CRWD - Earnings call transcript Q3 2020 | CrowdStrike Holdings, Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the CrowdStrike Fiscal Third Quarter 2020 Results 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. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions].

to conference like today your now Riley. Maria would hand to the speaker I ahead. go Please

Maria Riley

and and afternoon, me George Executive Burt call With for Officer. Financial on are CrowdStrike; Officer Podbere, Chief Chief President, Good Kurtz, you the thank your of and Co-Founder participation today.

the we I objectives those including within to only Act Securities forward-looking regarding future of plans, would date Before expected Private note made performance statements statements this facts certain of get as forward-looking not of conference this historical started, and Litigation are XXXX. during call. the of outlook call statements like the that meaning that are our our represent Reform These

the any have not our statements whether we on obligation as a believe subject actual current our made expectations we of or and results expressly statements risks and forward-looking to do are materially We statements update and uncertainties. alter new are based reasonable, While any because disclaim future is to undertake are the could section result differ quarterly on previously could time, financial on from the or to company's and Factors we Risk with the filed affect other company's SEC. factors results that time information, Further in with the these the otherwise. including make most SEC XX-Q filings recent titled in included information report events forward-looking Form

at may all on on revenue showing why press this Investor results on schedule our with be which discussed stated, currently non-GAAP X-K call non-GAAP. measures a otherwise or website non-GAAP SEC use filed our in we of the is Form financial financial In versus today. found our Relations be unless discussion Excluding measures release, ir.crowdstrike.com Also, GAAP available reconciliation will and

the to turn over will begin. I George to Now, call

George Kurtz

expectations. would revenue the delivered subscription board. significant you, Thank revenue we well growth, customers our by number above new highlight Across exceeding ARR exceptional end all which XX% quarter was high with us achieved and growth joining like XX% the achieved an quarter. growth, record we I of We total net Year-over-year, two and and increased subscription XXX% also guidance. third to thank you XX% today. for the results the our in Maria, milestones of

grew $X.X positive in generated ARR growth. strong our free second is to cash flow the the and in the our and industry our the foundation our billion which In quarter to continued at Security to First, growth over our drive and added future we rapid strong increasing significantly in cash balance. results leadership category scale, others outpacing demonstrate in Cloud view,

market Our the years is and work CrowdStrike for credit to accelerating is thank and to of focus hard thoughtful X,XXX momentum breaches to unwavering dedication serving and the their in of stopping our employees. a our I'd of team like all the every customers. member of execution, the culmination innovation

In once addition added quarter with XXX growth, in last record quarter. XXX is consecutive QX, we again of net a the customer net that new subscription number of saw versus new acceleration customers. seventh record we This customers our an a

million, $XX.X of solution XX% with customers winning with geographies is and was and is by sales industries The ARR new driven representing size customers. strong net our for enterprise across why quarter-over-quarter. record a SMB set reason growth also diverse We This simple. both

And consolidate to immediate to our use lightweight at our time agent scale. single we proven the customers enable agents and Our and endpoint increase realize all of native with deploy stopping is customers efficacy value. breaches, rapidly and platform which to that performance, cloud helps easy

it that important The also to is It smarter solution unlocks and data consumes. power the our of remember gets data CrowdStrike more

in long-term events is brain intelligence lake increases advantage. processes scaling trillion new CrowdStrike week and customer across correlates every and customer over our data our system, it workload endpoint the joining Our network base capable effectiveness, proprietary analyzes dynamically or and threat competitive X.X and Each demand; of to our real-time. our of is global graph meet

I the a would a of like to platform. take showcase power wins moment Falcon the customer to few highlight recent that

a XXX displacement The customer our products legacy solution. is next-Gen of that both, of win company the a at Insurance performance and competitive first superior highlights Fortune

it to After of not company beyond cheaper a and environment. deploy next-gen year security of XX% and trying less could their effective a vendor, this scale get to

with Additionally, their platform, performance built deploy engage with negatively had competitor to security vendors Falcon was evaluated relationship operating agent team applications server and system. CrowdStrike. was found it in the their with was when other to was be product critical impacted. frustrated, them the attempted They they too vendors' technology Even Their alongside incompatible legacy the and environment. security customer, environment, to a strong business prior this understandably prompting the across complex heterogeneous into customers' the another incompatible though the

efficacy compatibility, high During course, rigorous stopping performance application of strong testing application by CrowdStrike of the team ease and demonstrated deployment, security owners, breaches. and endpoint superior and

control, with threat won this We customer CrowdStrike helping protect is breaches, AV, the vulnerability seven OverWatch. our while hunting modules Falcon their adopting module. EDR, business cloud hygiene, NextGen streamlining management, across our IT from device including intel threat is platform single-agent and the this security significantly architecture. and stack customer our

