Q4 2024 CrowdStrike Holdings Inc Earnings Call
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Operator: Thank you for standing by, and welcome to CrowdStrike's fourth quarter and fiscal year 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. To remove yourself from the queue, you will need to press star 11 again.
Speaker Change: Thank you for standing by and welcome to crowd strikes fourth quarter and fiscal year 'twenty 'twenty four earnings conference call. At this time, all participants are in a listen only mode.
Speaker Change: After the speaker presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone to remove yourself from the queue you will need to press Star. One won a game I would now like to hand, the call over to Maria Riley Vice President of Investor Relations. Please go on.
Maria Riley: I would now like to hand the call over to Maria Riley, Vice President of Investor Relations. Please go ahead. Good afternoon, and thank you for your participation. With me on the call are George Kurtz, President and Chief Executive Officer and co founder of Crowdstrike, and Burt Podbere, Chief Financial Officer. Before we get started, I would like to note that certain statements made during this conference call that are not historical facts, including those regarding our future plans, objectives, growth, including projections, and expected performance, including our outlook for the first quarter and fiscal year 2025, and any assumptions for fiscal periods beyond that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our outlook only as of the date of this call.
Speaker Change: Hey.
Maria Riley: Good afternoon, and thank you for your participation today with me on the call are George Kurtz, President and Chief Executive Officer, and co founder of pouch.
And Bert Potbelly, Chief Financial Officer.
Maria Riley: Before we get started I would like to note that certain statements made during this conference call that are not.
Maria Riley: All historical facts, including those regarding our future plans objectives growth, including projections unexpected performance, including our outlook for the first quarter and fiscal year 2025, and any assumptions for fiscal periods beyond that are forward looking statements within the meaning of the private secure.
Maria Riley: <unk> Litigation Reform Act of 1995.
Maria Riley: These forward looking statements represent our outlook only as of the date of this call.
Maria Riley: While we believe any forward-looking statements we make are reasonable, actual results could differ materially because the statements are based on current expectations and are subject to risk and uncertainty. We do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise. Further information on these and other factors that could affect the company's financial results is included in the filings we make with the SEC from time to time, including the section titled Risk Factors in the company's quarterly and annual reports. Additionally, unless otherwise stated, excluding revenue, all financial measures disclosed on this call will be non-GAAP. A discussion of why we use non-GAAP financial measures in a reconciliation schedule showing GAAP versus non-GAAP results is currently available in our earnings press release, which may be found on the Investor Relations website at ir.crowdstrike.com or on our Form 8K filed with the SEC today. With that, I will now turn the call over to George. Thank you, Maria.
Maria Riley: While we believe any forward looking statements. We make are reasonable actual results could differ materially because the statements are based on current expectations and are subject to risks and uncertainty we.
Maria Riley: We do not undertake and expressly disclaim any obligation to update or alter our forward looking statements, whether as a result of new information future events or otherwise.
Maria Riley: Further information on these and other factors that could affect the company's financial results is included in the filings we make with that said from time to time, including the section titled risk factors in the company's quarterly and annual report.
Maria Riley: Additionally, unless otherwise stated excluding revenue all financial measures disclosed on this call will be non-GAAP.
Maria Riley: A discussion of why we use non-GAAP financial measures and a reconciliation schedule showing GAAP versus non-GAAP results is currently available in our earnings press release, which may be found on the Investor Relations website at IR, the crowd strike dot com or on our form 8-K filed with the SEC today.
Maria Riley: With that I will now turn the call over to George.
George R. Kurtz: And thank you all for joining us today. Crowdstrike delivered an exceptional fourth quarter that far exceeded our expectations. It was another quarter of record. Record net new ARR of $282 million, continuing our acceleration trend, growing 27% year-over-year, and record operating margin of 25%, up 10 percentage points year over year. Record free cash flow reaching 33% of revenue and a free cash flow rule of 66. Record Gap Profitability, and Record Cloud Identity and Next Gen SIEM Ending ARR of greater than $850 million together, more than doubling year over year. These results illustrate Crowdstrike's substantial and widening competitive moat, exceptional business acceleration, and validated market leadership. Building on my founding vision, Crowdstrike is the only single platform, single agent technology in cybersecurity that solves use cases well beyond endpoint protection. Falcon is the easiest and fastest cybersecurity technology to deploy, and our single AI-native platform makes vendor consolidation instant, frictionless, and natural. The feedback we receive from customers, prospects, and partners alike is consistent.
George R. Kurtz: Thank you Maria and thank you all for joining us today crowd strike delivered an exceptional fourth quarter that far exceeded our expectations. It was another quarter of record record net new AAR are up $282 million.
George R. Kurtz: Our acceleration trend growing 27% year over year.
George R. Kurtz: Record operating margin of 25%.
George R. Kurtz: Up 10 percentage points year over year.
George R. Kurtz: Record free cash flow, reaching 33% of revenue and a free cash flow rule of 66.
George R. Kurtz: Record GAAP profitability.
George R. Kurtz: And record cloud identity, and Nextgen, ending <unk> of greater than $850 million together more than doubling year over year.
George R. Kurtz: These results illustrate crowd strike substantial and widening competitive moat exceptional business acceleration and validated market leadership.
George R. Kurtz: Building on my founding vision crowd strike is the only single platform single agent technology, and cyber security itself use cases, well beyond endpoint protection.
George R. Kurtz: <unk> is the easiest and fastest cyber security technology to deploy it our single AI native platform makes it vendor consolidation incident free.
George R. Kurtz: Frictionless and natural.
George R. Kurtz: The feedback we receive from customers prospects and partners alike.
George R. Kurtz: Eagerness to deploy the Falcon platform, ease of adopting more Falcon platform modules, and excitement from Continuous Innovation with new Falcon capabilities delivered weekly. Leaving stitched-together point products and PowerPoint platforms behind, Crowdstrike customers realize the benefits of superior outcomes and lower TCO. A recent IDC report echoes this, showcasing $6 of return for every dollar invested in the Falcon platform. That is ROI. Free is never free.
George R. Kurtz: <unk>.
George R. Kurtz: Eagerness to deploy the Falcon platform.
These are adopting more falcon platform modules and excitement.
George R. Kurtz: From continuous innovation with new Falcon capabilities delivered weekly.
George R. Kurtz: Leaving stitched together quite products in Powerpoint platforms be hi, crush strike customers realize the benefits of superior outcomes and lower Tcl.
George R. Kurtz: A recent IDC report echoes this showcasing $6 of return for every dollar invested in the Falcon platform.
Roy: That is Roy.
George R. Kurtz: Customers understand the difference between product pricing and the total lifetime cost of operating inferior technology. Given the Falcon Platform's ROI and TCO savings, we believe we will continue to see favorable pricing dynamics. I'm thrilled with our performance, which is a testament to the execution and passion from the very best team in cybersecurity, unified by our focus mission, We Stop Breaches. My gratitude to all Crowdstrikers on a job well done.
Roy: <unk> has never free customers understand the difference between product pricing and the total lifetime cost of operating inferior technology.
Roy: Given the Falcon platforms ROI at GCI savings, we believe we will continue to see favorable pricing dynamics.
Roy: I am thrilled with our performance, which is a testament to the execution and passion from the very best team of cyber security unified by our focused mission, we stop breaches my gratitude to all crowd strikers on a job well done.
George R. Kurtz: Our execution and discipline across the business, coupled with overwhelmingly positive market feedback, gives me strong conviction in our fiscal year 2025 momentum, which Burt will cover in more detail. The current macro environment remains stable and consistent with prior quarters.
Roy: Our execution and discipline across the business.
Roy: Coupled with overwhelmingly positive market feedback gives me strong conviction in our fiscal year, 2025 momentum, which FERC will cover in more detail.
Roy: The current macro environment remains stable and consistent with prior quarters. We expect continued deal scrutiny throughout this coming year.
George R. Kurtz: We expect continued deal scrutiny throughout this coming year. We remain focused on operational excellence while delivering market-leading growth at scale, assisting organizations of all sizes to consolidate and improve their cybersecurity. In contrast to the macroeconomic backdrop, the state of the threat landscape has never been more elevated. In Crowdstrike's recent 2024 Global Threat Report, we unpack the harsh realities of cyber today. Key findings include first, Attacks are faster than ever. What took adversaries hours has shrunk to minutes and seconds. Attack speeds will only accelerate. Second,
Roy: We remain focused on operational excellence, while delivering market leading growth at scale.
Roy: Listing organizations of all sizes to consolidate and improve their cyber security.
Roy: In contrast to the macroeconomic backdrop.
Roy: State of the threat landscape has never been more elevated.
Roy: Craft strikes recent 2024 global threat report, we unpack the harsh realities of cyber today.
Roy: Key findings include first.
Roy: The attacks are faster than ever.
Roy: What took adversaries ours has shrunk to minutes and seconds.
Roy: A tax speeds will only accelerate.
Roy: Second.
George R. Kurtz: The cloud is increasingly under attack. We tracked a 75% increase in cloud intrusion attempts. The cloud is today's battleground for cyber attacks, and third-generation generative AI is an adversary force multiplier. Gen AI puts advanced cybercrime tradecraft in the hands of attackers of all skill levels. Gen AI will dramatically grow the adversary population. The Global Threat Report showcases our threat intelligence leadership.
Roy: The cloud is increasingly under attack.
Roy: Trac, a 75% increase in cloud intrusion attempts.
Roy: The cloud is today's battleground for cyber attacks.
Roy: And third generative AI is an adversary force multiplier.
Roy: Advanced cyber crime trade craft in the hands of attackers of all skill levels.
Roy: AI will dramatically grow the adversary population.
Roy: The global threat report showcases our threat intelligence leadership, we collect trillions of threat signals daily, creating one of the world's largest and fastest growing cyber threat datasets.
George R. Kurtz: We collect trillions of threat signals daily, creating one of the world's largest and fastest growing cyber threat data sets. From day one, we've been an AI company, training the industry's most effective and accurate AI models to prevent attacks based upon our data moat. Embedded in the Falcon platform is a virtuous data cycle where we collect the very best threat intelligence data, build and train robust preventative and generative models, and protect Crowdstrike customers with community immunity. Our team of data science PhDs operates this continuous and real-time process, constantly evolving Falcon's AI foundation to predict adversary activity and stay ahead of threats. Our ever-growing data corpus and unique access to cyber's freshest data at the source, alongside our technology and our human incident response.
Roy: From day, one we've been an AI company training the industry's most effective and accurate AI models to prevent attacks based upon our data moat.
Roy: Embedded in the Falcon platform is a virtuous data cycle, where we collect cyber security is very best threat intelligence data build and train robust preventative and generative models and protect crowd strike customers with community immunity.
Roy: Our team of data Science Phd operate this continuous and real time process.
Roy: Constantly evolving Falcons AI foundation to predict adversary activity and stay ahead of threats.
Roy: Our ever growing data corpus and.
Roy: And unique access to diverse fresher data at the source.
Roy: Alongside our technology and our human incident response threat.
George R. Kurtz: Threat Analysts, Data Science, and Engineering Expertise together serve as a structural competitive advantage. Along with AI, cybersecurity is a top priority in my discussions with numerous boards. In today's environment of heightened cyber attacks, the latest SEC breach disclosure regulation only increases the pressure on companies and their boards. We regularly assist boards with regulatory readiness by bringing cybersecurity from the back room to the boardroom. This, alongside the severity of the threat landscape, makes effective cybersecurity an increasingly mission-critical necessity.
