CrowdStrike (CRWD) 31 May 232024 Q1 Earnings call transcript

Good day and thank you for standing by. Welcome to the CrowdStrike Fiscal First Quarter 2024 Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded.

to Riley, conference Vice-President like speaker to now Maria today, of would hand over the your I Investor Relations.

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

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

as only of outlook our the of call. represent statements forward-looking this date These

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

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

difficulties. are any would ask and one technical call patience event for our in your that to note from today's I European of like conducting we of offices

now turn will George. I that, over to the With call

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

strong early growth and execution increased free Our continued margin, for top growth in will time. achieve built public our despite have contributed can we company drove the focus insight which profitability I cloud. margins, sustainable exceeded of we cash and cover a to GAAP both mega-trends three Reaching non-GAAP metrics, history. has the a life consolidation cost as comments record results. more provides Burt unfold, detail. GAAP discipline, first company exceptional record into so and across guidance and on continue bottom-line our profitability flow, as gross CrowdStrike my and moderated translated over advantage to strength AI, macro-environment model time strong the in clear what results We financial challenging our why to will profitability, and in the and bottom-line we a headcount believe

AI. the has our CrowdStrike better inception, be will Let's leveraging outcomes within been and start with Since own drive to forefront to of customer efficiencies business. AI and continue at

lowering by and business industry-leading our One had benefiting of and higher example to is costs AI rapid remediation model utilizing customers, Complete. benefited detection AI addition for In Falcon yielding our margins. financial

achieved margin For profile and rapidly possible to not offering margin with we would The years, for without our to have business a of margin. managed us in that AI gross leadership exceptional that enabled been our company our scale innovation an use position overall our product scale AI. has have exceeds

advantage, models exception. and an cyber outcomes, are which security LLMs bandwagon, we as now training business security customer data with relies have or mix content a Generative derived human-annotated context jumping that the transforming is for the good world as transformed are Large While only driving the others date data on are from and and AI better they on from best the on data. no cloud AI-powered trained having inception. AI the language just is

that expect we positioned new LLMs not. time, data benefit technology. from to over will commoditized become is While this they the CrowdStrike will uniquely are on trained which

petabytes events OverWatch, daily Combined of with our you human attack dataset new get from of captures been services XX and has data threat sensors. telemetry. trillions intelligence incident analysis Our our and of unrivaled and fleet and that spans graph years over with global response high-quality that from paired complete

unique advantage, the of we all put, of data a Simply and CrowdStrike has and set human correlated most believe data across cyber. sustainable powerful machine-generated

We adoption models, outcomes. force data Our from better generative better cyber see and growing advantage within as moat yielding and rapidly adversarial standpoint. AI security democratizing competitive both automation of creates better protection the an unique a a

expect we will easier actors for the less lower AI perspective, advanced of malicious entry the sophisticated LLMs even cyber-attacks. of to barrier adversarial an Generative to expected From that We create to adoption make is campaigns. crack standpoint, nation-state-caliber modern for protection it [indiscernible] a see AI for the like a will lowering this for even curve force demand dramatically cyber transforming Falcon. believe practitioners into user. a technologies power as even catalyze security we by democratizing learning analyst generative greater From attackers

loop represents Intel faster human to gap, latest outcomes, and cyber OverWatch, Charlotte overall innovation Complete, skills a AI an the will helping benefit we this new Tier-X net CrowdStrike's with AI, will analyst faster security lower fidelity reduce analyst, power head yield and customer, an operational a threats exciting the mind, benefit the all high security to security our teams. results, CrowdStrike's worldwide to with introduce Tier-X in cost. generative advantage, the costs. uniquely believe response data analyst. Utilizing advanced and results we Charlotte Charlotte better continuous to Falcon newly teams With AI Charlotte feedback of in AI security from AI minted

we a be and feedback while continuous This commitment customers approach CrowdStrike innovation, of other to security, lead industry initiative, requirements. to AI to AI. innovators. cloud, helping this up see next position keep range the of and protect help stringent content their on of develop generative CrowdStrike AI security match their loop with vendor in teamed meeting Demonstrating solutions because is AI critical. a AWS able And generative to new no will to powerful this human-validated in cyber through wave protect AI this, CrowdStrike's Through teams AWS journey. has leadership services, applications across and and already bring together will customers that accelerate our

of resources and perfect recent this also generative partial runtime Complete to environments. with dangers with team and small research more to expansion A across of is support this solutions, products example to fully customer provide AI have protection managed leverages client company. multi-cloud environment, a seamlessly monitoring faced adversaries growth, their significant their to or expanded a from multiple aware This others deploy BXB compromising the development customer Falcon This and Security without people. with coverage, their scale support hire both Cloud cloud or having public-cloud

