Summary
CrowdStrike's fiscal 2022 third quarter showed strong top-line growth but wider GAAP losses. Total revenue reached $380.1 million, up 63.5% from the prior-year quarter. Year-to-date revenue was $1.02 billion, up 67.4%. Gross profit was $278.4 million, up 62.9%, while gross margin slipped to 73.2% from 73.5%, a decline of 0.3 percentage points. Operating loss widened to $40.3 million from $24.2 million, and operating margin was -10.6%, down 0.2 percentage points. Net loss attributable to CrowdStrike widened to $50.5 million from $24.5 million, and diluted EPS fell to -$0.22 from -$0.11. On a non-GAAP basis, income from operations was $50.7 million, net income was $41.1 million, and diluted EPS was $0.17, compared with $18.9 million, $18.6 million, and $0.08 in the prior-year quarter.
Operational momentum stayed strong. Ending ARR grew 67% year-over-year to $1.51 billion. Net new ARR was $170.0 million, and net new ARR growth accelerated to 46% as reported and 55% on an organic basis. The company added 1,607 net new subscription customers, the second consecutive quarter above 1,600, bringing the total to 14,687, up 75% year-over-year. Module adoption continued to deepen: 68% of customers used four or more modules, 55% used five or more, and 32% used six or more. Recent product launches included Falcon XDR, the CrowdXDR Alliance, Humio Community Edition, Falcon Fusion, Falcon FileVantage, and Falcon CWP Complete. CrowdStrike also acquired SecureCircle to extend Zero Trust security to data. The Cybersecurity and Infrastructure Security Agency selected CrowdStrike as a major platform for the Executive Order endpoint detection and response initiative. Partnerships with Google, UiPath, and AWS expanded the platform's reach.
Cash generation improved. Operating cash flow was $159.1 million, up 79.7% from $88.5 million in the prior-year quarter. Capital expenditures were $29.6 million, up 198.9% from $9.9 million. Free cash flow, a non-GAAP measure, was $123.5 million, compared with $76.1 million. Year-to-date operating cash flow was $415.1 million, up 71.4% from $242.1 million. Deferred revenue rose 68.9% to $1.29 billion, and remaining performance obligations grew 77.6% to $1.90 billion. Backlog stood at approximately $654.7 million, with about $214.0 million not expected to be billed in the next twelve months. In October 2021, the company committed to purchase a minimum of $600.0 million of cloud services from AWS through September 2026, with a remaining contractual commitment of $587.7 million.
Management provided fourth-quarter fiscal 2022 guidance and raised full-year fiscal 2022 guidance. For the next quarter, the company guided non-GAAP income from operations to $55.2 million to $59.5 million, non-GAAP net income attributable to CrowdStrike to $45.2 million to $49.4 million, and non-GAAP diluted EPS to $0.19 to $0.21. For the full fiscal year 2022, it guided non-GAAP income from operations to $171.0 million to $175.3 million, non-GAAP net income to $135.4 million to $139.7 million, and non-GAAP diluted EPS to $0.57 to $0.59. The guidance excludes stock-based compensation, amortization of acquired intangible assets, acquisition-related expenses, and other items.
