Summary
CrowdStrike's fiscal 2024 second quarter revenue rose 36.7% to $731.6 million. GAAP gross profit increased 39.1% to $548.7 million, and gross margin was 75.0%, up 1.3 percentage points from 73.7%. The operating loss narrowed to $15.4 million from a loss of $48.3 million, and operating margin improved to -2.1% from -9.0%. GAAP net income attributable to CrowdStrike was $8.5 million, a swing from a loss of $49.3 million, and diluted EPS was $0.03 versus a loss of $0.21.
For the first six months of fiscal 2024, revenue rose 39.2% to $1.42 billion, and gross profit rose 41.9% to $1.07 billion. The year-to-date operating loss narrowed to $34.8 million from a loss of $72.2 million. Year-to-date net income was $9.0 million, a swing from a loss of $80.8 million, and diluted EPS was $0.04 versus a loss of $0.35.
Operating cash flow was $244.8 million, up 16.6% from $209.9 million. Capital expenditures were $40.4 million, down 38.9% from $66.1 million. Free cash flow, a non-GAAP measure, was $188.7 million versus $135.8 million. Ending ARR grew 37% to $2.93 billion, with $196.2 million of net new ARR. Deferred revenue was $2.51 billion, up 36.0% from $1.84 billion, and remaining performance obligations were $3.60 billion, up 44.0% from $2.50 billion. Module adoption rates reached 63% for five or more modules, 41% for six or more, and 24% for seven or more.
Management issued guidance for the third quarter of fiscal 2024 and raised its outlook for the full fiscal year 2024. For the next quarter, non-GAAP income from operations is expected at $154.4 million to $156.3 million, non-GAAP net income attributable to CrowdStrike at $179.8 million to $181.8 million, and non-GAAP diluted EPS at $0.74. For the full fiscal year, those non-GAAP targets are $601.3 million to $610.5 million, $680.4 million to $689.7 million, and $2.80 to $2.84. In the second quarter, non-GAAP income from operations was $155.7 million, non-GAAP net income attributable to CrowdStrike was $180.0 million, and non-GAAP diluted EPS was $0.74. The company said it reached its target model range for non-GAAP operating margin for the first time and expects fourth quarter non-GAAP operating margin within the target model, with sustainable annual non-GAAP operating margin within the target model beyond fiscal 2024.
Risks include intense competition, the length and unpredictability of sales cycles, the challenge of managing rapid growth, and execution risk around new products. The company also cites macroeconomic conditions, inflation, geopolitical uncertainty, public health crises, and volatility in banking and financial services. Integration of acquisitions and timely market acceptance of new offerings are additional concerns. CrowdStrike sees seasonality, with net new ARR typically greater in the second half and lower operating margin in the first half due to payroll taxes and sales and marketing events. It ended the quarter with a $1.0 billion backlog, $236.4 million of non-cancelable data center commitments, and $434.9 million utilized under a $600.0 million AWS cloud services commitment. The company had 7,586 full-time employees as of July 31, 2023.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2024 | Q1 FY2024 | QoQ | Q2 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $731.6M | $692.6M | +5.6% | $535.2M | +36.7% |
| Gross profit | $548.7M | $523.4M | +4.8% | $394.6M | +39.1% |
| Gross margin | 75.0% | 75.6% | -0.6 pp | 73.7% | +1.3 pp |
| Research & development | $179.4M | $179.1M | +0.2% | $137.9M | +30.1% |
| Sales & marketing | $282.9M | $281.1M | +0.6% | $224.8M | +25.9% |
| General & administrative | $101.8M | $82.6M | +23.2% | $80.3M | +26.8% |
| Total operating expenses | $564.1M | $542.8M | +3.9% | $442.9M | +27.4% |
| Operating income (loss) | -$15.4M | -$19.5M | +21.0% | -$48.3M | +68.2% |
| Operating margin | -2.1% | -2.8% | +0.7 pp | -9.0% | +6.9 pp |
| Net income (loss) | $8.5M | $499.0K | +1598.6% | -$48.3M | +117.5% |
| Net margin | 1.2% | 0.1% | +1.1 pp | -9.0% | +10.2 pp |
| Diluted EPS | $0.03 | $0.00 | +$0.03 | -$0.21 | +$0.24 |
Risks
The filing expands AI risk, noting AI including generative AI is core to CrowdStrike and that competitors may more successfully incorporate AI or gain superior access to AI technologies. Increased scrutiny of AI ethics, legality and operations could cause reputational harm, legal liability or delay adoption of CrowdStrike products.
As a cybersecurity provider, CrowdStrike has been and expects to remain a target of sophisticated cyberattacks, including from nation-state actors. A compromise of its internal systems, source code or customer data could reduce solution effectiveness, damage reputation and impair customer confidence.
MD&A reports ARR grew to $2.9 billion as of July 31, 2023 with year-over-year growth of 37%, down from 59% as of July 31, 2022, and dollar-based net retention was effectively at benchmark. Larger upfront deals may also reduce near-term expansion with existing customers.
Risk factors cite economic weakness, bank failures including the March 2023 Silicon Valley Bank receivership, inflation and rising interest rates as factors that may cause customers to delay or cut security spending, lengthen sales cycles or demand more flexible payment terms.
Customers often view Falcon platform subscriptions as strategic decisions, and large enterprises and governments undertake lengthy evaluations. Uncertain economic conditions have resulted in longer sales cycles and additional scrutiny of customer budgets.
The vast majority of Falcon platform sales flow through channel partners, and CrowdStrike depends on recruiting, training and retaining these partners. Loss of a substantial number of partners or partner underperformance could limit distribution and harm results.
CrowdStrike is highly dependent on CEO George Kurtz and key technical, sales and management personnel, and competition for cybersecurity and cloud engineering talent is intense. Many employees are or soon will be vested in substantial equity awards, which may affect retention.
The Falcon platform is hosted primarily with AWS and in colocation data centers. Service interruptions or less favorable AWS renewal terms could harm platform performance, customer renewals and operating costs.
Falcon Funds invest in early to late stage private companies where liquidity events may not occur. MD&A notes other income, net decreased for the three months ended July 31, 2023 compared to the prior-year quarter, partly due to lower net positive mark-to-market adjustments on strategic investments.
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
Non-GAAP Gross Margin
Summary, forecast, risks and KPIs are extracted from CrowdStrike Holdings, Inc.'s SEC filings for Q2 FY2024 (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.