Summary
CrowdStrike opened fiscal 2023 with rapid top-line growth and a narrower GAAP loss. Total revenue for the first quarter ended April 30, 2022 was $487.8 million, up 61.1% from $302.8 million in the prior-year quarter. Gross profit rose 60.9% to $361.0 million, while gross margin was 74.0%, essentially flat. The operating loss narrowed to $23.9 million from $31.3 million, and operating margin improved to -4.9% from -10.4%, a 5.5 percentage point gain. Net loss attributable to CrowdStrike narrowed to $31.5 million from $85.0 million, and diluted EPS improved to -$0.14 from -$0.38.
Cash generation remained a strong point. Operating cash flow was $215.0 million, up 45.7% from $147.5 million. Free cash flow, a non-GAAP measure, was $157.5 million, up from $117.3 million. Capital expenditures were $52.2 million, up 102.4% from $25.8 million. Deferred revenue reached $1.69 billion, up 65.6%, and remaining performance obligations were $2.40 billion, up 60.0%. Annual recurring revenue grew 61% year over year to $1.92 billion as of April 30, 2022. The company added $190.5 million in net new ARR in the quarter. Subscription customers totaled 17,945, up 57%, with 1,620 net new customers added. Dollar-based net retention was above 120%.
Module adoption continued to deepen. Customers with four or more modules represented 71% of the base, while five or more reached 59%, six or more reached 35%, and seven or more reached 19%. Management said customers adopting six or more and seven or more modules both more than doubled year over year. Non-GAAP income from operations was $83.0 million, compared with $29.8 million. Non-GAAP net income attributable to CrowdStrike was $74.8 million, compared with $23.3 million, and non-GAAP diluted EPS was $0.31, compared with $0.10. The company highlighted a record quarter for modules deployed in the public cloud and over 100% year-over-year ending ARR growth for its emerging product group, which includes Discover, Spotlight, Identity Protection and Log Management.
Guidance for the second quarter of fiscal 2023, ending July 31, 2022, points to non-GAAP income from operations of $70.4 million to $73.3 million, non-GAAP net income attributable to CrowdStrike of $64.9 million to $67.9 million, and non-GAAP diluted EPS of $0.27 to $0.28. For full fiscal 2023, ending January 31, 2023, CrowdStrike raised its outlook, with non-GAAP income from operations of $306.5 million to $317.8 million, non-GAAP net income of $283.3 million to $294.6 million, and non-GAAP diluted EPS of $1.18 to $1.22. The share count assumptions are 240 million for the second quarter and 241 million for the full year. Management also increased its revenue outlook for the full fiscal year.
Risks and operating context remain material. CrowdStrike still posted a GAAP operating loss and expects to continue incurring operating losses for the foreseeable future as it invests in sales and marketing and research and development. Management noted seasonality, with net new ARR generation greater in the second half of the year, particularly in the fourth quarter, and lower operating margin in the first half due to payroll taxes, new hires, and annual sales and marketing events. The company faces execution risks tied to rapid growth, new product introductions, customer acquisition and retention, acquisition integration, market acceptance, and geopolitical uncertainty. Contractual commitments include $74.3 million for data centers and $141.4 million for purchase obligations. Under its AWS agreement, CrowdStrike committed to purchase a minimum of $600.0 million of cloud services through September 2026 and had utilized $102.3 million as of April 30, 2022. The company also received IL-4 authorization from the U.S. Defense Information Systems Agency and expanded partnerships with Mandiant and Cloudflare.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2023 | Q4 FY2022 | QoQ | Q1 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $487.8M | $431.0M | +13.2% | $302.8M | +61.1% |
| Gross profit | $361.0M | $318.4M | +13.4% | $224.3M | +60.9% |
| Gross margin | 74.0% | 73.9% | +0.1 pp | 74.1% | -0.1 pp |
| Research & development | $123.4M | $105.0M | +17.5% | $78.2M | +57.8% |
| Sales & marketing | $193.5M | $162.6M | +19.0% | $135.1M | +43.2% |
| General & administrative | $68.0M | $74.3M | -8.6% | $42.4M | +60.4% |
| Total operating expenses | $384.9M | $341.9M | +12.6% | $255.7M | +50.5% |
| Operating income (loss) | -$23.9M | -$23.5M | -1.5% | -$31.3M | +23.8% |
| Operating margin | -4.9% | -5.5% | +0.6 pp | -10.3% | +5.4 pp |
| Net income (loss) | -$30.4M | -$41.7M | +27.1% | -$85.0M | +64.2% |
| Net margin | -6.2% | -9.7% | +3.4 pp | -28.1% | +21.8 pp |
| Diluted EPS | -$0.14 | -$0.18 | +$0.04 | -$0.38 | +$0.24 |
| Net retention rate | 120.0% | 120.0% | ±0.0 pp | 100.0% | +20.0 pp |
Risks
Headcount grew from 2,309 employees as of January 31, 2020 to 5,505 employees as of April 30, 2022, and the company expects to continue investing broadly. Failure to integrate and train new employees, improve infrastructure and controls, or manage global expansion could impair platform quality and revenue growth.