Roy: Threat analysts data science and engineering expertise together serve as a structural competitive advantage.
Roy: Along with AI cyber security is a top priority in my discussions with numerous boards.
Roy: In today's environment of heightened cyber attacks the latest SEC breach disclosure regulation only increases the pressure on companies and their boards.
Roy: We regularly assess boards with regulation readiness by bringing cyber security from the back room to the boardroom.
Roy: This alongside the severity of the threat landscape makes effective cyber security and increasingly mission critical necessity.
George R. Kurtz: That said, cyber security today is a frenetic vendor bazaar. Disjointed point-of-sale copycat products clutter the market, attempting to bandage symptoms instead of curing the illness. OS vendors use their market position to create a monoculture of dependence and risk and, in many cases, serve as the breach originator. Even worse, multi-platform hardware vendors evangelize their stitched together patchwork of point products masquerading as thinly veiled piecemeal platforms. And what organizations inevitably realize is that vendor lock-in leads to deployment difficulties, skyrocketing costs, and subpar cybersecurity. The outcome is shelfware and sunk costs.
Roy: That said cyber security today is a frenetic vendor bizarre disc.
Roy: Disjointed feature copycat products quarter than market attempting the bandaid symptoms instead of sharing the illness.
Roy: OS vendors used their market position to create a mono culture of dependence and risks and in many cases serviced the breach originator.
Roy: Even worse multi platform hardware vendors evangelize their stitch together patchwork of point products masquerading as thinly veiled piecemeal platforms.
Roy: And what organizations inevitably realized is that vendor lock in leads to deployment difficulties.
Hi, rocketing cost and Subpart cyber security.
Roy: The outcome is shelf wear and soft costs.
George R. Kurtz: ELA and bundling addiction have become the only way to coax customers into purchasing non-integrated point products. It's the organizations trapped in these fragmented pseudo platforms riddled with bolt-on point products that are the ones suffering from fatigue. And stark juxtaposition, what Crowdstrike customers tell us is that when you build the right single data-centric AI platform, deliver the right frictionless native solution, and architect the right go-to-market organizations purchase because they need more, receive more, and understand how cybersecurity transformation saves them time and money, or Geometric Validate. First, record deal volumes.
Roy: And bundling addiction become the only way to coast customers as the purchasing non integrated point products.
Roy: It's the organization.
Roy: And these fragmented due to platforms riddled with bolt on point products that are the ones suffering from fatigue.
Roy: And sorry, just the position what cross-react customers tell us is that when you build the right signal data centric AI platform delay.
Roy: To deliver the right frictionless native solutions and architect the right go to market organizations purchase because they need more receive more and understand how cyber security transformation saves them time and money.
Roy: Our deal metrics validate this.
Roy: First record deal volumes in Q4, we closed more than 250 deals greater than $1 million in deal value.
George R. Kurtz: In Q4, we closed more than 250 deals greater than $1 million in deal value. Additionally, more than 490 deals greater than 500,000 in deal value and more than 1900 deals greater than $100,000 in deal value. Deal counts grew by more than 30% year over year across all deal segments.
Roy: More than 490 deals greater than 500000 in deal value and more than 1900 deals greater than 100000 in deal value.
Roy: Gil counts grew by more than 30% year over year across all of your segments.
Roy: Second.
George R. Kurtz: Record platform adoption. Deals with eight or more modules more than doubled year over year, and lastly, continued rising win rates. In Q4, we saw steadily rising win rates across the board, validating our technological leadership over the competition. These results are driven by the following: the winning AI platform, the right solutions, and our frictionless go-to-market motion. Let me begin with our winning AI platform.
Roy: Record platform adoption deals with eight or more modules more than doubled year over year.
Roy: And lastly continued rising win rates in Q4, we saw steadily rising win rates across the board validating our technological leadership over the competition.
Speaker Change: These results are driven by the following the.
Speaker Change: The winning AI platform, the right solutions and our frictionless go to market motion.
Speaker Change: Let me begin with our winning AI platform the secret to cyber Securities leading platform is our single platform has one console and one agent it solves an ever expanding set of cyber security and IQ use cases.
George R. Kurtz: The secret to cybersecurity is leading platform is our single platform has one console and one agent. It solves an ever expanding set of cybersecurity and IT use cases. Our single platform is data-centric, AI-native, and scalable, delivering immediate times of value. Key wins prove the value of the Falcon platform, which makes point product consolidation and vendor replacement a reality. A recent seven-figure win in a Fortune 1000 company highlights how our platform consolidates at scale. Falcon replaced an OS security vendor, a legacy AV vendor, and a next-gen vendor. We eliminated multiple Microsoft consoles and multiple agents to a single console, single agent, and single platform of Falcon.
Speaker Change: Our single platform is open.
Speaker Change: Our single platform is data centric AI native and scalable delivering immediate time to value.
Speaker Change: Key wins prove the value of the Falcon platform, which makes point product consolidation and vendor replacement of reality.
Speaker Change: Our recent seven figure win in a fortune 1000 company highlights how our platform can.
Speaker Change: Consolidated scale.
Speaker Change: Al can replace an OS security vendor a legacy vendor and a next gen vendors, we eliminated multiple Microsoft consoles and multiple agents to a single console single agent and single platform of Falcon.
George R. Kurtz: Our platform approach organically inspires customers to deploy Falcon Cloud Security as their first CSPM, CIEM, and ASPM solution. An eight-figure multi-year win in a Fortune 100 business where the Falcon platform displays five different products, with recent breaches costing them hundreds of millions. It costs too much to keep using ineffective cybersecurity tools. They purchased EDR, NextGen AV, Identity, File Integrity Monitoring, and Vulnerability Management, reducing the number of agents on their devices by approximately 50%. What used to require five installs is now done with one. There are countless similar stories.
Speaker Change: Our platform approach organically inspires customers to deploy Falcon cloud security as their first ESPN.
Speaker Change: And <unk> solutions.
Speaker Change: An eight figure multiyear win and a fortune 100 business, where the Falcon platform displaced five different products with.
Speaker Change: With recent breaches costing them hundreds of millions.
Speaker Change: Cost too much to keep using ineffective cyber security tools.
Speaker Change: They purchased Edr Nextgen AAV identity file integrity monitoring and vulnerability management, reducing the number of agents on their devices by approximately 50%.
Speaker Change: What used to require five install is now done with one.
Speaker Change: There are countless similar stories our platform approach makes landing with multiple solutions at one's easy.
George R. Kurtz: Our platform approach makes landing with multiple solutions at once easy and adopting increasing capabilities over time an organic experience. We collect data once and reuse it many times for today's and tomorrow's use cases. Our application of Gen AI makes cybersecurity predictive and accessible for all skill levels.
Speaker Change: And adopting increasing capabilities over time and organic experience.
Speaker Change: We collect data once and reuse it many times for today's and Tomorrow's use cases.
Speaker Change: Our application of Gen AI make cyber security predictive and accessible for all skill levels.
George R. Kurtz: It's all on one platform, one agent, and one integrated workflow. Next, delivering the right solutions. Our market-leading cloud security, identity protection, and next-gen SIEM solutions are in demand because they solve painful customer problems. These businesses are collectively more than doubling year over year. Each are IPOable businesses, and each play lead roles in Falcon Platform consolidation. I'd like to start with our breakout cloud security solution, where we are setting new records and winning at scale. Our cloud security momentum accelerated in the quarter with net new ARR growing nearly 200% year over year. At more than $400 million in ending ARR, Crowdstrike is one of the largest cloud security businesses in the market, and was recently positioned as a market leader in Forrester's cloud security wave.
Speaker Change: It's all on one platform, one agent and one integrated workflow.
Speaker Change: Delivering the right solutions, our market, leading cloud security identity protection and Nextgen Sim solutions are in demand because they solve painful customer problems.
These businesses collectively are more than doubling year over year.
Speaker Change: Each of our IPO of <unk> businesses and each play lead roles.
Speaker Change: <unk> Falcon platform consolidation.
Speaker Change: I'd like to start with our breakout class security solutions, where we are setting new records and winning at scale, our cloud security momentum accelerated in the quarter with net new <unk> growing nearly 200% year over year and more than $400 million and ending IRR crowd strike is.
Speaker Change: One of the largest cloud security businesses in the market and was recently positioned as a market leader in forest, There's cloud security way.
George R. Kurtz: Here are a few recent cloud security wins, an eight-figure multi-year win, in a hypergrowth AI company. This company's endpoint footprint is in the low thousands. However, with its rapidly expanding cloud estate, this transaction marks our largest inside sales deal of all time. Falcon Cloud Security protects their LLM development and cloud environment. This customer uses CrowdStrike for CSPN, CIEM, DWP, and ASPN.
Speaker Change: Here are a few recent cloud security width.
Speaker Change: An eight figure multiyear win in.
Speaker Change: In a hyper growth AI company. This company's endpoint footprint is in the low thousands however, with its rapidly expanding cloud of state. This transaction marks our largest inside sales deal of all time.
Alcon class security protects their LLM development and cloud environment. This customer uses crowd strike force ESPN.
Speaker Change: DWP and ESPN from.
George R. Kurtz: From the SMB to large enterprises, our sellers and partners win with Falcon Cloud Security. A leading hyperscaler grew its use of Falcon Cloud Security, praising our Linux capabilities. This large eight-figure transaction takes us deeper into the account, where we're not only on every device but now across large parts of their cloud. The wind extends Crowdstrike leadership in securing the world's largest cloud. A global financial services giant replaced their Palo Alto Prisma cloud products in a large seven-figure deal. The Palo Alto cloud security products required separate management consoles and separate agents because cloud security is on a separate Palo Alto platform altogether.
Speaker Change: From the SMB to large enterprises are sellers and partners win with Falcon cloud security.
Speaker Change: A leading hyperscale or grew its use of Falcon cloud security, praising our Linux capabilities. This large eight figure transaction takes us deeper into the account.
Speaker Change: Where we're not only on every device, but now across large parts of their cloud. The win extends crowd strike leadership is securing the worlds largest clouds.
Speaker Change: A global financial services giant replace their Palo Alto Prisma cloud products and a large seven figure deal.
Speaker Change: The Palo Alto cloud security products required separate management consoles and separate agents because cloud security is on a separate Palo alto platform altogether crowd.
George R. Kurtz: Crowdstrike was able to deliver an expected 70% time reduction in management as well as more than $5 million in annual staffing cost savings. However, the patchwork of multi-product, multi-agent, multi-console, separate platform technologies resulted in visibility gaps, asynchronous alerts, and overall fatigue in managing cloud security. Falcon's single platform, with its integrated cloud security component, was a win for the customer. However, customers are starting to realize that CSPM doesn't stop the breach. It is a compliance and reporting tool.
Speaker Change: <unk> was able to deliver an expected, 70% time reduction and management as well as more than $5 million in annual staffing cost savings.
Speaker Change: The patchwork of multi product multi agent multi console separate platform technologies resulted in visibility gaps.
Speaker Change: Zig furnace alerts and overall fatigue managing cloud security.
Speaker Change: <unk> single platform with its integrated cloud security component was a win for the customer.