Risks remain. The company has a limited operating history and faces execution challenges as it scales. It depends on attracting and retaining customers and on successful new product introductions, where defects or vulnerabilities could hurt adoption. Integrating acquisitions such as Humio and SecureCircle carries risk. Sales cycles can be long, and general market, political, economic, and business conditions, including COVID-19, could pressure results. The company also expects continued operating losses for the foreseeable future. Deferred revenue and backlog are not necessarily indicative of future revenue performance. Seasonality may make net new ARR generation stronger in the second half of the year, particularly in the fourth quarter, while operating margin tends to be lower in the first half.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2022 | Q2 FY2022 | QoQ | Q3 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $380.1M | $337.7M | +12.5% | $232.5M | +63.5% |
| Gross profit | $278.4M | $247.3M | +12.6% | $170.9M | +62.9% |
| Gross margin | 73.3% | 73.2% | +0.0 pp | 73.5% | -0.3 pp |
| Research & development | $97.6M | $90.5M | +7.9% | $57.5M | +69.7% |
| Sales & marketing | $165.0M | $153.9M | +7.2% | $105.6M | +56.2% |
| General & administrative | $56.1M | $50.3M | +11.4% | $32.0M | +75.5% |
| Total operating expenses | $318.7M | $294.7M | +8.1% | $195.1M | +63.3% |
| Operating income (loss) | -$40.3M | -$47.4M | +15.1% | -$24.2M | -66.7% |
| Operating margin | -10.6% | -14.0% | +3.4 pp | -10.4% | -0.2 pp |
| Net income (loss) | -$50.5M | -$57.3M | +12.0% | -$24.5M | -105.7% |
| Net margin | -13.3% | -17.0% | +3.7 pp | -10.6% | -2.7 pp |
| Diluted EPS | -$0.22 | -$0.25 | +$0.03 | — | — |
| Net retention rate | 100.0% | 100.0% | ±0.0 pp | 100.0% | ±0.0 pp |
Risks
The company had $750.0 million of Senior Notes outstanding as of October 31, 2021 and up to $750.0 million of revolving facility availability. Restrictive and cross-default covenants could accelerate indebtedness, and interest expense increased 3,218% for the three months ended October 31, 2021 compared with the prior-year period.
As a cybersecurity provider, CrowdStrike has been and expects to continue to be specifically targeted by bad actors, including sophisticated cyber adversaries and nation-state actors. 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, Broadcom's Symantec Enterprise, McAfee Enterprise, Palo Alto Networks, VMware Carbon Black, and SentinelOne. Larger competitors with broader offerings may bundle products or pressure pricing, which could reduce gross margins and revenue growth.
Headcount grew from 1,455 employees as of January 31, 2019 to 4,543 employees as of October 31, 2021, requiring significant investment to attract, integrate, and retain employees and scale infrastructure. Failure to manage growth could impair platform quality and competitive position.
The company depends on key technical, sales, and management personnel, especially CEO George Kurtz, and faces intense competition for cybersecurity, sales, and cloud-engineering talent. Equity vesting and stock-price volatility may make retention more difficult.
The Falcon platform relies on third-party data centers, primarily AWS, and colocation facilities. In October 2021 the company committed to purchase a minimum of $600.0 million of cloud services from AWS through September 2026, with $587.7 million remaining as of October 31, 2021, increasing exposure to AWS service disruptions and pricing changes.
Sales cycles are long and unpredictable, especially for large organizations and government entities, and require significant upfront time and expense before any sale. The COVID-19 pandemic could delay and lengthen sales cycles and reduce customer spending.
The March 5, 2021 Humio acquisition had total consideration of $370.3 million and preliminary goodwill of $291.3 million. Integration, due diligence, retention, and accounting risks could cause unanticipated write-offs or liabilities.
A vast majority of Falcon platform sales flow through channel partners, and the company expects this to continue. Loss of a substantial number of partners or partner underperformance could limit market, sales, and distribution reach.
Future growth depends in part on increasing sales to government organizations, which involve unpredictable budgets, long sales cycles, and certification requirements such as FedRAMP. Losing or failing to maintain FedRAMP certification would restrict U.S. federal sales.
The company is subject to Sarbanes-Oxley Section 404 and is no longer an emerging growth company, requiring independent auditor attestation of internal control over financial reporting. Control failures could lead to restatements, sanctions, and loss of investor confidence.
COVID-19 has caused global economic disruption, and some customers requested special billing or payment terms. The longer-term impact on customer spending, churn, sales cycles, and office operations remains uncertain and may not be fully reflected until future periods due to the subscription model.
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
Non-GAAP Income from Operations
ARR YoY Growth
Subscription Customers YoY Growth
Summary, forecast, risks and KPIs are extracted from CrowdStrike Holdings, Inc.'s SEC filings for Q3 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.