Q1 2025 CrowdStrike Holdings Inc Earnings Call
Good day, everyone and thank you for standing by welcome to crowd strike fiscal first quarter 2025 results conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to participate you will need to press star.
One one on your telephone you will then hear a message advising your hand this waste.
To withdraw your question Press Star one again, please be advised that today's conference is being recorded I would now like to hand, it over to the Vice President of Investor Relations Maria Riley. Please go ahead.
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 crowd strike and Bert Colbert Chief Financial Officer.
Before we get started I would like to note that certain statements made during this call that are not historical facts, including those regarding our future plans objectives growth, including projections and expected performance, including our outlook for the second 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. 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 uncertainties, 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 entitled 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.
Hey, just a question 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 our Investor Relations website at IR dot crowd strike dot com or on our form 8-K.
George: Filed with SEC today with that I will now turn the call over to George.
Thank you Maria and thank you all for joining us for our first earnings call of fiscal year 2025, we start the year from a position of momentum and exceptional strength outperforming our guided metrics, our AI native platform wins at scale every geography every market segment and every salute.
<unk> area.
<unk> delivered a record Q1.
Our record Q1, net new <unk> $212 million growing 22% year over year.
Record ending.
365 billion.
Growing 33% year over year.
Record subscription gross margin of over 80% and record free cash flow of $322 million, reaching 35% of revenue and a free cash flow rule of 68, making us the only cyber security vendor of scale delivering this level of growth and profitability.
Right.
We achieved all of these records while closely managing every P&L line delivering significant year over year operating leverage and our fifth consecutive quarter of GAAP profitability.
As we continue investing in growth.
We're adding sales capacity investing in our market, leading brands and accelerating innovation, while firmly on the path to $10 billion and ending <unk>.
George: The foundational theme underpinning <unk> result is.
The power of the Falcon platform to consolidate cyber security at scale.
This is coupled with the markets unequivocal desire for a single AI powered software platform consolidator.
George: We're landing with more modules than ever before.
The number of deals involving cloud identity, or Falcon, nextgen fem modules more than doubled year over year.
And we're closing some of our largest deals ever.
We're consistently hearing that customers want to partner with us as they consolidate standardizing their cyber security future on the Falcon platform and investing their trust and trust rate as cyber Securities Northstar, Let me explain why.
We built the right architecture from the start the industry's lightest weight easiest to install sensor embedded with AI no system reboot required.
A single AI native platform console, not disparate fits together or siloed multi platforms.
Our architecture built from the start with what I refer to as gold plated plumbing allows the Falcon platform to gratefully land retrieve data once.
And then flight infinite security.
Data and compliance capabilities without any friction.
Is the definition of a true platform and.
And our platform strategy from inception continues to deliver the results.
With eight plus modules grew 95% year over year.
Our 28 modules are best in class on a standalone basis as rated by applicable leading industry analysts.
Combined and natively built into the single Falcon platform or solution modules work, even better together unlocking customer value characteristics of a virtuous flywheel.
The sum of platform adoption is even greater than the individual parts.
The Falcon platform is differentiated architecture creates a technological competitive moat around our ability to be cyber securities Premier platform consolidator.
Is something you can acquire or fixed later, you must build it right from the start.
Our platform architecture delivers the following unique customer outcomes.
Through consolidation the Falcon platform delivers faster and more effective cyber security than ever before our AI native platform is consistently evolving to close the gap between detection and response.
<unk> learnt to resolution time scales from days and hours.
Seconds in real time.
And now with Charlotte AI customers are experiencing more platform utility at faster speeds shrinking hours of their security workdays in 10 minutes.
Great hunting a supercharged.
George: Sponsor and remediation are revolutionized.
The AI powered stock is no longer a vision, it's a reality.
We stand out in our ability to secure diverse attack surfaces with the industry's highest protection levels.
Spanning cloud data device identity third party sources and beyond natively alerting in one place and automatically responding across the platform at machine speed.
No caso heightened go seek.
George: For platforms with their own UI languages, no multi agent bloat.
Stitch data silos.
Drew consolidation the Falcon platform delivers the extreme cost savings.
More modules customers adopt the more cost savings they realize that.
The Falcon platform consolidates point and pseudo platform vendors across points.
Cloud security fragments like CW P C.
Cm, ASTM DSM and see IEM products.
The entity protection.
Si E M.
Intel fee.
Data protection and DLP vulnerability management attack surface management compliance endpoint management suite and legacy and.
And next Gen EV.
And Edr.
As an industry organizations are buying many promises. Unfortunately, they are left with wasteful shelf, where point product learning curves and features that fail to deliver end to end outcomes.
The longtime cyber security adage of defense in depth is led to a new phenomenon expensive depth.
Consolidating on the Falcon platform reverses the ever increasing cost curve.
A recent IDC report Quantifies crowd strike extreme cost savings for every dollar invested in Falcon solution our customers recognize.
Of cost savings.
Our customers came to us asking for new ways to adopt the Falcon platform even faster.
Instead of acquiring Falcon module by module Redeveloped, the Falcon flex subscription model.