The business is highly dependent on CEO George Kurtz and key technical, sales and management personnel, who work on an at-will basis. Competition for cybersecurity talent is intense, and equity vesting may make it more difficult to retain and motivate employees.
As a security provider that has identified organized cybercriminals and nation-state actors, CrowdStrike is specifically targeted by sophisticated adversaries, and attacks may intensify if geopolitical tensions increase. A compromise of internal systems, customer data, or source code could damage reputation and customer confidence.
The security market is intensely competitive and fragmented, with competitors including Microsoft, Palo Alto Networks, SentinelOne and legacy antivirus providers. Competitive pricing pressure may reduce gross profits, and professional services gross margin decreased by 4% in FY2023 Q1 compared to the prior-year quarter.
The Falcon platform relies primarily on Amazon Web Services and colocation data centers. In October 2021 the company committed to purchase a minimum of $600.0 million of AWS cloud services through September 2026 and had utilized $102.3 million as of April 30, 2022; disruption or unfavorable renewal could harm service availability and costs.
In March 2022 Webroot, Inc. and Open Text, Inc. filed a patent infringement lawsuit against the company. The company is also in Trademark Trial and Appeal Board proceedings with FICO that could cancel CrowdStrike Falcon trademark registrations and reject the Falcon OverWatch application, potentially forcing rebranding.
Sales cycles for large organizations and government entities can be long and unpredictable, and a large percentage of the sales force is new to the company and its solutions. If new sales personnel do not become productive quickly, revenue growth could be harmed.
The company must retain existing customers and expand their subscriptions, but customers have no obligation to renew after terms generally of one year. Dollar-based net retention was above 120% as of April 30, 2022, and any decline in renewals or module expansion could harm future results.
Future growth depends in part on increasing sales to government organizations, which are subject to budgetary uncertainty, long sales cycles, FedRAMP certification requirements, and audit risks. Losing FedRAMP certification would restrict the ability to sell to government customers.
The company relies on a limited number of suppliers for components of equipment used to operate its cloud platform. Industry-wide component shortages and delivery delays could delay opening new data centers, increasing capacity, or replacing defective equipment, and could increase operating costs.
The OECD two-pillar plan includes a global minimum tax of at least 15% for large multinationals, and digital services taxes continue in some countries, which could increase tax obligations or change operations. As of January 31, 2022, U.S. federal NOL carryforwards were $1.6 billion and California NOL carryforwards were $168.9 million, subject to ownership-change limitations.
The revolving facility and the Senior Notes indenture contain restrictive covenants and cross-default provisions. A breach could accelerate indebtedness, and the company could be forced to reduce investments, sell assets, or seek refinancing on less favorable terms.
Results may fluctuate significantly, and the company experiences seasonality with net new ARR generation greater in the second half of the fiscal year and lower operating margin in the first half. Failure to meet investor expectations could cause the stock price to fall and lead to costly securities litigation.
Through the Falcon Funds, the company invests in early to late stage private companies and may not realize a return. Changes in fair value of strategic investments can cause material volatility, and other income, net decreased 33% in FY2023 Q1 compared to the prior-year quarter.
SaaS KPIs
All quarters →Free Cash Flow Margin
Non-GAAP Operating Margin
Net New ARR
Free Cash Flow
Annual Recurring Revenue (ARR)
Non-GAAP Subscription Gross Margin
Backlog
Dollar-Based Net Retention Rate
Subscription Customers
Net New Subscription Customers
Customers with 5+ Modules
Customers with 6+ Modules
Customers with 4+ Modules
Customers with 7+ Modules
Summary, forecast, risks and KPIs are extracted from CrowdStrike Holdings, Inc.'s SEC filings for Q1 FY2023 (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.