Earnings call transcript Q2 2024

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Operator

Hello, and welcome to the CrowdStrike Fiscal Second Quarter 2024 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. [Operator Instructions] Please be advised that today's conference is being recorded.

It is now my pleasure to introduce Vice President of Investor Relations, Maria Riley.

Maria Riley

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

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

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

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

call that, George. turn will now to With I over the

George Kurtz

scale and with exceeded a quarter, in and challenging competitive for target platform pleased CrowdStrike's Maria, operating our Thank joining thank that on Falcon quarter, second I delivering credible report delivered every today. bottom-line era. strong, highlighting within top both you, the and model structural guidance growth the to leverage for we metrics, am our and cybersecurity at all across you us definitive cloud macro the we impressive an moat, backdrop, metric. making Even durable

for quarter with million Financial margin cloud $XXX record year-over-year, ARR security, for second of record platform Next-gen QX highlights protection Falcon LogScale non-GAAP XX% net billion, profitability XX% the the income, involving non-GAAP eight record $XXX.X and record consecutive modules. and million include, free up ARR, contribution operating in $X.X from XX.X%, ending GAAP cash quarter, flow year-over-year together which more identity year-over-year, SIEM, of or of over surpassing grew in XXX% increase deals an

AI our utilization results, growth. we even within and fueling of to organization in driving Our leverage enviable the entire as platform aggressively in excellence across and commitment is operational our our financial invest

QX within FY remain 'XX. and for to exit starting non-GAAP As will margin target bringing target We discuss, our revenue our timeline model and raising within target our in basis our operating we annual now expect model model. non-GAAP the outlook our sustainably on to Burt year an in achieve are to operating

of ever. category and choice, level gravity of The In from growing a threats, important the an an cybersecurity’s disclosure Board is platform urgent powerful cloud-defined We CXO and more enacted At spend we priority. the continue to digital cybersecurity to concern increasingly an becoming stop offering simple cybersecurity substantiate operational world, than promise. recently build requirements cybersecurity breaches. CrowdStrike, SEC's elevating

to of of driven from new momentum deal upsell be increased consolidator partner levels our of trusting and security by levels second their year, the the into in long-term registrations ecosystem record market-leading CrowdStrike pipeline, half choice. record of business, Heading and see logo platform we the customers record proudly

are We benefiting uniquely changes landscape, substantial in competitive CrowdStrike. the also observing

our we performance the will competitive dynamics, and ARR yield second half market double-digit see momentum business growth. we With believe net new

Working created shifts midst and in chaff. Organizations efficient industry and break The society. investment. products today masquerading realities, past the Organizations of have this and as reflects have one not TCO data from these Those right cybersecurity with to stories. silos. automation tectonic for lower seamless, years, together we more versus legacy protection platforms are those in battlefield wheat ROI-driven of for recognized down in better, need I competitive and the need the cybersecurity separating point now. Organizations cost-effective a need digital faster the XX stitched platform who more

private of was strategic What left the point design several this dozens win quickly equity immediate that are CrowdStrike's being and turns Today's are solidifies leadership legacy vendors. is product were behind. hands competitors AV, landscape looking way buyers. companies Point in companies once These consolidating to market. of or products, built hard quickly is platforms narrower by the single are a companies for scale. into at donors. CrowdStrike for security what purpose-built hands already feature learning market way littered cloud competitive going of companies the shared with safe Smaller, position or the

the have innovation, team scale to and lead mission-driven We cybersecurity sizable consolidation. technology platform

LogScale are see with here real examples flighting right and and businesses. SIEM. of of the XDR are of outcomes, solutions to companies three protection are their Falcon The own consolidation I in high-growth, dynamics across each half in Next-gen market best-of-breed Each Falcon seamlessly the components platform identity security, competitive platform. beyond. are we sizable Each winning worthy integrated IPO and the second these from CrowdStrike, us are and transformations enables platform Shifting reasons cloud

cybersecurities not it cybersecurity CrowdStrike SIEM with updates Next-gen as delivering follow Falcon our provide for customers. identity cloud, me platform and Let and up the on commentary platform The platform consolidator, only for become then standard on businesses. AI-powered the has first Falcon cybersecurity, foundational become our I'll has

factor, deploy which sensor the and remains revolutionary Our lightweight to fastest form an cloud-native no AI-powered consists and data reboots. architecture of easiest platform with

integrations not for hardware-defined enterprise, or to anywhere the attacks and automation made visibility form bound digital to Our prevent system operating and perimeters. by remediate. was workflow detect network has the CrowdStrike and factor the

enterprise prime real the and cybersecurity. devices automate to multi-cloud workloads and consolidate have on We estate

after I anchor wants being important services. Companies stop breaches Hat technology, threat are customers to see really that with Customer the actors with as mean. vendors the stop core breaches. who partners to uniquely breach. hot understand, and topic, met is in can These respond This positioned their prevent to most talk a Security the to our what cybersecurity outcome. threat Conference us platform. is partner Stopping trusted their CrowdStrike journey. the consolidation their customer at about Falcon intelligence and need on With security let's security outcomes Black

