CrowdStrike Beats Microsoft When It Comes to Cybersecurity

After the market close on Tuesday, the cyber security firm CrowdStrike Holdings Inc CWRD reported better-than-expected fourth quarter earnings along with an optimistic guidance. According to the CEO George Kurtz, organizations are understanding that cyber security is key to saving money with management proudly stating that users find the company’s solutions better than those of its big tech competitors, citing a few examples how it won over Microsoft Inc’s MSFT customers with its security offerings.

Better Than Expected Fourth Quarter Figures

For the quarter ended in January 2023, total revenue rose 47.9% YoY to $637.37 million.  Earnings jumped 57% to 47 cents a share on an adjusted basis.

Analysts surveyed by Refinitiv were expecting 43 cents earned on revenue of $625 million.

Non-GAAP Gross profit from subscriptions amounted to $462.54 million. Non-GAAP Gross Profit from professional services amounted $18.02 million. GAAP Gross Profit from professional services amounted to $12.93 million with GAAP Gross Profit from Subscriptions amounting to 448.84 million.

William Blair analyst Jonathan Ho concluded that fears of pricing pressures caused by aggressive discounting strategies from CrowdStrike’s competitors did not materialize.

Key Metric Is ARR

A metric tied to subscription services growth, annual recurring revenue (ARR) amounted to $2.56 billion, having increased 48%, topping analyst estimates of $2.515 billion. According to management, emerging products contributed $182 million in net new ARR in fiscal 2023, which makes 22% of the $828 million.

Meanwhile, revenue from subscriptions rose 47.6% YoY as it amounted to $598.26 million. Professional services generated revenue of $39.10 million, rising 53% YoY.

A Positive Outlook

The Sunnyvale, California-based cybersecurity firm expected revenue for the undergoing quarter to amount to $676.5 million, exceeding estimates of $663.3 million. Deutsche Bank analyst Brad Zelnick commented that although the macro environment remains defined by an unstable dynamic, CrowdStrike overachieved in this competitive and growing industry, perhaps at the expense of SentielOne Inc S, its American cybersecurity rival, who will report its quarterly results on March 14th.

After better-than-expected results, CrowdStrike’s shares climbed more than 6% in premarket trading, as they are now 24% up this year.

A Time Like Never Before In The History Of Security

It is certainly an exciting time to be in the cyber security industry that keeps on expanding its capabilities and testing its limitations, with even the revolutionary ChatCPT being increasingly integrated into these products and services.  CrowdStrike chief security officer Shawn Henry described the current cyberthreat landscape, saying that today’s security breachers are smarter, more sophisticated and more well-resourced than ever before, emphasizing the call to action. On March 6th, CrowdStrike announced it is joining forces with Dell Technologies DELL in an effort to bring commercial PC security to a new level, helping organizations prevent, detect and protect themselves to these new threats with efficient and cost-effective solutions.