XXX subscribes a of today was next-gen platform. field prevention visibility with would to retailer, help their capabilities, meet This one Falcon legacy with CrowdStrike's strategic tight multiple position with vendors is in with agents EDR now as teams. Falcon removing Splunk leading three customer I from and and their that's an user environment. with win with IT for these replace CrowdStrike and you a operations This a looking turn to priorities. the modules, we vendors a their that along and customer and initially will us team endpoint contender where next-gen single-agent sales close relationships and security integrations cloud our better technical are provide internal been greater vendors to displacing customer next solution Fortune new The with is share customer experience

with of query-based platform. their enterprise large will win how with and tools highlights high companies security share with needs. security meet by business could four that merge, can I you their AV value two faced today next-gen business ROI included EDR derive and technology After peer-to-peer a companies of across legacy the teams next were not one and These tools consolidating agents ineffective were scale were The that one patchwork dozens providers, units. deployed to Falcon partially

to that our to of Additionally, ability they broad many a challenges our be XX manage modular marketplace needed the triage employees organization strong disparate decided false security reputation CrowdStrike overwhelmed agent a because these in a or alerts with range positives was of organization address to the estimated tools. evaluate in This through would and so platform. single

the Falcon over attain customer After CISO XX,XXX over services lastly, one During the customer a this hardware similar with to to And seeing had servers, of to it that process, other with scale incident vendors replacing platform one incumbent team, new a large taken customer significantly environment, a [ph] overall increased was Falcon they our associated in increasing a quickly easy subscription the it multi-year would that lead where endpoints deployed will platform I their compelling how labor reach win and deploying the they from share can new and CrowdStrike this well by response demonstrates like than at these of over ROI less quick XXX,XXX weekend, sales deployment to engagements. scope Falcon level. eight year costs the the on and across deployments endpoints software, include to vendors, workloads. our months. engagements The estimated the

the company a this hit and is eliminating restore who with hackers. this normal remediate not CrowdStrike need in being We to After a able attack rapidly operations, year, were the CrowdStrike engage based services to customer, the to earlier stiff a pay ransom ransomware team. a for customer the incident Europe

was trust build completeness the at trust within remediation Even premium but Falcon based our combines is endpoint Falcon which the technology value professionalism and this that capabilities. our internal urgent our full our they of security selected this our a Recognizing to customer deep competition, customer in solution this solution Complete through expertise, priced Through subscription built became efficacy. and total on brief interested response team. with our services provided, limited Complete customer with the solution module, security engagement, turnkey though had that resources, CrowdStrike and

XX CIOs in loud their breaches clear automation to them CrowdStrike and the The we've operations. endpoint subscription than platform that both seven restore to stop are ARR more a and performance. times our that figure project. than CISOs free initial of workloads, for success measure efficacy skills with at is team their and have many to and the all help endpoints also the Services closed looking To ways we our operations multiple deal strategy, had the percentage They services turning for strategic resources. leverage that adopted up are simplify of increase platform customers enhanced protect partner Organizations and to gap bridge engagement larger are looking the the look after From and was conversations modules. of Complete the the message resonates to customers, an array increasingly security Falcon Falcon and three weeks completed within

platform clearly with customers. is strategy Our gaining momentum

four reported quarter, cloud third more the we modules, XX% percentage adopted increased have that customers or In the of quarter. the beyond last

five or more that modules report to to pleased I'm with cloud Additionally, XX%. customers increased

industry of in in a highest positioned Magic modules recognition more Platform capabilities it a for X. all based in received power rating released Protection Lean Review Organizations the span increases the continues from of the as we a Customer which and that highest value believe of The Falcon Forward Choice platform receiving strengthens the customer. wide a received Platforms Gartner's Report. adopt array garner also Peer on Quadrant row QX, strong for with our we customer the customer X.X the score leader for with Endpoint of vendors on year Critical Protection As week, our Second CrowdStrike's satisfaction Endpoint strategic customers second and Gartner Gartner that rating relationship workloads, last was for out This to includes CrowdStrike In recognition. Gartner's of builds in being

Additionally, within lastly, the Security strategy in Solution the of Forrester CrowdStrike its the highest category The Forrester and Report. the possible SE in all Research achieved in And Endpoint received XXXX CrowdStrike named Leader the criteria. Annual named vendors Endpoint Best ranking New score in a QX of XX Labs highest as report. CrowdStrike Wave

CrowdStrike threat strong the in graph modules database cloud We proprietary validates believe and single-agent workloads that the standard the today gold future. and growing represent the our of architecture, industry's recognition of securing

to We our simple, deliver CrowdStrike's will next-generation customers Fal.Con, centralized our customers. at suites a transition focused on help intensely from remain announced firewall Annual module success host month Cybersecurity we to that platform. management Conference, legacy new Last the of away firewall endpoint management

module We and to next platform available this expect security intelligence. which cloud have year, early that time span the Falcon endpoint modules at will calendar operations be generally XX security, threat

Falcon introduced applications. the optimize to of the their to Amazon spend in also will enterprise easily Marketplace be available to able migrating increasing number metered solution with this Web will Services, which workloads. the integrated be and for Elastic are month. billing We cloud and deploy An security their for Customers purchase customers AWS modernizing

responsible had cloud itself. for as teams in as dynamic manner difficulty that cost-efficient security and security However, an providing and have in workloads flexible is effective protecting AWS

a security CrowdStrike applications our billing option fulfills Store we risk their coming with consumption use unified management their we as data leverage metered seven to metered cases quickly in needs business application AWS fluctuations trusted use including batch easily prioritization. as usage demands. their and billing, applications. allow payroll new analytic cases, Store. With scale whitelisting, security Falcon new At Pay-as-you-go such important of customers is running all and is applications and third-party change. The of workloads. existing to processing to in will extreme for CrowdStrike Falcon, address the allow announced These investments cloud also customers a apps integrated vulnerability of ecosystem patch or for CrowdStrike to an customers CrowdStrike and range these will

partners investment from with opportunities on and want new same store and While significant still longer-term to dramatically partners save our can our platform-as-a-service, develop our expanding interest apps time go-to-market By we see time, reach. that using we are early, the of receiving applications. their on strong platform R&D

company partnership customer We business go-to-market expand leading information touch partners of announced We services customers new technology with of recently and our a consulting international to also continue a points. with thousands Wipro, and process ecosystem globally.