cybersecurity and integrations everything people, makes faster require savings Saving maintenance, represents console with modern time, the building a and dwell enterprises reduces products, delivering in and products most process and integrating, AI there's Saving operating still generative money point higher north with managing, superfluous time much cybersecurity wear. single buying Individual of cybersecurity costs. coupled easier. regarding XX tools learning staffing too and Eliminating product, cost. real shelf updating and time

technology reduction, first creates estate native within and the platform. identity capabilities unlocks protection, more. as exposure stack attack next-gen more, capabilities And SMB of expansion integrated is surface advantage enterprise for significant in SIEM their The and one deploying Falcon such CrowdStrike's in our to security, and all code prime breadth organizations real Falcon new cloud customer finally, management, doing our path.

platform, XDR third-party is the becoming to data take the data in open destination. and ability Our quickly first-party enterprise

for security competitive observability reducing We moat and cases security also agents, but cost, see CrowdStrike. transform Customers every the consolidate with complexity adopt, platform. value gaps, stack broader management for as enabling use module data to gravity Falcon and a of them gain greater the cybersecurity, their with they

to customer recent wins that several share this. me speak Let new

lack major and platform that with Complete security tried hampered ability deployments of team customer consolidating Microsoft's EX. the consolidate to complexity, defend auto is Falcon Falcon This realized and This and a multiple is company's manufacturer integration, First detections miss on themselves Cloud. for their consolidate. failed quickly now but Identity complex Microsoft to security on Endpoint, their consoles,

threats and save to platform, can interface year plus have up costs, user on XX% savings. a and from per licensing Now Microsoft expensive single points, to organizations dollars identities complete moving stop they and real of By EX with adding visibility single cloud the per in ability their across agent, to of single CrowdStrike, end Microsoft user time. millions

was level. consolidation next win Falcon their construction Another a leading the with manufacturer took seven-figure who subscription to residential Complete

offering. the ARR. large LogScale, cloud and vendors the Beyond Identity security, in platform with deal attack more services, and ago stack. but bigger well $X.X a security customers as three which, than aggregate, with other multiple Consolidation in adoption, continue new increasingly is spend eliminating from stack. and in lands this contribute this reducing of wholly ending verticals technology, over vendors over to more the manufacturing Cloud we XX% eight consolidate platform increased become Protection, and Financial trust strong involving also industry to demonstrate deals more Security, has Falcon to areas Endpoint, retail not Falcon In closed look especially only protection fueling our year their sizes. for identity demand their XX% logo QX, customer modules than by LogScale or CrowdStrike of billion and Surface, management consolidation surface enterprise, purchased external Falcon

we Next-gen Cloud, our me platform where areas discuss Let of now are new momentum LogScale, the setting in Identity records. and SIEM,

almost new net across time growth accelerated on security cloud providing a offering, new growth today. this during where CNAPP XX% Security, ARR and major agent which cloud-native in ARR Driving Let's modules capabilities Falcon innovation the public Security million, $XXX a value all start immediate Cloud Cloud accelerated meaningfully inflection cloud larger and cloud our deployed up is than a for offering, unifies to single record ARR our Ending to quarter-over-quarter. into vendor Net new to focused security Cloud Falcon XX% suite with environments. for Falcon agentless in Security, reached quarter. year-over-year, single every grew

to security CrowdStrike We consume platform of SKU have customers and for a as on cloud choice. Falcon standardizing their rapidly made single are it Cloud Security customers easier with

of to to our best-of-breed point scanning attack Falcon a CNAPP offering, platform. capabilities surface monitoring solution and and year, including inside-out Customers that analysis, are most creating market. the new customer's external to added security outside-in product eager code, with attack We move from our site complete multiple view a acquired Combined vendors we comprehensive infrastructure provide now unified posture. we away CNAPP Surface, many the as Falcon's solution path last on

go-to-market Summit and we and plays. Security This a emphasis executed by followed hosting on virtual a security, security partner past cloud with cloud-focused sales XX,XXX participants over Cloud quarter, DevOp

cloud scale. integrated management at and easy value suite, propositions are resonating lower Our TCO

a prioritized scanner in cloud value. Falcon We multiple million QX, firewall excess customers, XX together displacing XXX Fortune number in full, vendor. with product of a of Security An choosing security phased, including a expansions in not of closed iconic deal over purchase $X customer Fortune cloud record retailer point their deal in million wins seven-figure cloud CrowdStrike value, $XX and Cloud

