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CrowdStrike (CRWD) Down 0.2% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for CrowdStrike Holdings (CRWD - Free Report) . Shares have lost about 0.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CrowdStrike due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CrowdStrike Q3 Earnings & Revenues Top Estimates, Up Y/Y
CrowdStrike Holdings reported third-quarter fiscal 2022 results, wherein non-GAAP earnings jumped over two fold to 17 cents per share from 8 cents posted in the year-ago quarter. The bottom-line figure surpassed the Zacks Consensus Estimate of 10 cents.
CrowdStrike added $170 million to its net new annual recurring revenue (ARR) in the quarter, reaching total ARR to $1.51 billion, up 67% from the year-ago quarter’s levels.
During the third quarter, CrowdStrike witnessed growing demand for its identity protection and Zero Trust, Humio and cloud security modules.
Top-Line Details
CrowdStrike’s fiscal third-quarter revenues of $380.1 million surged 63% year over year and beat the consensus mark of $364.8 million.
Subscription revenues jumped 67% year over year to $357 million. The company added 1,607 net new subscription customers during the reported quarter. It had a total of 14,687 subscription customers as of Oct 31, 2021, reflecting year-over-year growth of 75%.
CrowdStrike’s subscription customers who adopted four or more cloud modules increased to 68%, and those with five or more cloud modules rose to 55%, and those with six or more cloud modules jumped to 32% as of Oct 31, 2021.
Revenues from professional services climbed 21.6% year over year to $23.0 million.
Geographically, 73% of total revenues stemmed from the United States, 13% from Europe, Middle East and Africa, 10% from Asia Pacific and 4% from others.
Operating Details
CrowdStrike’s non-GAAP gross margin remained flat year over year to 76%. Non-GAAP subscription gross margin was 79%, up 100 bps from the previous year’s reported figure.
Total non-GAAP operating expenses as a percentage of revenues were 63% compared with the prior-year quarter’s 68%.
Non-GAAP operating income was $50.7 million compared with $18.9 million in the year-ago quarter. Non-GAAP operating margin for the quarter was 13%, up 500 bps year over year.
Balance Sheet & Cash Flow
As of Oct 31, 2021, cash and cash equivalents were $1.91 billion compared with $1.79 billion as of Jul 31, 2021. CrowdStrike has a long-term debt of $739.1 million.
During the fiscal third quarter, the company generated operating and free cash flows of $159.1 million and $123.5 million, respectively. In the first nine months of fiscal 2022, free cash flow accounted for 31% of revenues. CrowdStrike generated operating cash flow of $415.1 million in the first nine months of fiscal 2022.
Outlook
Buoyed by the stellar third-quarter performance, CrowdStrike raised its revenue guidance for fiscal 2022 to $1,427.1-$1,432.9 million from the previous range of $1,391-$1,409.4 million. CrowdStrike now anticipates non-GAAP EPS of 57-59 cents instead of 43-49 cents. Non-GAAP operating income for full fiscal 2022 is expected to be $171.0-$175.3 million.
For fourth-quarter fiscal 2022, management anticipates revenues between $406.5 million and $412.3 million. As far as the bottom line is concerned, the company expects to report non-GAAP earnings per share between 19 cents and 21 cents. Non-GAAP operating income is anticipated to be $55.2-$59.5 million.
Management expects Humio acquisition related expenses to impact operating and free cash flow during the fourth quarter. It expects the net new ARR contribution from its newly acquired SaaS-based cybersecurity service business, SecureCircle, to be lower than $1 million in the fourth quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted -122.22% due to these changes.
VGM Scores
At this time, CrowdStrike has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, CrowdStrike has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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CrowdStrike (CRWD) Down 0.2% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for CrowdStrike Holdings (CRWD - Free Report) . Shares have lost about 0.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CrowdStrike due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CrowdStrike Q3 Earnings & Revenues Top Estimates, Up Y/Y
CrowdStrike Holdings reported third-quarter fiscal 2022 results, wherein non-GAAP earnings jumped over two fold to 17 cents per share from 8 cents posted in the year-ago quarter. The bottom-line figure surpassed the Zacks Consensus Estimate of 10 cents.
CrowdStrike added $170 million to its net new annual recurring revenue (ARR) in the quarter, reaching total ARR to $1.51 billion, up 67% from the year-ago quarter’s levels.
During the third quarter, CrowdStrike witnessed growing demand for its identity protection and Zero Trust, Humio and cloud security modules.
Top-Line Details
CrowdStrike’s fiscal third-quarter revenues of $380.1 million surged 63% year over year and beat the consensus mark of $364.8 million.
Subscription revenues jumped 67% year over year to $357 million.
The company added 1,607 net new subscription customers during the reported quarter. It had a total of 14,687 subscription customers as of Oct 31, 2021, reflecting year-over-year growth of 75%.
CrowdStrike’s subscription customers who adopted four or more cloud modules increased to 68%, and those with five or more cloud modules rose to 55%, and those with six or more cloud modules jumped to 32% as of Oct 31, 2021.
Revenues from professional services climbed 21.6% year over year to $23.0 million.
Geographically, 73% of total revenues stemmed from the United States, 13% from Europe, Middle East and Africa, 10% from Asia Pacific and 4% from others.
Operating Details
CrowdStrike’s non-GAAP gross margin remained flat year over year to 76%. Non-GAAP subscription gross margin was 79%, up 100 bps from the previous year’s reported figure.
Total non-GAAP operating expenses as a percentage of revenues were 63% compared with the prior-year quarter’s 68%.
Non-GAAP operating income was $50.7 million compared with $18.9 million in the year-ago quarter. Non-GAAP operating margin for the quarter was 13%, up 500 bps year over year.
Balance Sheet & Cash Flow
As of Oct 31, 2021, cash and cash equivalents were $1.91 billion compared with $1.79 billion as of Jul 31, 2021. CrowdStrike has a long-term debt of $739.1 million.
During the fiscal third quarter, the company generated operating and free cash flows of $159.1 million and $123.5 million, respectively. In the first nine months of fiscal 2022, free cash flow accounted for 31% of revenues. CrowdStrike generated operating cash flow of $415.1 million in the first nine months of fiscal 2022.
Outlook
Buoyed by the stellar third-quarter performance, CrowdStrike raised its revenue guidance for fiscal 2022 to $1,427.1-$1,432.9 million from the previous range of $1,391-$1,409.4 million. CrowdStrike now anticipates non-GAAP EPS of 57-59 cents instead of 43-49 cents. Non-GAAP operating income for full fiscal 2022 is expected to be $171.0-$175.3 million.
For fourth-quarter fiscal 2022, management anticipates revenues between $406.5 million and $412.3 million. As far as the bottom line is concerned, the company expects to report non-GAAP earnings per share between 19 cents and 21 cents. Non-GAAP operating income is anticipated to be $55.2-$59.5 million.
Management expects Humio acquisition related expenses to impact operating and free cash flow during the fourth quarter. It expects the net new ARR contribution from its newly acquired SaaS-based cybersecurity service business, SecureCircle, to be lower than $1 million in the fourth quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted -122.22% due to these changes.
VGM Scores
At this time, CrowdStrike has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, CrowdStrike has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.