CrowdStrike (CRWD) 29 Nov 222023 Q3 Earnings call transcript

Hello, and thank you for standing by. Welcome to CrowdStrike's Fiscal Third Quarter 2023 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] It is now my pleasure to introduce Vice President of Investor Relations, Maria Riley.

you participation thank and afternoon, for today. your Good are President of and me and on Executive Kurtz, call the Officer. Financial Co-Founder With Chief George Officer Podbere, Chief Burt CrowdStrike; and

fourth beyond as this Litigation like the year our get we forward-looking assumptions that made outlook are XXXX. regarding any including started, our that, XXXX historical would our objectives, the conference Before expected periods to of future performance, Securities are as date within fiscal Private that These well call including call. Reform meaning quarter plans, the I of as this certain note outlook only statements represent statements for facts, and of of forward-looking those fiscal the not during statements Act growth for and

because future with new time time, the believe is events in reasonable, Factors company's and we including reports. uncertainties. in section any quarterly differ our whether any or alter results subject annual otherwise. to statements as results we risks on could forward-looking these Further to information, from and could other financial of statements undertake result included filings titled expectations Risk the affect the expressly update are We information the SEC not forward-looking are we factors make and make statements and that actual or and a While are do the to the company's based obligation current on disclaim materially

non-GAAP and reconciliation versus is A With on Investor in call stated, currently Additionally, GAAP at begin. be will to I our revenue, release, disclosed that, George measures over non-GAAP found be or excluding our today. to will non-GAAP. a with filed on may on earnings use the of turn now we available unless call Relations SEC which the discussion this website our Form X-K ir.crowdstrike.com press showing results all measures financial schedule why otherwise financial

and thank Maria, us. joining you, you Thank for all

Let XX% with ahead summary guidance. our a of non-GAAP results. growth we of of operating year-over-year, In and non-GAAP all start record QX, revenue were income, me margin which our delivered XX% net

Additionally, of our win There including $XXX XX% trends flow retention many revenue. we approximately cybersecurity. business, ASPs, of are of free in mission-critical exceptional rates, the positive strong we achieved million, see rates consistent record cash or nature competitive and

address However, come the to which we first increased in headwinds expectations. our to in saw I like the QX macroeconomic would net new below caused quarter, ARR

conditions last adding it discussed close call, approvals by we and organizations required were respond earnings extending of on extra the layers to some As our starting time deals. macroeconomic to to took

approximately $XX and In by progressed from our vendors in manage. quarter, dynamic impacted a decreasing win contribution though and customers lengthening our complex QX transactional also average require even to new increasingly non-enterprise delay more days million rates this QX. we This the with to pronounced. recession POV meaningfully ARR more over our net increased headcount new logo more that additions quarter-over-quarter close As became accounts, grew, saw decisions more smaller, of purchasing net fears XX%

just cash these While recognition last with CrowdStrike's we remain multi-phase the lengthen, modestly future not sales to are CrowdStrike deals and sales level. their this, have quarter's enterprise, that vast timing these ARR the customers signed To higher or close customers consistent days evolving manage expense to had also some some issues lost, start flow dates, delayed. cycles In believe macro. to to rapidly amidst but achieve into the average quarters. their and related which of investments, OpEx prioritize continue subscription budgets pushes QX, majority cycles In larger contracts

ARR some subscription last saw quarter, quarters. $XX to in QX, million dates, have we more with start approximately quarter, we into comparison multiphase every While deals in future deferred

to through headwinds macro these We QX. expect persist

as or for our resiliency position cycles. the Additionally, confidence macro us deter market net record not of discuss to see caution is elongated does We pipeline. in CrowdStrike increased cybersecurity ARR of evolving in and the important we're the a scrutiny of our But adjust flush, products, not entered inherent expectations, this more strong budget our typical Pipeline will with QX on new leading to more market. even the long-term an QX and expect a expansion given Burt going QX in we demand budgets, sales times detail.

are and stay brand Johnson, on recently greater initiatives more pipeline awareness front in of to now heights. drive focus With marketing ramping creation. appointed out our top-of-funnel realigning we pipeline working are to increasing to Jennifer marketing our We our and the helm, even CMO, with initiatives

from partner significant year-over-year. this million our number growing new in with in many were by also gained the contributing There highlighted ecosystem, XX% the quarter. record customers quarter ARR partner-sourced in leverage net We at $X of least ARR positives