XXX Additionally, Cloud manufacturer media technology a wins] replacing sought as product and (ph), major Security. include accounts. companies well a superiority Falcon financial, Fortune wins Other public cloud healthcare with as sector single-platform and with [new Wiz approach

overall to brand runtime unify is want helped XXXX facing their I security platform with to from increasing operational requirements with them costs these over a only their visibility security the vendor retail security Fortune highlight remove cloud Finally, drive down met initiative cloud cloud endpoint, customer gaps cloud traditional unified CrowdStrike launched limited that management. costs. and expansion and assets. stack a a posture and This an and incumbent their struggling vendor their and between

year-over-year posture and Only security like a protection, one intelligence market across unifies and management, Cloud opportunity only threat $XX agentless cloud with delivers rapidly solution way is agent the year hybrid threat integrated growing the workload all a fully-fledged to and exploitation infrastructure threats by CrowdStrike reach CNAPP management, to calendar platform in security entitlement XXXX. and cloud at cloud adversaries that is billion in XX% increased suite and massive multi-cloud hunting time cloud Falcon. with fully The cloud stop potential environments.

recently Cloud impressive Sullivan's CWPP XXXX Workload our security on and leadership our unrivaled recognized comprehensive & business and detection Protection published cloud Platform cloud our based in Frost in growth, Our services. report cloud visibility response was Radar, Frost

a Tech million on $XXX attacks over up solution with last intrusions observed Protection Innovator year-over-year. increased in to against a protection months. of XXX% to rate interactive CrowdStrike services where XXX%. financial products XX% existing response week. market. bypass the we an the recently Highlighting the identity delivers all of QX company's turned the for winning used year-over-year Identity-based XX to CrowdStrike's out identity for attacker new stands as undetected identity also more CRN breach ARR, tied this customers Falcon Identity in Protection legitimate adoption for following remain than attacks, credentials best protection ending in security incident grew is XXX% total a initially The the the firm Award represented and and the Identity best number deals that

responders, incident four SentinelOne, Security CrowdStrike Falcon platform, adopting and Falcon and consolidating by Microsoft, Arctic remediation Falcon Wolf vendors customer this Identity on Following process, the Sophos. consolidated Falcon Complete and Complete, displacing in Cloud Complete, the

with Net grew manufacturing LogScale. The approaching the quickly ending expanded nearly to from SIEM A as to purchase its XXX% number due using more migration Moving million LogScale becoming customers after record $XXX Fortune and cases. QX. cloud increasingly ARR platform milestone, new Next-gen on adopt SIEM sell million LogScale year-over-year. $X customers which LogScale a a licensing their of ARR value new than LogScale and complex is vendor increasingly poor grew reached ARR deal we legacy to Falcon year-over-year in expect frustrated Xx forced a prohibitive multiple experience. solution costs, to to XXX over on-prem the achieve company with use

SIM, LogScale's model, their the leveraging cost-effective legacy and and now Given this is supercharging use flexibility Falcon transition security away platform both customer and cases. of unparalleled to observability the licensing speed speed from

in generative with the a it all and platform Charlotte and do every in the that of is customers lower benefits time data, the engine proprietary cost, to AI era detect overall and to our brings platform, reduces of Charlotte and generative of with threat better The benefit single We a expertise. by CrowdStrike's is use from security. in powering results, across ushering AI enterprise. life net respond. and showcased more automating AI We is AI AI new platform of speed which only utilizing pricing to to the helps reception we at SOC, fuels the levels advantage. AI to machine outcomes faster this Falcon capabilities Falcon pioneering skill security PowerPoint, and release at vendor the of CXO we CISO, showcase month earlier Charlotte data of generative portfolio AI users Black action. in do mean Charlotte of AI for we're demo module Falcon. do industry-leading Public not it was AI will where workflows, high-fidelity Hat a fantastic, live, adoption our consequence platform a

enterprises partners. Moving our to XX% of partners sourced new from quarter. SMBs were in from large to customers the

building AWS' in innovation partner. Our is is industry-leading differentiated partner cloud ecosystem embracing CrowdStrike Partner the validating broader security CrowdStrike. won businesses success, cybersecurity go-to-market category Award, particularly commitment the Year and cloud And recently our platform, long-term ISV leadership, to security. of largest Falcon we with their go-to-market

a delivering partnership Finally, with deal the are through initial we our exciting, in momentum is in Dell eight value just building months. figures few

record the live Demand rapidly resilient. second with attached Dell attach hit In region. industry-leading every sales markets agreement has in and in As geography we new we achieved market highlighted quarter, our device globally QX device with resell the rates. deals our remained And deal levels. in continue driving in-quarter major delivering and SIEM previously, macro went even are we win partner of with momentum Identity to remain Security, a to our building our operate as uncertainty scrutiny, to consolidation increased pipeline high. Next-gen is at Protection, deals time Cloud The tied engagement specifically and rates we increased

so with last join us like display our year, partners. featuring our on at Additionally, webcast, and sessions year, we Podbere. a our in event, Similar annual please invite by biggest briefing will investor from be financial conjunction The customer include technology Fal.Com. hold not is already analysts year's would also the conversations selling be with ecosystem an to up the sponsors that person. XX will and customers customer the note us to Fal.Con, go-to-market registration to attendance. on join this available Please I investors will and CFO, year. will Falcon is in last year, our This led Burt with conference, briefing in event discussion over partner XX% full of

our to the turn to will over I call results. that, with Burt And discuss financial