We can flex customers enjoy the best prices for the products they want today and tomorrow, while eliminating procurement and legal cycles for module use the.
The outcome for craft strike is even broader platform adoption.
Unlike vendors, who peddle wasteful elas are customers utilized what they purchase.
Because when you buy what you want and need when you want a needed utilization is natural.
Reclassifying recounting or repositioning existing business to concoct receive platform value when our platform delivers real value you don't have to give it away.
The three quarters since we built the Falcon Flex program the customers who have subscribed to this new licensing model represent over $500 million in deal value growing our share of customer wallet, while consolidating and simplifying their security.
Applying idc's analysis would imply Falcon flex has assisted customers and saving more than $3 billion.
Would have been spent on other products now thats extreme cost savings and indicative of the platform momentum, we're seeing with new and existing customers.
Through consolidation the Falcon platform delivers innovation to solve tomorrow's cyber security as well as broader IP and data problems.
Our position of cyber securities consolidation platform keeps crowd strike innovating.
Lead the industry forward. This focus has allowed us to ship game changing products at rapid pace.
Within months of our Bionic acquisition, we fully integrated <unk> into our Falcon cloud security suite.
Over the past few months, we brought our log scale next gen Sim into the console of all of our customers.
Beating their utilization of Falcon to replace legacy systems.
And more recently following yet another major Microsoft breach and just as cyber safety review boards findings, we received an outpouring of requests from the market for help.
Decided enough is enough there's a widespread crisis of confidence amongst security Nike teams within the Microsoft security customer base.
At the request of organization saddled with Microsoft <unk> licensing, we delivered Falcon for defender.
Our platform on ramp to help organizations of all sizes start utilizing <unk> to secure their Microsoft defender usage.
Looking for defender is delivered via the crowd strike sensor encompassing our industry, leading overwatch threat hunting services as well as mission critical reporting to help security teams do their job.
With Falcon for defend their organizations using Microsoft now have what we call the squared validation and verification missing third party protection layer for their security programs.
And with our sensor already deployed on customer system, we're dropping anchor on the beachfront real estate to not only transform cyber security, but also stop breaches.
Feedback has been overwhelmingly positive.
We now have the ability to reduce monoculture risk from only using Microsoft products and cloud services.
Our innovation continues at breakneck pace.
Applying the reasons for the market to consolidate on Falcon.
Thousands of organizations are consolidating on the Falcon platform. There are a few that stood out from the quarter.
A seven figure deal in a fortune 100, healthcare company, who is using Microsoft and experience to breach our industry, leading IR team deployed more than 46000 sensors in days stopping the adversary restarting business and importantly, keeping this business out of promotional vendor fanfare discussed.
Immediately adopted Falcon complete identity Falcon cloud security log scale next Gen Sim and Charlotte AI. In addition to removing Microsoft security products, they were able to move off their vulnerability management vendor and their legacy Sim too.
The consolidation outcome, 75% reduction in agent footprint by consolidating to a single agent and a 700% improvement in mean time to detect and respond taking average alert triage time.
From four plus hours down to minutes, we stopped the breach displacing more than three vendors along the way and now this customer experiences not only lower tcl, but also cyber security outcomes they hadn't thought possible.
A seven figure deal and a large middle eastern power and utilities provider that experienced many incidents using a regional point product endpoint vendor.
These incidents where each preventable with the Falcon platforms AI defenses.
Standardizing the Falcon platform this customer adopted crowd strike for endpoint identity cloud and next Gen. Tim consolidating five security vendors down to just one in a few short months during the deal cycle.
Lastly, our focus on solving cyber security and <unk> use cases inspired a multinational services customer headquartered in Japan to consolidate on the crowd strike in a seven figure expansion deal.
Acquiring four additional modules they successfully eliminated Tam.
<unk> AAV vendor and their vulnerability management provider.
This deal illustrates existing customers, taking the opportunity to further consolidate on Falcon beyond just security.
The platform data gravity and trust to make consolidation, Turkey for security and it teams alike.
These deals highlight the tempo and scale of Falcon consolidation.
It's not on a Powerpoint slide it's inside a single console with a single sensor and delivered on a single platform.
We see our prospects and customers using consolidation as an opportunity to transform trading expense and depth for cyber security, that's better faster and more cost effective.
Consolidation is it just a phenomenon happening with end customers. It's also a priority embraced and prioritized by our partners too.
Our MSP business, one of our fastest growing segments partners are coming to us to migrate their customers off legacy and sub standard point products as well as multi platform vendors and a large seven figure deal <unk> tire and industry, leading msft selected the Falcon platform to migrate.
Hundreds of carbon black customers in mass, representing an exodus of nearly half a million endpoints.
This is a prime example of an industry, leading MTR that develop their own award winning services on the Falcon platform consolidating on crowd strike.
And our expanded partnership with mandate and Google Cloud announced at the RSA Conference <unk> is migrating its management managed defense and VR customers to the Falcon platform.
Recognizing our market leadership and the need to deliver services on the best technology platform, perhaps break is the natural choice to migrate their customers off legacy AAV and other point products.