consumer the of its and sector, the federal that areas is and public fully security bolster through initial driven the growth LAN cloud manufacturer $X CrowdStrike agencies allowing we year-over-year and milestone billion customers also posture vendors for as $X macro quarter, XX XXX standardizing manufacturer These managed brands platform on Complete traditional results all their US Marquee the million-plus a US US government prioritizing date, and luxury replace legacy end included agents protect that infrastructure that on points well Additionally, a the government to uncertain visibility standardizing opportunity to that and and protection QX Falcon leveraging approach and of our of ending Two that cross-sell XX both agent, the Complete District which CrowdStrike their institutions. a Fortune projects by Falcon, Falcon are as XXX In now a security and for protecting for the in state governments Global critical strong vendors leveraging XX who the and sizable largest to and brand, wins $X SLED Falcon its landed XX% ability moving multiple the conditions. represent to strong surpassed and are with are quarter Columbia under third of and with in consolidate million-plus a four business To in standardized even them state goods to products ARR workloads. XXX to modules, Falcon consolidating Falcon a standardizing rate. expansion are on their one cohort single expansion with up-sell customers, a chose local multiple larger agencies new our across for cohort forward financial delivered its US state Falcon. now educational on Falcon. a institutions deployment with have with in quarter, Global XXX environment unprecedented Global providing of

Additionally, one the estate, integrate as federal MSSP well its we offering. into internal of as that secured win with integrators be will largest its protect systems it using to a Falcon

Moving to retention performance. and our expansion

net the above our level Our rate with was highest QX in QX and which seven well dollar-based retention year quarters. at was performance, of last consistent

retention XX%. at gross best-in-class Our rates above remained record levels

We which six and QX or module or XX%, cohorts. customers LogScale the in XX% modules modules. are seven subscription Protection these This includes was for customers more Discover, increase XX%, platform respective -- another represents It and or XX% modules. adopt XX%, Identity a and more Falcon were more year-over-year our also and more with five adoption XX% product standardizing respectively. seeing more quarter our record and Spotlight, category, emerging

grew rapidly. Our solutions a Identity Identity attach another new for close emerging to cyber the to stopping the like largest to is ARR grow to logos was on contributor to breaches. leveraging attacks to credentials of Protection new With and detection, movement Identity within evade new solution use Protection record techniques continue core are Net to high, QX ARR compromise the all-time identity-based legitimate XX% tactics Protection and net category, and quarter. rate lateral

shoring services, financial spent attack down quarter up Protection routes a team identity technology, privilege and capabilities we from path stopping to passwords the seven-figure of is customer expirations, to for and across identified Falcon Our Identity launch. verticals, on Identity, defenses. global multiple mentioned well shutting secured without team another QX as retail, where US punctuate organizations directory telecommunications. share our with capabilities, accounts building users movement. in accounts active to Protection administrator environments. retain as and unprivileged brand. has existing changer more also and better multitude with wins of Access their implementing significantly very hardening their not of PAM. a lateral energy these visibility marked that new financial a illegitimate I'd expansion managed are reduce Global a to ransomware customer insurance and thousands like a this we game including value it Even access potential record LogScale security compromised years With both solution, dozens solutions, and recent security their were capable Falcon as data, across institution, leading a with and several dedicated XXX log enabled the more Identity wins This of Notable statewide previously resulting longer and in accounts To Identity domain misconfigurations, including provider password the LogScale cost log a a Falcon's that Privileged the efforts, included in has and by solution, their or turning being after of access a Protection POV, management Management shortly and PAM insurance,

help to and customers attack in exploit which Falcon we acquired The and expect to our will vulnerable quarter, closed from across acquisition assets eliminate modules EASM surface October, attack platform. external this Reposify, it. identify vendor, an launch and unknown the we to surface bring quarter, the XX During us our available module before management risk attacker can external management, early

public cloud over deployed build cloud growing ending front, we to in a with ARR for the public momentum modules year-over-year. setting continue XXX% On

Security as gain solution XXXX shine Falcon Awards. to winning continues XX% to extended and our embrace continues services, Cloud lineup net Complete Identity Best complete ARR industry close to Tech with Cloud customers CNAPP Complete growing CRN's and of including Complete. including quarter-over-quarter recognition, Innovators Our new

knowledge and highest for headcount offering Complete advantages providers. there coverage. closed that participants a the CrowdStrike's to or allows launched challenging MITRE's industry-leading are deliver our ransomware our Falcon economic EDR well-regarded Complete of already detection evaluating, our were XX for CrowdStrike from significant or service Complete XXX service us not protection by door delivered Out MSSP clear and firm through more evaluation of showcased did as hold enable The platform LogScale evaluation whether headcount and the stable. test. and expertise XXX% positives. first ransomware XDR, a like integration EDR security testing also leader tactics. means or appeal platform's was why customers. prior CrowdStrike in first solution environment, test, have won This participants technology of wins. to QX this was we human the and Falcon This and believe of in not managed the capabilities Labs demonstrates Additionally, variations Falcon zero several fully ATT&CK In decrease secured retesting involved allowed. We of false adversary, companies during is is which a prevention achieved MITRE Falcon the operated ransomware deep the partners Falcon independently attack The Falcon SE with third-party network