Burt Podbere

Thank you, and good George, everyone. afternoon,

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

a second continued to new the heights business quarter strong we environment. significant a drove challenging scaled In amid We macro delivered operating QX, and leverage.

the than New GAAP and margin, doubled attributable record quarter the for quarter within second in which non-GAAP operating CrowdStrike, company milestones included for target profitability was in model history, operating more first record time which income to a row. our in year-over-year, the net

ARR execution reaching heightened quarter and and new which stated relentless demand of assumptions The deal as we well we on ARR enabled scrutiny million, sales with even our levels was elongated $XXX.X pipeline. net built up and cycles. us focus QX upsell environment last sales ending XX% record as continue to logo of billion, resilient, achieved We the $X.XX new above over perform to ended We see remained year.

to continue rate pleased land-and-expand more respectively. in more, net Subscription seven retention or of or or our effectively our modules the to strategy five dollar-based QX. subscription be XX%, XX% and success We at XX% with and our with more of with very customers, six benchmark increased customers

revenue of grew $XXX.X QX revenue last XX% Moving year of $XXX.X the to setting year-over-year the over last a Subscription XX% XXth new consecutive P&L. revenue and representing over for Total year to was XX% to grew record million. $XX.X million. QX reach Professional quarter million, services reach growth.

also and XX% Latin strength Japan. International saw America, year-over-year. in quarter, East revenue Middle the grew we the During

target forward our subscription and our Fal.Con gross look are performance we Our was approximately and in to Total gross quarter. second and to higher model discussing initiatives in second drive beyond at detail for remained We Investor more margin of making margin quarter XX%, we gross non-GAAP investments XX% subscription achieved margin strong. non-GAAP margin September. the consecutive Briefing gross the

Total of and year operating QX were and XX% XX% XX% in sales or revenue expenses quarter last of expenses grew revenue. versus and the marketing year-over-year, non-GAAP million million respectively. second XX% $XXX.X or $XXX.X R&D

We quarter-to-quarter and events, marketing expenses the due technology marketing expect in-person fluctuate and to and programs. to R&D of timing sales development

ahead As and operating XX% QX, model for of for non-GAAP growth growing million, and non-GAAP in milestones operating of second a milestones non-GAAP a for in timeline. grew planned achievements to the XX% CrowdStrike, speak history business. doubling record and These income efficient on included profitability time the we dedication result profitable More of achieved attributable running revenue, business. at per on company excellence our than financial of new target or record our income our $XXX.X achieving model a the of diluted our consecutive quarter. $XXX.X These multiple achieving to the well GAAP $X.XX for to profitability a margin to net the of which And an year-over-year, operational million range scale, first finally, focus basis. share record power

We target are reach the model. accelerating timeline our to

QX our expect As in implied now within FY our margin starting remain in model target our on we to target guidance, 'XX. and annual basis non-GAAP an to operating model within exit

with cash XX year-over-year ended a a grew balance flow a quarter to Free from on XX% of increased a of of operations record We strong flow flow billion. grew free QX $XXX.X second a million. of XX% cash XX% cash $XXX.X to QX the sheet. million rule achieving basis. or record Cash $X.XX to revenue, Cash and equivalents year-over-year

XX% to for first million flow XX% well fiscal $XXX.X year-over-year half track of stated of the margin at putting flow to XX% cash year. the reach us our goal fiscal year and full revenue, free of grew cash on free Looking reach XXXX,

outlook. to our Moving

in revenue the which net new half raising for modestly fiscal maintaining second for year. for our and year, net ARR to the assumptions guidance and new line ARR are up full call fiscal We our for year the

the year-over-year 'XX, to in For the total XX% FY of of third a we revenue XX%. range $XXX.X to rate quarter of expect million to million be reflecting $XXX.X growth

million be to be to to million. $XXX.X million and CrowdStrike We range range of in to of the $XXX.X from $XXX.X to $XXX.X income in non-GAAP expect non-GAAP net income operations the attributable million

share a XXX shares of income million basis. net weighted to expect average per CrowdStrike count $X.XX, diluted utilizing diluted non-GAAP share be to attributable a on We approximately

year. raising and in We income range between over rate currently the million XX% of to for guidance of and is $XXX.X be reflecting a expect are $X,XXX.X our expected revenue the fiscal Non-GAAP revenue be from profitability to to the growth million. XX% total XXXX. $XXX.X full operations million million, to prior We year $X,XXX.X fiscal

million average and We expect the XXXX income CrowdStrike non-GAAP weighted attributable XXX per to to to net CrowdStrike diluted range share expect basis, attributable to in $XXX.X income non-GAAP to million. Utilizing be on fiscal $XXX.X net a shares be million we of $X.XX $X.XX. between

take will George and now questions. your I

Operator

first [Operator question with line Saket from comes Kalia Instructions] the of our And Barclays.

