Summary
CrowdStrike closed the first quarter of fiscal 2021 with revenue of $178.1 million, up 85% from $96.1 million in the prior-year quarter. Subscription revenue climbed 89% and supplied 91% of the total, while professional services revenue rose 57%. Annual recurring revenue reached $686.1 million as of April 30, 2020, an 88% increase, and net new ARR added in the quarter was $85.7 million. Subscription customers grew 105% to 6,261, with 830 net new customers added during the period.
Profitability improved on both GAAP and non-GAAP lines. Gross profit rose 96.4% to $131.2 million from $66.8 million, and gross margin expanded to 73.7% from 69.5%. The operating loss narrowed to $22.6 million from $25.8 million, and the operating margin improved to negative 12.7% from negative 26.8%. Net loss narrowed to $19.2 million from $26.0 million, and diluted EPS was negative $0.09 for the quarter. Stock-based compensation of $23.6 million is the main bridge to non-GAAP results. Non-GAAP income from operations was $1.2 million against a loss of $21.9 million a year earlier, the first non-GAAP operating profit in company history, and non-GAAP net income was $4.5 million compared with a loss of $22.1 million.
Cash generation was the standout. Operating cash flow was $98.6 million, up from $1.4 million a year earlier. Free cash flow, a separate non-GAAP measure that subtracts purchases of property and equipment and capitalized internal-use software from operating cash flow, was $87.0 million, compared with negative $16.1 million. Capital expenditures of $9.7 million fell 37.6% year over year. Deferred revenue rose 101.8% to $636.0 million from $315.2 million, and remaining performance obligations rose 111.8% to $817.5 million from $386.0 million. Cash and cash equivalents increased to $1,005 million as of April 30, 2020, after the company liquidated its entire portfolio of marketable securities.
CrowdStrike kept adding to the platform during the quarter. It launched a surge relief plan that lets customers expand endpoint counts for a limited time, plus a Falcon Prevent for Home Use program for employees working from home. The Falcon platform was named a Leader in The Forrester Wave for Enterprise Detection and Response, Q1 2020, and earned an overall rating of 4.9 out of 5 from 106 verified customer reviews in the 2020 Gartner Peer Insights Customers' Choice for Endpoint Detection and Response. More than half of the customer base had adopted four or more cloud modules and over a third had adopted five or more, out of 11 modules available. Headcount reached 2,583 full-time employees, with average headcount up 45% in sales and marketing, 50% in research and development and 74% in general and administrative.
Guidance covers both the next quarter and the full fiscal year. For the second quarter of fiscal 2021, ending July 31, 2020, management guided to a small non-GAAP loss from operations and a small non-GAAP net loss, with weighted average shares of 216 million. For the full fiscal year 2021, ending January 31, 2021, the company raised its revenue outlook and continues to expect a non-GAAP loss from operations and a non-GAAP net loss, on weighted average shares of 220 million.
Risks remain. CrowdStrike pointed to the effect of COVID-19 on customers and sales cycles, its limited operating history, execution challenges tied to rapid growth, the risk of defects or vulnerabilities in new products, its ability to attract and retain customers, and general market, political and economic conditions. Some customers in heavily affected industries have asked for special billing or payment terms. Because the business runs on subscriptions, management cautioned that the pandemic's effect may not appear in results until future periods.
Backlog stood at roughly $181.5 million, of which about $53.0 million is not reasonably expected to be billed in the next twelve months. The dollar-based net retention rate once again exceeded 120 percent and gross retention stayed high. Management said the vast majority of the quarter's seven-figure deals closed in the second half of the period, after shelter in place orders took effect. The company also flagged seasonality, expecting net new ARR to be greater in the second half of the fiscal year, particularly in the fourth quarter, with a lower operating margin in the first half. Accumulated deficit was $656.7 million, total contractual obligations were $229.7 million, and the $150.0 million revolving credit facility remained undrawn, with covenants tied to subscription revenue growth and minimum liquidity.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2021 | Q4 FY2020 | QoQ | Q1 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $178.1M | $152.1M | +17.1% | $96.1M | +85.3% |
| Gross profit | $131.2M | $108.7M | +20.7% | $66.8M | +96.4% |
| Gross margin | 73.7% | 71.5% | +2.2 pp | 69.5% | +4.1 pp |
| Research & development | $40.6M | $38.7M | +4.9% | $23.9M | +70.0% |
| Sales & marketing | $88.1M | $75.8M | +16.3% | $56.8M | +55.1% |
| General & administrative | $25.0M | $25.3M | -1.1% | $11.9M | +111.1% |
| Total operating expenses | $153.8M | $139.8M | +10.0% | $92.6M | +66.1% |
| Operating income (loss) | -$22.6M | -$31.1M | +27.5% | -$25.8M | +12.4% |
| Operating margin | -12.7% | -20.5% | +7.8 pp | -26.8% | +14.1 pp |
| Net income (loss) | -$19.2M | -$28.4M | +32.3% | -$26.0M | +26.0% |
| Net margin | -10.8% | -18.7% | +7.9 pp | -27.0% | +16.3 pp |
| Net retention rate | 100.0% | 100.0% | ±0.0 pp | 100.0% | ±0.0 pp |
Risks
The COVID-19 pandemic has caused significant volatility, uncertainty, and economic disruption. While the impact has been modest to date, some customers have requested special billing or payment terms, and the future impacts are largely unknown. Due to the subscription-based business model, the effect of the pandemic may not be fully reflected in results of operations until future periods.
Sales cycles can be long and unpredictable, particularly for large organizations and government entities. The company closed the vast majority of this quarter's seven-figure deals in the second half of the quarter after COVID-19 shelter in place orders were in effect, indicating pandemic-related sales cycle pressure and unpredictability.
Intense competition from legacy antivirus providers (McAfee, Broadcom/Symantec, Microsoft), alternative endpoint security providers (Blackberry Cylance, VMware Carbon Black), and network security vendors (Palo Alto Networks, FireEye). Many competitors have greater financial and technical resources, and may offer lower pricing or bundle competing products, potentially reducing gross margins and market share.
As a cybersecurity provider, the company is a target for sophisticated cyber adversaries, including nation-state actors, due to its involvement in identifying cybercriminals. A successful breach of its internal systems or Falcon platform could damage reputation, reduce solution effectiveness, and lead to customer loss and legal liability.
Heavy reliance on key personnel, particularly CEO George Kurtz. Intense competition for cybersecurity talent, especially for experienced sales professionals and cloud security engineers. Difficulty hiring and retaining qualified personnel, and equity vesting may reduce motivation to stay.
A vast majority of sales flow through channel partners. Loss of a substantial number of channel partners or failure to recruit additional partners could adversely affect results. The company depends on channel partners to sell and support the Falcon platform.
Sales to government organizations are subject to budgetary uncertainty, long sales cycles, and certification requirements like FedRAMP. Changes in government contracting or fiscal policies could adversely affect business. Sales to U.S. federal, state, and local agencies have not accounted for a significant portion of revenue.
Ongoing trademark dispute with Fair Isaac Corporation (FICO) before the Trademark Trial and Appeal Board regarding CrowdStrike Falcon and Falcon OverWatch marks. If the appeal board finds against the company, it could cancel trademark registrations and require costly rebranding efforts.
SaaS KPIs
All quarters →Free Cash Flow Margin
Non-GAAP Operating Margin
Net New ARR
Free Cash Flow
Annual Recurring Revenue (ARR)
Backlog
Dollar-Based Net Retention Rate
Subscription Customers
Summary, forecast, risks and KPIs are extracted from CrowdStrike Holdings, Inc.'s SEC filings for Q1 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.