technologies value alert. Based our observed we graph platform, to speed low me increase win Threat efficiencies data important believe of AI Falcon's a businesses customers at with from CrowdStrike's a escalating security make bloating today's operating be as any gold business stitched protecting full-time than Falcon's together to the environment standard reflects verified to for triage, estimate remediate a and In from upon approximately our on and the history. reducing operational represents increase invoice. realized pressures and to average, Let other believe solve by rate security more XX% value and assessment false also them adversaries to offset costs, unique analysis, employees. enterprise X.X to today equating complexity IT We an operational derive on their threat and tremendous technology an repeat, significantly order customers macro not our proposition the time need Falcon models record. enables continues integrated consolidate machine acquired investigate advantage exceptionally agent it truly CrowdStrike platform, business which we and in mode and the as the learning Falcon a our platform that, in on while zero positive false we of positives, a in the the and companies consolidator Graph. cyber stack, within superior

While immune adversaries it is to pressures, macro the not technology. cybersecurity a don't is market The stop. mission-critical

resilient intrusion rates nearly detailed in largest threat million-plus investments represented in rates. As and module customer OverWatch and the adoption year-over-year believe world's and organizations report, cohort is our interactive $X cybersecurity increase latest best-in-class in observed retention prioritized, as is our campaigns. among hunting a We XX% especially

threat in remain our model are flow, the CrowdStrike's Even free With solution and as of our end of that, innings operating we in and will our turn unique journey. expanding call technology the identity platform, market. that Burt discuss continue investments, the modules in the our accessibility year create success and environment, growth plan and is belief grow legacy early detail. early the bring more by responding in our over of the best vast to attack of We believe escalating to Falcon protection it to our leadership demonstrates surface to detail. we balance threat cash growth target and are will our I still steadfast and and intend conditions financial in and year dominate with and to reach innovation, to expand macro ARR new to fiscal We disruptive markets. with current our vision in intelligence Burt ability With to results leverage more fiscal to discuss We new rapid our these $X ending profitability XXXX. XXXX billion

afternoon, everyone. Thank and you, good George,

As all a quick remarks today my non-GAAP. numbers, reminder, revenue except during unless otherwise are noted, mentioned

million note get Net minimis XX% contributing started, In Reposify, than include I that ARR, ARR year-over-year revenue ARR will results to and ARR. quarter, grew QX year-over-year. which reporting XX% the was we million. we $XXX.X are grew to ending less the new Before of acquisition the today de to $X

due toward contribution weighted one our non-enterprise accounts composition was cohort outsized cycles the macro any million-plus sales elongated George that with net more from new $X the in to Given in pressures smaller no discussed, customer deal. of QX heavily ARR

level, level was QX breach, worldwide. to our the to above QX, fiscal retention to customers security benchmark in value delivering trust Our since Gross companies posture maintained record of dollar-based demonstrating consistent rate highest retention strong and also commitment maintaining XXXX. with net our the its restoring and stopping the

the As George will opportunity Falcon believe standardize modules. adopt mentioned, an customers We business more we for are years enduring create more the and also to these on seeing trends platform come.

year Professional a setting Total for revenue representing $XX.X reach last reach to grew Moving of consecutive revenue over $XXX.X XX% XX% was year-over-year to to QX P&L. ninth the grew growth. XX% and revenue million. $XXX.X million. of Subscription year the services over record QX million, quarter last new

the terms at to growth our we geographic In XX% US of revenue performance QX, in at international continue year-over-year. see strong XX% growth in and

Number gross Magic X.X very Third efficiency was go-to-market efficiency the current plan. revenue. continued million subscription of of engine. XX% believe approximately expenses last million quarter of relatively and XX% indicates QX, remained In favorable Magic operating the supports a respectively. X.X, our in We versus our or in Total of excess XX%, quarter go-to-market reflecting $XXX.X consistent investment and our non-GAAP or Number and $XXX.X were total non-GAAP margins at third year XX% revenue

investments focusing with time initiatives macroeconomic we to bigger the to even our on mentioned, unit economics. disciplined same the goal drive response George to specific pipeline are the approach maintaining an in while environment, marketing As at

quarter non-GAAP operating improved Third $XX.X year-over-year XX%. X reach year-over-year grew income to a million, reach XX% percentage to operating by and points record margin

to grew diluted $X.XX and to million the reach than attributable of more share XXXX. QX operating at growing a Non-GAAP in fiscal XX% net revenue. income year year, doubled $XXX.X to prior $XX.X Non-GAAP on per year-over-year months first over income Looking basis. a also XXX% nine record or the of million CrowdStrike