Saket Kalia

George. my Okay, taking Burt. Thanks great. here. Hey, Hey, for question

Burt Podbere

Saket. Great to hear your voice,

Saket Kalia

which great lens whether business, guess, second other a net the us -- now of Burt, ARR half to in scrutiny think about for hit profitability, wondering testing to help pipeline that maybe But implied that quarters all look maybe help half things ramp. listen, to through like have of you're look and just stuff head of any ramp lens think net you'd us another and that it get net at that on us guiding multiproduct if fun that to? here, the the us I'll new from the so that's But bit quarter. I topic when And Same was see multiple kind stress is strong. you X or talk much more logo revenue confidence, you from either the have based look on, ARR at we've just little new ramp looks I that maybe I could on retention heard George second I new

George Kurtz

Saket. Sure,

and the to it Burt. take turn will first over me I Let part,

the looking about, about the and you think Customer ecosystem. with we product it half consolidation the customer I and back some our great year we're product We starts that the platform gave our stronger, partners that So of never and when in areas around the portfolio industry-leading the you the to talked after partners, Identity. confidence, think our consolidate to seeing. numbers our been Then I that. LogScale, look in has Cloud, particularly on

pipeline, on grow got I partners our We record that this. certainly continue with we that are and down mean I I contributing the record can focus partners the our PaxX. of internally that. delivering leader, as tremendous called AWS new a go to then list pipeline out, Dell, see The CrowdStrike pipeline a all to products and momentum. there. the And are a because We've

way Burt? So look that's the at it. I

Burt Podbere

I just rates. things. multiple Yes. happy either One, with seeing in of our add retention couple would as right, a think from class, in I see as would from strength SMBs. add, of well both. We our or they're enterprise I we're best think very the we're aspects strength We business,

that's we in why get second the So half. confidence

Operator

Thank you. question. next for One our please moment

the of with question comes from Our Auty line Sterling next MoffettNathanson.

Sterling Auty

talk about is back if also Yeah, with and pipeline you Hi, the peel same specifically strength And quarter to about in topic, drive coverage, and you can sales wondering guys. what want the on pipeline. saw acceleration? the the the one I that drill onion comments this what made that but happening to and just in thanks. in George, to maturity of specific,

George Kurtz

Sure.

have. It rep. while I think takes the did year. ramp We reps that ramp start have of hiring lot a with you to last we a to

was them. people figures, with were because of being their so hearing me large call observability and year spend, we're we to the I'm the And company. with half a field is their Fortune have use the in We're which and ramp said strategic. to handling CSO. into of all So and do from on just what the their XXX lot we're I security two, obviously was CIO, these about. a then going eight capacity, excited their And the customers and which it is with CTO I of actually of together back reason a on and they recently talking has cases. we with their

with just sales capacity I and year. I we as are, portfolio have So when we combined back encouraging, of at and go ramp it's the the the look the look half that and the to where product we at

Operator

Thank Fargo. of you. from One Wells our next next line question. for And the Nowinski question please comes moment with our Andrew

Andrew Nowinski

and quarter wanted I an fairly Saket's another that really comps, afternoon year the Good the I to congrats outlook. guidance. just products, you Great. about look The ask amazing half comments growing, of the aggressive, I’d the partners is back back reps, question pipeline, on consolidation, and profitability, echo also George, know too. with but easy you does way ramped half record have described everything, on

that and heading why -- not quarter all maybe more So little a really caution those you you what of a coming about good with gives raising now? business trends bit off have your guidance for right into positive going

Burt Podbere

it's Andy, Burt. Hey,

tables. factor what it that, also and a macro. still when very it's see, see we're comes we So basically got -- to in to in we to to approach. we getting do still taking We a you've not take elongated And running guidance, we And We still prudent guide longer. cycles what don't see. tough deals sales definitely guide don't

the the those things think are I guided. to So way guided why we we

Operator

line question And from Rob Sandler. One the Thank for moment next of question. Piper Owens with our please next you. comes our

Unidentified Analyst

on here. taking just wanted my for question. Rob to touch is on just with Thanks Great. observability that Ethan for LogScale. seeing And This came I success point George, highlighted you're up the that again.

that So cases bit you. seeing those little more with you're you're a observability where about use of maybe some Thank seeing differentiation? can bit little you success talk of a and

George Kurtz

Sure.

we monitoring observability, schedules customers many Next-gen it have I manages SIEM, on when infrastructure, case, at mean also like use like that obviously LogScale, Things sell cloud the look capabilities them train that are for and the and we their just Kubernetes it. managing an in So but back go customer its to and have opportunity use and clusters, you we environment, who security. a have the

efficiently. set of what and And about extremely we're telling is customers seeing it a manage it large data, it So can customers now right does other it.

We have that in customers more space. the success I referenceable begets in huge success And area. XX think Fortune the

and area using you've about in why we're are an it. And gives that than them excited more that's So faster contemporary something customers what outcome that's they're seen and better is pretty that the looking for and growth today.