macro accelerated Another efficiencies realize platform. with results a of agents, consolidation. sprawl, drive the businesses. to customers CrowdStrike need has XXX% businesses surprise SaaS can and like costs, to protect, mega-trend Falcon best with continuing enterprise this, reduce reduce only security average, to ROI for ROI over reduce to and unfold power their On customers no for companies it's The backdrop is with in cyber vendor their protect turn

our net-new In longer which more these can We QX, for stated deals year-over-year even exceeded assumptions. ARR larger million-dollar complex customers ARR million as have the cycles. delivered net-new plus quarter, from in sales grew our $XXX.X

at deals we ago. success or look pipeline, in year customers, Our net-new the back ability the we to momentum us the QX, ARR deals consolidation When compared growth year. gives us with QX speaks large deliver pipeline remainder expect half a close, eight increasing the and the record using in We XX% modules, over our to tracking customer in to demand Falcon half we more the back more of for trend confidence of to continue, our giving platform. In for this closed this to believe of year. involving the year, confidence

Over have greater new months, and personally their want consolidate Falcon met same many I drive topic, with security customers, of stack partners. customers capabilities. all and on to cost our prospects, the unlocking efficiencies while conversations few the that centered These past

a share customer Let improving to while security recent outcomes. highlighting CrowdStrike wins you've [indiscernible] your cyber me few companies consolidate

with process CrowdStrike. Falcon, wins legacy CrowdStrike units. customers across nine their security on modules their purchased First, XXX vendors new these two one These modules multiple displacing of consolidating and unifying modern business Each single are in Fortune our organizations a new on different adopting their standardizing platform XDR next-gen and customers. with environment

Falcon Dell. One of with by their healthcare generated my frustrated teams' eight security Protection, legacy in secured quarter incidents. Recognizing by was modules, by security their consolidating Identity have total hampered increased Complete, CrowdStrike, a false product on was gain Falcon critical seven-figure organization their customer favorite This customer to positives customer regional could and the which of brought partner, and value volume value this adopted efficiency our they stack and deal. including by LogScale security win us a Threat modernizing this the

our share in market service leadership the NVR Forrester addition, security a MDR partner beyond Falcon the position showcases MDR teams MDR consecutive extends top as have platform services for detection the built in number-one XX% for catapulted modern services managed Gartner, the into market ecosystem, share our choice. MDR Gartner's Services In on of the vendors leader platform, MDR Wave have to and position by response CrowdStrike and managed report. top and XX second year defined Falcon managed of for Managed their our their of by CrowdStrike's

that their proud top them are many build platform different of so partners, the businesses We enabling on to Falcon CrowdStrike. powers

This PaxX, MSP ecosystem over prime market a cloud entered serve AV growth. partners partner partners across for today. industry-leading continues to and meaningfully that product vendors consumption PaxX MSP market. with to APJ rapidly MSP route marketplace and displace to NextGen partnership recently CrowdStrike EMEA, leading CrowdStrike and partnership contributing America, a North to expand born-in-the-cloud provides the use with legacy SMB our opportunity the into the strategic XX,XXX a Our

PaxX's and the for product PaxX purchase, with by MSPs leading the businesses, same software protect of now base will ease are deployment, be turning partner able world's technology marketplace XDR to fully-integrated security. including increasingly to their selected to cutting-edge billing largest cyber and run enterprises. their the customers MSP end rapid

in the continues expand. public sector to momentum Our

CrowdStrike not massive of competitors cyber has competitive remained dive customer the market. we where strong our into out disclosed all choose they X from deep Microsoft The defense, wins security times in win enterprise with eight government sector our us a a Level US Public agency. Defense. announced or well ILX granted Authorization ILX US contractor of Today, we an top Falcon at a Impact the the XX positions Complete win reach and in when to and an environment over included the and certification changed Provisional since tests, that our XX a CrowdStrike Department win federal across was extend IT April, major rates quarter in quarter.

more Organizations deep security while today, with than that their efficiencies before, can programs. expertise breaches, security stop driving partners ever need in

However, Microsoft, coverage companies costs. experience from higher less added and complexity,

will While from employees enterprise million that's cost the $X.X customer year told excessive or required XX,XXX more staff additional With to annual just five, EX over Microsoft's increases, upgrade. subscription $X.X the increased Microsoft by this the EX support [indiscernible] at excluding cost of CrowdStrike to us go for complexity. manage costs least moving to to million would upgrade their be extra and than with the

rapidly cyber map and is The adversary a cloud it increases third for that realize EX representing the as long is is requires their they and business. The all more sustainable our quickly expensive, for headcount, battleground. cloud tailwind customers the more using new When out, megatrend Microsoft emerging security risk.