approximately year-over-year flow cash approximately reflects grew and $XXX.X a was cash quarter cash XXX attributed with of of ended quarter shares increased CrowdStrike diluted to from acquired third of the common a approximately Free shares. record and revenue. the to or and million balance a XX% the calculate to average billion $XX XX% acquisition grew net Cash approximately We basis EPS $X.XX year-over-year operations million a weighted flow record million. Reposify. on for sheet. third Cash non-GAAP used strong $XXX.X totaled million XX% payment Our to equivalents to

like impact climate move view guidance, current I to how comments the of few business. a macro our to we Before ongoing the provide our about I'd on

for We guidance. year our fiscal bottom while guidance raising line maintaining revenue XXXX are our

we scrutiny mentioned, with we on elongated macro to cycles QX sales expecting to due to George though the not record are even budget and As continue, pipeline, the typical increased given entered a the see expecting concerns we flush budgets. QX are

given net provide macro will believe XX%. be ARR up to that not new uncertainty, assume below we the net guidance it current ARR QX prudent QX do is new we to by While

first approximately roughly a the flexibility in be mid-XXs and imply FY the net for an year-over-year. the rate new contract conditions. XXXX. Looking Similar ARR, as year, how full ending we with the height XXXX, modestly low we assuming a to would new more into year-over-year would XX% ARR the exercising on in up of This rate and of pandemic, growth new year for COVID-XX are ARR during FY macroeconomic XXs customers to subscription headwind half terms the payment flat, with revenue navigate partnered growth low organizations to net

quarters. deals We also multiyear to in renewals year expect than more previous one converting

year brought same an As of market and in the accelerated the XXXX at FY increased. date, we flow range key a XX% to have a in to of retention as time, pace. XX% superb talent revenue expect we free XXXX. dynamics of rates be taken result, on percent for employee Throughout cash and fiscal advantage At have functions

for and our pace next productivity, plans. focus by we to of execute new near-term hires to have our really position year. slowing our significantly shift team enablement the of execute to XX% us good needed while grown This in on allows plan putting XXXX, As a us in FY of the end to our QX,

macro the levels, to toward plan march generate does our leverage weaken target Assuming from we to of modest model. revenue see FY as in materially and in XXXX, we a flow operating to cash XX% path continue operating margin we environment not margin non-GAAP free current FY of XXXX incremental

to XXXX, of of of we FY reflecting in quarter growth subscription $XXX.X fourth revenue expect dominant the to to a For the with million, million revenue driver total XX% of year-over-year rate $XXX.X growth. be range being the XX%,

be attributable We operations million $XXX the net be income to $XX.X million million. and to of from to in million expect $XX.X non-GAAP the non-GAAP income $XXX.X CrowdStrike range range to to of in

non-GAAP income share CrowdStrike of in to be diluted $X.XX, expect million attributable per weighted a utilizing a net to of share on We to XXX range shares diluted basis. $X.XX the count average

For we currently of range the XXXX, rate income expected is from Non-GAAP operations in XX% between be the XX% to $X,XXX.X of full fiscal the to reflecting total and million. fiscal $X,XXX.X prior million to million, expect growth $XXX.X to million $XXX.X year. year revenue a be over

net attributable Utilizing of to to $X.XX. attributable non-GAAP net million. a We CrowdStrike income range George per and $X.XX to your to diluted take average to between in income we XXX be million share expect basis, $XXX.X non-GAAP expect XXXX fiscal million CrowdStrike the $XXX.X weighted and will on now be shares questions. I

Thank comes from question first And Barclays. you. of with line Saket Instructions] Kalia our [Operator the

you that here George, big of ARR metric drivers? perhaps or well. the for I to. competitors manage can everybody's into you if wondering questions guys. smaller quarter. Clearly, if are even might for have next-gen competitors looking different deeper could back here. like a to Microsoft unpack. one kind Okay. you Burt, growth was you squeeze having and in Great. talk as you, could any feel RPO an maybe you've to just taking that like Hey, question impact? Thanks competitive how the But any lot data benefit, Do is reviewed in dig my maybe also for A level housekeeping ARR I

Saket. Yes. Thanks,

win We in inherent if some elongated And in deals. there's increase remain rates. deals, macro we're close. you significantly days our having look demand to the fact, the smaller not remain headwinds. the in seen lost actually are products XX% So sales what them and about customers, And seen the those customers what talked we've enterprise, again, delayed the on high. We at cycles. smaller of strong. saw again, in an improved commented They we've we've on, seeing Obviously, increase for And quarter-over-quarter. consistent

and true and might you to I and standpoint, this for we are like from looking see breaches, as reduce work us. technologies closely, stop look Falcon. another favorable landscape really that And costs, So delivering. complexities, our what imagine, at very the reduce that's consolidator customers we're don't remains actually

