CrowdStrike Holdings, Inc. ($CRWD) Earnings (Q3 FY23)

 CrowdStrike Holdings, Inc. ($CRWD) Earnings and Opinion:


CrowdStrike is a company in the Technology sector and operates in the Software-Infrastructure industry. The company provides cloud-delivered protection across endpoints and cloud workloads, identity, and data. CrowdStrike was incorporated in 2011 and is currently headquartered in Austin, Texas. The company made its debut on the stock market in the middle of 2019.

CrowdStrike Financial Results:

  • Revenue of $581M beating estimates of $575M
  • Operating Income of $90M beating expectations of $77M
  • Adj EPS of $0.40 beating expectations of $0.32
Opinion:
CrowdStrike is currently plummeting after hours. The stock is down about 18% despite a pretty strong financial quarter. The main reason for the drop has to be the slowdown in subscriptions, as well as the management coming out saying the ARR (annual recurring revenue) is expected to come in lower in the next quarter. CrowdStrike is blaming a lot of this mess on the macro headwinds faced by not only the company, but the customers as well. A lot of the smaller customers CrowdStrike deals with are causing elongated sales cycles. The bigger customers are also feeling the headwinds which is causing multi-phase subscription start dates. This causes the revenue to be recognized in later quarters and can make the ARR figure look bad in the upcoming quarter. However, when we look at this from a long-term perspective, this really doesn't play too big of a determinant. I think this is a short-term problem that will eventually clear itself up, once the economy kind of stabilizes out. Cybersecurity is a space that is heating up, especially with enemies (Russia) ramping up its hacking. I think CrowdStrike is unique in the way it implements AI into its practice and provides a nice experience for the customer. This is one of the main reasons why I chose them out of the cybersecurity space as a long term hold. On another hand, I see a lot of growth in the future with this company, they are based out of Austin and will gain a lot of exposure being located there. The short-term does look rough, but that is what ultimately shapes the investor. I am holding CrowdStrike with faith that they will continue this solid business model and get back on track with their ARR in future quarters. 


*Information from Yahoo Finance, Consensus Gurus, MarketWatch, and CNBC

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