Operator

Thank you. please for next question. moment One our

next Our BMO from Markets. Bachman Keith comes of the Capital with question line

Keith Bachman

thanks question. the that I same that composition the from $XXX ARR And, for you is analyst where for January in ask the $XXX you many event and Hi, mentioned taking rate about the wanted was A, to million referenced quarter. run others. million LogScale it the

XX% of continuing there? much? so how that half of on realize Thanks pretty two to thoughts that on your in to contribute might help of that growth quarters to healthy comments up any any the growth it's anticipate So C, emerging only guidance? M&A scale next that you on portfolio? update the couple the quarters, very B, back over

Burt Podbere

Yeah, it's a question. great

business it So the we the everybody not call, they're they're visibility we the into had increased would see category important performing. in how very talked this scale give to And [indiscernible] earnings lines. for And well It's out that emerging thought for specific to way be it we it's and that well on the about past. we how different. us, performing broke wanted

our obviously, momentum. Cloud got, you've So

pass taking doing to And You've momentum flight George. and show LogScale got we to other we're at our and I'll how the our momentum. questions those areas, everybody scale. over that in they're wanted exactly Identity

George Kurtz

environment, current of the in back of the shift a Well, companies activity. when environment that are a opportunity. is M&A is the everyone We seeing I will and the year terms think moving half be about around we think think great competitive there in

we we on getting we normally the to a candidates from and integration to diligent we And in bar different continue platform buy to how And very do. in we because look many think an the true approach, as many, remain perspective. is we're seamless environment focus one M&A better we that. and evaluate things how We

year, of we it the and half people. back culture how good but good excited and look good externally So certainly for companies we'll internally about see with and we'll innovation to goes, that, drive continue

Operator

please. with of Walkley Thank from And Canaccord you. Genuity. our question One the next moment Mike line comes

Mike Walkley

strong sale, a you us up favorable more even potentially there's versus platform BlackBerry dig Go with are from can big a quarter how enterprises and SMB to want is clear opportunities the in Great. are Thank CrowdStrike gaining seems It let you. market? trending George, you more. generating share to vendors. Falcon a Or your gain as it's just comments for in like your consolidate leaders ago, expectations? know little shift bit SentinelOne even share I wallet just already Cylance

George Kurtz

Yeah. uncertainty see We've Blackberry very We that thing the for Cylance a are They concerned about a and seen the marketplace. buyer. in good is that they're never and security the movie uncertainty. already got before, have customers concerned

leader seen we space, of So accrues way. we've value And as the consolidator, a deals think our come more the us. as and to just again, that already

space everything for So for our again, concern shakes but about in from from And customers they're looking out, we're we'll partner, are sources. in what how viable the latest a those movements see and is hearing long-term sure, what of some -- we're competitors. of hearing partners multiple other and terms that's

Operator

moment you. One please question. Thank next for our

of Our next Powell question Gray from the with BTIG. comes line

Gray Powell

results. congratulations And question. on the taking good for the Thanks Great.

past competitive we've the heard in moves just investors mark. on concern one pricing as XX% adoption from maybe side. particularly on the security the I endpoint biggest is space, guess EDR So the

incremental guess you. the the is think Global XXXX? would how what how you've in to two sensitive seen Thank the be, left So much today you buyer question compared is I last room do years? And then the

George Kurtz

really of getting not area buying XX the not works, prevented it's have the way individual The in as different activity areas. a look issue. an modules that outcome, And area. we've at data potential But Well, from in They're talked only we particular Protection single-agent the platform you about look just Identity, customer it's then detected look cloud, seen across controls. the buying we've monetize I talked you sale, been products earnings to at able some and other about one and a and common They what that platform. our store and right breaches. and a different LogScale agentless, when the recently. stopping then obviously environment offerings, and were script, I you buyers, area. at their actually one just one architecture, is technology to is their

legacy really legacy almost, is available focus And a market XX% when look that's from near still what, even I of think perspective, So been areas, the at the the XX%. us. for it's you

yeah, So XX%.

we opportunity a TAM in script, just the IPO-able big as business be I out are. think as well that, opportunities. each still stand-alone that I And they are legacy you as massive look when called platform at areas an mentioned displacements basis as the in could on a as big they

Operator

next One please. please Thank moment you. our question, for

question JPMorgan. from comes the next Our with Brian of Essex line

Brian Essex

Burt. know perspective. non-GAAP that and the a is afternoon. but up. Would sequentially, declined toward expenses how to you Maybe spending about flow that And GAAP like think Thank hiring understand stock-based might and balancing on wanted any I actually both love comps you to taking achieving for looks targets? question. Thank It for you're a impact managing on playing going just basis have cash how spiked your the Yeah. non-GAAP into how operating Good that forward? you. environment