So we we to saw look out, and competitive increased pointed the favorable at we remains again, as about. And it what us. macro that's headwinds, landscape, talked we when

to So I'll turn Burt. it over

Saket. Thanks,

noisy that are noisy prior I positive with think to several normalized it's to the ARR about there on or ARR business do first, a Well, fully And big I that in as is number. headwinds what metric. a that mean given a we duration CRPO, CRPO. picture, by relative designed periods really annual by So metric? and think mean captured is we when necessarily And create what fact can not correlate in that not our trends match

more the us as to would business, it multiyear deals. with drive include, for the given are often opportunity for gross deals high prior us headwind in expansion bigger periods. than respect where customer to year a deals is, our which lands this Two, examples In one within become sold as CRPO. it's existing retention renewals portion of for with and the contracts, year software, And year one difficult rates, bigger to renew a And one to one are compared creates these to bundles. we Some expand duration. provide to co-terminus cross-sell year to less us, the

And our some has our on on to that's net have evidenced rapidly be our CRPO. could billings those cRPO well would It have noncommitted finally, rate, business, as and do And growing this to increasing, And in the as are as by -- we retention been deals. expansion MSSPs become part built been new has then finally, MSSPs, our or as of So duration, consumption cloud. going a ARR. our uses expansion usage-based majority just business more vast business based, monthly. comment impact MSSPs on pressure of as

You that's outlook into as the most And business, the view as business. metric into our that run one that's is on. where really we contracts an how for pointed -- we're the or out transparent we though, ARR, our important the X-ray themselves. focused most

So, hopefully, clarity about we that cRPO gives on some ARR. and how more think

Thank line you. And Piper Rob next Owens the our from question comes of Sandler. with

Wondering compare versus Thanks rates afternoon. if my growth for international And contrast Good internationally. fall and taking you off. guys actually strengthen question. US could a based what to and domestically you see saw surprising little the on

So clarity if could provide great. you a be that'd Thanks. little there,

for Hey, the Burt. is this Rob, question. Thanks

So, geos. overall internationally, all we the States think our split United between we of our business. in obviously, hit and macro the is the general, United about as States portion saw biggest But the

So impact will generally to from ARR any be that driven sector.

with Thank MoffettNathanson. our you. line of the please. next Sterling Auty question One And from comes moment,

the net quarters? expansion several versus as rates particular. going to terms it question growth over extra thank Yes. on about the And macro really, or the Hi, you manifesting more customers? those how My year, for in unfolds new think dollar in themselves you macro one of hit guys. Is versus the rate is other commentary next and particularly side be retention in headwinds next do

Thanks, Sterling.

saw. a has in saw model that and great logos. there's that tremendous in So, since good think opportunities about ratios land-and-expand in very one. And that goes healthy model. us for capture have that started we've for new installed a to the we we that that that the got Having we said And new talked news we our we -- that feel that the traditional us, that, day We and still go we is those some to feel logos opportunity of really opportunity base.

talk feel new ever in from land-and-expand fact add seen just So that our opportunity opportunity rates, we've TAMs well. also the retention still about IDC We in evidenced think after as the by been clip. terms of a and that the we nice go we've at capture. to model, that opportunity net have those as we able the increasing new dollar-based new that the go net tremendous but great logos about we We a to have modules to logos today,

from next you. comes Thank And the our Truist. of Fishbein line question Joel with

service Day, taking conference. Hi. about hear George, -- Thanks Analyst Reposify, A to my you is going launched trail if any initial or you said, this interest demand? be in to positively of do talking that'll Wanted to of year. indication tax at were question. or terms of how the the user it Love think this And attract there's there. lot you management. bought for see external customers

are they Yes. to a to their policy-driven. seen as more Fal.Con. externally. that their really tremendous exposures We move interest since at and the announced and looking exposures And acquisition. We've configuration Customers are understand more the cloud, lot of

It of It management it putting only we're nicely chain at perspective suppliers And making looking not from platform. and their excited us. sure on are within and ties at not we're for into it overall, fantastic very risk and a for themselves, but what side. also terms customers vulnerability it's really customers So doing our fits a the secure about at it. add in their leveraging supply are it that across third-party looking risk. risk And

So, feedback product get market. so we're excited it far, and bring the to and very positive to launched

line with from our And the question Morgan Fodderwala next comes Hamza you. of Stanley. Thank

evening. George, question. Thanks Good for my a question taking you. for Hi.