Speaker Change: Customers are starting to realize that CSP doesn't stop the breach.
George R. Kurtz: Cloud security has moved beyond CSPM. Customers are increasingly realizing that a holistic suite encompassing runtime protection is the only way to protect from active real-time threats. Crowdstrike built the first native single agent and agentless cloud security solution. We've taken cloud security beyond CSPM to include CIEM for securing cloud identity, and ASPM for locating, controlling, and securing cloud applications.
Speaker Change: It is the compliance and reporting tool.
Speaker Change: Security has moved beyond CSPI customers are increasingly realizing that our holistic suite encompassing runtime protection is the only way to protect from active real time threat.
Speaker Change: <unk> built the first native single agent and the agent with cloud security solution, we've taken cloud security beyond the SPM to include CIM for securing cloud identity.
Speaker Change: ASTM for.
Speaker Change: <unk> controlling and securing cloud applications.
George R. Kurtz: CWP, to stop malicious behavior and breaches. And now we turn to securing the cloud data itself that flows in and out of the cloud. Turning our cloud security focus to data, we're incredibly excited to announce our intended acquisition of Flow Security. Flow stood out as the most unique technology amongst a sea of early startups by delivering the industry's first and only cloud data runtime security solution. Let me explain.
DWP to stop malicious behavior breaches and now we turn to securing the cloud data itself that flows in and out of the cloud.
Speaker Change: Turning to our cloud security focus to data, we're incredibly excited to announce our intended acquisition of <unk> Securities.
Speaker Change: Flow stood out as the most unique technology amongst a sea of early start ups by delivering the industry's first and only cloud data rug type security solution let.
George R. Kurtz: The majority of companies in cloud data security focus on two things. Discovery and classification. Here's where Flow stands apart: runtime data discovery and classification.
Speaker Change: Let me explain the majority of companies in cloud data security focus on two things discovery and classification.
Speaker Change: Here's where flow stands apart Ron.
Speaker Change: <unk> data discovery and classification data is analyzed pre and post decryption, enabling precise and instant results.
George R. Kurtz: Data is analyzed, pre and post decryption, enabling precise and instant results, real-time and continuous data visibility, a live view into data risk, not just at rest, but also in motion with LLM-powered adaptive policy. Data Leakage Prevention, the ability to block data exfiltration, including the data exposed through Gen AI service. Simply put, Flow is the industry's first and only cloud data runtime security solution.
Speaker Change: Real time and continuous data visibility alive view into data risks not just at risk, but also in motion with LLM powered adaptive policies.
Data leakage prevention, the ability to block data exploration, including the data exposed through Gen AI services.
Speaker Change: Simply put flow is the industry's first and only cloud data run type security solution.
George R. Kurtz: But we'll also enhance our native data protection module, which is off to a great start, already replacing legacy DLP products in Fortune 500 accounts. Customer frustration with legacy DLP is at a fever pitch, similar to the days of legacy AV, where outdated products overstayed their welcome.
Speaker Change: But we will also enhance our native data protection module, which is off to a great start already replacing legacy DLP products and fortune 500 accounts.
Speaker Change: Customer frustration with legacy DLP is at a fever pitch similar to the days of legacy AVB, we're outdated products overstayed their welcome.
George R. Kurtz: We will now be able to offer a cloud-centric next-gen alternative addressing a market currently shackled by ineffective legacy vendors estimated to be an $8 billion TAM in CY28. With Flow, we will have the most comprehensive data protection from code to application to device to cloud focused on stopping breaches. Next, let's look at identity protection, which surpassed $300 million in ARR, more than doubling year over year. Q4 was also a record quarter for net new identity customer ads. With 80% of attacks involving identity vectors, we've made identity protection a standard for modern cybersecurity because it is already integrated into our single agency. Other vendors attempt to offer identity protection through non-integrated afterthought features or simply lack identity protection altogether.
Speaker Change: We will now be able to offer a cloud centric nextgen alternatives addressing a market currently shackled by ineffective legacy vendors.
Speaker Change: Estimated to be an $8 billion Tam and see why 28.
Speaker Change: With flow, we will have the most comprehensive data protection from code to application to device to cloud focused on stopping breaches.
Speaker Change: Next lets look at identity protection, which surpassed $300 million in <unk> more than doubling year over year.
Q4 was also a record quarter of net new identity customer ads with 80% of attacks involving identity vectors. We've made identity protection standard fare for modern cyber security because it is already integrated into our single agent.
Speaker Change: Other vendors attempt to offer identity protection through non integrated afterthought features or simply lack identity protection altogether.
George R. Kurtz: Our Identity Threat Detection and Response module remains the market's only single-agent solution that stops lateral movement, protects credentials, and secures where identities are actually born active directly. Wins from the quarter include a seven-figure deal with a mega-cruise line using a next-gen product that can never be fully deployed because upgrades and operations were disastrous.
Speaker Change: Our identity threat detection and response module remains the markets only.
Speaker Change: <unk> agent solution that stops lateral movement.
Speaker Change: Protect credentials and secures where identities are actually born active directory.
Speaker Change: Wins from the quarter include a <unk>.
Speaker Change: Seven figure deal with a Mega cruise line using a next gen product that could never be fully deployed upgrades and operations were a disaster.
George R. Kurtz: When I personally met with them, they were beyond frustrated with being the quality control test bed and tired of too many incidents that slipped past their current vendors. Our identity solution delivered in one, not two, agents sets the Falcon platform apart. An eight-figure transaction with a major chip manufacturer added identity to the Falcon deployment. Trapped in a large Microsoft ELA, this organization realized Microsoft needed to bring in a startup to augment its current offering. This piecemeal approach to identity protection created a massive burden of deploying another unproven age. The customer saw the immediate value of Falcon Identity. Our single-agent and single-platform approach reduced their Microsoft dependency.
Speaker Change: When I personally met with them they were beyond frustrated with being the quality control testbed and tired of too many incidents that slipped past their current vendor.
Speaker Change: Our identity solution delivered in one not to agents.
Speaker Change: The Falcon platform apart.
Speaker Change: An eight figure transaction with a major chip manufacturer added identity to their Falcon deployment.
Speaker Change: And a large Microsoft VLA this organization realized Microsoft needed to bring in a startup to augment its turn offering this piecemeal approach to identity protection created a massive burden of deploying another unproven agents to.
George R. Kurtz: Lastly, let's discuss LogScale NextGen SIM, an inflecting Falcon platform solution. We added record net new next-gen SIM, ARR, and Q4, growing over 170% year over year. As of the end of Q4, our next-gen SIM-ending ARR is now greater than $150 million, and it is selected by well over 1,000 customers. Our next-gen SIM is quickly emerging as the go-to Splunk alternative for all businesses looking to leave legacy SIMs. Following M&A consolidation in the legacy SIEM market and mounting dissatisfaction with a slew of withering SIEMs, the market is hungry for better technology, lower TCO, and instant time to value. For large-scale next-gen SIEMs, all Crowdstrike data is already resident. Saving the expense and time of data transfer.
Speaker Change: The customer saw the immediate value of Falcon identity.
Speaker Change: Our single agent in single platform approach reduced their Microsoft dependency.
Speaker Change: Lastly, let's discuss log scale Nextgen Tim.
Speaker Change: When selecting Falcon platform solution.
Speaker Change: We added record net new next Gen <unk> in Q4 growing over 170% year over year.
Speaker Change: As of the end of Q4, our next Gen 10, ending <unk> is now greater than $150 million.
Speaker Change: Selected by well over 1000 customers.
Speaker Change: Our next Gen. Sim is quickly emerging as the go to Splunk alternative for all businesses looking to leave legacy Sims.
George R. Kurtz: Customers are looking to standardize on the right cloud-native data-centric platform for actioning their data, whether manually searching, using automated AI-powered queries, or trusting partners to manage their next-gen SIEM Falcon experience, with pipeline already in the hundreds of millions. There's overwhelming interest in lock scale next-gen sims. One of the many noteworthy wins from the quarter was in partnership with Deloitte, which has a hyper growth lock scale next-gen SIM practice. Together, we closed a seven-figure multi-year next-gen SYN deal with a large European manufacturer, displacing Splunk and Elastic and beating out Azure Sentinel. This customer now has 16 Falcon platform modules deployed. A major mobile computing company standardized on Lock Scale next-gen SIM in a seven-figure multi-year deal replacing a legacy SIM. We competed against Palo Alto's XIM. The customer was looking for an open architecture versus a closed, vendor-locked in approach to cybersecurity. The complexity of having to deploy many different Palo Alto products and multiple agents made Crowdstrike an even easier choice.
Following M&A consolidation in the legacy market and mounting dissatisfaction with a slew of weathering Sims.
Speaker Change: Market is hungry for better technology, lower Tcl and instant time to value.
Speaker Change: And large scale next gen. Tim all crowd strike data is already resident.
Speaker Change: Saving the expense and time of data transfer.
Speaker Change: Customers are looking to standardize on the right cloud native data centric platform for action in their data, where they're manually searching using automated AI powered queries or trusting partners to manage their nextgen, Tim Falcon experience.
Speaker Change: With pipeline already in the hundreds of millions.
Speaker Change: There is overwhelming interest in lock scale next Gen Tim.
Speaker Change: One of many noteworthy wins from the quarter was in partnership with Deloitte, which has a hydro growth large scale nextgen practice together, we closed a seven figure multi year next gen deal with a large European manufacturer, displacing splunk and elastic and beating out Azure Sentinel.
Speaker Change: This customer now has 16 Falcon platform module is deployed.
Speaker Change: A major mobile computing company standardized a lot scale nexium, Tim and a seven figure multi year deal, replacing a legacy Sim.
George R. Kurtz: Lastly, a Fortune 500 hospitality brand grew its relationship with us again, displacing Splunk and Azure Sentinel in a seven-figure deal. In partnership with E&Y and their global log scale next-gen SIEM practice, this customer grew their SIEM use cases by bringing in more security and IT data than before, retaining that data for years, and benefiting from faster search. LockScale NextGen SIM was significantly faster than Azure Sentinel, with a substantially lower total cost of operation, which helped drive this. Our lock scale next gen SIM wins illustrate our sticky and growing data gravity within businesses of all sizes. I can confidently say Log Scale NextGen Synth is one of the fastest growing synth solutions on the market today.
Speaker Change: We competed against Palo Altos Siam.
Speaker Change: The customer was looking for an open architecture versus a closed vendor locked in approach to cyber security.
The complexity of having to deploy many different Palo alto products and multiple agents made crowd strike and even easier choice.
Speaker Change: Lastly, a fortune 500 hospitality brand grew its relationship with US again, displacing Splunk in Azure Sentinel and a seven figure deal.
Speaker Change: In partnership with NY and a global large scale next Gen 10 practice. This customer grew their same use cases by bringing in security and data more than before retaining that data for years and benefiting for faster searches.
George R. Kurtz: Our pace of innovation has never been faster. We're incredibly excited to announce that Falcon for IT and Charlotte AI are generally available. As our customers look to solve increasingly complex IT challenges across their heterogeneous environments, Falcon for IT's excitement is palpable. Our customers are also excited about the Gen-I productivity gains from Charlotte AI, where over 80% of our beta users believe they will save hours to days of work each week using Charlotte AI. The third and final driver of Crowdstrike's growth at scale is our frictionless go-to-market. I'm a big believer that customers don't buy what they don't need and should never be forced to do so.
