Crowdstrike reports fourth quarter and fiscal year 2020 financial results
Sunnyvale, calif.--(business wire)--crowdstrike holdings, inc., (nasdaq: crwd), a leader in cloud-delivered endpoint protection, today announced financial results for the fourth quarter and fiscal year 2020 ended january 31, 2020. “crowdstrike delivered a record-setting fourth quarter to conclude an exceptional fiscal year. with arr reaching $600 million, we continued to see broad strength in multiple areas of the business during the quarter, including 90% year-over-year subscription revenue growth, record net new arr and an acceleration in net new customers. throughout this past year, we continued to execute on the increasing demand we see in the market and the security cloud vision we pioneered. looking into fiscal 2021 and beyond, the powerful combination of our cloud-native platform and frictionless go-to-market positions us well as the fundamental endpoint platform for the future,” said george kurtz, crowdstrike’s co-founder and chief executive officer. commenting on the company's financial results, burt podbere, crowdstrike’s chief financial officer, added, “fourth quarter results well exceeded our expectations. our continued robust growth along with our relentless focus on execution and strong unit economics drove improved operating leverage, positive cash flow from operations and positive free cash flow for the quarter and year.” fourth quarter fiscal 2020 financial highlights revenue: total revenue was $152.1 million, an 89% increase, compared to $80.5 million in the fourth quarter of fiscal 2019. subscription revenue was $138.5 million, a 90% increase, compared to $72.8 million in the fourth quarter of fiscal 2019. annual recurring revenue (arr) increased 92% year-over-year and grew to $600.5 million as of january 31, 2020, of which $98.7 million was net new arr added in the quarter. subscription gross margin: gaap subscription gross margin was 75%, compared to 70% in the fourth quarter of fiscal 2019. non-gaap subscription gross margin was 77%, compared to 70% in the fourth quarter of fiscal 2019. loss from operations: gaap loss from operations was $31.1 million, compared to $31.2 million in the fourth quarter of fiscal 2019. non-gaap loss from operations was $6.7 million, compared to $28.0 million in the fourth quarter of fiscal 2019. net loss: gaap net loss was $28.4 million, compared to $31.3 million in the fourth quarter of fiscal 2019. gaap net loss per share was $0.14, compared to $0.67 in the fourth quarter of fiscal 2019. non-gaap net loss was $3.9 million, or $0.02 on a per share basis, compared to a loss of $28.0 million, or $0.60 on a per share basis, in the fourth quarter of fiscal 2019. cash flow: net cash generated from operations was $66.1 million, compared to $15.8 million in the fourth quarter of fiscal 2019. free cash flow was positive $50.7 million, compared to negative $0.1 million in the fourth quarter of fiscal 2019. cash, cash equivalents and marketable securities increased to $912.1 million as of january 31, 2020. full year fiscal 2020 financial highlights revenue: total revenue was $481.4 million, a 93% increase, compared to $249.8 million in fiscal 2019. subscription revenue was $436.3 million, a 99% increase, compared to $219.4 million in fiscal 2019. subscription gross margin: gaap subscription gross margin was 74%, compared to 68% in fiscal 2019. non-gaap subscription gross margin was 75%, compared to 69% in fiscal 2019. loss from operations: gaap loss from operations was $146.1 million, compared to $136.9 million in fiscal 2019. non-gaap loss from operations was $65.6 million, compared to $115.8 million in fiscal 2019. net loss: gaap net loss was $141.8 million, compared to $140.1 million in fiscal 2019. gaap net loss per share was $0.96, compared to $3.12 in fiscal 2019. non-gaap net loss was $62.6 million, compared to $119.0 million in fiscal 2019. non-gaap net loss per share was $0.42, compared to $2.65 in fiscal 2019. cash flow: net cash generated from operations was $99.9 million, compared to a use of $23.0 million in fiscal 2019. free cash flow