that I'm how company, you're opportunity and think thinking else. from maybe of security do, But consolidator every invest that. is more from because much leverage? you show you're excluded bit time on growth free this curious, you've slow market a profitability to about a cash the here cybersecurity. Just about on flow you for generation time feel going to that you curious got this macro don't pretty is and how to maybe the impact you as they big like pretty to for clear that, I thinking not to more, feel CrowdStrike one growth sort like are clearly, going continue little everybody struggle or it's balancing others other been front an has do is hand, that? hand in have in as the of this maybe Do emerging a

And opportunity things shown track Well, I it's costs. the never play think always growth been to a Hamza. long balanced great game. go see other and great end all performance been We billion record. And competitors at now the we generation we look into mean, that the put consolidate it's smaller the billion within by into we macro our continue attractive continue see question, $X flow and you a if actually that CrowdStrike growth scale day, a exits in fall remarkable. at very And these plus for approach, it's we've growth I for with sheet, of But And you great we're think Rule XX as the platform. private us we future our the ARR for at this think and $X.X last companies of technologies perspective, at about balance pretty quarter. is cash cash. trends to to customers wayside, as with forward as as for the as opportunity a as fit almost evolve, a as opportunity a well us our might

we're at it, balanced delivering way again, look for shareholders. So that's and, focus investment that sure flow a on making we cash the our

our next And Nowinski line Wells with from the of Andrew Fargo. you. Thank question comes

this taking for question afternoon. Great. Thank the you

– was down that was new still you logos billion, scale. amazing, total of were the net XX% and I $X.X surprised that you X% it's growing at I were But So wondering, is this quarter? added absolutely ARR

Thanks, Andy.

about, our terms we So in And increase new the XX% it in space $XX logos. saw in actually that what as push when what cycle drives equated we think saw logos, we space. of net new corresponds our is talked SMB the that net SMB space. of And space of terms talked SMB million an that in velocity could in really in deals one we The the that we that the of sales out. into about to

logos, big million about you it do and you when so what it's And a pretty think the of in that means terms number. space XX math, where in can

corresponding what SMB logos in to we we how net space. think saw ARR that's new So new net from about the

day what increased surprised cycles perspective, the out when respect amount money at space. the end to SMB got of that we the that pushed and saw we in from the with weren't the So happened that of sales

Ho comes line Blair. next question with of from And you. Jonathan the Thank William our

there? are can to maybe Jonathan, question. Operator, we next the move you

next question line of And Certainly. Markets. our Matt comes with from the RBC Hedberg Capital

Great. Thanks you. question. my for George, for taking

smaller running sales been can that to there you've like macro do And kind than of long all cycles, time. of do? been you sooner the a in in of pop tactically see at anything going normally anything the Just you obviously times this you are for competitively in? you'd assets like business side the industry -- customers that When you from perspective things a changed has the security accelerate like play in sort do this? up, headwinds You've that

Sure.

So let me take question first. the latter

we our up actually rates down-market in win I mentioned, space. go As saw the SMB

getting really that. to pushed that just making deals saw fit we can And and as the it execution cycle enterprise we sure focus expect. And on you that like to and of the all takes checked deals of lengthy cycles effort, through that with the we go partner continue and And what continue normal just also but have that legal we So work it's us. that those you partners to well approvals talked kind privacy, more in various the that important is getting it when all compliance, of of you of about, continue to -- pipeline what off that to to on, in only in Burt and segment, obviously, have and we vast see you have. do the that we're would that's our making try focus. been teams, sales with I think and leveraging focus reviews out the ahead not sales we full about And from our sure think But network working the impact do we the internal to there. a

will, headwinds. again, in been as macro in multiple great opportunity we economic if earlier through out, So you through the think you I push cycles, do said as it's long-term pointed security. And sales as an question, I've a cycles, I

comes And Liani the from our of of with Tal line you. next Thank America. question Bank

soccer, win budgets. take Hi. We'll after in I to have. hope better want the news ask but today I about for okay. it's you what

kind sales is XXXX that the larger touch if linearity, risk which the fluctuations? low question of of go asked we in don't and no new January, companies budgets we off we're into and lengthening off pricing now, end quarter as less are working budgets you sensitive to see So to important is trends? around about mind, The budgets see and one on, work cycle And the the quarterly just to behavior Thanks. we're market. and XXXX set, two are what's going about or are similar which

around and take enterprise There's they that. again, optimize we've we cloud, the are so Sure. think many getting budgets, that When to are is mandates I'll move to is cut. about of security. customers And the spend seen all that just part consolidate. budgets the feedback what do, though, as the in that first Yes. not looking

past, may spending whole So the on with Tal, and complexity with the value. vendors, looking time spent they of this they're for of and this, not much consolidate in like a selling CrowdStrike. about a the is It's to customers, lot money a of point And pain bunch be of we talked companies the about agents. we cost. when as We consolidation think huge the

because where deals, that do with focused think, work, And on. has the and to consolidate having they'd through shines. do extra fewer the vendors, that's And and got upsizing we're they some take help going conversations spend that's, cost, outcome. more I a CEO, through how because I'm better get cases, a of more go down, may all we've to So how that in spend and CrowdStrike all value with again, we're the they're what been it some around approvals go the But we way money, rather little selling. the

enterprise if top and monitor and had, in for mind any But security the environment there's of So, see changes. we'll still obviously, budget all I've top the customers. of remains that conversations

the take second part, I'll Tal.

