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CrowdStrike (CRWD) Q3 Earnings & Revenues Beat Estimates

CrowdStrike Holdings Inc. CRWD reported third-quarter fiscal 2020 non-GAAP loss of 7 cents, narrower than the Zacks Consensus Estimate of a loss of 12 cents. It was also significantly narrower than the year-ago quarter’s loss of 64 cents.  

CrowdStrike’s revenues of $125.1 million beat the consensus estimate of $118 million. Moreover, the figure soared 88% year over year. Growing traction in the Security Cloud category was a key driver.

Moreover, strong customer growth was a tailwind.

CrowdStrike Holdings Inc. Price, Consensus and EPS Surprise

CrowdStrike Holdings Inc. Price, Consensus and EPS Surprise
CrowdStrike Holdings Inc. Price, Consensus and EPS Surprise

CrowdStrike Holdings Inc. price-consensus-eps-surprise-chart | CrowdStrike Holdings Inc. Quote

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Quarter Details

Subscription revenues (91.3% of total revenues) of $114.2 million grew a whopping 98% year over year. Subscription customers increased from 730 to 772. Strong sales across both enterprise and SMB customers were a positive.

Revenues from professional services (8.7%) came at $10.9 million, growing 25.3% year over year.

Annual recurring revenues grew 97% to $501.7 million as of Oct 31, 2019.
 
Strong adoption of the expanded cloud-native Falcon platform was also a positive. The company introduced a new Firewall Management module to the platform.
 
CrowdStrike also introduced Falcon for Amazon’s AMZN cloud computing arm, Amazon Web Services, to simplify cloud workload protection and improve visibility.
 
During the quarter, the company also partnered with Wipro WIT to provide comprehensive, real-time endpoint protection that comes with the Falcon platform to Wipro’s global customers.
 
Margins

CrowdStrike’s non-GAAP gross margin expanded 300 basis points (bps) year over year to 70%. Continued adoption of multiple cloud modules by the company’s customer base was a tailwind.

Non-GAAP operating expenses soared from $7.1 million to $106.7 million. The company reported non-GAAP operating loss of $16.5 million.

Balance Sheet

CrowdStrike exited the quarter with cash, cash equivalents of $833.7 million compared with $732.8 million in the previous quarter.

Cash from operating activities amounted to $33.8 million.

Guidance

CrowdStrike expects full-year fiscal 2020 revenues to be between $465.2 million and $468 million.

Non-GAAP loss per share of 53-52 cents is expected.

For the fiscal fourth quarter, the company expects revenues in the range of $135.9-$138.6 million. Non-GAAP loss of 9-8 cents is expected for the  fiscal fourth quarter.

Zacks Rank & A Key Pick

CrowdStrike currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the broader technology sector is Fortinet, Inc. FTNT, flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Fortinet is currently pegged at 14%.

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Fortinet, Inc. (FTNT) : Free Stock Analysis Report
 
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Wipro Limited (WIT) : Free Stock Analysis Report
 
CrowdStrike Holdings Inc. (CRWD) : Free Stock Analysis Report
 
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