was positive $12.5 million, compared to negative $65.6 million in fiscal 2019. recent highlights added a record 870 net new subscription customers in the quarter for a total of 5,431 subscription customers as of january 31, 2020, representing 116% growth year-over-year. crowdstrike’s subscription customers that have adopted five or more cloud modules increased to 33% as of january 31, 2020. launched crowdstrike falcon spotlight™ app for security operations, which integrates real-time endpoint vulnerability data and patch validation with prioritization and response workflows provided by servicenow and is available in the servicenow store. announced extending the capabilities of the crowdstrike falcon® platform's award-winning endpoint protection and endpoint detection and response (edr) to provide visibility specific to workloads hosted on google cloud platform (gcp) and microsoft azure and to provide edr and run-time protection for containers. falcon will now provide comprehensive visibility into all three leading public clouds. introduced endpoint recovery services to accelerate incident response and remediation. this new offering combines the power of the crowdstrike falcon platform, threat intelligence, and real-time response to accelerate business recovery from cyber intrusions. promoted michael sentonas to chief technology officer. sentonas joined crowdstrike in 2016 and most recently served as the company's vice president of technology strategy. financial outlook crowdstrike is providing the following guidance for the first quarter of fiscal 2021 (ending april 30, 2020) and guidance for fiscal year 2021 (ending january 31, 2021): q1 fy21 guidance full year fy21 guidance total revenue $164.3 - $167.6 million $723.3 - $733.5 million non-gaap loss from operations $(16.2) - $(13.9) million $(37.1) - $(29.9) million non-gaap net loss $(14.0) - $(11.7) million $(29.3) - $(22.1) million non-gaap net loss per share, basic and diluted $(0.07) - $(0.06) $(0.14) - $(0.10) weighted average shares used in computing non-gaap net loss per share attributable to common stockholders, basic and diluted 211.3 million 212.5 million these statements are forward-looking and actual results may differ materially as a result of many factors. refer to the forward-looking statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements. guidance for non-gaap financial measures excludes stock-based compensation expense and amortization expense of acquired intangible assets. we have not provided the most directly comparable gaap measures because certain items are out of our control or cannot be reasonably predicted. accordingly, a reconciliation for non-gaap loss from operations, non-gaap net loss, and non-gaap net loss per share is not available without unreasonable effort. conference call information crowdstrike will host a conference call for analysts and investors to discuss its earnings results for the fourth quarter of fiscal 2020 and outlook for its fiscal first quarter and year 2021 today at 2:00 p.m. pacific time (5:00 p.m. eastern time). a recorded webcast of the event will also be available for one year on the crowdstrike investor relations website ir.crowdstrike.com. date: march 19, 2020 time: 2:00 p.m. pacific time / 5:00 p.m. eastern time dial-in number: 409-937-8967, conference id: 5282383 webcast: ir.crowdstrike.com forward-looking statements this press release contains forward-looking statements that involve risks and uncertainties, including statements regarding our future financial and operating performance, including our financial outlook for the fiscal first quarter and year 2021. there are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: our limited operating history; our ability to identify and effectively implement the necessary changes to address execution challenges; risks associated with managing our rapid growth; our limited experience with new product and subscription and support introductions and the risks associated with new products and subscription and support offerings, including the risk of defects, errors, or vulnerabilities; our ability to attract