will We in cloud exploitation is cloud actors service in Securing year-over-year grow in that and paramount how to increase cloud a XXX% threat importance. observed environments. continue a assets increase operate and to have in today XX% know

most As deployed seen companies, the of largest in have strong some of net-new growth a for clouds. leader public protecting we ARR and critical cloud module

cloud-native momentum unifies cloud a cloud cloud their offering replacing Our agentless that's capabilities as products from into Falcon. environments security with Falcon multiple single consolidate and offering run-time all driving deploy and security across incredible customers easy cloud our point to build customer major security to it's agent

between today evolving rapidly widen and identity, your data why can the expanding and endpoint, modern Tying platform, that you it gap is environment so We've covered cloud demonstrates this together, Falcon. innovation XDR have the see to critical continues one on our to threat lot and competition. the all a relentless CrowdStrike unified, protection and

few key will a In closing, reiterate points. I

AI First, and advantage built XX by expertise. CrowdStrike the unmatched combining past over data has intelligence clear our a years human-threat

and cost-effective advantage customers, For security. cyber CrowdStrike's meets better, more faster,

business CrowdStrike signs our our For business, [excellent] AI (ph) through model differentiated efficiencies.

Second, cyber era ushered into we of introduction AI. security new Charlotte with a the

model single costs reduce security protect a runtime built sacrificing to They without to platform. their agents, need To reduce their must complexity, environments stack companies with consolidate that reduce Third, to coverage And generating and building we and of we free cloud choose durable a unified customers or to platform, rapid from built security. at a in believe flow. CrowdStrike. winning earnings this, scale, cash fourth, achieve capable business robust addition growth

the will turn discuss our financial that, I over call Burt With to results. to

Thank you, afternoon, good everyone. George, and

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

delivered balancing performance and financial of continued challenging margin, business growth reaching fabric which with CrowdStrike's when We culture, even guidance gross in the our cash income, operating macro-environment all the the revenue, quarter strong our income, flow, first free a net diligence model We profitability. of and to strength operational our exceeding with excellence discipline and speaks the believe new and records. subscription includes on ingrained

resilient, above the quarter and similar year. billion, with We remained assumptions. focus up environment and especially new larger we was of consolidation expansion The sales our last $X.XX typical demand execution, than ARR which ARR cycles, to with between logos quarter net-new the continued $XXX.X deal we on stated see relentless million, achieved was ARR longer QX. QX increased net-new with mix deals scrutiny over cross-sells, well-balanced although for sales ended to ending XX% reaching The

very We XX above net expand with the our now respectively. and five and land represent more more, Subscription success to strategy subscription modules or once be customers QX. XX or benchmark with seven with in XX% customers, and dollar-based pleased our to six retention or XXX% of continue more, of rate again the

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

the in the East, quarter, During Europe, International Japan. saw revenue strength Middle XX% we grew also and year-over-year.

was subscription crossed margins non-GAAP the margin margin performance Total Our first outstanding milestone with new and ascending first-quarter both and XX% total heights. was gross margin non-GAAP gross to non-GAAP XX% time. gross gross the for subscription

quarter. optimization Our our workload data in margin investments in and improvement gross drove center the

to As margin said platform on basis fluctuate the in quarter-to-quarter we subscription past, point up balance capacity we expect a have as gross investments by with functionality. growth optimization one we new to and

the million we subscription execute were non-GAAP future to long-term continue Total further margin of investments first in plan drive above XX% our year, revenue these enhancement expect We XX% or in operating sustainably expenses XX%. drive margin of approximately or to revenue. the versus as gross last on to $XXX.X quarter $XXX.X million

we The sequential a on XX number marketing flow events continued of reflects X.X In programs. and basis, metrics increase efficiency timing both in our of and sales the magic free in-person and the achieved of a was QX, model. reflecting cash rule our marketing

grew and attributable in we a QX to grew First-quarter net basis. XX% $X.XX CrowdStrike $XXX.X non-GAAP margin Non-GAAP $XXX.X million million per share XX%. or of on record income diluted income reach operating reported a year-over-year to to a operating record

shares EPS to calculate on XXX a and Our was non-GAAP attributable to weighted-average million approximately used shares. totaled first-quarter basis CrowdStrike diluted common

company for We time first also reached profitability history. GAAP the in

While we yet of GAAP proud reach milestone, are very profitability. to we have this sustained

XXXX. record our QX benefited reaching up significantly moderated pace year, a comparison financial expect at increased to Free billion. demonstrates the will to in hires and QX revenue. time. a grew grew record quarter operations short-term much FY to $XXX.X fewer approximately net-new to which We We to XX% XX% deliver a GAAP in in XX% the throughout cash flow a Cash year-over-year or approximately milestone from million flow the million. strong equivalents, this remainder albeit more of cash, ended year-over-year we with $XXX.X of due sheet, cash pick profitability $X.XX balance first that believe model investments from