comment things. So, what pricing, that I of is first, on couple can a on

discounting is, is outsized QX. to there. we've with no additional be There that were see I, and see on consistent. any escalations, We consistent George we seen discounting change is, for didn't one two deals. Number ASPs So

overall a that that that I So the increased with about -- and our and in was home play platform drives and think level. bit sell sales consistent value. QX, QX enterprise point just our And ability to cycles

I how that, with part second your think the that's When for I to I you think think do -- about that. just about we We prepared pricing question, of from the this linearity, in how up I about that's we about QX, about So into talk about talk to end new XX% coincide think talk think that the when saw of we activity ARR, did on net of the headwind anyway. QX remarks did going headwinds to about and accelerated quarter. some at

So that's that. about how we think

our Thank the you. And Guggenheim. DiFucci from line next question John comes of with

for my question. taking Thanks

multiphase in said the remarks -- you prepared pursuing You about customers subscriptions. large talked

bit. intentions? the ramp dig How into or if period long just of you little that for we a do parts you commitments expect can deal verbal that Just have be? ramp maybe the And to do

Thanks, John.

I'll part the first. So second take

do have They're commitments So deals. from those signed deals. we

think structure, to respect this subscriptions. we we the Just with about that have start when phase date

how deals. I QX. seen and deals that going about the seen, patterns multiphase I those consistent So then, And that's to think think we we've see something think that, multiphase those we're think with about in that when we what we've

that sign think budgets. to deals, deals. They're going they're more larger of look those to enterprise those at going I their

to So quarter a their to be this well, this they're and question could turn I the and part say, which date sense the on at we and deals important okay, if your saw most end. anticipate we it -- deals look think in they're going going then at point, makes OpEx, in, about are that, the we QX. is that in locked QX, what the post that's But

Bank. Thank with of from you. question Brad comes our the Zelnick Deutsche line next And

telling prudent assumptions much for coming inputting that maybe are than to versus transparent guys I only that comment great. your it Christmas. asked perspective. Well, QX much you're QX? in, guys. conversion fitting a pipeline saying Santa me ones little a inform I this also I'm And the more is because environment maybe Thanks. into how that But for you're you like kid explicitly you no Burt, budget expect Claus rate it's And flush Thank wondering forecast methodology how guessing is being this, guess, isn't is and differently, the saying of and your I'm the it think assumptions adapting you so more and others. bit in your

Yeah.

the the So pipeline it – really, see did that to question attack record into want from we quarter. I of fact again standpoint starts from that, the going

space. this I on quarter So we've goes think it the and SMB what back to seen in enterprise both the

think macro to is that I consistent the the themes we're going see driving.

And continue see the I deals. going We're think the we're to more pushed deals out. to be we're see on SMB see to going enterprise, going to space. multiphase

one we've it's just are that of to And on important the is of So that that's are the the we in top continuing just add focused thing I have that, macro. about we lot be that of And it and got guess a drive I the I to one that funnel. think quarter. those how things programs that is to want going overcome to

line you. Fatima our Thank with And of Boolani question next Citi. the comes from

clearly Thank negotiations, respect these guidance related become more more as negotiations? which you you maybe are more flexible a team just net respect doing on becoming to introducing taking the get of maybe XXXX this business a business, of influencing implications of does how afternoon. in changed how around around start business some how to engagements my a shared more customers activity more leverage prepared can little but getting changes preliminary on and front, sort and from those the some business commentary a is the invoicing bit of is a you of you're payment a quota your fronts, on flexibility Good new does matter, you're in little environment? more some in appreciate bit And number as if little fiscal detail the do the the versus collections challenging those I activity. to coming you. Burt, incentives with becoming of us renewal, questions. contract particularly for can on with some lower of your that share to Thank model from to to sales threshold behavior detail wondering with renewal to bit

Fatima, good questions.