Speaker Change: <unk> next Gen, Tim was significantly faster than Azure Sentinel with a substantially lower total cost of operation, which helped drive this win.
Speaker Change: Our large scale next gen same wins illustrate our sticky and growing data gravity within businesses of all sizes.
Speaker Change: I can confidently say large scale next gen is one of the fastest growing since solutions on the market today.
Speaker Change: Our pace of innovation has never been faster, we're incredibly excited to announce that Falcon for IP and Charlotte AI are generally available.
Speaker Change: As our customers look to solve increasingly complex challenges across their heterogeneous environments.
George R. Kurtz: At Falcon, we announced Falcon Flex, a flexible licensing model where we enable customers to use the products they want when they want over the course of a multi-year subscription term. Falcon Flex drives customer stickiness, enabling larger deployments and helping us expand with customers adopting more Falcon platform solutions faster. A recent noteworthy FalconFlex deal was a multi-million dollar transaction with a Fortune 500 technology company that leveraged FalconFlex to go all in with Falcon, consolidating and displacing legacy IT hygiene products, Point Cloud Products, and Legacy DLP Products. The right platform, solutions, and go-to-market make us the partner ecosystem's leading choice. Some partnership highlights include Accelerating Momentum with Dell. Since announcing our Dell partnership last year, we've transacted more than $50 million in total deal value together with customers in every segment and geography.
Speaker Change: Falcon for excitement is palpable and our customers are also excited about the agenda productivity gains from Charlotte AI.
Speaker Change: 80% of our beta users belief they will save hours to days of work each week using Charlotte AI.
Speaker Change: The third and final driver of <unk> growth at scale is our frictionless go to market.
Speaker Change: Im a big believer that customers don't buy what they don't need it should never be forced to do so.
Speaker Change: That's all cloud, we announced Falcon flex of flexible licensing model, where we enable customers to use the products they want.
Speaker Change: When they want over the course of a multiyear subscription sir.
Falcon flex drives customer stickiness, enabling larger lands and helping us expand with customers adopting more falcon platform solutions faster.
Speaker Change: A recent noteworthy Falcon flex deal was a multimillion dollar transaction with a fortune 500 technology company that leverage Falcon flex to go all in with Falcon consolidated and displacing legacy IP hygiene products.
George R. Kurtz: We're in the early innings of where this partnership is going, and I'm thrilled with the momentum that we have with Dell as they standardize new offerings, such as their own MDR service on Falcon. Our MSSP business is growing by triple digits year over year, fueled by the right technology, strategy, and partners. MSSPs increasingly want the platform, not just part of the platform, to power their cybersecurity transformation.
Speaker Change: <unk> cloud products and legacy DLP products.
Speaker Change: The right platform solutions and go to market make us the partner ecosystems.
Speaker Change: Leading choice.
Speaker Change: Some partnership highlights include.
Speaker Change: Accelerating momentum with Dell.
Speaker Change: Since announcing our Dell partnership last year, we've transacted more than $50 million, a total deal value together with customers in every segment and geography.
George R. Kurtz: MSSPs are bringing Falcon to tens of thousands of SMBs who lack the staff and time but still need the outcome of the industry's best cybersecurity. Our AWS Marketplace business continues to accelerate at scale, surpassing $1 billion in sales. The AWS Marketplace continues to be one of the fastest growing routes to market. A vast majority of our marketplace business also transacts through resellers and SIs, where we've unified partners and cloud marketplaces for ease, speed, and end customer value. The Falcon platform is validated, tested, and certified. Industry analysts regularly recognize Falcon in our leadership. Here are two recent examples.
Speaker Change: We're in the early innings of where this partnership is going and Im thrilled with the momentum that we have with Dell as they standardized new offerings such as their own MTR service on Falcon.
Speaker Change: Our MSP business is growing by triple digits year over year fueled by the right technology strategy and partners.
Msft's increasingly want the platform.
Speaker Change: That part of the platform to power cyber security transformation.
Msp's are bringing falcon to tens of thousands of Smbs, who lack the staff and time, but still need the outcome of the industry's best cyber security.
George R. Kurtz: First, the Gartner EPP Magic Quadrant. Our placement speaks for itself. Crowdstrike's positioning as the highest inability to execute and furthest to the right in completeness of vision in this year's Magic Quadrant solidifies our unequivocal market leadership ahead of Microsoft and every other vendor profile. Second, the Forrester Way for Cloud Security placed Crowdstrike as one of only two leaders in the entire cloud security market, ranking highest in provision and innovation. In conclusion, Crowdstrike's single agent...
Speaker Change: Our AWS marketplace business continues to accelerate at scale.
Speaker Change: Passing $1 billion in sales the AWS marketplace continues to be one of the fastest growing routes to market a.
Speaker Change: A vast majority of our marketplace business also transact through resellers, and Si, where we've unified partners and cloud marketplaces for ease speed and customer value.
George R. Kurtz: The single unified data-centric platform and our mission to stop breaches sets us apart, is starting the company. We brought cybersecurity to the cloud. We pioneered AI for cybersecurity, and we've quickly become the de facto security platform that disrupts, displaces, and consolidates other vendors. I couldn't be more excited about the year we completed as well as our bright future. Crowdstrike's contribution to cybersecurity goes beyond technology. It's the power of the crowd.
Speaker Change: The Falcon platform is validated tested and certified <unk>.
Speaker Change: Industry analysts regularly recognized Falcon and our leadership.
Speaker Change: Here are two recent examples.
First the Gartner <unk> magic quadrant.
Our placement speaks for itself.
Speaker Change: <unk> positioning as highest in ability to execute and <unk>.
Speaker Change: Further to the right and completeness of vision and this year's Magic quadrant solidifies, our unequivocal market leadership ahead of Microsoft and every other vendor profiles.
George R. Kurtz: We are the cybersecurity community. When cybersecurity professionals apply for jobs, Crowdstrike certification is the required skill set. In the reseller and ISV ecosystem, Crowdstrike is at the top of the line card, and socks across every vertical in geography. Crowdstrike is the security operating system. It's Crowdstrike that's on the screen.
Speaker Change: Second the Forrester wave for cloud security placed crowd strike as one of only two <unk>.
Speaker Change: <unk> in the entire cloud security market ranking highest for vision and innovation.
In conclusion, <unk> single agent single unified data centric platform and our mission to stop reaches sets us apart.
George R. Kurtz: When talking about the threat landscape, Crowdstrike pioneered commercial threat intelligence that governments and companies of all sizes depend on. It's Crowdstrike that delivers billions of new threat detections every month to stop the breeze. It's Crowdstrike that is the search bar of security, where analysts complete millions of XDR queries daily. It's Crowdstrike that created cybersecurity's first dedicated NAI stock assistant to make every user a power user. It's Crowdstrike, where more than half a million cybersecurity defenders log in every day to protect society by stopping breaches. The technology, the crowd, the mission. This is what makes Crowdstrike the definitive cybersecurity platform. With that, I'll turn the call over to Burt. Thank you, George. And good afternoon, everyone.
Speaker Change: Since starting the company.
Speaker Change: We brought cyber security to the cloud.
Speaker Change: We pioneered AI for cyber security and.
Speaker Change: And we have quickly become the de facto security platform that disrupts displaces and consolidate other vendors.
I couldnt be more excited about the year, we completed as well as our bright future.
Speaker Change: <unk> contribution to cyber security goes beyond technology.
Speaker Change: Power of the crowd we.
Speaker Change: Cyber security is community.
Speaker Change: When cyber security professionals apply for jobs.
Speaker Change: <unk> certification has the required skill set.
Speaker Change: And the reseller and ISC ecosystem crowd strike is at the top of the line card.
Burt W. Podbere: As a quick reminder, unless otherwise noted, all numbers except revenue mentioned during my remarks today are non-GAAP. Crowdstrike delivered an exceptional fourth quarter and a record finish to the year, highlighting our outstanding execution, growing market leadership, and accelerating adoption of the Falcon platform. For the full fiscal year, we achieved 34% and 36% ending ARR and revenue growth, respectively, while delivering significant leverage on the bottom line. Operating income grew 86% year over year to reach a record $660.3 million, or 22% of revenue, and net income attributable to Crowdstrike and EPS more than doubled to reach a record $751.8 million, or $3.09 per diluted share. Free cash flow grew 39% year-over-year to reach $938.2 million, or 31% of revenue, exceeding our target for the year.
Speaker Change: And Sox across every vertical and geography crowd strike is the security operating system. It's crowd strike that's on the screen.
Speaker Change: When talking about the threat landscape crowd strike pioneer commercial threat intelligence that governments and companies of all sizes depend on.
Speaker Change: It's crowd strike that delivers billions of new threat detection every month.
Speaker Change: The breach.
Speaker Change: It's crowd strike that is the search bar of security, where analysts complete millions of xdr queries daily.
Speaker Change: It's crowd strike that created cyber securities first dedicated NII stock assistant to make every user of power user.
Speaker Change: <unk> crowd strike, where more than half a million cyber security defenders logging every day to protect society by stopping breaches.
Speaker Change: The technology the crowd. The mission. This is what makes crowd strike cyber security definitive platform.
Speaker Change: With that I'll turn the call over to Bert.
Bert: Thank you George and good afternoon, everyone. As a quick reminder, unless otherwise noted all numbers, except revenue mentioned during my remarks today are non-GAAP.
Burt W. Podbere: Additionally, we are very proud to have achieved the important milestone of gap profitability for the past four quarters and full fiscal year in less than five years following our IPO. Our achievements in fiscal year 2024 represent another high watermark for Crowdstrike. Through our consistent focus on execution, we have efficiently scaled the business, growing ending ARR by over 10x from our IPO in fiscal year 2019, delivering significant operating leverage and growing our free cash flow margin profile to above 30%. We continue to aggressively invest in our innovation engine and empower the company to achieve its vision of reaching $10 billion in ARR over the next five to seven years. Moving to the specifics of the fourth quarter, we achieved record net new ARR of $282 million, up 27% off of last year's record Q4, representing our second consecutive quarter of accelerating growth. And we finished the quarter with $3.44 billion in ending ARR, up 34% over last year.
Bert: <unk> delivered an exceptional fourth quarter and a record finish to the year, highlighting our outstanding execution growing market leadership and accelerating adoption of the Falcon platform.
Bert: For the full fiscal year, we achieved 34% and 36% ending <unk> and revenue growth, respectively, while delivering significant leverage on the bottom line.
Bert: Operating income grew 86% year over year to reach a record $663 million or 22% of revenue and net income attributable to crowd strike and EPS more than doubled to reach a record $751 8 million.
Bert: Or $3 <unk> per diluted share.
Bert: Free cash flow grew 39% year over year to reach $938 2 million or 31% of revenue exceeding our target for the year.
Bert: Additionally, we are very proud to have achieved the important milestone of GAAP profitability for the past four quarters and full fiscal year and less than five years following our IPO.
