Summary
CrowdStrike closed FY2022 Q2 with revenue of $337.7 million, up 69.7% from the prior-year quarter. Gross profit was $247.3 million, up 71.0%. Gross margin reached 73.2%, up 0.6 percentage points. The top line expanded quickly, but GAAP profitability moved the other way. The operating loss was $47.4 million, and the loss widened from the prior-year quarter. Net loss was $57.3 million, also widened. Diluted EPS was -$0.25, and that loss widened too. Operating margin was -14.0%, up 1.0 percentage point from the prior-year quarter. The company is growing fast and still spending heavily to do so. The GAAP loss widened even as revenue grew.
The operational metrics show broad expansion. Ending ARR was $1.34 billion, up 70% year over year. Net new ARR was $150.6 million in the quarter. CrowdStrike added 1,660 net new subscription customers, ending with 13,080, which represents 81% growth year over year. Module adoption deepened: 66% of customers use four or more modules, 53% use five or more, and 29% use six or more. The dollar-based net retention rate stayed above 120%. Backlog stood at $512.8 million, with $183.4 million not expected to be billed in the next twelve months. The company also closed the Humio acquisition on March 5, 2021, adding cloud log management and observability. These figures suggest the land-and-expand model is working.
Cash generation improved. Operating cash flow was $108.5 million for the quarter, up 97.1% from the prior-year quarter. Capital expenditures were $30.0 million, up 45.3%. Free cash flow, a non-GAAP measure, was $73.6 million, compared with $32.4 million in the prior-year quarter. Deferred revenue was $1.16 billion, up 68.8%. Remaining performance obligations were $1.70 billion, up 83.7%. These balances point to a strong pipeline of contracted business. The balance sheet also carries the weight of the Humio purchase and the January 2021 Senior Notes issuance, which added interest expense. The company reported an accumulated deficit and expects to keep incurring operating losses for the foreseeable future as it invests in sales and marketing and research and development.
Guidance points to continued growth. For Q3 FY2022, the company guided non-GAAP income from operations to $29.4 million to $34.7 million, non-GAAP net income attributable to CrowdStrike to $19.7 million to $25.0 million, and non-GAAP diluted EPS to $0.08 to $0.10. For the full fiscal year 2022, it guided non-GAAP income from operations to $138.5 million to $152.1 million, non-GAAP net income to $102.9 million to $116.5 million, and non-GAAP diluted EPS to $0.43 to $0.49. The company also raised its full-year guidance. Management expects the robust demand environment to continue. The main risks include the COVID-19 pandemic, execution challenges tied to rapid growth, new product introductions, potential defects or vulnerabilities, the ability to attract and retain customers, and the integration of acquisitions. Seasonality is another factor. CrowdStrike expects net new ARR to be 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. Sales cycles and general market conditions remain part of the story.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2022 | Q1 FY2022 | QoQ | Q2 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $337.7M | $302.8M | +11.5% | $199.0M | +69.7% |
| Gross profit | $247.3M | $224.3M | +10.2% | $144.6M | +71.0% |
| Gross margin | 73.2% | 74.1% | -0.9 pp | 72.7% | +0.6 pp |
| Research & development | $90.5M | $78.2M | +15.7% | $50.5M | +79.2% |
| Sales & marketing | $153.9M | $135.1M | +13.9% | $95.1M | +61.7% |
| General & administrative | $50.3M | $42.4M | +18.8% | $29.0M | +73.8% |
| Total operating expenses | $294.7M | $255.7M | +15.2% | $174.6M | +68.8% |
| Operating income (loss) | -$47.4M | -$31.3M | -51.2% | -$30.0M | -58.1% |
| Operating margin | -14.0% | -10.3% | -3.7 pp | -15.1% | +1.0 pp |
| Net income (loss) | -$57.3M | -$85.0M | +32.6% | -$29.9M | -91.9% |
| Net margin | -17.0% | -28.1% | +11.1 pp | -15.0% | -2.0 pp |
| Diluted EPS | -$0.25 | -$0.38 | +$0.13 | — | — |
| Net retention rate | 100.0% | 100.0% | ±0.0 pp | 100.0% | ±0.0 pp |
Risks
Net loss attributable widened to $57.3M in FY2022 Q2 from $29.9M and to $142.4M YTD from $49.1M; accumulated deficit was $872.5M as of Jul 31, 2021.
Risk factors identify McAfee, Broadcom Symantec, Microsoft, Blackberry Cylance, VMware Carbon Black, SentinelOne, Palo Alto Networks, and FireEye; larger competitors may bundle or lower pricing, pressuring revenue and gross margins.
Growth depends on the direct sales force, but a large percentage of the sales force is new and may be less effective, and hiring and training delays are accentuated by long sales cycles.
As a cybersecurity provider, CrowdStrike has been specifically targeted by sophisticated cyber adversaries, including because of its work identifying organized cybercriminals and nation-state actors; a compromise could damage reputation and customer confidence.
Real or perceived defects, misconfigurations, or failure of the Falcon platform to detect or prevent advanced attacks could harm reputation; advanced attacks may evade detection until after customers are affected.
As of Jul 31, 2021, $750.0M of indebtedness was outstanding and there was additional $750.0M revolver availability; interest expense increased 3,518% for the quarter and 3,851% YTD, and restrictive covenants limit operations.
COVID-19 could delay and lengthen sales cycles, reduce demand, and increase churn; MD&A says some customers requested special billing or payment terms and longer-term impact remains uncertain.
Headcount grew from 1,455 as of Jan 31, 2019 to 4,224 as of Jul 31, 2021; failure to manage rapid growth and integrate new employees could impair platform quality, controls, and compliance.
Customers generally have one-year subscriptions and no renewal obligation, and some have elected not to renew; failure to expand modules and endpoints could harm future results even though dollar-based net retention rate was above 120% in FY2022 Q2.
Sales cycles can be long and unpredictable, especially with large organizations and government entities; purchases are subject to budget constraints, multiple approvals, and delays.
The Humio acquisition involved total consideration of $370.3M, including goodwill of $291.3M; integration, retention, and accounting risks could disrupt business and cause unanticipated charges, including $48.8M tax cost from an intercompany IP sale in YTD.
MD&A expects net new ARR to be greater in the second half of the year and lower operating margin in the first half due to payroll taxes, new hires, and events, causing period-to-period fluctuations.
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
Dollar-Based Net Retention Rate
Subscription Customers
Net New Subscription Customers
Customers with 5+ Modules
Customers with 6+ Modules
Customers with 4+ Modules
Summary, forecast, risks and KPIs are extracted from CrowdStrike Holdings, Inc.'s SEC filings for Q2 FY2022 (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.