new and retain existing customers; the failure to timely develop and achieve market acceptance of new products and subscriptions as well as existing products and subscriptions and support; rapidly evolving technological developments in the market for security products and subscription and support offerings; length of sales cycles; and general market, political, economic, and business conditions. additional risks and uncertainties that could affect our financial results are included under the captions “risk factors” and “management’s discussion and analysis of financial condition and results of operations” set forth from time to time in our filings and reports with the securities and exchange commission (“sec”), including our quarterly report on form 10-q filed with the sec on december 6, 2019 and in our annual report on form 10-k for the year ended january 31, 2020 that will be filed with the sec following this earnings release. you should not rely on these forward-looking statements, as actual outcomes and results may differ materially from those contemplated by these forward-looking statements as a result of such risks and uncertainties. all forward-looking statements in this press release are based on information available to us as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made. use of non-gaap financial information we believe that the presentation of non-gaap financial information provides important supplemental information to management and investors regarding financial and business trends relating to our financial condition and results of operations. for further information regarding these non-gaap measures, including the reconciliation of these non-gaap financial measures to their most directly comparable gaap financial measures, please refer to the financial tables below, as well as the “explanation of non-gaap financial measures” section of this press release. channels for disclosure of information we intend to announce material information to the public through the crowdstrike investor relations website ir.crowdstrike.com, sec filings, press releases, public conference calls, and public webcasts. we use these channels, as well as social media and our blog, to communicate with our investors, customers, and the public about our company, our offerings, and other issues. it is possible that the information we post on social media and our blog could be deemed to be material information. as such, we encourage investors, the media, and others to follow the channels listed above, including the social media channels listed on our investor relations website, and to review the information disclosed through such channels. any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website. about crowdstrike holdings crowdstrike provides cloud-delivered endpoint protection. leveraging artificial intelligence (ai), the crowdstrike falcon platform protects customers against cyberattacks on endpoints on or off the network by offering visibility and protection across the enterprise. 2020 crowdstrike, inc. all rights reserved. crowdstrike® and crowdstrike falcon are among the trademarks of crowdstrike, inc. 2020 2019 2020 2019 $ 138,537 $ 72,831 $ 436,323 $ 219,401 13,572 7,624 45,090 30,423 152,109 80,455 481,413 249,824 34,616 22,131 112,474 69,208 8,801 4,864 29,153 18,030 43,417 26,995 141,627 87,238 108,692 53,460 339,786 162,586 75,803 49,338 266,595 172,682 38,691 22,005 130,188 84,551 25,331 13,349 89,068 42,217 139,825 84,692 485,851 299,450 (31,133 ) (31,232 ) (146,065 ) (136,864 ) (145 ) — (442 ) (428 ) 3,203 321 6,725 (1,418 ) (28,075 ) (30,911 ) (139,782 ) (138,710 ) (333 ) (349 ) (1,997 ) (1,367 ) (28,408 ) (31,260 ) (141,779 ) (140,077 ) $ (0.14 ) $ (0.67 ) $ (0.96 ) $ (3.12 ) 207,565 46,416 148,062 44,863 2020 2019 2020 2019 $ 2,062 $ 156 $ 5,226 $ 689 955 49 2,486 205 8,408 1,234 23,919 5,175 5,050 583 15,403 7,815 7,888 1,080 32,906 6,621 $ 24,363 $ 3,102 $ 79,940 $ 20,505 2020 2019 2020 2019 $ 61 $ 105 $ 323 $ 327 31 32 123 143 10 11 41 113 $ 102 $ 148 $ 487 $ 583 january 31, 2020 2019 $ 264,798 $ 88,408 647,266 103,247 164,987 92,476 42,971 