I I'd guidance, provide notes. move our like few Before modeling to a to

half full for for and the are net-new year-over-year guidance call modestly We to year ARR the headwind first XX% ARR fiscal which revenue raising a to the year. first net-new our ARR maintaining assumptions net-new up our in and the line half for fiscal for in year and

and to the half the large Our the strong QX confidence including where year expect give pipeline to year-over-year in growth back consolidation us in of return ARR. net-new remainder deals momentum we with

free reminder, maintain a of billing XX% midyear flow our given achieving for This expenses, quarter of second see and the expect is fiscal the cash the seasonality ESPP timing quarter as generally cash the year. our Also flow and margin pronounced generation seasonality the purchase, year we lowest more target year. of to

and of of by income, higher interest in duration assumptions during inclusive are expenditures on balanced tailwinds income As And is taxes, CapEx. taxes, briefing this impacts we operating income interest discussed capital Investor the and billings cash full-year lastly, for our leverage, lower estimated and from April, unchanged. cash increased outlay our positive

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

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

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

revenue our XXXX. to and the prior XX% guidance of XX% rate growth raising a We fiscal currently profitability million, for full-fiscal reflecting in to $XXXX.X revenue to $XXXX.X be range year. of the are expect We year over the total million

to between $XXX.X expected operations million $XXX.X and Non-GAAP income be from is million.

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

will now take and George your I questions.

question Kalia with comes Our Saket Barclays. Instructions] [Operator first from you. Thank

proceed. may You

my thanks taking here. Hey congrats the And question DoD great. for authorization. on guys, Okay,

Thanks, Saket.

share George here. beyond talk macro stick Hey, given we taking the a for little endpoint that opportunity George, continued specifically. how you're one hey just but here. in for just about for share and just gain maybe Burt, what about clearly, Can feel gains? just you, seeing platform mean George, broader a legacy CrowdStrike -- I'll happening, question endpoint endpoint, has curious, I'm I thanks in my to and curious everything bit you

are for about market market-leading XX.X% feel that good our share at look the when penetration players in heavier still that in current I Again, the many from take you and a look market. fragmented North legacy still -- It's leadership America, rest And very converting but got the Well, penetrated deeper, you in geographies to at of endpoint geographies, and have to we be continue different if at we've those in players. world particularly that leadership the security. opportunity. market legacy obviously, there's modern

So really fragmented a feel it. I It's about good market.

the next-gen the and conversion technologies for just you of players continue legacy foreseeable ongoing at numbers will like look If future. CrowdStrike the into

you. Thank

with Our comes MoffettNathanson. next SVB question from Sterling Auty

You may proceed.

Yes, Hi, banking the a from give what and of billings the kind even business if quarter. sense us in from guys. you thanks. both the of maybe crisis could disruption in the linearity, saw of on in kind impact I you ARR wonder March,

talk of one, banking one, impacts are about Hey, So the -- talk impacts you? Sterling. let's How the let's number crisis. about the number

So banks. a for was material ARR there us, on from impact not the

cyber particular banking need robust regional gross we with in quarter. to was retention Overall remained close Banks churn continue industry defenses. and in And the the think impact deals banks I de-minimis. really high of from best-in-class. the

in the felt segment. pretty terms of good that of we piece particular So

cyclical it for through billings of billings, overall primarily and of terms driven seasonality. course, is In quite us is,

decrease. deals would an into renewals our up falls overall the have QX, we has then and came impact and QX see which the So largest that impact

of on we as the idea it. focused which an you opposed -- So and think the ARR, that's focus have gives just as about And business how know, the to whipsaw business billings, can the effects ARR, you be on overall can about health is which

you. Thank

with comes Fishbein from Securities. Joel Truist Our next question

You may proceed.

Thanks Thanks for the for for you. curious. just Hey, George, update AI. I'm taking the one question. on

recently threats of a some surface, exploited follow-up. result increases I it you've of may models As any proliferation quick there out threats as and that curious new if have the the of seen that been have attack are just new a these

for we and AI. Well, to we continue of seen have time period some see adversarial

AI, deceive So specifically the to use to security the adversary try systems. by of

time. So that's been some going on for

what new able able for fact be a is I the now very same that new to deliver think as create AI to to exploits, it emails, easy seeing phished vulnerabilities LLMs we're be cetera. generative novice et becomes nation-state a adversary with capabilities to even have and the to

will be ongoing effort. So an that

we're Charlotte we this really about excited announced which week. again, AI, And

a our think to it's we're us for absolute we analysts I workloads and provide really the able intelligence changer through the the and that do the and analysts for Falcon an right game have to company platform. compress of have what and lot

monitor seen to but that an continue some we'll that's been activity for ongoing So we've that, time.

a Great. Falcon CrowdStrike increase may that follow-up noise your And on Complete as a talk out competitive about this of there's I lot just XDR, release new just think the there. space? how you advantage can in