such CrowdStrike use utilizing out insider cases next-gen Falcon data to build will as platform proprietary that on specific Wipro is threat our their and service focus the malicious new detecting behavior. offerings graph leverage

go-to-market our expand will partnership globally. this reach that expect We

As we shift continue to massive including workloads, an cloud recognize in The cloud we seismic technologies has native opportunities. containers created this that to the unique competitive landscape, evaluate and the industry. with a is greenfield environment time

seen increase outlook. pipeline has a strong our base. increased adoption, and believe the has customer in our consolidation driving in these Additionally, and rapid customer We contributed within uncertainty which have market dynamics is an expansion results overall which among their in acceleration competitors, to our created an

is will workload the customers and ecosystem. the winner most protection endpoint It technologies in partner or with value delivers our that view leverages ultimate rich and native company platform the platform to the that cloud via its be

motion. all all believe go-to-market engine that companies attributes a also We important. platform in frictionless cloud-native across is built aligned foster inherent CrowdStrike's adoption of are tightly These sales to sizes and equally

industry, rationalizing acquired retooling workforce are focused intensely or the their on offerings, distracted protecting are learning to integrate technologies, trying competitors simply customers. their our we While on-prem by

We the lead unit engines enduring best-in-class frictionless and over we delivered in a We with believe with and first-mover future at in success rapid to expand continued economics growth. to scale multiple with business strategy continue are the strong advantage and our a customers, position have drive performing growth competition. high believe model for we go-to-market a

I'll to that, the turn Burt. With call over

Burt Podbere

good and George, you, Thank afternoon, everyone.

a my non-GAAP. during all unless today otherwise mentioned remarks except are As numbers quick reminder, revenue noted,

new delivered million net including areas and we cash ARR, positive we in George another strong surpassed business, customers the record We across As flow. board record ARR milestones discussed, continued multiple as generated margin. gross net and subscription achieved the quarter new strength outstanding free saw of important and $XXX

delivered added new quarter the $XX.X contraction reach quarter $XXX.X saw and both in new driven consecutive a SMB in we again ARR for in with quarter, third We churn million. growth. ARR, acceleration new another quarter. logo record within combined enterprise in million the year-over-year XX% In existing new our growth low business to strong for third base. was setting and with expansion once ARR net an ARR We customers, growth the The customer acquisition by and net

revenue of year net efficacy expand million. benchmark. land our dollar-based reach successful retention our exceeded year million. sales model, reach XXX% Subscription revenue our over to once Total of Additionally, grew our to grew speaks rate, the $XXX.X solution and $XXX.X XX% again QX to last of last in XX% which QX over

the was geographic In third terms markets. approximately from was US from of derived XX% breakdown, and of international XX% revenue quarter customers in

markets. international growing of the rapidly nature industry, market penetrating business and opportunity Our us security the our highlights continued massive global the these in front of success

Moving to our operating results.

SaaS reach we we As QX, in discussed compelling global and platform. and of In in margins. on focused recognize our even continued business operating have building scale, to benefits investments we a long-term as our growth previously, we model increased and the leverage cloud sustainable are with

XX% Third quarter to from year gross non-GAAP margin ago. improved a XX%

represents which versus XXX% we to of Number. we XX%, base. is the $XX.X modules focus is to XX% gross primarily our economics and increase a last our our our cloud or business This be attributable Scaling center ended by operating the expenses marketing non-GAAP key Number million including Total and continued revenue. top multiple year. two a point last quarter unit X.X, priority, of increased an is XXX of improvement margin data QX, QX sales $XXX.X revenue of Magic strong Magic in of why customer a optimization year to non-GAAP uptake efficiently million with third we in very from were subscription or efficiency. In Our basis drivers; and on which consider improvement

and reported loss low-friction include and our driving gross $XX.X drive sales our to net continue our strong and operating growth. rates that programs non-GAAP unit retention revenue subscription economics a efficient highly We marketing Key factors million. of

continued of line investing the a growth, and strong leverage approach business, in rapid gross our As top we expanding result profile quarter. to drove margin disciplined our operating in

consecutive QX on basis. our operating quarter dollar Our represents margin points non-GAAP year-over-year. percentage and XX margin fourth improving non-GAAP of operating both improved loss

achieving a leverage. a of remain operating and between investing top committed have proven history growth to line thoughtful and We generating disciplined balance maintaining

to XX, the year Non-GAAP of year net market invest fiscal fourth operating loss time aggressively XXXX, year fiscal the opportunity. into positive XXXX year. ending QX income the be fiscal achieve and non-GAAP $XX.X million the net continuing flow or $X.XX used per same period. The in common at XXXX quarter forward and while we million expect for shares in free non-GAAP cash to loss quarter was calculate Looking January in or XXXX, million per share, XX.X in QX to our breakeven third shares which in of compares average QX to million last of shares EPS a QX in fiscal was XXXX XXX.X $XX.X $X.XX share weighted

