CrowdStrike (CRWD) Q2 Earnings Beat, Revenues Increase Y/Y
CrowdStrike CRWD reported second-quarter fiscal 2024 results, wherein both revenues and earnings surpassed the Zacks Consensus Estimate and marked significant year-over-year improvements.
CrowdStrike reported second-quarter fiscal 2024 non-GAAP earnings of 74 cents per share, beating the Zacks Consensus Estimate by 32.14% and jumping 105.6% year over year.
The company’s fiscal second-quarter revenues of $731.2 million rose 36.7% year over year and surpassed the consensus mark by 0.85%.
Subscription revenues (94.3% of the total revenues) jumped 36.3% year over year to $689.9 million. Professional services revenues (5.7% of the total revenues) rose 43.9% year over year to $41.65 million.
Annual recurring revenues (ARR) increased 37% year over year to $2.93 billion. The company added $196 million to its net new ARR in the reported quarter.
CrowdStrike’s subscription customers, who adopted five or more cloud modules, represented 63% of the total subscription customers, those with six or more cloud modules accounted for 41% and those with seven or more cloud modules represented 24% as of Jul 31, 2023.
CrowdStrike Price, Consensus and EPS Surprise
CrowdStrike price-consensus-eps-surprise-chart | CrowdStrike Quote
Operating Details
CrowdStrike’s non-GAAP gross margin improved 200 basis points (bps) on a year-over-year basis to 78%.
The non-GAAP subscription gross margin expanded 200 bps to 78% on a year-over-year basis. The non-GAAP professional gross margin improved 200 bps to 43%.
Non-GAAP sales and marketing expenses jumped 25.8% year over year to $231 million. Non-GAAP research and development expenses surged 35.3% year over year to $132.3 million. Non-GAAP general and administrative expenses increased 22.7% year over year to $49.1 million.
The non-GAAP operating income was $155.65 million, up 78.2% year over year. The non-GAAP operating margin for the quarter improved 500 bps to 21.3%.
Balance Sheet & Cash Flow
As of Jul 31, 2023, cash and cash equivalents were $3.17 billion compared with $2.93 billion as of Apr 30, 2023. CrowdStrike had a long-term debt of $741.7 million.
In the fiscal second quarter, CRWD generated operating and free cash flows of $245 million and $189 million, respectively.
Updated Fiscal 2024 Guidance
For fiscal 2024, CRWD now expects revenues between $3,030.7 million and $3,042.9 million, up from the previous guidance range of $3,000.5-$3,036.7 million. Non-GAAP earnings are now anticipated in the band of $2.80-$2.84 per share, up from the earlier forecasted range of $2.32-$2.43 per share. The non-GAAP operating income for fiscal 2024 is now projected in the band of $601.3-$610.5 million compared with the earlier guidance range of $498.9-$526.2 million.
For the fiscal third quarter, CrowdStrike anticipates revenues between $775.4 million and $778 million. The non-GAAP operating income is expected in the band of $154.4-$156.3 million. For the bottom line, the company expects non-GAAP earnings to be 74 cents per share.
Zacks Rank & Stocks to Consider
CrowdStrike currently carries a Zacks Rank #3 (Hold). Shares of CRWD have rallied 41.7% year to date (YTD).
Some better-ranked stocks from the broader Computer and Technology sector are NVIDIA NVDA, Manhattan Associates MANH and Zscaler ZS. NVIDIA and Manhattan Associates sport a Zacks Rank #1 (Strong Buy) each, while Zscaler carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVIDIA's third-quarter fiscal 2024 earnings has been revised upward by 39.7% to $3.24 per share in the past seven days. For fiscal 2024, earnings estimates have increased by 30.8% to $10.46 per share in the past seven days.
NVIDIA’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing on one occasion, the average surprise being 9.8%. Shares of NVDA have skyrocketed 237.1% YTD.
The Zacks Consensus Estimate for Manhattan Associates’ third-quarter 2023 earnings has been revised 5 cents northward to 77 cents per share in the past 60 days. For 2023, earnings estimates have moved 22 cents upward to $3.09 per share in the past 60 days.
Manhattan Associates’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 31.6%. Shares of MANH have rallied 67.4% YTD.
The Zacks Consensus Estimate for Zscaler's fourth-quarter fiscal 2023 earnings has remained unchanged at 49 cents per share in the past 60 days. For fiscal 2023, earnings estimates have remained unchanged at $1.63 per share in the past 60 days.
Zscaler's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 19.6%. Shares of ZS have risen 31.6% YTD.
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