And our channel ecosystem at large we're seeing partners deep prioritizing other vendors on their line card to consolidate their time head count and go to market focus on crowd strike.
Our top 50 partners in every geo are growing and telling us they are doing less and less with other vendors.
Instead, increasing their focus and business results on Falcon.
Partners are a key driver of market consolidation, both representing our technology to their end customers and also consolidating their efforts away from anecdotal declining feature.
Feature vendors.
The power to consolidate on a single platform requires having the right technologies at the right time delivered on the right platform.
Our investments in hyper growth solution businesses continued to deliver market, leading capabilities and record results.
Here's our Q1 color on cloud security identity protection and lock field <unk>, Tim as well as several platform innovation areas.
While utilization is reaching unprecedented highs. This is largely driven by the AI Revolution of the past few quarters to date every company is or is quickly becoming an AI company every Cisco CIO and board member I speak with is experimenting with using AI in new ways.
George: We all know that AI is transformative.
And this transformation is happening in public and private clouds.
The cloud is foundational technology for building AI models.
George: <unk> AI and integrating AI into existing technologies.
The only way to safely harness the transformative nature of AI is through best in class security that operates at the speed and scale of AI built natively with AI with.
With craft strike.
As Hyperscale is print remarkable results as in a video continues to amaze and an AI hardware spend reaches gold rush levels estimated to be north of $60 billion in the last 12 months.
Strike is at the epicenter of securing the workloads driving the AI Revolution.
Where the next conversation.
Jensen Huang founder and CEO of the video recently validated this.
<unk> in our Q1 partnership announcements that quote pairing the video accelerated computing and generative AI with craft strike cyber security can give enterprises unprecedented visibility into threats to help them better protect their businesses and quote.
And this is why industry leaders across every vertical including the Ginnie AI companies themselves are choosing Falcon cloud security to secure their heterogeneous cloud environments consolidating multiple point products on the Falcon platform.
Here's a lighthouse example.
One of the world's leading Hyperscale is grew their adoption of the Falcon platform standardizing on the Falcon cloud security and an eight figure deal and a public press release, this customer and partner extolled the unified nature of our security platform and their ability to consolidate multiple cloud security point product on Falcon <unk>.
Security.
Our joint go to market partnership has evolved to focus on Falcon cloud security, where craft strike rises above other vendors to enable secure cloud consumption.
Driving our cloud security customer wins is the market embracing our runtime centric cloud detection and response vision that focuses on real time cloud visibility and protection.
Features like cloud attack path analysis.
<unk> scanning and most recently integrated ESPN and CVR.
A part is the only solution on the market that spans code application to the infrastructure on which everything runs.
Our latest acquisition of flow furthers, our competitive mode.
Adding in the industry's only runtime DSP in securing data both at rest and in motion.
Falcon cloud security has surpassed our garden of Unicorns, Deca, Corns and legacy vendors as one of the largest cloud security businesses in the market.
As of Q1 Falcon has been selected by <unk> 62 of the Fortune 100, as their cloud security provider of choice.
<unk> pioneered the creation of the identity detection and response category.
Identity protection module continues to be the only single agent solution on the market, giving us a major competitive advantage. Our active directory expertise has evolved to now support increasingly popular cloud identity solutions, such as Microsoft enter I'd.
Ordinary notice Azure <unk>, giving us the ability to support diverse customers wherever their identities reside.
Our sustained focus on identity protection continues to pay dividends not only winning deals, but also with industry analysts where crowd strike was named the overall leader and cutting their calls inaugural Dr. Compass, a key customer wins from the quarter includes.
A seven figure deal with a large healthcare provider, who is stuck in a broadcom contract and increasingly being pushed towards a multi platform hardware providers patchwork products.
Our identity threat protection module was a game changer for this customer deploying us in more than 100000 devices and allowing us to replace these other two vendors identity protection led to an 85% better meantime to respond for identity based attacks and motivated this customers significant cyber track.
Formation.
One of the solution areas I'm. Most excited about is our large scale next gen and business. There is certainly no shortage of market activity in the Sim space, where consolidation is a foot with M&A activity impacting splunk and more recently exited being an <unk> radar more happened in the Sim market over the past few months and a day.
In the wake of this consolidation the demand environment is right.
Each of these consolidation moves create immediate opportunity zones organizations.
<unk> organizations, our iconic classically questioning their legacy Sim choices and looking for new better and more cost effective ways to run their stock in the AI era.
With <unk>, representing more than 80% of the data going into todays spin.
We are naturally placed to disrupt consolidate and chart the future of the Sim market.
This is because of our large scale next gen. <unk> is already natively in the Falcon platform.
Already ingesting visualizing and Actioning, all first party crafts rate data for all of our customers.
While other vendors must buy their way into this market acquiring legacy technology. Our flag is already firmly planted in flying.
Our goal is to win the hearts and minds of customers through superior technology and outcomes, not elas forced migration and traps.
Here's why we're winning.
We have the right technology. Our next Gen immediately solves one of the biggest and most costly Sim challenges ingestion of data.
Strike data natively resides in the platform, requiring zero transportation costs zero storage costs and zero configuration.