Turning cash positive $XX.X securities million and equivalents positive now flow to Cash operations increased the balance and from to sheet. free $XXX.X cash marketable flow was Cash, was million. million. $X.X

for guidance the XXXX. fiscal full-year our to Moving fourth and quarter

QX, the subscription to For growth to the be revenue reflecting total of range being of growth. is rate $XXX.X million, with of to revenue year-over-year driver a dominant XX%, in XX% $XXX.X expected

We $XX.X be $XX.X million $XX.X $X.XX $XX.X of net to Utilizing million non-GAAP net non-GAAP and million the weighted to non-GAAP average basic and expect XXX.X and loss loss we non-GAAP per in million. share, operations range the the of in of million, per share, net be to shares to in to used in diluted range loss expect $X.XX. loss range computing of diluted from basic

$XX.X to $XXX.X million, XX% our We growth currently be between the basic the over in computing raising per between the net shares total year. XXXX weighted net of non-GAAP expected million full in loss share, is and outlook million, net used range non-GAAP per expect a of are diluted be the expected to XXXX. of and from fiscal rate average loss to non-GAAP to million, million. range be $X.XX $XX.X Utilizing Non-GAAP year $XX.X and million share XX% XXX.X $XXX.X operations of be reflecting loss to for expect we We revenue million fiscal is and $X.XX. $XX.X loss to to in

the we are the term. with strong results over we pleased believe to driving are have capacity the long continue today We forward business and resources reporting the and

George your questions. now and will I take

Operator

from first J.P. with [Operator Morgan. you. Sterling comes Our Instructions] question Thank Auty

Your is open. line now

Unidentified Analyst

This on Thanks for Hi, my Sterling. is question. guys. for Matt taking

the of I five initial have at the modules. more to four, using adoption initial or a what terms terms of of, about multiple you are of in seeing sense get wanted But deals, seeing what guys been customers of you Just talked more. in percentage guys in stage, that know you modules? guys multiple just

George Kurtz

Hey, question. Matt. Thanks for your

respect would to modules provide, to the It be adoption quarter share on it with milestones. they we and discuss we call modules rates we periodically that We and vary adoption number this quarter-to-quarter. our thought for believe milestones come this of So are can in. as informative

more and and more now. we're out have in kind modules, bring and that's clearly seeing of upfront. opportunity is thinking purchase more what there the for we that we As customers it come modules to that's more And

Unidentified Analyst

then Great. just And quick follow-up. a

that are ones the modules, guys any are adoption? of terms there you Thanks. newer In specific increased seeing

George Kurtz

You're welcome.

and of So new beyond. given got the we module. those any think Control. IT when any one We've have vary. X Clearly, module got any about quarter, modules of given given Falcon quarter, fourth course, could and on And be vulnerability on is management. again, on or got new any -- We've it we've Discover, Device our could which we adoption, modules hygiene

Unidentified Analyst

Great. Thanks, guys.

Operator

you. Thank

Our comes Saket with Barclays Kalia from next Capital. question

is line now Your open.

Saket Kalia

displacements questions the the go of just one for in helpful commentary. Hey, here. that A thought George. displacements, changing winning, you, that was guys. taking first level meaning I what Maybe year, for quarter. of competitive talk the lot the you about really my Can last of example? maybe about all of sources profile you the you're are share at saw deals to market competitive compared for deeper those Thanks

George Kurtz

earlier the Well, aggressive obviously, the continue of the large great call, as to standpoint, of have dramatically their sheer our we etcetera. has an that obviously, given their very coverage, place changed the and small have uncertainty these we've in level acquisitions parts our seen companies we've taken sales and investment, in had competitive pipeline, we markets. of other call, some that From be the in and displacements R&D mentioned acquired, been environment some and of acceleration level just of

modules of coming we've so maybe what who So, into to have us seen get we year about of incumbent cycle customers the that were even solve are to problem. existing provider the their testing and earlier capabilities various is and for far ready next some to talk renewal now a the

that's place. some they incumbents acceleration of So with is dissatisfaction a just in seen of drilling taken the that and had pipeline what we've the acquisition, acquisitions general have the

Saket Kalia

you, is most of about the building across that customer touch disclose, effort just business enterprise but sense. thinking was And willing of it. just for been inside Can And what makes my this follow-up if mid-market how really will? team when if what the for I maybe maybe you Burt, about of -- kind there lot balanced customer in addition a are mix point, is versus Got some going? to ARR for the on you've That additions a size. mid-market nice you think mid-market/SMB, is of at you sales sales time is clearly, enterprise, number and quarter. talk just

Burt Podbere

the question, for Saket. Thanks

strategy enterprise and verticals In we acceleration in customer SMB So, in during we outlined which great model, is space, new in the efficient both aligned with we our but less. very is about strong clearly cloud-based is seen deals massive to adds us growth we have SMB of news SMB address IPO. are customers, certainly -- The the there discount are number a obviously, smaller, our manner. able a of space, because the that our

about or going both, we're quarter as as us, vary efficient we're them we're in markets, equally not. after we greenfield which of, both. terms And in in particular in and acceleration of any both for in bigger could because a so both And think investing has

both happy we're of now, right those markets. So the with really acceleration in really,

Saket Kalia

queue. in get guys. back I'll helpful. Thanks, very it, Got

Operator

Thank you.

with Alex Our next Henderson from Needham. comes question

now open. line Your is

Alex Henderson

much. Great. very Thank you

in wanted clarify, Ukraine, you in just are right. I based not California, guys First, to