Burt Podbere

right. Sure,

So thanks question. for the

continue said think I keep attract and to to use next dilution, for as invest one, us, for can for number are we're going under grants and profitability are the year. we X% we you strive to metrics. of a of compensation, here, X% timing on that retain. year as less commitment based us, stock-based that lot this mentioned that, show key I we continue Having And we think to to So think it than to that to to to to low our going going aggressively had keeping on continue that grants our is and while the

a and calls, we today, Difficulty] where, and prudent to we're environment. we hiring prior of what it's is And we've going what we're in we of pace continue think hiring time being where good accordance the are us need [Technical terms we we're headcount. in of managing deploying We're the hit in with For very think in as targets. mentioned terms to our hiring how taking to

it. So that's see how we

Operator

our One for next question. moment you. Thank please

Blair. Our of William Jonathan from Ho the next with line comes question

Jonathan Ho

or the going especially retention platform results. terms rates, that forward of about products vision? Can you. eight attach and how strong to net Hi, do give you're in with Thank what start as maybe you for seeing on the congrats and good we you afternoon us more realize maybe these think some additional color

Burt Podbere

to Jonathan, what great with six, seven, to board, really Yeah, seen your eight We're hear customers adopting Yeah. modules. pleased respect five, with across voice. the we've

talk repeatedly. and for fluctuate about that So when DBNR, us, the remember, you and quarter-to-quarter, talked it we've it's a can noisy metric, about

we've we more And lot provider Some have our goes we're seeing our a from with in it delight new and we've been the the headroom legacy have of is consolidation the opportunities. us, both talked to of they're for George what (ph) we continue also but market think got about customer bigger quarters and as XX%, bigger end going day, [lands] I But to at buy to expense. along ever-growing for that have local available talking the theme that continue an base. us, about customers, here. some

we to into year. far So that remains it favor. the is new new really were our higher The expecting news great strong than so contribution logos from high, plays net in addition for ARR expansions, even

Operator

line And Thank Moskowitz next from you. our for Mizuho. with comes One question. Gregg moment the of our please next question

Gregg Moskowitz

discrete you means as generative form be the AI to it's rather George, Fal.Con. you at as prepared remains Okay. plan Thank -- remarks arc Charlotte Presumably, early to will did the in that extremely you monetization it there pricing mention release of Charlotte. But obviously, some relates question. AI. it for taking for your of that

that haven't as other from vendors seen cybersecurity yet. We really though

your data to when of of just you'll understand but monetize just as customers and Thanks. tech, why you well? think incremental your deliver maybe So to it to help it be not the us your application kind value able AI comes

George Kurtz

less. them X at and actually the there's probably of of upwards And in I ability is a million security, to Sure. Well, gap folks. it when maintain. And when mentioned, security AI you look one -- person outcomes, as doing really public mentioned, hire with expensive hard which virtual I are Charlotte is SOC a preview in analyst, as a that to the and fact is it super launched we analyst, more really

we'll have it, which And that one real. It's it's it's People to from the liked it create it. purposes, work we've recently even there. for just and we into compress and at minutes. why it Fal.Con. when an value example around to just a analysts, total deliver is shown real customer, in that, from differentiated conferences, out security virtual we which want PowerPoint. what of of the So takes we're pricing were think our We more at to look others can showing value that there's XX going They hours if eight as

virtual we So for real pay early in we're analysts are we these if about can really it. going AI, Obviously, innings. excited value But Charlotte creating to show customers around it's think that.

Operator

Goldman One please moment the from next Borges And for line our question. you. question of Thank comes our next with Gabriela Sachs.

Gabriela Borges

that And number the of pressure think on of causing that number Thank optimize NRR. upsell Burt, looking Is trying NRR? have if headwind might up that you and have? coming and do impact to of you. afternoon. they customers they for abate? I'm on may better Good endpoints having seeing employees the understand to contracts, newer the it you that be the is, component macro downsell Are when

Burt Podbere

Hey, Gabriela.

what course, out the that came year. those be we opportunity the to And I in a about we those said on I great we about talked that to we have invest, all very to there. that. we XX% be prudent able things still, to we it's longer we tough of we're do macro. that, to think we're so. We half, that talked And think over as think think to believe in we good We stay way on be day, were flat we're We shape. talked And where invest approach, take we're to the a going a need did for giving in about, that so I George I continue second the for long us, coming this -- that at that you as headwinds anything feel able close, overcome to achieve Having to last going so the first, deals did. the we end taking there's scrutiny still have are earlier things. I P&Ls overcome to the adamant than remember up for about put really call, things why So half would have to we more to said guidance and the first talk slightly in the better

Gabriela Borges

you. Thank

Operator

for One moment you. please next our question. Thank

question from comes Colville next Our of the Patrick Scotiabank. line with

Patrick Colville

we is question. Hey, products emerging previously gave I clarifications. juicy had Can And I thank this kind metrics. some what mean give triage number, so lots you us one taking comments we what Burt. And second to 'XX of for what us want kind your versus you're operating get the Can in for the my question being of of I you of just you is you my can margin referencing? And now? with is the giving part the model. that line remind in target fiscal to then target just us us about guess reference I model you're guess

Burt Podbere

Yeah.