Well, automation is can is an provide noise about industry a of at that what does technology. lot you of in and level when leverage do a and a it lot is XDR in our automate because now talked what it XDR AI additional of terms still help the offering, and look we driving with really of business, in we've to use immature as an complete of we still -- there

peace a allow service think of staff take third-party really I outcomes, and in they the mind, to that it drive faster with already built get wrapping leverage response, we've to allows data, better down customers' overall that us models costs. operational their complete can

you. Thank

Hamza Our Morgan next question comes with Stanley. from Fodderwala

proceed. may You

my for you you thank as have question. I Hey a taking for guys, good well. question George, evening, and

So you're of released? drive you're conversion? how days. can services know early that offering? going like Just demand sort curious drive top-of-the-funnel of thinking I about this about something Is that. mean, that to SKUs there pretty you're I AI that thinking you've it's for monetizing how you LogScale? more it's some I'm more new explicit Do is curious think the

foundationally that's throughout modules something additional lot it's Well, going of and usage into customer a the drive base. to believe platform really and built the we platform it's adoption of

So we'll start there.

it able to we've advantage let's leverage time, we think the train think we've monetize as but advantage that let's most the will, get with iterate I it, data because I SKUs, know, have these XX can that being you we've and talked and because us look call, see into and that evolves with used I really the if work be we As allows attack algorithms interaction as for it got is human the it years years training. customer about first real got think and let's of how to earnings if over we'll attacks LLMs will specific to foremost got pairing, XX data I've shine the in of a base,

platform we're iterate of that get after out then see more we'll how the separate I adoption customer then the it in from going So and we'll to it it drive will it. a base, modules believe perspective. continue monetize to And SKU

you. Thank

Our from with comes next Matt RBC. Hedberg question

You may proceed.

guys. Thanks my question. for Great taking

fiscal XXXX? maybe ARR in to think I a And growth? be lot for about you of sit still look about, second biggest are that lot what you at half of talking but of targeting a net-new are You're and missed back it, it, there's excited when you ARR the drivers growth low you things XX% the confidence do acceleration,

question. great Hey, Yes.

to a half. QX the us We we number pipeline. pipe saw the second half, in really one. obviously, see is that's comps started about rapidly bit building second half the into right? able really the the second back easier in and the And first, build to talk the So of three momentum gives let's middle half, from half. going activity then, So confidence One and things. It deal momentum second is little that the for be what

is one. that number So

Number a we've were excited some we two, about lot, given George LogScale, about talked examples. products, it

So is opportunity momentum with we great think in also there that LogScale, cloud. a seeing we're

power or move about XDR Charlotte needle has with others will really that the PaxX can about second something George think think we're that the third, now something it's ARR Whether excited we coming talked in are and our half. or that then I that. that's Dell that online, And already us for be partnerships. and

here cyber want critical. is designed So customers and security TCO, do than more And ever think exactly the mission down remains consolidate to I key to and is drive that. Falcon

when look deals talk at to you that and involving gives think quarter or year I more the a speaks modules over module adoption -- of compared that XX% overall about our the we ago, closed we to platform. that power eight more -- So this

And we what -- the confidence half those talked about same. in things us so for give all stated about second and remain assumptions

you. Thank

Our next Fargo. with comes Wells Andrew question Nowinski from

proceed. may You

that question, how Thanks. visibility it contributed was expand new guidance talked your partnership your could Great, Dell if factor enough into wondering the actually thank the year for wondering you. yet just to so much the sector? have that's guide Thanks that quarter, SMB into you at partnerships on for taking just your with new whether I traction driving from revenue if any -- quarter, you that you about last and

question. Good Yes.

still Dell plan, with traction. any gain we're Dell. obviously time tracking brought to early called alliance, So a out regional a new We obviously, company we're take it in one-seven-figure with our through deal was to does And that with one, the days partnership healthcare quarter. with

great from time that things are anything have piece But do anticipate are partnership, not that yet, take But to coming in those still it. expectations. right, else, big a over -- we terms like quarter, the the of but Dell of we and time. So we about numbers grow affected

Thank you.