28,847 51,614 18,410 1,171,636 331,388 1,000 — 136,078 73,735 71,235 9,918 7,722 7,947 527 1,048 16,708 9,183 $ 1,404,906 $ 433,219 $ 1,345 $ 6,855 30,355 32,541 36,810 19,284 412,985 218,700 11,601 4,040 493,096 281,420 158,183 71,367 11,020 10,313 662,299 363,100 — 557,912 — — — 24 106 — 1,378,479 31,211 (637,487 ) (519,126 ) 1,009 98 742,107 (487,793 ) 500 — 742,607 (487,793 ) $ 1,404,906 $ 433,219 year ended january 31, 2020 2019 $ (141,779 ) $ (140,077 ) 23,026 14,815 — 191 487 583 35,459 28,642 6,022 3,576 556 551 79,940 20,505 (1,247 ) (1,152 ) 435 98 (427 ) — (73,067 ) (33,413 ) (86,594 ) (45,073 ) (43,467 ) (5,819 ) (6,570 ) (2,403 ) 9,173 3,564 17,526 971 280,768 131,117 (298 ) 356 99,943 (22,968 ) (80,198 ) (35,851 ) (7,289 ) (6,794 ) (1,000 ) — (779,701 ) (199,335 ) 9,581 — 228,976 99,950 (629,631 ) (142,030 ) 665,092 — — 206,896 — (6,158 ) — 10,000 — (20,000 ) — 198 — (242 ) — (1,887 ) — (2,330 ) (5,872 ) — 21,512 3,912 10,264 — 12,365 — 2,283 — 500 — 706,144 190,389 (66 ) (162 ) 176,390 25,229 88,408 63,179 $ 264,798 $ 88,408 2020 2019 2020 2019 $ 138,537 $ 72,831 $ 436,323 $ 219,401 $ 103,921 $ 50,700 $ 323,849 $ 150,193 2,062 156 5,226 689 61 105 323 327 $ 106,044 $ 50,961 $ 329,398 $ 151,209 75 % 70 % 74 % 68 % 77 % 70 % 75 % 69 % 2020 2019 2020 2019 $ 152,109 $ 80,455 $ 481,413 $ 249,824 $ (31,133 ) $ (31,232 ) $ (146,065 ) $ (136,864 ) 24,363 3,102 79,940 20,505 102 148 487 583 $ (6,668 ) $ (27,982 ) $ (65,638 ) $ (115,776 ) (20 )% (39 )% (30 )% (55 )% (4 )% (35 )% (14 )% (46 )% 2020 2019 2020 2019 $ (28,408 ) $ (31,260 ) $ (141,779 ) $ (140,077 ) $ 24,363 $ 3,102 $ 79,940 $ 20,505 102 148 487 583 — — (1,250 ) — $ (3,943 ) $ (28,010 ) $ (62,602 ) $ (118,989 ) 207,565 46,416 148,062 44,863 $ (0.14 ) $ (0.67 ) $ (0.96 ) $ (3.12 ) $ (0.02 ) $ (0.60 ) $ (0.42 ) $ (2.65 ) 2020 2019 2020 2019 $ 152,109 $ 80,455 $ 481,413 $ 249,824 66,107 15,808 99,943 (22,968 ) (13,350 ) (14,187 ) (80,198 ) (35,851 ) (2,081 ) (1,752 ) (7,289 ) (6,794 ) $ 50,676 $ (131 ) $ 12,456 $ (65,613 ) $ (572,115 ) $ (10,671 ) $ (629,631 ) $ (142,030 ) $ 27,310 $ (325 ) $ 706,144 $ 190,389 43 % 20 % 21 % (9 )% (9 )% (18 )% (17 )% (14 )% (1 )% (2 )% (2 )% (3 )% 33 % — % 3 % (26 )% (in thousands) 2020 2019 2020 2019 $ 43,417 $ 26,995 $ 141,627 $ 87,238 3,017 205 7,712 894 61 105 323 327 $ 40,339 $ 26,685 $ 133,592 $ 86,017 $ 103,921 $ 50,700 $ 323,849 $ 150,193 2,062 156 5,226 689 61 105 323 327 $ 106,044 $ 50,961 $ 329,398 $ 151,209 $ 4,771 $ 2,760 $ 15,937 $ 12,393 955 49 2,486 205 $ 5,726 $ 2,809 $ 18,423 $ 12,598 $ 75,803 $ 49,338 $ 266,595 $ 172,682 8,408 1,234 23,919 5,175 31 32 123 143 $ 67,364 $ 48,072 $ 242,553 $ 167,364 $ 38,691 $ 22,005 $ 130,188 $ 84,551 5,050 583 15,403 7,815 10 11 41 113 $ 33,631 $ 21,411 $ 114,744 $ 76,623 $ 25,331 $ 13,349 $ 89,068 $ 42,217 7,888 1,080 32,906 6,621 $ 17,443 $ 12,269 $ 56,162 $ 35,596 $ (31,133 ) $ (31,232 ) $ (146,065 ) $ (136,864 ) 24,363 3,102 79,940 20,505 102 148 487 583 $ (6,668 ) $ (27,982 ) $ (65,638 ) $ (115,776 ) $ (28,408 ) $ (31,260 ) $ (141,779 ) $ (140,077 ) 24,363 3,102 79,940 20,505 102 148 487 583 — — (1,250 ) — $ (3,943 ) $ (28,010 ) $ (62,602 ) $ (118,989 ) explanation of non-gaap financial measures in addition to our results determined in accordance with u.s. generally accepted accounting principles (“gaap”), we believe the following non-gaap measures are useful in evaluating our operating performance. we use the following non-gaap financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. we believe that non-gaap financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. however, non-gaap financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with gaap. other companies, including companies in our industry, may calculate similarly titled non-gaap measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-gaap financial measures as tools for comparison. in addition, the utility of free cash flow as a measure of our financial performance and liquidity is limited as it does not represent the total increase or decrease in our cash balance for a given period. investors are encouraged to review the related gaap