George Kurtz

That would California. be correct. Sunnyvale,

Alex Henderson

you've outstanding execution So the first really ask was, had across question, to here I wanted obviously board.

be bit off. talk that is there Your if about just in products degree go model incremental scalability growth to sustain up the rates? in these little much it'd model. staff obviously, the Can to able can a is your you're that exceptional taking think And you different to through how you order helpful than typical an capacity And growth. deliver I need add to you

George Kurtz

And saying, Well, start just execution phenomenal by the great question. of out lot entire the with I'll noise team, environment. obviously, a despite the in

So, as we're sales think terms team that. world. as excited very well side the And all around I technology. been personnel have on the We've about in built, model that's both the hiring a and we've the aggressively of operating to financial we side the really the testament that on

our As of Burt inside with trials our robust our and team trial-to-pay. sales bit talked a go-to in-app is earlier, market little piece a our frictionless model

you adding unit the world the get technology and economics in again, we're look them of speed productive hardest that's one areas. But formulaic can to really folks, we've people we're the at created do. them up appropriately hiring in a very way quickly. get And tell to add to those really closely lots and I we So, things on of board and

quickly a think maintain and and built, execution. really we've been testament that. So, And level we it is to that the grow of able feel this really model people about this and to the I good we've

Burt, anything add? to

Burt Podbere

Thanks, George. Yes.

very capacity go it. we point our unit it the worked a planning, I'll closely. When George go at we Just economics said, as Finance with add sales. following. behind look closely is through and we the through the very They produce we worked plan, one

amount come in allocated and standpoint, as that company, can appropriately. sure sure, the we we absorb so And resources make territory folks can make we've a a from of the

Alex Henderson

and opposed had I Second Black with contribution Carbon you vast issue question, currently. by those One, -- to more being versus was the two How the as majority weigh meaningful a of slice talking any acquired think about disruption Obviously, the the bread of the out other, into channel sides of of import that time? the the slice if opportunity as the to does we any there scaling Black over with either VMware, do of terms upside [ph] Dell understand your or of bread or this relationship sell channel. of to are Dell model a it, here I related And strategy? Carbon in SecureWorks to could. to you loss The coin. of to that is than how that

Burt Podbere

Hey, revenue. the Dell de our Thanks of for in the X% it's Burt. standpoint, today. Approximately, our minimis of it's question. terms business From

And with. been the not out we're think it an it's modeled that's of So impactful piece business. we when we even begin how the about models, how building to

George Kurtz

They're I have looking And in also feel best-of-breed really area. same strong would we this do the -- remember, say, customers, and I'll with relationship obviously, way. George -- for I'll also a still SecureWorks. And we say that feel

wide is to open So obviously channel that us. still

relationship. it's And been good a far so

Alex Henderson

Great. very Thank you much.

Operator

Thank you.

from Our Nomura Eberle next question Chris Instinet. with comes

Your line is now open.

Christopher Eberle

potential providing that detection. to Are CrowdStrike offering taking we continue hear One for and question. be only firmware the seems to still yet customers thing of importance Thanks is and customers vendor seen that from that services from you the from why offerings? even there and on the similar vendors to close out touch -- anything other guys add others maybe have such

Burt Podbere

Yes.

this element it we that And capabilities think out that's have have of and important to from when increasingly preventing make that's supply more perspective able to we becomes even important I system, stuff one. I the which, that in deep these figure technical reflective work I have look of the many government firmware But operating that others really chain So, the breaches don't. be even features just a think is one at below attacks, number an we space. think, and it seen, as many in

able p great were one thanks feature to again, have, we the So CrowdStrike, we to

obviously, that ut is a protect together. larger it threat from becoming important more perspective, for more to and chain. But supply organizations their

Christopher Eberle

just And progressing? how and mobile one. quick then Great. Update other on one that's

George Kurtz

lot Still We've is sure. got George. interest. days. This a Yes, of early

we I the when seen, understand We we're market, some continue continue add think add come how of so encouraging beginning. We to point. this it's with at works. get add along that path, and to We but still very detection that's begin to to We've area, in as And just it days. going begin the model we to many collect data. that. been wins from something. We modules, to that new capabilities prevention. early nice our we And And

Christopher Eberle

Great, Great thanks. guys. job,

Operator

you. Thank

question next Gur with comes Talpaz Our from Stifel.

open. is line now Your

Gur Talpaz

first you, off, Thanks for taking congrats the each launch about management. you One host-based talked Okay, George for of my And and Burt. the questions. great. questions. firewall on forthcoming George, of Two results.

initial And the wanted in better sole all to module. customers of endpoint augmentation what I to of one the on so provider want the to you're ultimately understand seeing allows as standardize to CrowdStrike to interest move also that for endpoint wanting them we past gauge terms security.

George Kurtz

question. Good thanks. Sure,

is helping legacy their the the to kind that they last customers in is manage demand, looking One for those terms are the a of that lot were to suites our out customers firewalls. easier in of firewalls. that found we And talking is things from way one the and of manage of and that an vestiges there roadmap, customer module it of again, of driven

That another replacing out in of kind around look legacy we the that way was there. the that component we're Obviously, areas, EDR. hanging as already continue to, So, fully that was module anti-malware in particularly acceleration again, a doing just at vendors. many

and a that suite, again, lasting, least on was of still to that a were year. the come we holding So, encouraging piece. even us next of out them the And for they at feedback excited customers, sort continue us have really comments to of their lot early small to that part Fantastic if anti-malware from path. push using down

Gur Talpaz

That's think helpful. customers improvement margin what year? forthcoming when you and Maybe then targeting them? of motion sort for next important some about give the frictionless when you; trial sales you in And the and year, colors in next into getting you before buy positive conversion thinking a us is of on Burt how you're move about can margin of QX you

Burt Podbere

Thanks, Gur. Yes.

