CrowdStrike’s Record Subscriptions, ARR Prove Cybersecurity ‘A Priority, Not A Line Item’
CrowdStrike’s annual recurring revenue increased an impressive 59 percent year over year, among other records. “We believe this makes us the second-fastest software company reported to reach this … ARR milestone,” said the company’s CEO and co-founder George Kurtz.
Cybersecurity specialist CrowdStrike is breaking records and winning over customers with its security “platform play,” that goes beyond endpoint protection, executives said during the company’s second quarter fiscal year 2023 earnings call on Tuesday.
CrowdStrike said that it is reaching customers of all sizes and verticals — from large enterprises and state and local governments, to the midmarket and smaller businesses — who are standardizing on the company’s flagship Falcon detection and response platform for endpoints, cloud workloads, identities and data. That’s because businesses are looking for fewer point products to reduce complexity and offerings that require fewer resources. CrowdStrike’s Falcon platform is standing out from its competition, according to the company’s CEO and co-founder George Kurtz.
“Cybersecurity is not a discretionary line item. It’s a priority … CrowdStrike is leading with Falcon and we see no other comparable offering,” Kurtz told investors on Tuesday evening.
CrowdStrike counts 37 U.S. states and Washington, D.C. as customers that have standardized on Falcon, Kurtz said.
The company’s annual recurring revenue, a financial metric tried to subscription customer growth, increased a whopping 59 percent year over year to $2.14 billion, with $218.1 million being added during the quarter alone, the company said. “We believe this makes us the second-fastest software company reported to reach this $2 billion-dollar ARR milestone,” Kurtz said.
Austin, Texas-based CrowdStrike also added a record 1,741 net new subscription customers during the quarter.
Subscription sales, at the same time, rose to $506.2 million, up an impressive 60 percent from $315.8 million the year prior.
Professional services revenue surged to $28.9 million, up 32 percent from $21.85 million last year, setting a new growth record, said Burt Podbere, CrowdStrike’s CFO.
Kurtz also called out managed security service providers, or MSSPs, as critical in helping customers simplify their cybersecurity operations. MSSPs are a “rapidly growing” component of the company’s ecosystem, with MSSP ARR increasing more than 150 percent during the quarter, he said. “The numbers don’t lie with our success there,” he added.
The cybersecurity company was reported to be considering further growth via acquisition, but news of a deal didn’t come during CrowdStrike’s earnings call on Tuesday.
CrowdStrike’s Kurtz reportedly traveled to Israel to meet with a number of startups it could invest in or acquire in April. The company then made news earlier this month when Talon Cyber Security, an Israel-based security firm, revealed that it has raised a hefty $100 million in a Series A funding round led by Evolution Equity Partners, with participation from CrowdStrike’s Falcon Fund and CrowdStrike’s own Kurtz.
For the quarter ended July. 31, CrowdStrike continued to see strong demand, despite challenging macro-economic conditions, executives said. The company reported non-GAAP net income of $85.9 million compared to $25.9 million in the year-ago quarter. The company reported diluted earnings per share of 36 cents compared to 11 cents in Q2 2022, on revenues of $535.2 million, a 60 percent increase from $506.2 million. The results surpassed analyst predictions of 28 cents per share on revenues of $516 million, according to Seeking Alpha.
The company said that deals committed to close during the quarter closed, and CrowdStrike entered Q3 2023 with a record pipeline.
CrowdStrike’s stock climbed to $193.30 per share, up .65 percent in after-hours trading on Tuesday.