We have also made it easy to ingest data from third party sources. Once the data is in the platform users benefit from our heads here any incident workbench, providing curated alert visualization delivering on the promises of xdr like never seen before.
Our next Gen. Tim has created for security users by security users, making running a cyber security program easier and more data driven.
And coupled with Charlotte AI going from an idea to action context to conquest and of course detection to respond is super charge for the AI era.
At our recent partner Symposium in Asia, and Europe, we receive standing ovations with viewers commenting that next gen is our biggest industry changing innovation.
We have the content with over 500 integrations, we welcome data from all sources to call. The Falcon platform Hall, while many competitors are closed and complicated and what day to day and Jess we are open the melting pot of cyber and data.
Our ecosystem as a proxy for the cyber security market at large for years, we have collaborated closely with Isps of all kinds from startups and innovators in our Falcon fund portfolio to industry stalwarts across cyber security and the broader it market.
With hundreds of native vendor specific connectors as well as the generic logging just theyre, bringing data into next gen image easier and faster than ever before.
Once the data is in cyber security experiences are enriched with the Falcon platform illustrating alert specific attack surface specific and campaign specific events, coupled with automated response through fusion sore Playbooks and Charlotte AI actions.
To date fusion soar is used by 47% of our top 5000 customers. We have created more than 135000 custom workflows processing more than 155 billion signals weekly to automate actions across the Falcon platform and third party products.
George: We have the right services, helping organizations move into their next Gen <unk> as a partner led opportunity.
Today's Sims were installed configure and oftentimes managed by partners.
Partners see where the puck is going and have approached cross rate to build their nextgen and practices.
These practices span data governance data movement dashboard configuration, and automation response creation as well as manage Sim services.
System integrators, like Deloitte UI Hcl tech as well as since specific partners like net builder are leading the movement with proud to break as their next Gen 10 platform of choice.
Here's an example of a noteworthy customer win.
The global 2000 manufacturing and machine system conglomerate with more than 100000 employees less lumpy for large scale next gen. Tim.
Eight figure deal.
Together with Accenture, we were able to successfully and swiftly migrate numerous data sources as well as ongoing Sim management to the Falcon platform delivering the outcome of consolidation cost savings as well as longer data retention and faster alert response times.
We have the technology platform the content the partners the customers and the native data gravity to transform the Sim market.
And it's happening right now.
Outside of our cloud identity and next Gen. Tim hyper growth businesses, New platform innovation areas are quickly taking flight.
Demand for each of these products is exceeding our expectations driven by both the innovative nature of our technology, but also secular consolidation market factors and frustration with legacy incumbents.
First data protection.
Frustration with legacy DLP remained had a fever pitch where logging into these products is akin to taking a time machine back to the nineties.
And a little more than a quarter, we sold our data protection module to several hundred customers.
Many of which are fortune 1000 accounts delivering results indicative of a hyper growth startup.
We win because we scratch the consolidation, it's delivering the compliance necessities without anything new to deploy and manage.
Ada protections coupled with flows DSP are.
Are important components of our ability to natively secure AI as well.
And with data, becoming increasingly important for AI model development customers want more than back in the disaster recovery for the data data protection is laying the groundwork for another multibillion adjacent Falcon market.
Next Falcon for it.
The desire to move away from endpoint management point products is pronounced and exceeding our expectations.
Organizations are looking to Falcon to deliver enterprise search patchy deployment device health and more all from the same sensor.
It's a very logical add on and our pipeline is already in the eight figure since shifting this module a little more than a quarter ago.
And lastly, Charlotte AI every Cisco is eager to see their employees become more productive.
Every Cisco wants their cyber security to be faster.
The productivity gains are real and the benefits of making cyber security easier conversational and instant multiply the cyber security outcomes the Falcon platform creates.
While still early our pov close rate is close to 90%, reflecting excitement for Charlotte AI.
Despite each of these solutions areas being young and the Falcon nest.
The feedback from prospects customers and partners shows we're on the right path for these technologies to be meaningful growth drivers and competitive differentiators.
Crowds strikes innovation engine is just another reason why customers have confidence in Falcon as cyber securities platform consolidator for today and tomorrow.
In closing I am excited about the consolidation crowd strike is driving in the market. The business results, we're delivering and most importantly, the falcon platform societal impact of stopping breaches over.
Over the past 12 months, our industry, leading incident responders and our partner network use Falcon to response at thousands of breaches and mezzanine crowd strike as the industry incident response authority.
These engagements often convert to net new Falcon customers.
Delivering a Q1 like the one we're announcing today is a strong reflection not only of the technological superiority of the Falcon platform, but also of the passion the tenacity and the mission focused from the very best team in cyber Securities.
While the talent war is ongoing <unk> remains a career destination.
Many vendors take great pride in best place to work designations.
I'd like to point to a figure that dimensionalize crowd strike as cyber security is a very best place to work over.
Over the past five quarters, we received more than 687000 applications from individuals who want to work for crowd strike.
These professionals decided that crowd strike would be the ideal venue to build a career.
And hiring low single digit thousands of these individuals are acceptance rate is low.
Our lower acceptance rate that to every Ivy League institution.