So in few things there.

seen, next got our the for we times seen on operating to about enter to in both that year put the put momentum able biggest we we margin, us We've into frictionless whether continue think it's about up we in-app income aspects motion, and it together flow in of go-to-market when have QX free Both when trials with driving So equally uptake, year. We has positive when think, of don't system, about operating non-GAAP business think that is the the the have one, indicate outlook the in are ensure we've we've as George able I both -- giving And with business, and tech percentages frictionless we're those cash we give of be focused been important ever or QX. as that we accelerating as business. the invest right. whether but a been pipeline the the confidence, talked many the a in breakeven continued the the out on you trial-pay. and it's necessarily to as -- next

Gur Talpaz

Thanks, great. That's guys.

Operator

you. Thank

Our of next Gregg question Moskowitz from Mizuho. comes

line open. is Your now

Gregg Moskowitz

Thank a very strong as much really quarter. on well Okay. and you congratulations

capturing months X.X only outdated update few events think last a can X week. trillion. over I from was Graph trillion number. significantly So, now is a per assume the ago, that I was But George, Threat this

database importantly, this but if us over of you this long earlier, I'm of growing? elaborate to can on this a brings the So, you wondering term? as CrowdStrike give touched a both how on sense sizable can And well today you fast distributed how competitive is advantage as more

George Kurtz

Absolutely.

yes, the earlier again, were I year. of in So think just, numbers those some earlier

to continue grow collect. data that we the we So,

in very to unique getting help and grow us in the we to view been have start learning. It's that industry that drivers to time important it's also base. a one that advanced element machine we've data really continue built, bespoke a again, [ph] breaches these graph a to strategic that's customer weapon as And has real continue element it. time. is our identify technologies that of our real very and the think We them used from to We

becomes for with keep from data up consumes, The data smarter becomes our and harder capture moat. And gets really and we'll what of level perspective, that competitors data that more harder grow is it. continue to So to and that. it it a the

certainly it crown our technology of is So, stack. jewel

Gregg Moskowitz

the a of any are the you over around Okay, then level. perfect. get changes months lot so? at Have in past at questions Burt. we or seen for And endpoint pricing There environment discounting that all the rates few

Burt Podbere

Greg. Thanks,

are the me our start terms that fact with with very pricing good in market. dynamics see let So discounting, we're to with comfortable that continue we to of going the where Combine in disciplined we market.

to continuously try that value. on there out others with and seen compete we have win us We

Gregg Moskowitz

Terrific. you. Thank

Operator

you. Thank

Erik question Securities. comes Suppiger from JMP next with Our

Your line open. is now

Erik Suppiger

Thanks for the taking Yes. question.

talk enabling you expectations. I a over about Burt, think, your First up pull free flow around generation, little bit timing that notable to was could improvement, off, a cash what you is

Burt Podbere

and it board, Again, Sure, respect an specifically amount board, gross of of year. line, QX. enabled unit company those outline We've We've has we have leverage to All to Eric. continued the us going economics. strongest what the of come a the lot momentum combined margin OpEx. we've seen opportunity strong and seen with out the to operating think seen we've seen next with across happen top pipe in in seen Thanks S&M the ever incredible things history. to the the of We've is question. Across for just course, execution.

Erik Suppiger

consistent of been previously a you Did what outlook terms to maintain in had for you looking OpEx dollars?

Burt Podbere

aggressively that Yes. and all. haven't changed to And we continue invest we at

Erik Suppiger

Okay.

benefit aggressively you long And in seen Symantec's resumes of population? much of from hire is out you have Symantec? going that, curious, to just of the acquisition be or light a to there how of opportunities I'm that that in more acquisition, Secondly, do think terms

George Kurtz

from seen acquisitions. we've general, resumes in of many Well, the

obviously, there specific customer So, trend a stop base I looking better continues is, the advantage not outcomes, and two Symantec. installed that's to I'll there. base massive is think for to there, out to to cloud. breaches, of. a move start looking for accelerates us just take And great it's And the it to Number customers looking of

it areas. number think the opportunity. two it the in doing about We've been concern R&D accelerates uncertainty one. the investment, One customers' just So, and we're move going a be also And not we're partner limited. are looking them dealing to with enterprise for technology, great to excited coverage is sales, prevent for customers And I some time for if there really only breaches. now, and number to after that two, but the is and service support help account

Erik Suppiger

Thanks. Very on a good. Congratulations quarter. great

Operator

Our Thank next Capital Instructions] you. Markets. from RBC with question Hedberg comes [Operator Matt

Your line is now open.