financial measures and the reconciliation of these non-gaap financial measures to their most directly comparable gaap financial measures and not rely on any single financial measure to evaluate our business. non-gaap subscription gross profit and non-gaap subscription gross margin we define non-gaap subscription gross profit and non-gaap subscription gross margin as gaap subscription gross profit and gaap subscription gross margin, respectively, excluding stock-based compensation expense and amortization of acquired intangible assets. we believe non-gaap subscription gross profit and non-gaap subscription gross margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as these measures eliminate the effects of certain variables unrelated to our overall operating performance. non-gaap loss from operations we define non-gaap loss from operations as gaap loss from operations excluding stock-based compensation expense, amortization of acquired intangible assets, and acquisition-related expenses. we believe non-gaap loss from operations provides our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as this metric generally eliminates the effects of certain variables unrelated to our overall operating performance. non-gaap net loss per share attributable to common stockholders, basic and diluted we define non-gaap net loss per share attributable to common stockholders, as non-gaap net loss divided by the weighted-average shares outstanding, which includes the dilutive effect of potentially diluted common stock equivalents outstanding during the period. we may periodically incur charges or receive payments in connection with litigation settlements. we exclude these charges and payments received from non-gaap net loss when associated with a significant settlement because we do not believe they are reflective of ongoing business and operating results. free cash flow free cash flow is a non-gaap financial measure that we define as net cash provided by (used in) operating activities less purchases of property and equipment and capitalized internal-use software. we monitor free cash flow as one measure of our overall business performance, which enables us to analyze our future performance without the effects of non-cash items and allow us to better understand the cash needs of our business. while we believe that free cash flow is useful in evaluating our business, free cash flow is a non-gaap financial measure that has limitations as an analytical tool, and free cash flow should not be considered as an alternative to, or substitute for, net cash provided by (used in) operating activities in accordance with gaap. the utility of free cash flow as a measure of our liquidity is further limited as it does not represent the total increase or decrease in our cash balance for any given period. in addition, other companies, including companies in our industry, may calculate free cash flow differently or not at all, which reduces the usefulness of free cash flow as a tool for comparison. explanation of operational measures annual recurring revenue arr is calculated as the annualized value of our customer subscription contracts as of the measurement date, assuming any contract that expires during the next 12 months is renewed on its existing terms. to the extent that we are negotiating a renewal with a customer after the expiration of the subscription, we continue to include that revenue in arr if we are actively in discussion with such an organization for a new subscription or renewal, or until such organization notifies us that it is not renewing its subscription. magic number magic number is calculated by performing the following calculation for the most recent four quarters and taking the average: annualizing the difference between a quarter’s subscription revenue and the prior quarter’s subscription revenue, and then dividing the resulting number by the previous quarter’s non-gaap sales & marketing expense. magic number = average of previous four quarters: ((quarter subscription revenue – prior quarter subscription revenue) x 4) / prior quarter non-gaap sales & marketing expense.