Its figures like this one that send a clear message to me to crowd strykers to customers to partners to prospect.
The cyber security community and to the market at large.
<unk> best talent build the very best cyber security and <unk>.
We have ample runway ahead of us to revolutionize innovate and of course consolidate.
This year and well into the future.
Bert: I'll now turn the call over to Bert for our financial update thank you.
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.
Additionally, the results. We are reporting today includes the acquisition of flow security, which closed during the quarter and was de minimis to revenue and <unk>.
<unk> delivered an exceptional start to the fiscal year, driven by strong execution and increased platform adoption as customers prioritize their cyber security budgets around consolidation on the Falcon platform driving bigger deals and increased wallet share.
We have demonstrated a consistent track record of execution profitably scaling the business to new Heights.
In Q1, we achieved net new <unk> of $212 million up 22% year over year, bringing ending <unk> to $3 $65 billion up 33% over last year.
Demand in the quarter was broad based across the platform our strong win rates remain consistent with the prior quarter and we built a record Q2 pipeline.
As George discussed the Falcon platform unique ability to consolidate multiple vendors along with the early success of our Falcon Flex program drove bigger consolidation deals in the quarter.
Customers are embracing crowd strikes platform strategy more than ever as evidenced by the number of deals with eight or more modules with grew 95% over Q1 of last year subscription customers with five six and seven of them are modules grew to 65, 44 and 28% of subscription.
Customers respectively.
And the number of deals involving cloud identity, or Falcon, Nextgen Sim modules more than doubled year over year.
Additionally, our dollar based gross and net retention rates were consistent with our expectations as we are executing well across landing retaining and expanding with our customers.
Moving to the P&L total revenue grew 33% over Q1 of last year to reach 921.0 million.
Subscription revenue growth accelerated to 34% over Q1 of last year to reach $872 2 million.
Professional services revenue was $48 $9 million, representing 18% year over year growth.
The geographic mix of first quarter revenue consisted of approximately 68% from the U S and 32% from international geographies.
Record total gross margin of 78% increased by 26 basis points year over year.
Record subscription gross margin of 80% increased 32 basis points over the prior year driven by investments in data center, and workload optimization and a consistent pricing environment.
Total non-GAAP operating expenses in the first quarter were $522 5 million or <unk>, 57% of revenue compared to 61% of revenue in the prior year.
As planned in Q1, we increased our pace of hiring growing total head count by 15% year over year as we invest in scaling the business to $10 billion and ending <unk> and capture the massive opportunities ahead of us.
In the first quarter non-GAAP operating income grew 72% year over year to reach $198 7 million and.
And operating margin increased by five percentage points year over year to reach 22%.
We once again delivered GAAP profitability, which grew to $42 8 million up significantly over Q1 of last year.
non-GAAP net income attributable to the crowd strike grew to $231 7 million or <unk> 93.
Diluted per share basis.
Cash and cash equivalents grew to a record $3 seven zero or $1 billion and free cash flow grew 42% over Q1 of last year to reach a record $322 5 million or 35% of revenue increasing to achieve a rule of 68 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 we see across the business I am pleased by our strong execution to start the fiscal year.
While the macro environment remains challenging the unique capabilities and data gravity of the Falcon platform, coupled with our Falcon Flex program are driving larger platform deal sizes consistently strong win rates and record levels of pipeline for the year.
With that in mind, we continue to maintain a consistent and prudent approach to our outlook and assumptions I'm in a macro environment that remains challenging.
We do not specifically guide to net new <unk> are net new air our year over year growth assumptions for the second quarter of the fiscal year or at least double digits up to the low teens.
And second we are maintaining our free cash flow margin target of 31% to 33% of revenue for the full fiscal year 2025, and expect Q1 to Q2 seasonality similar to last year.
Moving to our outlook.
For the second quarter of FY 'twenty five we expect total revenue to be in the range of 958, three to $961 2 million.
Reflecting a year over year growth rate of 31%.
We expect non-GAAP income from operations to be in the range of $208 three to $210 $5 million and non-GAAP net income attributable to crowd strike to be in the range of $245 seven with $247 8 million.
We expect diluted non-GAAP net income per share attributable to crowd strike to be approximately 98% to 99.
Utilizing our weighted average share count of approximately 250 million shares on a diluted basis.
We are raising our guidance for the full fiscal year 2025.
We currently expect total revenue to be in the range of $3976 three to $4010 $7 million, reflecting a growth rate of 30% to 31% over the prior fiscal year.
non-GAAP income from operations is expected to be between 891, and 916 5 million.
We expect fiscal 2025, non-GAAP net income attributable to crowd strike to be between $985, six and 1000 $12 million.
Utilizing approximately 251 million weighted average shares on a diluted basis, we expect non-GAAP net income per share attributable to Crouch ROIC to be in the range of $3 93 to $4 three.
Speaker Change: George and I will now take your questions.
Thank you.
As a reminder, press star one one to get into queue and wait for your name to be announced to remove yourself from the queue Press star one again.
Please.
Limit your questions to one.
Please standby, while we come back the Q&A roster.
And our first question comes from the line of Andrew Nowinski with Wells Fargo. Please proceed.