I'll them both. So take

billings obviously on So impact respect that subscription the start structure, there two is dates One cash. the mind. with that enterprise come things will obviously and deals are and to to phased

The when second one is those flexibility due. become on payments

impact we've But our meet meet And respect that. changed. Visma their strong to customers overall, have and and with as our model lines, to of to with business see their course, that an business – cash and of well. I will working on flexible budgets, we're model been hasn't time So still because consistent our

standpoint, our the now we've free model And that and have. we – got we've got see respect is the remarks. to It's the how well that this year. And what to with business that we the in And comfortable I macro see the fact customers. being of big well that was appreciated the pandemic a be about back great XX% that margin we're in a of the I think flow when a I appreciated the prepared forfeit. that to think durable. respect really goes terms this to cash flow strength back the I I on opportunity in picture, doing talked to that respect just the things structure next from with cash really path with And to with all to talks that headwinds partnering think

the about new going to we about -- our renewal very second, and is with with is to there think about logo. our new team out that definitely a renewal to from that customers. And the our getting client than actual and think business, in think partner larger think with able sales excited when business be to how net then go lower news light and you to out still respect respect that good larger, cost to existing generate is ARR we we're to of compensating opportunity continue So, the it I an becoming

that. So I some think is leverage there to

think respect year. in thanks I leverage good with really next to for me for the question. why that we're But that's about a So talking spot

Alex & Thank our the next Company. from of with Needham you. And Henderson question line comes

kind se, we I of what if talk market to what could of of or segment share in their that terms in context, gaining you but workloads. hoping seeing Thanks. per progression rather in share are And Thanks. the little of cloud within accelerate picking bit to decelerate not -- do those about Great. workloads the you're cloud was necessarily up, think of in willingness growth that a you the that rate you're company's or terms moving? are your

the is Yes. to cloud what Thanks. the Obviously, of of growth. they cloud, customers terms are cloud going growth flex is and in the sort what it in put macro

as we migrate we continue what protection, as we've cloud. they in both suite leverage of a more workload technologies well and full security protection capabilities. workload customers a cloud cloud and have We combination the terms continue because got that of win our of to in our we win those to In posture as to management more see And areas. protection

it's So cloud. cloud it's still terms the They're technologies certainly been our leveraging they're across very, in board, to migrating our the of as And workload all protection strong. integrated. very

are the broader and they a win But we've cloud business. environments. in there's migrate. in and So are to customers that's we our and we choose for seen obviously, environment, there when them, in what And going continue how those to theme

next from Roger Boyd comes comes line with the our line question from Thank of you. of UBS. the And

just taking for there customers, the practice being of to bit. other the on on follow-up timing on And just subscription Burt, end mostly and by Great. more any a a start whether start questions. factors a little Falcon driving solutions third-party resource consideration behavior, constraints, aligning care the multi-phase are just sounds unpack behavior cash to just there dates. Thanks It flow want then dates my it's consolidated like follow-up. of maps I platform? it's road this or but

mentioned are deals. confirmed that you think I these

Thanks. showing is up. So are showing that want make sure up in RPO. that I deals just to Those

Yes. Thanks, Roger.

and the We sure at the first on answer deal. align so at those They their times, I -- signed that And got are driver I for OpEx. in. that So dates part resources sense those locked their good they staggered that news your it. biggest them. confirmed. the end think looking think looking makes of are They're to the folks starting have is right is us, making for deals what question, the your to They've subscription at

will Thanks Some be now, RPO some deployed question. the the might they might be for later. be And in calculations.

from And with Jefferies. the our next you. Gallo of Thank Joe comes line question

to expecting think on comments Hey, start George, and alleviation near-term is they for conversations with XQ about this budgets guys. might a as on XXXX Really or XQ rip-off, on Based more your we your question. or what a of F them? they quick that long-term appreciate macro. the Are view cyber with normal the Band-Aid customers, is their new see next year so? appreciate

year. do it seen wisely earlier, Well, customers and it. obviously with any We mentioned, cut looking vendors and as looking resources And better fewer our They're those are hey, they're and I consolidate. haven't come back we as say, next I to just get deploy seen to haven't mentioned budgets outcomes.

whole lot the they're coming that drive to globe There might they seen haven't adding nothing will and to seen, that we've get we area and what customers security want in you in spending around -- strength. have buck from consolidated of that's bang it They're a way slew I back exactly my next talked on to in the conversations has a So, that. and come compliance capabilities. where deploying to cloud. a again, And, the fashion. they are their less is an And in a think again, They're deviate I prospects. requirements of do we tremendous spend. globe that for year. Nothing most over all said that's that the additional But anything as imagine,

any turn concludes closing George for Thank to back over call I remarks. session. to would the Kurtz you. And question-and-answer now our that like

all today at time, thank for we you investor look forward Thank seeing your certainly day. your to interest you and and to events. you, a of and our appreciate wanted have I great upcoming

Thank participating, today's disconnect. this conference and you now call. and you Ladies for gentlemen, concludes may