Bank with from Tal comes of question next Our America. Liani

proceed. may You

update us area? give us Falcon you you there you stronger see an competition what -- update SMB and down on that -- give market the Can Microsoft is of market? guys. Go, kind questions. -- Hi, with what's So the an Can do the on your going in two how traction down given focus

kind And second from is question, see customers, there give existing new versus new slowdown new in on this sales existing Can than we coming growth do sales us in have to stronger of to where customers? to the much you the data seen Thanks. customers. sales and many customers, companies space having you

and Sure, then out I'll start anything needs if add he Burt can to.

success Go Falcon has for So us. been a

market. to continued SMB the We target

think a a in focus and out ourselves specific one lot We've prior organized internally. our need managed calls, I the I us I partnership which and got call We've leader through the get called success to those -- we'll that. service out offerings PaxX how really seen out of of pairing success earnings the there and like to providers. a to on market lower-cost to customers also MSP allows in we

big it's a us for highly market So, fragmented market. SMB, it's a in very

some customers we've have because looking are but You for been outcomes. there, successful players

You Customers with us next depend after looking talked on hit gen solution, get issue and routinely they for doesn't come have signatures. about Microsoft. they after an to it ransomware,

we that Dell see managed we've ramp good service over to up. continue feel channels others with providers. But working will got I success about really and there, We're that grow our So and opportunity and time. to

question, take of I'll second the Tal. part the

a We install as haven't we mix between to difference terms So have over opportunities that terms headroom and to Having think said logos. installed our of [indiscernible] the we seen still see net-new have logos in we sell more we lot larger, versus our of that, do of base gets quarter. base base. net-new installed they material time a really in last will think

talked on a have that calls. long about and go way earlier to we We

from opportunity pleased from in a logo new upsell really we're both opportunity. standpoint logos overall, So a net-new with and cross-sell our

Thank you.

comes question TD next Shaul Cowen. Eyal from with Our

proceed. may You

while from that displacements, prior maybe quarters can to Thank guys. in mentioned about modules, Thank update maybe that trend this to you've during last a -- us model about specific seeing from versus respect talk that. good ones Microsoft And that you. the and afternoon, of versus know you some context, some you. the actually George, Microsoft the just perspective, that leading shifting quarter any I talked identity, the a kind of you lot everything with I Hi, to emerging believe quarter the in you're respect. of

Sure.

many, to spoke start And was many spoke quarter, I and really RSA. and I'll customers consolidation. prepared even in what I back customer I think remarks. with I'll consolidation that about about we at to it Every spoke to reference throughout the the

cost-compelling good paying than a for CrowdStrike I particularly the showing outcomes. pieces a where them security for of [indiscernible] and better done are actually they're think they we've very job model getting less

but things, do customers CrowdStrike. said, pipeline that to what certainly we take to saw we're deals to what are that's growing more. take We and buy these of -- seen want scrutiny They consolidate the sort in want we've those reflected have that's So Obviously, this there quarter these with on customers want many as more CrowdStrike. I think seeing and we more of bigger in deal have what sort time.

you. Thank

DiFucci next Our Guggenheim question comes from John with Securities.

You may proceed.

you. questions George. for Thank My

a largely realize for guys is asked this new about most quarters declined whereas the started to in decline quarters the other's that's that weakness So like we several hear ARR that market, about ever competition ago. what the in the Tal for you mid-market quarter some but SMB and greenfield ago, started you. demand, first SMB in we

be are for might harder versus in it tell, demand you to seeing previously? you market that quarter this changes any but So

demand and in results actually saw strong SMB. No, we

the charging security. even are we're many for a Because customers. we the a we've itself, many Complete not we're as great compelling solving can many, got When that it the also they're Falcon customers, model, you head of have price only we've them getting for it's got Why? world buy one think SMB in buy obviously, the at technology Complete, a a you fill what Falcon cost can the and I technology terms Falcon but right from perspective, look customer, they Go you proposition very outcomes, right? best couldn't in and of

good not We've and So, got, of seen end SMB. it's I our a overall the in fragmented there. of And at the traction think out, really slowdown you a part it's we smaller as market still a have day, pointed revenue.

opportunity any future it great see we quarter. with last didn't and of see So impact

you. Thank

Our question next JP comes with Morgan. Brian from Essex

proceed. may You

bit view Thank for I question. guess going maybe milestone the growth decline your profitability. to GAAP should there? you a also Nice around forward? what guess how good profitability plans taking your and GAAP I stock-based the drive Hi, thank that expect? and your first maintaining Burt. and and profitability, a And balanced GAAP outlook out commitment afternoon, of we had is of more sequentially, should you. of really time, frame kind the would love for we you what color little I hitting And to think we kind comp profitability for

Brian. Thanks, question. Great

So one, of the various model. we've very look had a overall, the methodical at in approach aspects how we

can So made there. see we progress on we've And the focused first, you that margin. gross

non-GAAP free on Second as is XX%. which and that's ongoing. is profitability something And flow, cash piece that free cash you focusing was know, flow,

focus will Third continue achieving which evolution and drive we towards to sustainability. is GAAP profit on

that. Of course, biggest the piece is of SBC

We for best continued we talent with retaining to be to that's manage going and mindful brightest paramount us. SBC the the and are balanced

dilution. to look also We

Our coming. good in to X% less dilution, in than it place, is keep the that this under feel are year, we strive X% a year

growth Everything with it we power demonstrates in about not how that disciplined it's overall, fluke. profitability today. time, think are disciplined market in the hitting it. believe the the do we and So and model a GAAP the we very of we our pleased and We see is are by we are

of we're best can to and we with terms SBC, on other we talent. for sustainability, for focus look making things retain how it. and best when reach including have talent that extend, after the now right to really think really the the retention forward That's about able best we but are attraction. how we us but and And In and sure talent can attract we the we get where going we're to us, we extend going

you. Thank

Ho with William question next Blair. from Jonathan comes Our

You may proceed.

