CrowdStrike (Nasdaq: CRWD) — American holding company, providing its customers with protection against all types of cyber threats. The main product of the company is its own IT platform Falcon, which offers secure cloud solutions for various sectors.
In mid-March, CrowdStrike presented some very compelling data for 4 quarter and gave a strong outlook for the next fiscal year. Basic moments:
- Revenue increased by 63%, up to 0.431 billion, — against market consensus of 0.412 billion.
- Net loss per share increased by more than 2 times from -0.09 to -0.18 $. At the same time, the adjusted indicator turned out to be in the positive zone and amounted to 0,31 $ when forecasting 0,20 $.
- At the end of January 2022, the company had accumulated about $2 billion in cash on its accounts..
- Management announces excellent outlook for next year: revenue will grow to 2.13 billion, adjusted net earnings per share - up to 1,13 $.
Sales structure of the company
CrowdStrike International Business. The company provides its services on almost all continents, and receives the main income from subscriptions to the Falcon platform, which bring about 95% of the total result. The remaining 5% are for additional services, such as malware analysis, assessment of the damage suffered by customers from cyber attacks and much more.
Sales geography of CrowdStrike:
- USA - 73%.
- Europe, Middle East and Africa - 13%.
- Asia - 10%.
- Other countries - 4%.
In the fourth quarter, CrowdStrike increased its sales by 63% from $0.265 billion to $0.431 billion thanks to strong growth in subscription revenue. This segment added 65% to 0.405 billion due to increased demand from customers. Additional services showed the growth of everything 25%, increasing to 0.025 billion.
Sales structure of the company, billion dollars
| 4к2021 | 4к2022 | The change | |
|---|---|---|---|
| Subscription revenue | 0,245 | 0,405 | 65% |
| Extras | 0,020 | 0,025 | 25% |
| total revenues | 0,265 | 0,431 | 63% |
Key metrics
CrowdStrike Management Identifies Two Key Operating Metrics: subscription customers и ARR. The first value calculates the total audience of the service — how many corporate clients subscribed and got access to the Falcon platform.
The second parameter is annual recurring revenue, or ARR, - is one of the most important indicators for subscription services. This value allows you to determine the annual value of contracts with customers, provided, that any agreement, which expires within the following 12 Months, extended under existing conditions.
Last year, CrowdStrike managed to increase ARR by 65% to 1.73 billion thanks to strong results in two markets: Endpoints (endpoint) and cloud computing. Subscription customers also grew by 65% to 16 325 customers amid increased demand.
Dynamics of Subscription Customers
| Number of clients | Growth dynamics compared to last year | |
|---|---|---|
| 2018 | 1242 | 176% |
| 2019 | 2516 | 103% |
| 2020 | 5431 | 116% |
| 2021 | 9896 | 82% |
| 2022 | 16 325 | 65% |
Dynamics ARR, billion dollars
| 2018 | 0,141 |
| 2019 | 0,312 |
| 2020 | 0,600 |
| 2021 | 1,050 |
| 2022 | 1,730 |
0,141
Dynamics of the global endpoint market until 2025, billion dollars
| 2020 | 8,200 |
| 2021 | 9,485 |
| 2022 | 11,192 |
| 2023 | 13,431 |
| 2024 | 16,251 |
| 2025 | 19,826 |
8,2
Profit
CrowdStrike's fourth-quarter net income fell to -0.042 billion from -0.019 billion amid strong growth in cost and operating expenses, which year-on-year added 69 And 60% respectively. Adjusted net income, on the other hand, increased by more than 2 times from 0.031 to 0.070 billion.
Regarding free cash flow, then in the last quarter of last year he added 31% from 0.097 to 0.127 billion due to strong growth in operating cash flow, which has increased by 39% up to 0.160 billion.
Key financial results of the company, billion dollars
| 4к2021 | 4к2022 | The change | |
|---|---|---|---|
| Revenue | 0,265 | 0,431 | 63% |
| EBITDA | −0,006 | −0,008 | −33% |
| Net profit | −0,019 | −0,042 | −121% |
| FCF | 0,097 | 0,127 | 31% |
| net debt | −1,181 | −1,257 | 6% |
| Adjusted net income | 0,031 | 0,070 | 126% |
Management forecasts and comparison with competitors
Following the release of current financial results, CrowdStrike management also announced its guidance for the first quarter and for the full year ahead.. Let's start next quarter:
- Revenue in the first quarter will grow by 51-53% to 0.459-0.465 billion.
- Adjusted operating profit will be 0.062-0.066 billion.
- Adjusted net income will increase by more than 2 times from 0.023 to 0.052-0.057 billion. Net earnings per share will range from 0,22 to 0,24 $.
- The weighted average number of CrowdStrike shares will be 240 million pieces.
Forecast for next year:
- Revenue for the next four quarters will grow by 47-49% from 1.452 to 2.133-2.163 billion against the market forecast of 2 billion.
- Adjusted operating profit will be 0.289-0.312 billion.
- Adjusted net income will increase by 70% from 0.161 to 0.251-0.274 billion. Net earnings per share will range from 1,03 to 1,13 $, while Wall Street expected 0,9 $.
- The weighted average number of CrowdStrike shares will be 243 million units.
Comparison with competitors, billion dollars
| EV / EBITDA | P / S | Rates of growth | net debt | |
|---|---|---|---|---|
| CrowdStrike | Otric. | 28,92 | 63% | −1,257 |
| Octa | Otric. | 16,86 | 63% | 1,572 |
| Palo Alto Networks | Otric. | 10,71 | 29% | 1,751 |
| SentinelOne | Otric. | 37,68 | 133% | −1,665 |
| Zscaler | Otric. | 31,73 | 62% | 0,531 |
What's the bottom line?
CrowdStrike posted very strong fourth quarter financial results along with excellent guidance for next year: revenue increased by 63%, adjusted net profit — on 126%. The market reacted positively to such shock indicators.: The company's shares after the publication of the report rose by more than 12%.
Now it is better to wait for the correction, than buying stocks. The estimate in P / S < 20 or EV / S < 20, on which the company was trading before the coronavirus crisis in 2019 - it is interesting to buy shares at 127 $ and below.
