ 288,867 expenses

Less:

Stock based 25,499 12,811 68,178 35,101 compensation expense

Amortization ofacquired intangible 540 91 1,509 153 assets

Non-GAAP sales andmarketing operating $ 138,921 $ 92,700 $ 384,265 $ 253,613 expenses



GAAP research anddevelopment $ 97,630 $ 57,539 $ 266,265 $ 148,600 operating expenses

Less:

Stock based 27,333 11,771 70,942 25,700 compensation expense

Amortization ofacquired intangible - 9 - 29 assets

Non-GAAP researchand development $ 70,297 $ 45,759 $ 195,323 $ 122,871 operating expenses



GAAP general andadministrative $ 56,061 $ 31,951 $ 148,780 $ 85,955 operating expenses

Less:

Stock based 25,319 11,251 55,684 29,357 compensation expense

Acquisition-related 971 2,119 5,912 2,119 expenses

Amortization ofacquired intangible 13 - 13 - assets

Legal reserve and - - 2,500 - settlement charges

Non-GAAP general andadministrative $ 29,758 $ 18,581 $ 84,671 $ 54,479 operating expenses



GAAP loss from $ (40,264) $ (24,159) $ (119,014) $ (76,726) operations

Add:

Stock based 86,666 40,610 217,315 101,961 compensation expense

Amortization ofacquired intangible 3,337 372 9,072 579 assets

Acquisition-related 971 2,119 5,912 2,119 expenses

Legal reserve and - - 2,500 - settlement charges

Non-GAAP income from $ 50,710 $ 18,942 $ 115,785 $ 27,933 operations

CROWDSTRIKE HOLDINGS, INC.

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

(in thousands, except per share amounts)

(unaudited)

Three Months Ended October 31,

Nine Months Ended October 31,

2021

2020

2021

2020

GAAP net loss attributable to CrowdStrike

$

(50,455)

$

(24,531)

$

(192,822)

$

(73,627)

Add:

Stock based compensation expense

86,666

40,610

217,315

101,961

Amortization of acquired intangible assets

3,337

372

9,072

579

Acquisition-related expenses

971

2,119

5,912

2,119

Amortization of debt issuance costs and discount

546

-

1,639

-

Legal reserve and settlement charges

-

-

2,500

-

Provision for income taxes(1)

-

-

48,824

-

Less:

Gains and other income from strategic investments attributable to CrowdStrike

(5)

-

(2,183)

-

Non-GAAP net income attributable to CrowdStrike

$

41,060

$

18,570

$

90,257

$

31,032

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

228,293

219,401

226,292

216,432

GAAP basic net loss per share attributable to CrowdStrike common stockholders

$

(0.22)

$

(0.11)

$

(0.85)

$

(0.34)

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

$

0.18

$

0.08

$

0.40

$

0.14

GAAP diluted net loss per share attributable to CrowdStrike common stockholders

$

(0.22)

$

(0.11)

$

(0.85)

$

(0.34)

Add:

Stock-based compensation

0.36

0.17

0.91

0.44

Amortization of acquired intangible assets

0.01

-

0.04

-

Acquisition-related expenses

-

0.01

0.02

0.01

Amortization of debt issuance costs and discount

-

-

0.01

-

Legal reserve and settlement charges

-

-

0.01

-

Provision for income taxes (1)

-

-

0.20

-

Adjustment to fully diluted earnings per share (2)

0.02

0.01

0.05

0.02

Less:

Gains and other income from strategic investments attributable to CrowdStrike

-

-

(0.01)

-

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

$

0.17

$

0.08

$

0.38

$

0.13

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

GAAP

228,293

219,401

226,292

216,432

Non-GAAP

238,563

234,626

238,194

232,969

CROWDSTRIKE HOLDINGS, INC.

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

(in thousands, except per share amounts)

(unaudited)

Three Months Ended October Nine Months Ended October 31, 31,

2021 2020 2021 2020

GAAP net lossattributable to $ (50,455) $ (24,531) $ (192,822) $ (73,627) CrowdStrike

Add:

Stock based 86,666 40,610 217,315 101,961 compensation expense

Amortization ofacquired intangible 3,337 372 9,072 579 assets

Acquisition-related 971 2,119 5,912 2,119 expenses

Amortization of debtissuance costs and 546 - 1,639 - discount

Legal reserve and - - 2,500 - settlement charges

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

Less:

Gains and otherincome fromstrategic (5) - (2,183) - investmentsattributable toCrowdStrike

Non-GAAP net incomeattributable to $ 41,060 $ 18,570 $ 90,257 $ 31,032 CrowdStrike



Weighted-averageshares used incomputing basic netincome (loss) per 228,293 219,401 226,292 216,432share attributableto CrowdStrikecommon stockholders(GAAP and Non-GAAP)



GAAP basic net lossper shareattributable to $ (0.22) $ (0.11) $ (0.85) $ (0.34) CrowdStrike commonstockholders



Non-GAAP basic netincome per shareattributable to $ 0.18 $ 0.08 $ 0.40 $ 0.14 CrowdStrike commonstockholders



GAAP diluted netloss per shareattributable to $ (0.22) $ (0.11) $ (0.85) $ (0.34) CrowdStrike commonstockholders

Add:

Stock-based 0.36 0.17 0.91 0.44 compensation

Amortization ofacquired intangible 0.01 - 0.04 - assets

Acquisition-related - 0.01 0.02 0.01 expenses

Amortization of debtissuance costs and - - 0.01 - discount

Legal reserve and - - 0.01 - settlement charges

Provision for income - - 0.20 - taxes^ (1)

Adjustment to fullydiluted earnings per 0.02 0.01 0.05 0.02 share ^(2)

Less:

Gains and otherincome fromstrategic - - (0.01) - investmentsattributable toCrowdStrike

Non-GAAP diluted netincome per shareattributable to $ 0.17 $ 0.08 $ 0.38 $ 0.13 CrowdStrike commonstockholders



Weighted-averageshares used indiluted net income(loss) per share attributable toCrowdStrike commonstockholderscalculation:

GAAP 228,293 219,401 226,292 216,432

Non-GAAP 238,563 234,626 238,194 232,969

____________________________(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, including purchased patents, acquisition related expenses, amortization of debt issuance costs and discount, gains and other income from strategic investments attributable to CrowdStrike and legal reserve and settlement charges or benefits 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, including purchased patents, acquisition-related expenses and legal reserve and settlement charges or benefits. 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, including purchased patents, acquisition-related expenses, amortization of debt issuance costs and discount, gains and other income from strategic investments, legal reserve and settlement charges or benefits 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.

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

CONTACT: Media CrowdStrike Holdings, Inc. Kevin Benacci, Sr. Director, Corporate Communications press@crowdstrike.com 216-409-5055