Matthew Swanson

is This thanks. Matt for Yes, Matt. on Swanson

talk existing bit of and some you capacity little feel just from where aggressive overall hiring ramping talked of still. have now? those about we've investments a productivity amount sales reps. you on like, So, also about you touched reasonable force Could right maybe feels you is the sales It a

trying kind gauge of a to Just that. on get

George Kurtz

Matt. Yes,

where put Magic plan, the with of like look dovetail we Number. capacity Magic on to together Number the things we we I Number. one We forecast. our with where So, mentioned, respect time as and And is are the at are Magic we look every into we the

And to be long in our with hit very to terms see, comfortable capacity feel so able comfortable as we targets. our we we're what of

Matthew Swanson

you're question. platform start the environment questions feel then When like a of than into playing a different you second little go some about of deals? your a of breadth these when competitive and little maybe do the some endpoint the you sell given And solutions into we're All to legacy of more peers, trying bit to right. peers, maybe and a abstract talking game you're

George Kurtz

areas I These a think -- Workday endpoint cloud opportunities Salesforce, and cases look provider. part risk. we're and ourselves big of bellwethers as other different security strategy we overall well, not being just the are so view we're at strategic. been pulled many at leader very leaders would our I IT level, as reduce CIO right? are hygiene like in solving Board Well, cloud and mean, and to I ServiceNow, again, use like we've operating the Because Many an of

and So time in we a heard And the terms the our is restoring on competitors. reducing selling you've multiple endpoints, on it It's actually when story. we're we harmonizing agents, those that a an beauty of headcount. opposed went just I value. that spend performance into And products comments great as I many basically earlier taking in come organization, of lot of to through delivering think

bit a to would, different I it's think analogy. Salesforce And do of of a kind I the Siebel go So, back game. again,

of acquired. of and that's versus think that where that we're have some I gotten the them other obviously at you've competitors seen some already

Matthew Swanson

the results. on Thanks. Congratulations

Operator

Thank you.

next Jefferies. comes question from Brent with Our Thill

Your line is now open.

Brent Thill

I'm sound year is are speed, just government. the that Fed cycle for size you seeing, a on if if cycles, the had curious update you Thanks. an the initial up flavor like it sales George, given on can picking can ago. you give give you. sales Thank just a is commentary, picking seeing certification deal FedRAMP over maybe would a just the there. Burt, you all us the of what up and us you're speed And

George Kurtz

Sure.

So, got we've it season. the because time we've first missed last our year we buying certification seen for tremendous really this Obviously, FedRAMP growth.

So, that in we area. see growth triple-digit

state, about Some we an fantastic local overall, civilian I us. Fed, just think bright spot amazing think, agencies. when traction for And been in the and has that

the We not it of great and hit was and with team parts counties and weekend. and governments really back by it customers massive our a home wins. run other family have were were visited And of we've that some XXX/XXX customers protected ransomware weeks visiting that got and appears We by on CrowdStrike, number there we're that their impactful. got government the states

acceleration So across over happened and wondering business seen we've everybody what was local and state, that Fed there governments. an in

Burt Podbere

more the and of our And have five that forward with respect Yes. initial with you of purchases. the percentage customers both of initial things of give more trending the or an of also uptake we're our milestones to put can in customers, number with you we where think look terms the of modules, that to have in that respect number that deals I our when indication modules those four customers the at so our

we're So, with what seeing today. we're happy

Brent Thill

Thanks.

Operator

you. Thank

from comes question next Bellini Our Sachs. Goldman with Heather

open. now is line Your

Daniel Church

In bit Hi, of for this for the regards taking could on you little mentioned you're my compared a of and Bellini. rates? provide color is in more Heather in Thanks just seeing question. to earlier Dan And low channel. you attach any in go-to-market SMB, success how terms then friction disciplined Church about traction look those customers modules in enterprise customers discounting terms to

unit on the those any relative larger commentary look economics how enterprise? So, to

George Kurtz

I'll is modules. George. just this the Yes, start with

complete as mid-market, of well that kind have extremely deal some to technology, they of in seen smaller mids, the end-to-end on, the Again, board. in of they SMB, that's interested really larger with are the turnkey I our challenge think people as what hiring across helping great kind again, organizations offering. we've from, is focused

that sort to away you're we just expensive of we offering $X warranty it what services that the do want you companies with complete it's or for. know, protection can a it's breach I very as that government problem financial and and with looking grade go and do for call and back have provide the And million opportunity. great It's our level the would hard outcome, to

see we them. and modules So adopting all associated help complete with those our them service turnkey to

Burt Podbere

we which space. the benefit And Clearly, to that when add. space, respect there. economics to discounting with SMB obviously think on do able are from smaller with to we SMB able I'll the the about unit Yes, fact less the discounting, we were

margins on discount get healthier to volume and really with so where as we're are, we the SMB something a and trending on we're respect little are with space. where we achieve think pleased I Clearly, the to your you a customer velocity. able

of both unit to add economics. up things strong those So

Daniel Church

in guess on up you very then, impressive. continues in of on the following thanks. year-over-year terms Helpful, gross mentioned I expansion be the And margin, question same the to

how So room uptake there. just and data is on on center more versus continued any high much of modules incrementals and front there the commentary optimization

George Kurtz

Yes.

place the topic to a few be the where that's on heart. able has going feel a a to long-term With here. be enhanced where where company to projected, in we're overtime. think dear margins. to to really to extremely respect gross to to but quite the go that going to place continued the We have going I we we margin already from initiatives well. going in respect about take with still touched we're you've were and So non-GAAP executed We're model my near

Daniel Church

you. Thank

Operator

Thank you.

question Macquarie. next Sarah comes with from Hindlian Our

Your line is now open.