Burt W. Podbere: Demand in the quarter was broad-based, and we have a record Q1 pipeline as we executed on our platform strategy, closed many large consolidation deals, and extended our leadership across the market from large enterprises to small businesses. While companies may be fatigued with other vendors, they've embraced Crowdstrike's platform strategy and want to buy more of the Falcon platform. This is evidenced by first, the number of deals with eight or more modules more than doubling year over year in Q4. Second, subscription customers with five or more, six or more, and seven or more modules grew to 64, 43, and 27% of subscription customers, respectively. Third, the number of customers with greater than $1 million in ending ARR is growing to more than 580,000. And finally, the growth of deals with total values exceeding $1 million accelerated to over 30% and reached an all-time record at over 250 in Q4. We finished the year with 29,000 subscription customers, which excludes smaller customers served through our MSSP partner.
Bert: Our achievements in fiscal year 2024 represent another high watermark for crowd strike.
Bert: Through our consistent focus on execution, we have efficiently scaled the business growing ending air or by over <unk> from our IPO in fiscal year 2019, delivering significant operating leverage and growing our free cash flow margin profile to above 30%.
Bert: We continue to aggressively invest in our innovation engine and flight the company to achieve its vision of reaching $10 billion in <unk> over the next five to seven years.
Bert: Moving to the specifics of the fourth quarter, we achieved record net new <unk> of $282 million up 27% off of last year's record Q4, representing our second consecutive quarter of accelerating growth.
Bert: And we finished the quarter with 344 billion.
Burt W. Podbere: We are landing bigger, with new customers on average adopting 4.9 modules out of the gate, an increase over last year. Our gross retention rate remained high at 98%, and our dollar-based net retention rate was consistent with last quarter at 119%, which is slightly below our benchmark as the mix of net new ARR from new customers has remained above our expectations and we continue to land bigger deals for the interim FY 24 quarter. Net retention was 119% in Q3, 119% in Q2, and 122% in Q1.
Bert: Ending air are up 34% over last year.
Bert: Demand in the quarter was broad based and we have a record Q1 pipeline as we executed on our platform strategy close many large consolidation deals and extended our leadership across the market from large enterprises to small businesses.
Bert: While companies may be fatigue, with other vendors they've embraced crowd strikes platform strategy and want to buy more of the Falcon platform.
Bert: This is evidenced by first the number of deals with eight or more modules more than doubling year over year in Q4.
Bert: Second subscription customers with five or more six or more and seven or more modules growing to 64, 43% and 27% of subscription customers respectively.
Burt W. Podbere: Looking into FY25, we expect our dollar-based net retention rate to fluctuate within plus or minus a few points of 120% as the business scales to even greater heights and customers continue to land bigger and with more modules. Moving to the P&L, total revenue grew 33% over Q4 of last year to reach $845.3 million. Subscription revenue grew 33% over Q4 of last year to reach $795.9 million, and professional services revenue was $49.4 million, representing 26% year-over-year growth. The geographic mix of fourth-quarter revenue consisted of approximately 68% from the U.S., 16% from Europe, Middle East, and Africa, 10% from the Asia-Pacific region, and 6% from all other members.
Bert: Third the number of customers with greater than $1 million of ending <unk>.
Bert: <unk> growing to more than 580 <unk>.
Bert: And finally, the growth of deals with total value exceeding $1 billion accelerated to over 30% and reached an all time record at over 250 in Q4.
Bert: We finished the year with 29000 subscription customers, which exclude smaller customers served through our MSP partners.
Bert: We are landing bigger with new customers on average adopting $4 nine modules out of the gate and increase over last year.
Bert: Our gross retention rate remained high at 98% and our dollar based net retention rate was consistent with last quarter at 119%.
Bert: Which is slightly below our benchmark as the mix of net new <unk> from new customers has remained above our expectations and we continue to land bigger deals.
Burt W. Podbere: Total gross margin increased by 282 basis points year over year to reach 78%, and subscription gross margin was above 80% in the fourth quarter, an increase of 291 basis points over the prior year. Our strong gross margin performance was driven by our ability to command stable pricing, supported by the exceptional customer value delivered by the Falcon platform, as well as our continued investment in data center and workload optimization. Total non-GAAP operating expenses in the fourth quarter were $448.1 million, or 53% of revenue compared to 60% of revenue in the prior year.
Bert: For the interim FY 'twenty four quarters net retention was 119% in Q3, 119% in Q2 and 122% in Q1.
Bert: Looking into FY 'twenty five we expect our dollar based net retention rate to fluctuate within plus or minus a few points of 120% as the business scales to even greater heights and customers continuing to land bigger and with more modules.
Bert: Moving to the P&L total revenue grew 33% over Q4 of last year to reach $845 3 million.
Bert: Subscription revenue grew 33% over Q4 of last year to reach $795 9 million.
Burt W. Podbere: Our strategic investments in talent and innovation underpin our ability to scale the business and deliver profitable growth. In the fourth quarter, non-capital operating income grew 123% year over year to reach a record $213.1 million, and Operating Margin increased by 10 percentage points year over year to reach a record 25%. Non-GAAP net income attributable to Crowdstrike in Q4 grew to a record $236.2 million, or 95 cents on a diluted per share basis, each more than doubling year over year. Our weighted average common shares used to calculate fourth quarter non-capital EPS attributable to Crowdstrike were on a diluted basis and totaled approximately 248 million shares. We ended the fourth quarter with a strong balance. Cash and cash equivalents and short-term investments grew to a record $3.47 billion. Cash flow from operations was a record $347.0 million.
Bert: Professional services revenue was $49 4 million rep.
Bert: Representing 26% year over year growth.
Bert: The geographic mix of fourth quarter revenue consisted of approximately 68% from the U S, 16% from Europe, Middle East and Africa, 10% from the Asia Pacific region, and 6% from all other markets.
Bert: Total gross margin increased by 282 basis points year over year to reach 78% and subscription gross margin was above 80% in the fourth quarter, an increase of 291 basis points over the prior year.
Bert: Our strong gross margin performance was driven by our ability to command stable pricing supported by the exceptional customer value delivered by the Falcon platform as well as our continued investments in data center and workload optimization.
Bert: Total non-GAAP operating expenses in the fourth quarter were $448 1 million or 53% of revenue compared to 60% of revenue in the prior year.
Burt W. Podbere: Free cash flow reached a record $283.0 million, or 33% of revenue, achieving a rule of 66 on a free cash flow basis. Before I move to our outlook, I'd like to provide a few modeling notes. First, we are encouraged by the momentum in the business, including larger deal sizes, increased win rates, and a record Q1 pipeline. However, we continue to maintain a consistent and prudent approach to our outlook amid a macro environment that remains challenging, and therefore, the guidance we are providing today assumes a consistent, challenging macro background.
Bert: Our strategic investments in talent and innovation underpin our ability to scale the business and deliver profitable growth.
Bert: In the fourth quarter non-GAAP operating income grew 123% year over year to reach a record $213 1 million.
And operating margin increased by 10 percentage points year over year to reach a record 25%.
Bert: non-GAAP net income attributable to crowd strike in Q4 grew to a record $236 2 million or <unk> 95 on a diluted per share basis, each more than doubling year over year.
Burt W. Podbere: Second, while we do not specifically guide to ending or net new ARR, given the incredible performance of Q4, I will share our current seasonality assumptions with respect to net new ARR in Q1, which calls for Q1 net new ARR year-over-year growth to be at least double digits to the low teens. Third, given our strong momentum in the market, we are increasing our pace of hiring in FY25 as we continue to invest in our innovation engine and go-to-market functions to scale the business to $10 billion of ARR and, as a result of increased hiring in the first half of the year, changes to the timing of our merit cycle and the timing of certain marketing programs. We expect operating leverage to be more weighted to the back half of FY25.
Bert: Our weighted average common shares used to calculate fourth quarter non-GAAP EPS attributable to crowd strike was on a diluted basis and totaled approximately 248 million shares.
Bert: We ended the fourth quarter with a strong balance sheet cash.
Bert: Cash and cash equivalents and short term investments grew to a record $3 $4 7 billion.
Bert: Cash flow from operations was a record 347.0 million.
Bert: Free cash flow reached a record 283.0 million or 33% of revenue achieving a rule of 66 on a free cash flow basis.
Speaker Change: Before I move to our outlook I would like to provide a few modeling notes.
Speaker Change: First we are encouraged by the momentum in the business, including larger deal sizes increase win rates and a record Q1 pipeline.
Speaker Change: However, we continue to maintain a consistent and prudent approach to our outlook amid a macro environment that remains challenging and therefore the guidance. We are providing today assumes a consistent challenging macro backdrop.
Burt W. Podbere: Next, we are raising our free cash flow target for FY25 from between 30% and 32% to between 31% and 33% of revenue. Our assumptions on interest, income, and expense, CapEx, and cash outlay for taxes will be included after this call in our earnings presentation available on our Investor Relations website. Moving to our forecast, for the first quarter of FY25, we expect total revenue to be in the range of $902.2 to $905.8 million, reflecting a year-over-year growth rate of 30 to 31%. We expect non-capital income from operations to be in the range of $188.1 to $190.8 million, and non-capital net income attributable to Crowdstrike to be in the range of $220.4 to $2 We expect diluted non-capital net income per share attributable to Crowdstrike to be approximately 89 cents to 90 cents, utilizing a weighted average share count of 248 million shares on a diluted basis. For the full fiscal year 2025, we currently expect total revenue to be in the range of $3,924.9 to $3,989.0 million, reflecting a growth rate of 28 to 31% over the prior fiscal Non-GAAP income from operations is expected to be between $863.6 and $913.0 million.
Speaker Change: Second while we do not specifically guide to ending or net new <unk> given the incredible performance of Q4, I will share our current seasonality assumptions with respect to net new <unk> in Q1, which calls for Q1 net new air our year over year growth to be at least double digits up to the low.
Speaker Change: Teams.
Speaker Change: Third given our strong momentum in the market, we are increasing our pace of hiring in FY 'twenty five as we continue to invest in our innovation engine and go to market functions to scale the business to $10 billion of <unk> and beyond.
Speaker Change: As a result of increased hiring in the first half of the year changes to the timing of our merit cycle and the timing of certain marketing programs, we expect operating leverage to be more weighted to the back half of FY 'twenty five.
Speaker Change: Next we are raising our free cash flow target for FY 'twenty five from between 30, and 32% to between 31 and 33% of revenue.
Speaker Change: Our assumptions on interest income and expense Capex and cash outlay for taxes will be included after this call and our earnings presentation available on our Investor Relations website.
Speaker Change: Moving to our outlook.
Speaker Change: For the first quarter of FY 'twenty five we expect total revenue to be in the range of $902 two to $905 $8 million, reflecting a year over year growth rate of 30% to 31%.
Speaker Change: We expect non-GAAP income from operations to be in the range of $188 $1 million to $198 million.
Burt W. Podbere: We expect fiscal 2025 non-GAAP net income attributable to Crowdstrike to be between $940.3 and $989.7 million. Utilizing 250 million weighted average shares on a diluted basis, we expect non-GAAP net income per share attributable to Crowdstrike to be in the range of $3.77 to $3.97. George and I will now take your questions. As a reminder, to ask a question, you will need to press star 11 on your telephone. Please limit yourself to one question.
Speaker Change: non-GAAP net income attributable to crowd strike to be in the range of 224 to $223 1 million.
Speaker Change: We expect diluted non-GAAP net income per share attributable to crowd strike to be approximately 89 to 90.
Speaker Change: Utilizing our weighted average share count of 248 million shares on a diluted basis.