Okay. Thank you and congrats on another amazing quarter, particularly in a tough environment, where every single one of your peers has put a pretty mediocre results this quarter.
So you have so many interesting things going on with cloud and identity and Simba.
My question will stay focused on the Sim offering.
I think you've done a really nice job building out clearly has a lot of advantages over the legacy vendors like Splunk and <unk> and now it seems like the Sim market in general has been revitalized. Some I'm wondering how are you thinking about the opportunity with your Sim solution.
Speaker Change: Going forward and what are the what are you seeing in terms of Splunk in Q radar displacements, which are obviously some of the largest potential share donors. Thanks.
Thanks, Andy So when we look at this market as I've said in my prepared remarks, we've seen more movement in the last year that 10 years and I think a lot of the various factors in play in the market M&A and various partnerships and alike.
Contributed to.
A.
Broad interest and adoption of our technology. If you look at what we've done and what we've talked about for some period of time 80, 85% of the data that goes into a Sim comes from the endpoints themselves. So having this type of capability natively built into our platform now gives us data gravity and we've got.
All of our customers enables for Nexgen Sim and that's one of the things I really want to reinforce all of our customers are now enabled now becomes a sales motion to be able to convert them into nextgen, some customers and given the.
The movement in the marketplace. We've got many many customers reaching out dissatisfied with their current vendors and also interested in leveraging a completely integrated solution with the data. They already have so we think this is a massive massive opportunity for us and given what we're doing in this space and the innovations we're driving particularly.
With AI and the data we have.
We think it's going to be a.
Speaker Change: Many multi year journey of opportunity for us.
Very antiquated space and one that is ripe for disruption.
Thank you one moment for our next question.
And he comes from Keith <unk> with Barclays. Please proceed.
Okay, Great Hey, George Hey, Bert Thanks for taking my question here and nice start to the year.
Okay.
Thank you Thanks, George sure thing George maybe maybe for you.
The AWS win.
<unk> publicly intra quarter.
Interesting.
And of course, you've talked about them as a key customer and partner for crowd strike in the past can you just dig into how you've maybe expanded that relationship, particularly around cloud security I think you've referenced it a little bit in your prepared remarks, but could you maybe flush that out a little bit and also touch on how that's maybe setting crowd strike apart.
Competitively in the cloud security market.
Sure and even when we look at our cloud offerings as we've talked about in the past, we built an incredible portfolio of capabilities.
From code to cloud and everything in between whether that's agent agent list.
Yes.
Titled Management et cetera, So I think it's really reflective of what we built and the technological advantages that our offerings have for our customers.
When you look at someone like AWS, they're obviously looking for the best cloud technology in the market and we believe we have it and it's fantastic to be able to.
To continue to expand our relationships there.
This was also a falcon flex deal and I think again reflective of the fact that customers want to do more with us they want to buy more and we're giving them the opportunity to do this and in fact second while we're on the call. We actually just won another award best Cloud security solution by FC Europe.
Followed up by another five wins.
Speaker Change: <unk>.
As I have said for many years and you've heard me say it.
The best architecture, the best Technology starts from the beginning and it can't be stitched together and I think these wins really highlight what we've been able to do.
And how we've been able to deliver on what we built since I started the company.
Speaker Change: Thank you.
For our next question please.
And he is from the line of Brian Essex with J P. Morgan. Please proceed.
Hi, good afternoon, and thank you for taking the question and congrats from me as well on a nice set of results.
George I was wondering if you could maybe just broadly talk about the emerging products on the platform and now that they're becoming meaningful and scale I think last year, you kind of last quarter you referenced that they are each kind of <unk>.
<unk> segments in their own right. How often are you leading with the with individual solutions that are emerging solutions, whether it's log scale identity cloud.
Versus leading with the platform and pulling some of those emerging products onto the platform just wanted to get a sense of maybe how that go to market might be changing there. Thank you.
It's a good question and.
In general, we're leading with the platform, but maybe to focus in on the heart of your question, which is we have various use cases for the platform. So we may have a customer that comes to us and says Hey, we are using a legacy Sim we want something better right. We may have a new prospect that says the same thing we're using legacy Sim and we want to explore with crowds.
What I can offer us.
We have plenty of new customers that come to us and say, hey, we need a better solution of our cloud because what we have is not working or it doesn't give us the full spectrum of capabilities. So we can land with something.
Specific to that customers use case and Thats a lot of times, they're looking for something that they need to solve immediately and of course, we're selling the value of the platform. So whether it's an existing customer a new one.
Focused on delivering the full value of the platform, but solving their use cases today and into the future and obviously consolidating on what they have in place in terms of legacy you heard some of the incredible stats.
And delivering more value at a lower cost.
Thank you one moment for our next question. Please.
And it comes from the line of Tagliani with Bank of America. Please proceed.
Speaker Change: Hi, guys.
Two questions first is SBC went up 40% and that's on the back of 28% increase last year.
It's a material increase from previous quarters can you talk about stock based compensation and what's the driver for this.
And then second on the results.
The.
So.