just afternoon. additional from, success multi-product of in little from ask us that endpoint products good this some existing sales where there, more that about to your a the whether or newer with Thank these Can instead is it's Or maybe you. your add-on capabilities? bit you've I is of modules. EASM? coming sort areas cloud an like wanted understand of success you help maybe seen Hi

Sure.

better, different was the that we the in great momentum a logging had faster, need strength customers areas, so While are wins that, seeing industry on to incredible some a there's many for in and we've looking see. seen with cheaper solution, real for LogScale. I'm really

areas we're XDR when that like now wasn't of starting and I one EDR those sorry, actually is is identity, it like current emerging necessarily are where you as in just days, this companies an in budgeted to the look -- product. what think at early just and budgeting identity, EDR see for future budgets

third And up had the they include packaged both a the on And can one to some technologies. is wins. environment. -- in agentless environment as We results differentiator cloud both agent customers it, cloud the they're and basically our is getting that We've SKU, incredible fact from and the love area the offering agentless cloud. true use agent that competitive

you and of on out year. we that the capabilities a this at in them that I when full-speed lot product continue past, overall, have So areas the about add look called for excited and really to these have ahead lineup I'm more we fiscal it's

you. Thank

Gregg next Our Mizuho. question comes Moskowitz from with

You may proceed.

Thank taking question. for you the Okay.

but dataset been a provide there AI on commoditizing George, years, might quarter alluded LLM and duration was comment open-source on quick to under into so a develop value own you just platform clarification you to could you if Charlotte, Graph average this know but LLM Threat any space your And and you've incorporating First, from Burt, for change. there. and leverage for the I additional broader if

to may wedge, little [indiscernible]. Thanks. hear to based on speak, LLM you curious drive how augment potentially Just so your a more on greater a to inherent existing

first Hi, of the question. part Greg. that take I'll

know, So one-year to the we see multi-year deals that as we in the out to shift expect called you from deals. long-term,

shift compared the But see a I quarter. think trend we that's do in last the this software. quarter not traditional material in when to

are we've the durations very, shorter, within overall be it our clear modeled business. out getting So are very but of how parameters Deal and just expected on that remains point.

Yes, Greg, the the fact is of you the cloud view out many really training is LLM particular and of already you remarks is results the that's some trained to and makes for couldn't regarding doesn't just an in there but able leverage leverage results concept hallucinations prepared purpose. or LLMs. that spurious think the areas think that ChatGPT, with understanding to our be shine of And their get -- things a this very technology important out these terms what's I have to build LLMs, seen the It's mean called think the one leverage I I different I have people there. you if to It we that will. that in our to great question be a LLMs on obviously similar is providers, own,

data the sustainable lot Graph what threat best done human a already years is believe barrier LLMs dataset continue over we kind the we've XX looking because last our annotated can to we're of and interchange training of standpoint, and entry advantage own the a our of of within from will So on to that we outcome Threat take be depending provide pairing for. with the and advantage

right leverage may but got way we've we dataset importantly, more there, think we'll some we it. need what's our of training, So the build out own, to the I get the

Thank you.

Alex next Henderson with comes from Our Needham. question

proceed. may You

the of on to love it. those if little would the your the in to was bit relative are in then you to what expecting federal, to rates sizes push on in price are you more deal about closure so you the close you environment? feather Thanks. in could little could assuming I bit hoping sizes, All in thank And pipeline, a Are I bit around assumptions your a assumptions up, much. conservatism in closure duration, of terms some baking right, you out of parameters? continue what deals? Are and little but this you in time rates deal talk go And conditions. a terms Tier

a involving to there, deals Few XX% Thanks, unpack start in with so Alex. this again of more let's ago. more we closed year deals, over compared things quarter, to terms larger modules

the this to the to play, they platform means really consolidation outcomes as fact to want right at the do think want to price. the I to leverage right speaks continue Falcon a really get customers that

see terms and the the of in so big the the rest we now overall year. improving for In picture of environment, the macro first macro, don't

think about durations think we be backdrop, when to yeah, going a So sure durations, are as deal that with shorter. deal we

are that to looking continuing going the from to able I -- additional more of their be see consummate. in And deals goes think to to to are takes time. people going be companies scrutiny we're to longer that terms to bigger they do size,

perspective, going when that And a to we deals that to are know all going think about particular quarter. close be there's difficult within more we that to so, be

we've so, And that modeled in.

some think the other to think we we you to think maintain I one, that the previously. for that of that I overall I with metrics our had going that for assumptions respect ARR, mentioned, that stated net-new are

pass the over that's that, talk With that. George I'll it do. to right think about thing to to I

does drive to big and may last medium, It ILX in. a get get done, us. that but a are in prior and doors up, much up nice opens bigger I as mentioned open they one, I more about got again it's in quarter. just really and time take on so We while wins it to ILX, think comments, the and they slow I excited opportunity. a we we're And steady, Sure, this for think deals to had some long you've certification federal that's continued forward

Thank you.

