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CrowdStrike CEO: MSPs ‘Are Looking For The Best Endpoint Platform’

Michael Novinson

‘[MSPs] are looking for the best endpoint platform that they can plug in and offer other services. I think we’ve figured out a way to complement the services that they have,’ says CrowdStrike CEO George Kurtz.

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CrowdStrike has capitalized on its “technology advantages” to drive record growth in recent quarters with resellers, MSPs and public cloud providers, CEO George Kurtz said.

The Sunnyvale, Calif.-based endpoint security vendor grew its business with MSSPs (managed security services providers) by more than 200 percent and partner-sourced annual recurring revenue (ARR) by 83 percent in the fiscal year ended Jan. 31. CrowdStrike also more than doubled its ARR transacted through the AWS Marketplace and ended the year as one of AWS’ top ISV partners be transaction volume.

“Managed service providers are looking for the best endpoint platform that they can plug in and offer other services,” Kurtz told investors Wednesday. “I think we’ve figured out a way to complement the services that they have in those areas, and it’s been very effective.”

[Related: SentinelOne COO: ‘We Do Not Compete With Our Partners’]

CrowdStrike has taken the approach of augmenting what its partners are attempting to do rather than competing with them outright, Kurtz said. Unlike endpoint security rival SentinelOne – which relies almost entirely on partners for services delivery – CrowdStrike has a broad portfolio of vendor-delivered assessment, advisory, technical, managed and incident response services.

Kurtz in recent months has dismissed claims that competitors like SentinelOne are more partner friendly than CrowdStrike as “noise in the system” and “FUD.” Three-quarters of CrowdStrike’s revenue came through channel partners in the nine months ended Oct. 31, 2021, while 92 percent of SentinelOne’s sales came through channel partners during that same time period, according to regulatory filings.

“We’re a partner-first company,” Kurtz said Wednesday. “That’s the way I built it. And we haven’t wavered from that.”

CrowdStrike’s technology advantage starts from having smart filtering capabilities on the agent, which Kurtz said allows the company to stream rich telemetry from the cloud in real time. End customers are clamoring for CrowdStrike’s technology, which Kurtz said has prompted more channel and technology partners to work with the company.

“Our architecture is fundamentally different from any other vendor we’ve seen in the market,” Kurtz said. “We believe these foundational architectural elements have created a high barrier to entry while competitors operate in batch mode and struggle with storing data on the endpoint.”

CrowdStrike’s revenue for the quarter ended Jan. 31 skyrocketed to $431 million, up 62.7 percent from $264.9 million the year prior. That beat analysts’ revenue expectations of $412.4 million, according to Seeking Alpha.

The company’s net loss deepened to $41.7 million, or $0.18 per diluted share, 119.7 percent worse than a net loss of $19 million, or $0.09 per diluted share, a year earlier. On a non-GAAP basis, net income surged to $70.4 million, or $0.30 per diluted share, up 123 percent from $31.6 million, or $0.13 per diluted share, the year prior. That crushed analysts’ non-GAAP earnings estimate of $0.20 per share.

CrowdStrike’s stock is up $21.81 (12.85 percent) to $191.60 per share in after-hours trading Wednesday. That’s the highest the company’s stock has traded since March 2.

On a full-year basis, CrowdStrike’s revenue surged to $1.45 billion, up 66 percent from $874.4 million the year prior. Meanwhile, net income worsened to $234.8 million, or $1.03 per diluted share, 153.5 percent higher than a net loss of $92.6 million, or $0.43 per diluted share, from last year.

In the fourth quarter, CrowdStrike’s subscription sales leapfrogged to $405.4 million, up 65.7 percent from $244.7 million the year prior. And professional services revenue surged to $25.6 million, up 26.2 percent from $20.3 million last year.

For the quarter ended April 30, CrowdStrike expects non-GAAP net income of $52 million to $56.7 million, or $0.22 to $0.24 per diluted share, on revenue of $458.9 million to $465.4 million. Analysts had been expecting earnings of $0.18 per diluted share on sales of $440.8 million, according to Seeking Alpha.

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