For your for your platform sales total pricing is going up because you can bundling more and more components, but does it mean for those who are selling point solutions that pricing is coming down. The fact that you and others are driving platform.
Does it result in individual component pricing coming down can you talk about the pricing environment. Thanks.
Okay.
Thanks, Paul.
Hopefully you can hear me.
Okay.
I can hear you can you hear me, yes, I can hear you.
Speaker Change: So let's talk about SBC, so first as I think about SBC.
Think about the dilution right SBC in and of itself really doesn't tell you a whole lot until you get into dilution or and so you look at Etfs. So for US dilution as I've stated many times, we're looking at around 3% for the year and Thats well within our.
In terms of our expectations.
Terms of the pricing environment, the pricing environment for us.
We're in a consistent area for ourselves and how it impacts other point solutions, where you can see by our results we are winning.
We want to consolidate with us people want to actually.
Go to one single platform one single agent One center console those are all those things combined together those are the things that are making us win.
Think about the pricing environment I think about an advantage the crowd given our single platform given the fact that we have 28 modules to choose from.
Okay.
Speaker Change: Thank you.
One moment for our next question please.
And he is from Hamzah.
Further <unk> with Morgan Stanley.
Hey, everyone. Good afternoon, and very solid results and strong start to the year.
George just you spoke a little bit about public sector. There was an article last month.
About the state Department looking to really broaden their security vendors.
Microsoft, which you mentioned in your prepared remarks I'm curious.
How is that conversation going with some of those federal agencies, who are looking at crowd strike and how is the pipeline trending particularly ahead of the September fiscal year close in fed.
When we think about the federal market, obviously, the buying cycles happen, mostly in the third quarter for them, but we continue to maintain our momentum and gain momentum in those areas.
Many of the challenges that we've seen over the years from organizations outside of the public sector.
Plagued the government and when you look at the additional budget, that's being released into these governments given cyber security is important we think we can play a meaningful part.
In those opportunities so.
From our perspective, we continue to gain.
I think deliver technologies and now we've if you look at Nextgen seven we think is there.
Massive opportunity in the federal <unk>.
Base for our products.
Thank you gentlemen for our next question please.
And he is from the line of Matt Hedberg with RBC.
Great guys. Thanks for taking my question I'll offer my congrats as well obviously.
Difficult selling environment, you guys are doing really well.
I had a question for you.
The success you had with Charlotte AI I think you said, 90% pov close rates.
Great to hear and I know, it's still early but I guess the spirit of our customers overall journey I, Jeremy one of the things, we're hearing that that could potentially slow down deal cycles for broader software.
The broader software landscape I'm wondering as your customers adopt your AI platform, maybe even more specifically Charlotte AI are they seeing faster time to production for Gen. AI application numbers do speed up a customer's journey a journey.
Yes, I think what we're seeing is that customers are really embracing the fact that we can reduce their operational workload for their stock analysts, we could take hours of mundane grunt work and turn it into minutes and.
Not only answer questions with the collective wisdom and knowledge that crowd strike has developed over the many years, but also drive automation, we've talked about the Falcon.
Fusion store technology built in so when they look at what we've built and how we can save time and how it can drive AI automation.
<unk>.
Into an AI native sock I think this is really important for them and.
Overall.
Speaker Change: I think it's a fantastic technology.
As I mentioned, we won a few other awards were on the call. We actually won best AI category for SC Awards specific to Charlotte. So we're delivering on our promises and this is real technology in the hands of customers today.
Thank you one moment for our next question.
From Fatima <unk> with Citi. Please proceed.
Thank you for taking my question George I'm going to ask you a very high level question, just with regards to the $10 billion target have you read the emphasize that you've reaffirmed it with a lot of confidence and Theres a lot of reasons to anticipate why that's going to be a very likely outcome, but I wanted to ask you very specifically.
What do you feel like will help your relative velocity and attaining.
That sort of bogey. So frankly, what would have to go really right for that outcome to be realized within three years versus five years appreciating that you haven't put a timeframe on it then.
Speaker Change: I appreciate there's no shortage of product.
So much momentum in Falcon slacks, and a lot of the platform anecdotes that your platform Ization anecdotes, there I'd say that that you shared but would love to kind of get your perspective on what could change our relative velocity to that target.
Sure I think there's probably two key points here and then I'll see if Brent wants to chime in when we look at our ability to consolidate and I talked about in the call Falcon flex.
<unk> is a game changer for a lot of customers buying more buying bigger leveraging the platform.
And you see velocity of adoption using Falcon flex, so really excited about that and what it's going to mean for crowds right. The second piece again as I talked about in my prepared remarks is that next gen. Sumus natively built in so rather than.
Sending data out somewhere else and paying for the transport cost and all the complexity around that.
Bulk of the use cases and the data that is generated that goes into a sim is already in the platform of choice for customers and we see that being.
A meaningful opportunity for us to massive market opportunity and then other things like data protection I talked about that that is an industry.
Or technology, that's ripe for disruption.
Definition of legacy and we've got a fantastic product around it and combine that with Falcon for leveraging the the single agent architecture to do more than just security. These are all meaningful drivers for our growth any other comments on that thanks, George So one of the things that we talked about it back on with the $10 billion.