Kidron question from Ittai Oppenheimer. comes Our next with

You proceed. may

George, I Burt. guess thanks. question review thanks the AI. great for for on the is Hi,

With you the as of raise benefits George how margin targets? described AI, them, soon long-term can your

Well.

making George the our from certainly hand-in-hand we've just competitors. remind see that is there news everything talked as data -- over good of with do and going centers, And continued as AI, well margin, do AI doing we've all years. mentioned, our And -- doing as cloud XX we just that then massive we're one where just the over been you had there. We we've about our our Ittai, saw been the progress into with to from XX any our across optimization, we built the pleased workloads. on got, to did other it the and it made as to developments a of we've years, we're really for training head-start progress AI AI continue beginning, out anticipate cloud in and in memory those as two beginning, and of -- the we for that's the were gross we're you improvements. us, was that the in margins, For We've those

Thank you.

Our with question Colville comes next Scotiabank. Patrick from

proceed. may You

late quarter, Hey, me deal much you increased in. more cycles, beginning? just sales fascinating. on color was And thank you quarter I saw in cycles. scrutiny longer on you longer scrutiny the towards remarks, would that is increased Thank that in sales in that the for deal and mentioned any comment? the the in like be those I of clarity the so guess, that March-April? Or In and you. you kind double-click squeezing comments or that you gave mean prepared Can't was

Sure, be so comment throughout meant the to the was quarter.

we're into adding deals, customers As modules with consolidate more we they're go seeing to us. more time want and more because that takes

thinking one. other more at with we've actually how it space get that's they're today. that and looking things then again, talked price. in cheaper beyond, happen us, day about seeing And spends to but other sense, and better they're a reduce outcomes from the a And competitors, security spend overall that from we're and about So in to

but just do I the quarter throughout and longer what the both seeing entire deal mentioned, they take throughout that also So, that's scrutiny we're additional quarter.

Thank you.

question comes next Our from Cantor Fitzgerald. with Jonathan Ruykhaver

You may proceed.

Hi Yes. guys.

I can models, about So threat for forward like other is you cost? you requirements, you've already I'm that have? requirements data particularly facing issue for to you the hunting, at what costs XDR advantage way going quantify talk around with these there I for versus when increase on but language adoption, solutions, the retention curious, LogScale data but you and And look LogScale retention the positively any guess in looks those the is industry talked increasingly large know just pre-associated

the you ability and to you one we've seen, better, where specifically just think at of you still data in using store Well, see if and their get their, efficient around simple what cost-efficient look the is or I customers we've of big store a view as faster, performance. them and compression -- like that cheaper it, of algorithms the really in and cloud very very data a it and some increase lots call had that on-prem in many of cost terms LogScale a are will. our a that's massive LogScale, our can data of they areas for manner They

is which architecture And give architecture, advantage the LogScale think there. an customers a in around by really been us I that's testing. does their modern So own out borne

Thank Rosenblatt. you. last Catharine from with question comes our And Trebnick

proceed. may You

talk dissipated? last your Is -- tailwind Analyst was still coalition is you tailwind before at than you. -- the for that to or the and talked partnership, -- cyber this tailwind the you thank biggest Day as can -- about insurance you Hi, that question. Thank that a last one a Last year?

Yes.

up Cyber customers is lot get think of it's for gone a difficult in I actually insurance cost. to very and

have that of recognize are B, part CrowdStrike reduced. we cost be CrowdStrike insurance in risk customers So and the their in ability; reduce insurance; A, cyber baking dramatically to as with many to acquisition overall place in the get able because cases, many being is cyber providers of overall going many

B, a another, what actually cyber and overall don't or industry costs. insurance is them customer that's I insurance it able cyber that know of our anomalies get to problem part it; value overall to way seen. but to in be and there help proposition to; one So the we've it's reduce is A, get their continued any

the call for closing to the over Kurtz now Q&A turn Thank this back I'd concludes you. remarks. George like any And to session.

we appreciate Well, Thank and the much. and their I we questions you thank time look to next attention, seeing you so just to wanted quarter. for forward everyone and

call. you This Thank conference for concludes you. today's participating. Thank

You may now disconnect.