• CrowdStrike Holdings Inc (NASDAQ:CRWD) achieves a milestone with over $3 billion in Annual Recurring Revenue (ARR).

• Record net new ARR of $223 million and a 35% year-over-year increase in total revenue.

• GAAP net income reaches $26.7 million, a significant turnaround from a loss of $55.0 million in Q3 FY2023.

• Strong operational cash flow and free cash flow underscore CrowdStrike's financial health.

• Warning! GuruFocus has detected 4 Warning Sign with CRWD.

On November 28, 2023, CrowdStrike Holdings Inc (NASDAQ:CRWD) released its 8-K filing, announcing financial results for the third quarter of fiscal year 2024, which ended on October 31, 2023. The company reported significant growth, with total revenue increasing by 35% year-over-year to $786.0 million, driven by a robust subscription revenue of $733.5 million. The company's focus on operational excellence has led to record profitability, with GAAP net income attributable to CrowdStrike reaching $26.7 million, a substantial improvement from a net loss of $55.0 million in the same quarter of the previous fiscal year.

Financial Performance Highlights

CrowdStrike's financial achievements in the third quarter of FY2024 reflect the company's strong market position and operational efficiency. The company's ARR grew to $3.15 billion, marking a 35% increase year-over-year, with $223.1 million in net new ARR added during the quarter. Subscription gross margin improved, with GAAP and non-GAAP subscription gross margins at 78% and 80%, respectively. Income from operations also saw a dramatic shift from a loss of $56.4 million in Q3 FY2023 to a GAAP income of $3.2 million in Q3 FY2024. Non-GAAP income from operations more than doubled to $175.7 million.

Operational and Strategic Achievements

CrowdStrike's operational success is further underscored by its cash flow performance. Net cash generated from operations was $273.5 million, and free cash flow was $239.0 million, both setting records for the company in the third quarter. The company's cash, cash equivalents, and short-term investments stood at $3.17 billion as of October 31, 2023.

Strategically, CrowdStrike has continued to innovate and expand its offerings. The company's module adoption rates demonstrate strong customer engagement, with 63%, 42%, and 26% of customers adopting five or more, six or more, and seven or more modules, respectively. CrowdStrike also made significant strides in the industry, achieving perfect scores in MITRE Engenuity ATT&CK Evaluations and becoming the first cloud-founded cybersecurity ISV to exceed $1 billion in sales through AWS Marketplace.

Forward Guidance and Market Recognition

Looking ahead, CrowdStrike provided an optimistic outlook for the fourth quarter of fiscal 2024, with total revenue expected to be between $836.6 and $840.0 million and non-GAAP income from operations projected to be between $186.5 and $189.0 million. The company has also increased its guidance for the full fiscal year 2024, reflecting confidence in its continued growth trajectory.

CrowdStrike's market leadership has been recognized through various accolades, including being named a Customers Choice in the 2023 Gartner Peer Insights Voice of the Customer for Endpoint Protection Platform report and a leader in The Forrester Wave: Endpoint Security, Q4 2023 report.

Conclusion

CrowdStrike's third-quarter results for fiscal year 2024 highlight the company's ability to achieve significant growth and profitability. With a strong financial outlook and continued market recognition, CrowdStrike is well-positioned to maintain its leadership in the cybersecurity industry. Investors and stakeholders can look forward to the company's sustained momentum as it pursues its vision of reaching $10 billion in ARR over the next five to seven years.

For a detailed analysis of CrowdStrike Holdings Inc (NASDAQ:CRWD)'s financials and operational performance, readers are encouraged to review the full 8-K filing.

Explore the complete 8-K earnings release (here) from CrowdStrike Holdings Inc for further details.

This article first appeared on GuruFocus.