Speaker Change: For the full fiscal year 2025, we currently expect total revenue to be in the range of $3924 nine to 3980 9.0 million.
Operator: Please stand by while we compile the Q&A roster. Our first question comes from the line of Saket Kalia of Barclays. Your question, please, Saket. Okay, great. Hey guys, thanks for taking my question here and congrats to the team on a strong finish to the year. Thanks Zach. George, sure thing. George, maybe for you.
Speaker Change: Reflecting a growth rate of 28% to 31% over the prior fiscal year.
Speaker Change: non-GAAP income from operations is expected to be between 863, six and 913.0 million.
Speaker Change: We expect fiscal 2025, non-GAAP net income attributable to crowd strike to be between 943 and $989 7 million.
Saket Kalia: I think the number that sticks out the most to me from the quarter is the $850 million in ARR from maybe what I'll call platform products. So, the question is, can you just talk about the competitive landscape in a couple of those areas like cloud security and SIEM? I mean, definitely a rising tide in some of those markets, but also some good competitors. What do you think is giving Crowdstrike a right to win in those markets? Oh, thanks, Saket.
Speaker Change: Utilizing 250 million weighted average shares on a diluted basis, we expect non-GAAP net income per share attributable to <unk> to be in the range of $3 77.
Speaker Change: The $3 97.
Speaker Change: George and I will now take your questions.
Speaker Change: As a reminder to ask a question you will need to press star one on your telephone please limit yourself to one question. Please standby, while we compile the Q&A roster.
George R. Kurtz: Our first question comes from the line of <unk> Kalia of Barclays. Your question. Please.
George R. Kurtz: Obviously, a key part of our success has been that all of the modules are platform-based, which is really a key driver and when I started the company, it was really about creating this data platform that allowed us to ingest data at scale and then create multiple use cases. And really, what you're seeing is many, many years of hard work that allow us to solve use cases beyond just core endpoint protection. So when we think about cloud security, customers are really looking to rationalize the alphabet soup of cloud products that are out there. And they're looking not only for posture management but runtime protection, and they want it all integrated into a data platform. So I think given what we've done, and some of the acquisitions, including now flow, we are obviously well positioned in that area, and have a lot of interest from our customers, and we've seen a lot of success.
Okay, Great Hey, guys. Thanks for taking my question here and congrats to the team on a strong finish to the year.
Speaker Change: Thanks George.
Speaker Change: Sure thing George maybe for you.
Kalia: I think the number that sticks out the most to me from from the quarter is the $850 million in IRR.
Kalia: What I'll call platform products.
Speaker Change: So the question is can you just talked about the competitive landscape and a couple of those areas like cloud security and Sam I mean definitely a rising tide in some of those markets, but also some good competitors. What do you think it's given crowd strike a right to win in those markets.
Speaker Change: Oh, Thanks second.
Speaker Change: Obviously.
Speaker Change: A key part of our success has been that all of the modules or <unk>.
George R. Kurtz: When we think about the SIM market, and maybe more importantly, the legacy SIM market, customers are just frustrated with the existing technologies, and the cost structure around those. And what they're really looking for is a data platform like Crowdstrike and other log scales natively integrated into the product. It's a better way to give them the outcome they want, which is faster results, better overall outcomes, and a lower TCO.
Speaker Change: Platform, which is really key driver and.
Speaker Change: When I started the company it was really about creating this data platform that allowed us to ingest data at scale and then create multiple use cases and really what youre seeing is.
Speaker Change: Many many years of hard work that allow us to solve use cases beyond just core endpoint protection. So when you think about cloud security customers are really looking to rationalize the alphabet soup of cloud products that are out there.
Speaker Change: We're looking not only for posture management, but runtime protection and they want it all integrated into a data platform. So I think given what we've done and some of the acquisitions, including outflow.
George R. Kurtz: So I think it's this data concept that we've been talking about for many years, and everyone is now starting to see the fruits of our labor and how we can solve use cases well beyond just endpoint protection. Yeah, so I would agree, George. I think at the end of the day, for us, when we're thinking about, you know, the different products that are in our portfolio, it's really about the platform. We sell the platform, regardless of what the products that are in the platform are; they all kind of work off of each other. And we're just out there solving as many problems as we possibly can. Thank you. Our next question comes from the line of Brian Essex of J.P. Morgan. Please go ahead, Brian.
Speaker Change: Obviously.
Speaker Change: Well positioned in that area and a lot of interest from our customers and we've seen a lot of success. When we think about the the Sim market and more maybe more importantly, the legacy Sim market customers. It just frustrated with the existing technologies.
The cost structure around those and what they're looking for really is a data platform like crowd strike another large scale natively integrated into the product.
Speaker Change: It's a better way to give them the outcome they want which is.
Speaker Change: Faster results.
Speaker Change: Overall outcomes and a lower tcl. So I think it's this data concept that we've been talking about for many years that everyone. Now is starting to see the fruits of our labor and how we can solve use cases, well beyond just endpoint protection Bert.
Brian Lee Essex: Great, good afternoon. Thank you for the question or for taking the question. It's great to see the strong results from the team. George, you articulated a few thoughts on consolidation and pricing in your prepared remarks, but I wanted to ask a little more directly and maybe follow up on Saket's question. Both for you and Burt, you know, one of the other vendors in the space has talked about a strategy of platformization. So maybe with that in mind, how does this impact your go-to-market and pricing? Well, thanks, Brian. As you might imagine, I heard a lot about platformization over the last week. You know, to me, it's kind of a made-up, flimsy term, but I believe... What our competitors are talking about is bundling, discounting, and giving products away for free, which is nothing new in its software and security software. It's been done for the last 30 years.
Bert: Yeah. So.
Bert: George I think at the end of the day for Us when we're thinking about.
Bert: The different products that are in our portfolio, it's really about the platform we sell the platform.
Regardless of what are the products that are in the platform. They all kind of work off of each other and we're just out there solving as many outcomes as we possibly can.
Speaker Change: Thank you.
Speaker Change: Our next question.
Comes from the line.
Speaker Change: Ryan Essex of Jpmorgan. Please go ahead Brian.
Brian Lee Essex: Great. Good afternoon, and thank you for the question for taking the question and great to see the strong results from the team.
Brian Lee Essex: George you articulated a few thoughts on consolidation and pricing in your prepared remarks, but wanted to ask a little bit more directly and maybe follow up to sockets question.
George R. Kurtz: So when we think about what we've seen in the past with other competitors, we know free isn't free. And what customers are saying is more consoles, more point products masquerading as platforms create fatigue in their environment. And one of the things that we've been focused on is that single agent architecture, single platform, single console that allows us to stop the breach, but more importantly, drive down the operational cost and supply many use cases or solve many use cases that are out there. So, you know, I've been around the block for a bit. I saw this movie of wrap, roll, and bundling, together with multiple products that were acquired. And, you know, last time I saw him, I was at McAfee.
Brian Lee Essex: Both for for you and Bert.
Brian Lee Essex: One of the other vendors in this space as talk about our strategy of platform innovation. So maybe with that in context, how does this impact your go to market and pricing.
Brian Lee Essex: Yeah.
George R. Kurtz: Well, thanks, Brian as you might imagine I heard a lot about platform position over the last over the last week.
Speaker Change: To me, it's kind of a made up fugazi term, but I believe.
Our competitors are talking about is bundling discounting and giving product away for free which.
Speaker Change: There is nothing new and its software and security software, it's been done for the last 30 years.
Speaker Change: When we think about.
Speaker Change: And what we've seen in the past with other competitors, we know free as in free.
Speaker Change: And what customers are saying is it more consoles.
Speaker Change: More point products masquerading as platforms.
Speaker Change: Create fatigue in their environment and one of the things again that we've been focused on is that single agent architecture. A single platform single console that allows us to stop the breach, but more importantly drive down the operational costs and supply. Many use cases are solved many use cases that are out there. So.
Burt W. Podbere: So, I know, Burt, you have anything to add to that? Yeah, I think, George, look, at the end of the day, we sell on value. And we've never been a company that's done deep discounting. We've never been a company that has increased our prices to get more ARR. That's not us.
Burt W. Podbere: And at the end of the day, for us, you know, we're here to help customers get the greatest amount of outcomes at the lowest TCO, period. And to George's point, free is not free, and good is not good enough. Thank you. Our next question comes from the line of Rob Owens of Piper Sandler. Please go ahead, Rob.
Speaker Change: Been around the block for a bit I've seen I've seen this movie.
Speaker Change: Rapid roll and bundling together with multiple products that were acquired in last time I saw that I was at Mcafee. So.
Speaker Change: Bert do you have anything to add to that yes, I think George look at the end of the day, we sell on value and we've never been a company that's been deep discounting.
Robbie David Owens: Yeah, good afternoon. And thanks for taking my question. I was wondering if you could address a modest step-up in billing duration after a year of compressing duration. Total billings outgrew your short-term billings, and it does appear that customers are committing for longer contracts. Wondering if that's a function of your consolidated platform or another dynamic. So, hey, Rob, I think it's a couple of things.
Bert: We've never been a company that has increased our prices to get more IRR that's not us.
Bert: And at the end of the day for Us.
We're here to help customers get the greatest amount of outcomes at the lowest tcl period.
Speaker Change: And to George's point free is not free and good is not good enough.
Speaker Change: Thanks Bert.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Rob Owens with Piper Sandler. Please go ahead Rob.
Yes, good afternoon, and thanks for taking my question I was wondering if you could address the.
Burt W. Podbere: One is, you know, for sure, it's about the platform. But second, historically, we've seen a lot more multi-year deals in Q4 as well. But billings, in general, remember, it's a noisy metric, right? It's heavily influenced by duration and timing of deals within the given quarter.
Robbie David Owens: Modest step up in billings duration after a year of compressing durations here.
Robbie David Owens: Billings outgrew your short term billings and it does appear that customers are committing for longer contracts wondering if thats a function of your consolidated platform or another dynamic in the market. Thanks.
Robbie David Owens: So hey, Rob So I think it's a couple of things one it for sure it's about the platform, but secondly, Q4 is.
Burt W. Podbere: But, having said that, at the end of the day, we do manage the business to air, and that's the one that we focus on. Billing, for us, is just an aftermath. You're right.
Robbie David Owens: Historically, we've seen a lot more of the multi year deals. We also see more renewals in Q4 as well, but billings in general remember, it's a noisy metric right. It's heavily influenced by duration and timing of deals within the given quarter.
Joel P. Fishbein: It was a strong billings quarter, but that's not really how we, Thank you. Our next question comes from the line of Joel Fishbein of Truist. Please go ahead, Joel.
Robbie David Owens: But having said that at the end of the day, we do manage the business to <unk>.
George R. Kurtz: And congrats on the great execution as well. George, just a follow-up for you on the data market or the DLP market, and congratulations on the acquisition of Flow. Just curious how that will be integrated. You didn't really mention how big that is for you guys, but obviously a very big market that is ripe for disruption. Maybe talk about the competitive dynamics of that market as well. Well, we're excited about this because not only do we get the classification of data, but we also get runtime protection in the cloud. So it's a perfect fit for our data protection module. And again, what I talked about in prepared remarks was that there are a lot of similarities to what I saw when I started the company in legacy AV to legacy DLP. I don't even like the term DLP; we call it data protection.
Robbie David Owens: And thats the one that we focus in on.