Number in five to seven years and along with that.
Give an illustrative example of some of the things that will get us other than what George has talked about in terms of Tam.
Talked about cloud being around in that same timeframe.
Two and a half to $3 billion, we talked about identity being one to one and a half we talked about next gen. Soon being one to one 5 billion. So you start adding up those numbers and you get more and more confidence in terms of being able to attain that number that's how we think about it internally.
Thank you.
One moment for our next question please.
And he is from Gabriela Borges with Goldman Sachs. Please proceed.
Hi, Good afternoon, and thank you for taking my question, George and Burt I wanted to follow up on one of my earlier questions on AI and more specifically when you talk to your customers.
Turning up the generative AI projects.
That impact with cyber security, so what extent any scenarios, where you may be.
On budget, maybe an acceleration in budget and maybe as part of that charge. If you could just touch on help us understand the technical differences between protecting clinic classic Clutterbuck.
Most of the cloud workloads running in our landmark connecting Ken Alan Thank you.
Sure So we see the opportunity.
Growing in a number of years ago, we talked about the cloud opportunity, we thought that was underrepresented by some of the market.
Researchers and now when we think about the proliferate proliferation of new hardware just look at how much new hardware has been procured over the last six to eight months right a lot of that is going towards generative AI workloads and.
You've seen the announcements with the video these workloads continue to be.
Something that needs to be secured and will be I think a huge opportunity for crowd strike given what we've built and the fact that not only can we tell you.
Sure.
What may be mis configured, but our cloud workload protection is really a.
It is a hallmark of what we do at crowd strike and it's providing real prevention capabilities into these workloads, which consistently come under attack. So that's the way I would look at it as a huge opportunity for us and we have spent many many years protecting cloud workloads and we've adapted that into protect.
<unk> Gen AI workloads.
And providing additional information on how those workloads.
Ron and how they need to be protected so.
Big opportunity for us today and in the future.
Thank you one moment for our next question. Please.
And he is from Alex Anderson with Needham. Please proceed great.
Thank you so much.
You guys had an outstanding quarter here and in an environment, where a lot of people are are struggling. So what I was hoping you could talk to a little bit is what youre seeing as youre talking to see.
<unk> you are talking to us.
<unk> C suite type people about what is causing their reticence to spend short term.
No youre, gaining share and doing well, but many aren't and I'm wondering if that's a function of there.
Challenges in figuring out how they're going to implement AI and to what extent, that's causing a slowdown in decision making process or is it macro or alternatively is it.
They are determined what theyre going to spend on and their spend shifting money away from other things, including some security and some.
If you look at the results of some of the other players. So what is exactly going on in the field right now with the decision making process.
Well, what we've seen and Bert talked about in the.
Prepared remarks is that <unk>.
Customers are looking to consolidate and save money on crowd strike.
And at the same time, Alex as we mentioned it's still.
A challenging macro environment, but I think the results youre seeing from US is the fact that the consolidation technologies and platform that we're delivering is working we're providing more for our customers.
And consolidating other spend that they have and they're taking that share of wallet and putting it with crowd strike from other vendors and we gave you. Some I think really interesting stats around that.
The simple version of it we've got the right technology.
Got the ability.
To reduce their costs, we've got a partner network, which is delivering massive value for us and when you put it all together, yes, it's challenging but if you've got the right solution with the right offerings.
Speaker Change: We think we can be very successful and I think the quarter that you. Just saw is that reflective of what we've been saying for a long time and what we delivered.
Thank you one moment for our last question in queue.
And it comes from the line of John <unk> with Guggenheim Securities.
Thanks, Thanks for taking my question.
So George you and your team have put up consistently seeing numbers, we just havent seen from anyone over what's been described as a challenging it spending environment and I'm talking about the last couple of years.
Especially this quarter.
I think we understand how early on you expanded the definition in the scope of the market you address and also more recently you did something similar in broadening your market influence to customers of all sizes.
But it's the backdrop remains the same at.
At least for the rest of this year.
And it doesn't get better like.
A lot of people thought it would at the beginning of the year.
Is it more of the same for you or are there other levers that you can or needs to pull to continue to put up impressive numbers that you have.
Sure. So thanks, John I think you said it right, we Burton I and the rest of the team focus on consistency and delivering value to our customers. If we can provide the right technology and solve the use cases and more importantly listen to them. If you look at Falcon Flex, which I talked about which we're really excited and I.
No it's going to continue to drive results for us that was an outcome of listening to our customers. We actually worked with several customers on putting that together.
It how they want it the way they want it reducing friction in the procurement cycle. So that's what we're going to focus on and.
I think I'll leave you with if we take care of the customer the rest takes care of itself and that's again, a hallmark of what we tried to do at crowd strike and what Bert and I are focused on every day.
And thank you with that I will conclude the Q&A session and we will pass it back to George for his final comments.
Thank you so much for joining our call and we look forward to seeing you next quarter.
Thank you everyone for joining you may now disconnect.
Okay.
[music].
Speaker Change: Okay.
Okay.
[music].
Okay.
Okay.