CrowdStrike’s Q4 Results Surpass Expectations; Shares Jump 13.5%

Cybersecurity technology company CrowdStrike Holdings, Inc. (NASDAQ: CRWD) has reported better-than-expected results for the fourth quarter ended January 31, 2022.

Following the upbeat earnings, shares of the company jumped 13.5% to close at $192.80 in Wednesday’s extended trading session.

Revenue & Earnings

CrowdStrike reported quarterly revenues of $431 million, up 63% year-over-year. Further, the figure surpassed the consensus estimate of $410.89 million. A year-over-year increase of 66% witnessed in subscription revenue to $405.4 million drove the overall growth in revenues, making up over 94% of the total quarterly revenues.

The company’s earnings per share (EPS) for the quarter stood at $0.30, up 130.8% from the same quarter last year. Further, the figure surpassed the consensus estimate of $0.20 per share.

Other Operating Metrics

CrowdStrike added 1,638 net new subscription customers during the quarter, denoting a rise of 65% from the prior-year quarter. However, subscription gross margin remained flat at 79%.

The company generated net cash from operations of $574.8 million, up from $356.6 million reported in the previous year. Similarly, the free cash flow balance witnessed a year-over-year increase of 50.8% to $441.8 million.

Outlook

For the first quarter of 2023, the company expects revenues in the range of $458.9 million to $465.4 million against the consensus estimate of $440.8 million. Further, it expects EPS between $0.22 and $0.24 per share versus the consensus estimate of $0.17 per share.

For the Fiscal Year 2023, CrowdStrike forecasts revenues between $2.13 billion and $2.16 billion against the consensus estimate of $2.01 billion. It anticipates earnings to be in the range of $1.03 to $1.13 per share versus analysts’ estimates of $0.91 per share.

Management Commentary

The CEO of CrowdStrike, George Kurtz, said, “CrowdStrike once again delivered an exceptional fourth quarter and capped off a record year, achieving new milestones across both the top and bottom line. Net new ARR of $217 million in the quarter was a new all-time high, driven by expansion of our leadership in the core endpoint market as well as a record quarter for cloud, identity protection and Humio. As our record results, growing scale and module adoption rates demonstrate, customers are increasingly leveraging the breadth and depth of the Falcon platform as they look to transform their security stack.”

Stock Rating

Consensus among analysts is a Strong Buy based on 15 Buys and 1 Sell. The average CrowdStrike price target of $258.69 implies upside potential of 52.4% from current levels. Shares have declined 12.9% over the past year.

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