So better first, give would flight. be businesses full on our to thought it numbers products, taking on the meaningful, we are that you emerging that are

we between and to That plus, that and hit the last of the our out and used for from won't call targets, to emerging XX% we operating that one. back several XX% certainly we last we we anything R&D. the was margin. to subscription target one were actually 'XX respect margin hitting FY G&A to about said were We gross to gave that be going to we to So those products. that was be talking model one With F&M going the

cash. We XX% still we're talking year, And also gave about to for plus. XX% out that the free

Operator

moment our Fu Yi with from the Fitzgerald. One please. comes Thank you. Cantor And next Lee question line of

Yi Fu Lee

Congrats on Ruykhaver. in the This Yi Jonathan of results. set for strong is

I us. building was question it like, say, Exchange? one maybe, endpoint. Trust other any a from let's if Zero around this building vendors off, CNAPP around That of benefits you Just could share versus is Obviously, George, is that CNAPP. CrowdStrike wondering doing

George Kurtz

Yeah.

around from workload the and being earnings tremendous called protection, Cloud to but just our code this. about cetera. it's think right? detail into on insecure understand cloud we is management went and posture containers out of our code in to flight business, the as added agentless terms et instrument and some and agent put well really capabilities, script It's which and into both around cloud. not And in pipeline, we've ability the I've I when everything security if CICD So also cloud It's so, the

it we've that because what and the success agentless, of So last Falcon. agent customers cloud, we moving team And of are the together finding been both strong benefits in agent worlds, single had and seeing We've got a quarter. customers the are our tremendous always best looking to at combines with we're solution and is And world. integrated in SKU. sales on one dedicated an platform agentless

capabilities So business we'll there. build continue down to win we And its out that and new again, path. continue

Operator

One please. you. Thank moment

Our with next question comes Securities. from Trevor the JMP Walsh line of

Trevor Walsh

George, taking or with my kind CNAPP two Thanks to the that of at -- What's response going? where on combining the just all follow you of together it maybe at from capabilities it point question. the look for to as bridging last Great. state that the kind -- just as happening of kind kind either another of around And see do see and you what's least where appetite start customers Thanks. XDR far up into feeding do or XDR of outlook? CNAPP. current cloud least for to at telemetry

George Kurtz

Well, what state the that's is today. the reality, doing current which is we're

way sort graph an cloud this idea which in gives issues of is help are It's cloud and of in any compliance all malicious services the point, operating. So a then back from the we're some which of environment. exposure taking are into manage our of the CNAPP platform the available management any help from all identify to a managed actually of customers asset perspective, that adversaries perspective actually to their have prevent even to also activity. coming agentless customers, that detection available rich from sort an that epidemic we and the their compliance environments, able customers offering, And the at XDR from and from to agent, cloud an telemetry perspective, of and It's what's algorithms risk. is perspective, response is Falcon available an

revenue putting we're all really we're the space that today. largest security a the it reason is vendors why and of pioneering So by market one together. cloud And there in

Operator

Thank One please. moment you.

of the from comes Levine question ISI. with Evercore Peter next Our line

Peter Levine

Great. just question. proprietary vendor to questions. proprietary. The piggyback that of Thanks, Every their maybe is my are guys, AI other taking off George, us data. AI to outcomes for telling their is

AI? outcomes. where kind to explain about your are moat on same competitive about like you of their Microsoft comes When customers all is why their all talk hear us from? going maybe at Palo, So we what talking a or around think point the finer the Zscaler But really Charlotte moat maybe put products, least push copilot,

George Kurtz

Sure. It I about people with certainly There's of it, a it. good question, actually I and you. a really agree is think talking and lot we're delivering

just things the would I to point data about important the of set what's the itself. most to data. realize One is isn't you it that And

You'll be when has lot because hear about about train more it. vendor One trained. data there's of really from humans it curated set a a say It's to we helping We sort other. than vendors. will the think of that think about ChatGPT, the data bunch generative AI, actually to of

actually more hunting threat very all be company, happens, on that XX when we was so Just training started the we've generative we probably to set that's luck annotated the by done the upon AI last horizon, over a have well-defined going based that the years. than understanding

helping data in our customers. of distinct start to is curated having terms actually that's us believe give our set advantage So XX-year a we of head a going

platform, a So is different service others. available foundational component, that's which a than is big every area. which on it's then other platform And made the to

So how has very unfolds, initial it again, very, reaction customer innings, been first see positive. all but we'll

Operator

back the remarks. Kurtz now I'll you. hand George Thank closing over call for any to CEO,

George Kurtz

appreciate soon. Great. person today. Thanks to I look talk you want to and much, forward certainly seeing time Well, thank and in We so we'll for upcoming conference. our their interest Fal.Con everyone at your

Operator

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

CrowdStrike (CRWD) 30 Aug 232024 Q2 Earnings call transcript