Sarah Hindlian

would It in, interest fronts. to me would seeing quarter. interesting building Yes, module where that of you much you're fitting proposition appreciate seems the be are on it. using really for a seeing I so thank the on kind like me be and you Great, hear client early Falcon it's value really, platform-as-a-service what And or compelling clients. or really to congrats for

George Kurtz

sort customers plan, that actually got many there. in the are their ability of scale are whether data even -- it's out to systems asset we've relevant of technology IT out what the understanding Well, use data or ways. gather a at we haven't security date, assets data just

reduce with tremendously of and we the is kind time in our customers what But actions what power the to been that's we're out own leverage with build overall, it So, they to at put our they is sky collect again assuming to response there the APIs endpoint value there. overall enrich APIs of where do as into to limit. their, the our infrastructure want, built. part lake their of which able has the seeing customers the and data scale flexibility even on platform data we've and It's to take the of information other and kind for real-time --

Sarah Hindlian

terrific. a well. right, just quick for you as And All follow-up

up kind see the coming today more And you the is some that displacements starting in know management to real progress particular space. your of the core the adoption more well. about interesting Are vulnerability that really you're and you multi-cloud it's competitors but of So arena. as in to and hear just name how five And of not the I'm plus four making plus, tracking? and with security just curious is

George Kurtz

Yes, great.

multi-cloud been obviously with some workloads out we've enhancements seen protecting metered for we terms billing time, some you what came etc. of cloud So in we've saw

core that's deploy We any those I been our and For for of us, terms in great matter protect really cloud AWS doesn't and is tremendous can cloud, cloud or on-prem of it and it but think easy off-prem, just has is. with success and them, hybrid momentum work workloads whether fantastic technology works. been one a it partner the the fact where our of and it which again of it's workloads

environment, necessarily we winning VMworld, about just they to which can the what do we threat we've about new which really the are think we are am agent agent called think Spotlight the our application update if them, We've is combined that about with customers vulnerabilities VM excited feedback. walk leverage CrowdScore, And technologies not they normally for helps a it, overall I as combination. a out, that's and our looking excited that. hear risks with module, really gotten we crawl for customer something adds run and prioritize taken tight another VM released When came

add trialed there and So we capabilities some. that make have big that pretty in is say we and progress out of would that most area. wins probably to our it gotten and out continue I module we've

Sarah Hindlian

helpful. Great, very that so much. Thank was you

Operator

Thank you.

next [indiscernible] comes from Our with Oppenheimer. question

Your line is now open.

Unidentified Analyst

Shaul. congrats Thank for question, the taking This gentlemen, [ph] my on you for is quarter. actually Ing

this region on Just that coming in the question Wipro the first quickly Would the we George, more deals saw of that international APAC to see be expecting Asia quarter. expansion; with region. we deal out partnership

George Kurtz

those a have that While that the of big we wins been we recently and all, have able Australia was is people many many, APAC Asia I the region for years. those fantastic interest of in we've with is it areas the team leverage. some is Singapore worked many out first in to that level customer charts we've really off and gotten and really

relationship. continuing is build got and a we've great now out name a our to So, there, team, partnership we're

about that we're beyond. reach that they got Obviously, Wipro opportunity. and scale massive in even area excited and So

excited about overall but So and APJ our early partnership days, about that excited business.

Unidentified Analyst

the but just year, give improvements, -- quarter as a our the modules points last is should two? improvements; Can quickly you point margin same leverage to get compared as like gross cloud many versus color how That's out little basis period. a bill margin expect saw the we on great. you gross you you see correlation how this there performance basis module, between to on the we And, many to amount of out us a XXX build compared the that

Burt Podbere

the question. Yes, for thanks

our platform. about great So the news here's

first after the buy virtually, our margin. gross COGS that absorbs it you once module every So that is, module

margin module now on different could so be every and the would top a on with every we module bring on a that So full that see incremental buy top each to can vary it modules. would module customer one. come out going price, first of enhancements, We're

George Kurtz

to once that's architecture Threat the with really reuse just to and on built we And We follow many. of the that, power Graph. collect the

used So and be is once Threat analyzed, then obviously data that Graph, powers AI can all in other it for the it the modules.

margin already we've once fact as said So it, collected [ph]. virtually it's after Burt pure the

Unidentified Analyst

questions. again, my congrats And strong Thank you execution. for the taking on

George Kurtz

Thank you.

Operator

you. Thank

Our question Andrew Nowinski with Davidson. from comes next

Your line now is open.

Hannah Rudoff

Hannah Andy, a growth, that year-over-year what posting is tougher your ARR moving for and accelerating hint on continue. because growth get to after you factors the this strong seems forward metrics do Thank customer you. the comparisons should growth see ARR Hi, as

George Kurtz

for thanks So the question.

see we to, comment So has in anything back in again, pipe continue anything or of great as think I this than mean again ARR, goes the I more to like momentum really and before. guidance been we've the we it don't on but seen that, we business QX. entered terms substantial else,

talk year. gives next things talked And to so about that some the to able about of we've in the us be confidence

Operator

like Thank to you. for would over George closing Kurtz This today's concludes question-and-answer call I the to session. now turn remarks. back

George Kurtz

today. for I Thanks. you. your holiday. look forward interest you next want really a appreciate We thank to thank time and speaking to Have with you all your Sure, great of quarter.

Operator

conference for concludes today's you Thank this gentlemen, and Ladies participating. call.

now may You disconnect.

CrowdStrike (CRWD) 5 Dec 192020 Q3 Earnings call transcript