Robbie David Owens: Billings for us assistant aftermath.
Robbie David Owens: <unk>.
Robbie David Owens: It wasn't strong billings quarter, but that's not really how we run the business.
Robbie David Owens: Thank you. Our next question comes from the line of Joel Fishbein of.
Joel P. Fishbein: Truest. Please go ahead Joel.
Joel P. Fishbein: Okay.
Joel P. Fishbein: Congrats on the great execution as well George just a follow up for you on the.
Joel P. Fishbein: The data marketers, the DLP market and congrats on the acquisition of <unk>.
Joel P. Fishbein: Curious how that will be integrated you didn't really mentioned how big that is for you guys, but obviously a very big market.
Joel P. Fishbein: Right for disruption and maybe talk about the competitive dynamics of that market as well.
Speaker Change: Sure well, we're excited about this because not only do we do we get the classification of data, but we also get the.
Speaker Change: One time protection in the cloud so it's a perfect fit for our data protection module and again, what I talked about in the prepared remarks was that there's a lot of similarities.
George R. Kurtz: Because it's really about how data flows and data is in motion, not only in a company's organization but through all of their clouds and all of the applications. So I think it's a perfect fit. We're excited about the team, and we're excited about the technology that will be integrated. Of course, as part of our platform, we spend a lot of time on that making sure the customer gets the right user experience. And, you know, we'll get this closed, this acquisition closed out in the next couple of weeks, and then we'll be heads down with the integration. But so far, so good on our data protection module; we've got some wins there and a tremendous amount of interest in replacing the legacy DLP technology. Thank you.
Speaker Change: What I saw when I started the company and legacy <unk> to legacy DLP.
Speaker Change: I'd like to turn DLP, we call data protection, because it's really about how data flows and David motioned not only in our company.
Speaker Change: Company's organization, but through all of their cloud and all of the applications. So I think it's a perfect fit we're excited about the team. We're excited about the technology that will be integrated of course as part of our platform. We spent a lot of time on that and making sure. The customer has got the right user experience and we'll get this closed this acquisition closed out in the next couple of weeks and then we'll be heads down with the integration.
Speaker Change: But so far so good on our data protection module, we've got some wins, there and a tremendous amount of interest in replacing the legacy DLP technologies.
Andrew James Nowinski: Our next question comes from the line of Andrew Nowinski of Wells Fargo. Your question, please, Andrew. Thank you for taking the question. This is a really amazing quarter again, particularly in light of some of the noise that's been in the market.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Andrew Nowinski of Wells Fargo. Your question. Please Andrew.
Andrew James Nowinski: Thank you for taking the question I was just a really amazing quarter again.
Andrew James Nowinski: Particularly in light of some of the noise that's been in the market.
Andrew James Nowinski: So I wanted to ask about the expanded partnerships with Dell that you announced today and also about, I think, the Pax8 partnership that you announced at your user conference last year. I guess first, how did both partners contribute to results in the quarter relative to your expectations? And then second, have you factored in a contribution from those partners into your FY25 outlook?
Andrew James Nowinski: So I wanted to ask about the expanded partnerships with Dell that you announced today and also about the I think the pack seat.
Andrew James Nowinski: Partnership that you announced at your user conference last year, I guess first how did both partners contribute to results in the quarter relative to your expectations and then second have you factored in the contribution from those partners uninterrupted by 'twenty five outlook.
George R. Kurtz: I'll take the first part, and I'll turn it over to Burt. So we are obviously very excited about the Dell partnership. I'll start with them.
Speaker Change: Yes, I'll take the first part and I'll turn it over to Bert So.
Burt W. Podbere: Obviously, we're very excited about.
Burt W. Podbere: The Dell partnership I'll start with them I talked about that earlier.
George R. Kurtz: I talked about that earlier. And really, we're in the early innings, and we're winning deals, large enterprises all the way down to SMBs, taking advantage of their reach and, and their go-to-market motion. So, it's still early days, and we've already put up some big numbers from that partnership. When we look at PAX 8, and the like, again, it's still early days, but we've seen tremendous success. Particularly in the down market in the SMB.
Speaker Change: Really we're in the early innings, and we're winning deals.
Speaker Change: Enterprise all the way down the SMB, taking advantage of their reach and their go to market motion. So still early days and we've already put up some big numbers from that partnership when we look at <unk> eight and the like.
Speaker Change: Again, it's still early days, but we've seen tremendous success, particularly down market and the SMB.
George R. Kurtz: And what customers are looking for, even if the smaller customers are looking to solve big problems, they can't be hit by ransomware, they can't have an impact on their business. So it's a perfect model for us to get to those SMBs. And, you know, it's, like I said, early days, but tremendous results so far, Burt. Yeah, so I think that we're very excited about both the partnerships, both Dell and PAX 8. They represent, you know, additional routes to market, but it's still early days on both of them, as George had mentioned. But they're just one of many routes to market.
Speaker Change: What customers are looking for even if the smaller customers are looking to solve big problems. They can't be hit by ransomware. They can have an impact to their business. So it's a perfect model for us to get to those smbs and.
Speaker Change: It's like I said early days, but tremendous results. So far Bert yes. So I think that we're very excited about both the partnerships with Dell and Bax eight reps.
Represent additional routes to market, but it's still early days on both of them as George had mentioned, but there are one of many routes to market. We do believe that theyre going to bring deals to us and we're excited to have him on board as partners.
Burt W. Podbere: We do believe that they're going to bring deals to us, and we're excited to have them on board as partners. Thank you. Our next question comes from the line of Tal Liani of Bank of America. Please go ahead, Tal.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Liana <unk>.
Liana: Bank of America. Please go ahead Todd.
Tal Liani: Hi guys, So we had discussions this kind of the past few weeks about the pricing environment of the XDR market and the ability to offset this with add-on modules. And the question is, you touched on it, but I wanna ask: do you feel the contribution of Microsoft and Cortex from Palo Alto and others? Do you feel their impact on the pricing of individual components?
Liana: Hi, guys.
Liana: So some of the we had discussions this past few weeks about the pricing environment of the xdr market and the ability to offset this with add on modules and the question is you touched on it but I wanted to ask.
Todd: Do you feel the contribution of Microsoft and cortex from Palo Alto and others do you feel their impact on pricing of individual components of your package and is the story.
George R. Kurtz: of your package and what is the story. Is there a story about price compression of each individual component offset by the bundle, or that you just don't see the XDR pricing pressure that Palo Alto was talking about? Thanks. Well, again, I mean, I can try to focus on what we've been able to do. And as a leader in the space, we've been solving problems for a long time. And when we look at the impact that ransomware and some of these very prominent breaches have had, you're talking about hundreds of millions of dollars for companies. So to buy a platform that has the capabilities to stop breaches is really what customers are looking at. And when we think about sort of one-off modules or things of that nature, you know, for us, we're looking at the total package and the solution of what we put together.
Todd: Is there a story about price compression of each individual components offset by the bundle or that you just don't see the xdr pricing pressure that Palo Alto is talking about.
Speaker Change: Well again, I mean, I can try to focus on what we've been able to do and as the leader in the space. We've been solving problems for a long time and when we look about we look at the impact that ransomware and some of these very prominent breaches have had you're talking about hundreds of millions of dollars for company. So.
Speaker Change: To buy a platform that has the capability to stop breaches is really what customers are looking at and when we think about sort of one off modules or things of that nature.
Speaker Change: For us we're looking at the total package and the solution of what we put together and of course, it's a competitive environment, but you have to have a competitive product you have to have the right level of innovation and you have to have the right go to market motion, which we talked about in some of the.
George R. Kurtz: And, of course, it's a competitive environment, but you have to have a competitive product, you have to have the right level of innovation, and you have to have the right go-to-market strategy, which we talked about in some of the prepared remarks. So it's, it has been competitive, it has, you know, will be competitive. But at the end of the day, what we're finding is that customers want the right outcome. And we've seen that free is not free. And we've seen that good enough is not good enough.
Speaker Change: Prepared remarks, so it has been competitive it has we will be competitive but at the end of the day, what we're finding is that customers want the right outcome.
Speaker Change: And we've seen the free is not free and we've seen that good enough is not good enough and I think customers are smart enough to realize difference between price and total cost and that's what we've been able to show with <unk>.
George R. Kurtz: And I think customers are smart enough to realize the difference between price and total cost. And that's what we've been able to show that every dollar spent on CrowdStrike is a $6 return on their investment. And, you know, we're going to continue to deliver value and outcomes for customers. Thank you. Our next question comes from the line of Alex Henderson of Needham. Please go ahead, Alex. Great. Thank you so much. The first thing you ever said to me, George, was that you're a platform, not an endpoint company. I think you've been proving it with high alacrity over the last year.
Speaker Change: Every dollar spent on crowd strike as a $6 return on their investment and.
Speaker Change: We're going to continue to deliver value and outcomes for customers.
Speaker Change: Thank you.
Speaker Change: Our next question.
Speaker Change: It comes from the line of Alex Henderson of Needham. Please go ahead, Alex great. Thank you so much so.
Alexander Henderson: Firstly do you ever said to me George was it your platform not an endpoint company I think <unk> been proving it.
Alex Henderson: Yes.
Alex Henderson: Hi.
Speaker Change: Or do you over the last year.
Alexander Henderson: With the comrades coming in about... platformization, it sounds like the response that you're having here is that the companies that are trying to do that are We're really just offering bundles of products, but they're not truly integrated. Your platform is based on cloud-native microservices, API-driven. And I think if you were to talk about the degree to which you integrate any acquisition into that platform, it would be radically different than what we're hearing or seeing from some of the other players. So can you talk about why the microservices cloud-native architecture in a single platform integrated up front is the way to go, and how hard it is for companies that are trying to merge disparate packages into a platform that wasn't designed as a platform from the get-go? Because I think ultimately that's the key differentiator. And I would think that with the acquisition of Flow, you'll be able to integrate it much more rapidly because it's API-driven and microservice-based. Can you talk about that? Yeah, sure I can.
Speaker Change: With the conference coming in about.
Speaker Change: Platform Ization.
It sounds like the response that you are having here is that the companies that are trying to do that.
Speaker Change: Really just offering bundles of products, but they're not truly integrated.
Platform is based off of cloud native micro services, API, driven and I think if you were to talk to the.
Speaker Change: Degree to which you integrate any acquisition.
That platform it would be radically different than what we're hearing or seeing from some of the other players. So could you talk about why the micro service cloud native architecture in a single platform integrated upfront.
Speaker Change: Is the way to go and how hard it is for companies that are trying to merge dispirit packages into a platform that wasn't designed as a platform from the get go because I think ultimately that's the key differentiator here.
Speaker Change: With the acquisition of flow youll be able to integrated much more rapidly because it's API driven because it's micro service based can you talk to that.
George R. Kurtz: Thanks, Alex. It's a great question. And I do remember our early conversation, and you're absolutely right about it being the platform for cybersecurity when I started the company. So when we think about architecture, architecture does matter. And really, what we've created is a very data-centric architecture that allows us to get data at scale into our platform, leverage our AI, and then create outcomes. It's that collect once, reuse many.
Speaker Change: Yeah sure Ken Thanks, Alex It's a great question and I do remember our early conversations finally, and Youre, absolutely right about being the platform for cyber security.
Speaker Change: I started the company. So when we think about architecture architecture does matter and really what we've created is a very data centric architecture that allows us to get data at scale into our platform leverage our AI and then create the outcomes it's that collect once reuse many.
George R. Kurtz: We have a single platform, our competitors have many other platforms, as they call them; we have a single agent, our competitors have, you know, 56788 agents, depending on the competitors. So when we look at our architecture, it was really designed from the beginning to solve the problems of today and future problems. And the result of that is ease of use, the outcome that a customer is looking for, stopping breaches and lowering the cost, and future-proofing what they want. In my previous life, you know, I was involved in companies that acquired a lot of products. And I can tell you it is nearly impossible to stitch all this stuff together, particularly at the agent level, unless you're very diligent about it.
Speaker Change: We have a single platform our competitors have many other platforms as they as they call them, we have a single agent or competitors have 567 hundred $80, depending on the competitor. So when we look at our architecture. It was really designed from the beginning to solve.
Speaker Change: The problems of today and the future problems and the result of that is ease of use the outcome that a customer is looking for stopping breaches and lowering the cost and future proofing what they want.
Speaker Change: In a prior life I have been involved in companies that acquired a lot of products and I can tell you. It is near impossible to stitch. All this stuff together, particularly at the agent level.
Speaker Change: Yes, youre very diligent about it and I can tell you from a crowd strike perspective, we've been very diligent about our acquisitions as you've seen.
George R. Kurtz: And I can tell you from a Crowdstrike perspective, we've been very diligent about our acquisitions, as you've seen, and thoughtful about the pricing. But also, what's important to realize is that we bought products, and we really haven't sold some of them for the better part of 18 months because we wanted to focus on the integration, things like identity. Now we see the fruits of our labor.
Speaker Change: And thoughtful on the pricing, but also what's important to realize is that we bought products and we really havent sold some of them for the better part of 18 months, because we wanted to focus on the integration things like identity and now we see the fruits of our labor. So it is this focus long term diligent approach to our acquisitions I think that have helped us.
George R. Kurtz: So it's this focused, long-term, diligent approach to our acquisitions that I think has helped us because we started with a very innovative cloud native platform from the beginning. Thank you. Our next question comes from the line of Roger Boyd of UBS. Please go ahead, Roger.
Speaker Change: Because we started with a very innovative cloud native platform from the beginning.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Roger Boyd.
Roger Foley Boyd: Great, thanks for taking the question. And again, congrats on a really strong end to the year. I wanted to talk about Charlotte.
Roger Foley Boyd: Please go ahead Roger.
Great. Thanks for taking the question and again congrats on a really strong end of the year I wanted to talk about Charlotte the customers that we've spoken to that were part of that early access programs.
Roger Foley Boyd: The customers that we've spoken to that were part of that early access program sound pretty positive about both what the product can do today as well as the pipeline of where it could go in the future. George, you said it had a couple of positive stats around automation. Any updated view on your ability to monetize the Charlotte product or the timeline to monetization from here? Thanks. Well, yeah, and that is the goal. We already have paying customers in Charlotte; we just released it.
Roger Foley Boyd: Pretty positive on both what the product can do today as well as the pipeline and where it could go in the future. George you said it a couple of positive stats around automation any any updated view on your ability to monetize the Charlotte product or the timeline to monetization from here. Thanks.
George R. Kurtz: Well, yes that is the goal we already have paying customers in Charlotte and we just released it so the good news for us and I think the good news for our customers is they see the value and they're willing to pay for it obviously, we're in the early innings of this but the way we've architected as a foundational component of our platform. It allows us.
George R. Kurtz: So the good news for us, and I think the good news for our customers, is that they see the value, and they're willing to pay for it. Obviously, you know, we're in the early innings of this, but the way we've architected it as a foundational component of our platform, it allows us to create expertise around different areas of the platform, as well as automation, leveraging the native automation capabilities that we have. So our overall goal, again, is how do you drive automation in a stock? How do you modernize a stock?
George R. Kurtz: Two.
George R. Kurtz: <unk> expertise around different areas of the platform as well as automation leveraging the native automation capabilities that we have so our overall goal again is how do you drive automation in the stock how do you modernize the stock and how do you take the collective wisdom of crowds strike in its years of knowledge in.
George R. Kurtz: And how do you take the collective wisdom of Crowdstrike and its years of knowledge in vast categories and bring that to bear for customers, big and small? And so far, we've gotten the response from customers where they understand the time savings and the value that it can bring. So more to come on this. Obviously, we just got started on it over the last week or so, but overall, I'm very encouraged by what we're hearing and seeing from customers. Thank you. Our next question comes from the line of Matt Hedberg of RBC. Please go ahead, Matt.
George R. Kurtz: Fast categories, and bring that to bear for customers Big and small.
George R. Kurtz: And so far we've gotten the response from customers, where they understand the time savings.
George R. Kurtz: And the value that it can bring so more to come on this obviously, we just generated over the last week or so but overall I'm very encouraged by what we're hearing and seeing from customers.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Matt Hedberg of RBC. Please go ahead Matt.
Matthew George Hedberg: Gray, thanks for taking my question. I'll offer my congratulations as well, guys. Burt, your ARR commentary was helpful for Q1. I'm curious, this time last year, I believe you talked about flat net new ARR growth for fiscal 24. And obviously, I think you guys did about 6% this year.
Matthew George Hedberg: Great. Thanks for taking my question I'll offer my congrats as well guys.
Bert Youre <unk>, new air our commentary.
Matthew George Hedberg: Commentary was helpful for Q1.
Matthew George Hedberg: Im curious this time last year I believe you talked about flat net new <unk> growth for fiscal 'twenty, four and obviously I think you guys did about 6%. This year any any sort of directional guardrails, you would give us from a full year perspective in terms of.
Matthew George Hedberg: Any just sort of like directional guardrails you'd give us from a full year perspective in terms of what you're thinking about from a net new perspective? Hey, Matt, thanks. So with respect to ARR, obviously, we don't guide to it.
Matthew George Hedberg: Just think about from a net new perspective.
Speaker Change: Hey, Matt Thanks So.
Matthew George Hedberg: With respect to <unk>, obviously, we don't guide to it.
Burt W. Podbere: But we have talked about in the past where we've, you know, started the year in Q1 and built from there. And that's kind of really all I can really comment on about ARR; you can kind of infer where we're going with our guide. And but at the end of the day, our guide, the methodology has remained, And that's how we think about it. So, it sounds like you want it sounds like your commentary on linearity, you'd expect q1 to be sort of the low point for net new growth in your net new dollars. Yeah, that would be accurate.
But we have talked about in the past, where we've started the year in Q1 and build from there.
Matthew George Hedberg: And Thats kind of really all I can really comment on IRR, you can kind of infer where we're going with.
Matthew George Hedberg: With our guide, but at the end of the day our guide.
Matthew George Hedberg: Methodology has remained consistent and that's how we think about it.
Speaker Change: So it sounds like Q1, it sounds like your commentary on linearity you would expect Q1 to be sort of the low point for net new growth and your net new dollars for the year.
Speaker Change: Yes that would be accurate.
Burt W. Podbere: Excellent. Thanks, guys. Thank you very much. Our next question. Actually, pardon me.
Speaker Change: Excellent thanks, guys.
Speaker Change: Thank you very much.
Speaker Change: Our next question.
Speaker Change: Actually pardon me our last question comes from the line of John <unk> of Guggenheim. Please go ahead John.
Burt W. Podbere: Our last question comes from the line of John DiFucci of Guggenheim. Please go ahead, John. Thanks. Thank you for taking time to answer my question. Listen guys, as everybody said, these are really impressive results, no matter how you look at them, but especially as compared to others out there. I'd like to ask another question about, you know, the past is, I know, I know, George, you think, but let's say the past is the past.
John: Thanks, Thank you for taking my question.
John: As you guys see as everybody said these are really impressive results no matter, how you look at it put especially as compared to others out there.
John: I'd like to ask another question about zero.
John: The past us.
Speaker Change: I know George.
John Stephen DiFucci: It's great. It's great to see. But I'd like to ask another question about the future. I know Charlotte AI is the sexy new product. It's everybody. Are you an AI winner? Are you a loser?
Speaker Change: The past is the past it's great it's great to see but I'd like to ask another question about the future.
Speaker Change: I know Charlotte AI as the sexy new product, it's everybody or your AI winner or loser.
John Stephen DiFucci: I mean, and we'll see how that develops. But given your lightweight agent and all the data you collect, or even could collect, it just seems that Falcon for IT could be a whole new world for you, which might make it harder given it might perhaps be a different buyer, but certainly worth it. I guess, how should we think about the development of this product going forward, given your, you know, I know it just was generally available, but I'm sure you've had early conversations with customers. Well, I've got to tell you that the customer excitement around Falcons for IT is off the charts. When we talked about it, Falcon, and now that it's generally available, customers were looking for a better solution in this area. And one of the things that we found is that the security team has been solving a lot of IT problems and challenges for IT for a long time. And we really needed to carve out a home for IT.
Speaker Change: And we will see how that develops but given your lightweight agent and all the data you collect.
Speaker Change: Or even could collect it just seems that falcon for it could be a whole new world for you, which might make it harder given it might perhaps be a different buyer, but certainly worth it.
Speaker Change: How should we think about the development of this product going forward given you.
Speaker Change: No. It just generally available too, but I'm sure you've had early conversations with customers.
Speaker Change: I've got to tell you that the customer excitement around Falcons for it is off the charts. When we talked about it's alcon and now that generally available customers are looking for a better solution in this area and one of the things that we found is that the security team has been solving a lot of problems and challenges for it for a long time and we.
Speaker Change: Really needed to carve out a home for it. So when you look at some of our competitors in that market.
George R. Kurtz: So when you look at some of our competitors in that market, it's, you know, obviously, it's a pretty big market, but having a single agent and the ability to actually solve IT problems, which many of our customers were doing already, is fantastic. Again, it's early days, but the feedback and the interest are off the charts for Falcon for IT. And it goes to the heart of how we built the platform. To collect data, it doesn't have to be security data; it can be almost any data related to either our agent, first party data, or now third party data we can ingest. And that solves many use cases beyond what we originally came to market with. So I think the sky's the limit there.
Speaker Change: Obviously, it's a pretty big market, but having a single agent and the ability to actually solve problems, which many of our customers.
Speaker Change: Customers were doing already.
Speaker Change: Fantastic so.
Speaker Change: So again early days, but the feedback and the interest is off the charts for Falcon for it and it goes to the heart of how we built the platform to collect data it doesn't have to be security data can be almost any data related to.
Speaker Change: Either our agent first party data or now third party data, we can ingest and that solves many use cases beyond.
Speaker Change: What we originally came to market with so I think the sky's the limit there.
George R. Kurtz: Thank you. I would now like to turn the conference back to George Kurtz for closing remarks, sir. First of all, I want to thank all of you for your time today. We appreciate your interest and certainly look forward to seeing you at our upcoming investor events. Thank you so much. This concludes today's conference call. Thank you for participating. You may now disconnect.
Speaker Change: Thank you I would now like to turn the conference back to George Kurtz for closing remarks, Sir.
George R. Kurtz: So I want to thank all of you for your time today. We appreciate your interest and certainly look forward to seeing you at our upcoming investor events. Thank you so much.
Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.
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