Summary
CrowdStrike closed fiscal 2023 with $637.4 million in revenue for the quarter ended January 31, 2023, up 47.9% from the prior-year quarter. Full-year revenue was $2.24 billion, up 54.4%. Gross profit was $461.8 million in the quarter, up 45.0%, and $1.64 billion for the fiscal year, up 53.5%. Annual recurring revenue grew 48% year over year to $2.56 billion. Net new ARR reached a record $222 million in the quarter. The company added 1,873 net new subscription customers, taking the total to 23,019, up 41% year over year. Module adoption stood at 62% for five or more modules, 39% for six or more and 22% for seven or more as of January 31, 2023.
Profitability is still the soft spot. GAAP operating loss widened to $61.5 million in the quarter. GAAP net loss attributable to CrowdStrike widened to $47.5 million. For the fiscal year, net loss attributable to CrowdStrike narrowed to $183.2 million, and diluted EPS was -$0.79, a narrowed loss. Gross margin was 72.4% in the quarter, down 1.4 percentage points, and operating margin was -9.6%, down 4.2 percentage points. Full-year gross margin was 73.2%, down 0.4 percentage points, while full-year operating margin improved to -8.5%. The non-GAAP picture looks different. Non-GAAP income from operations was $95.6 million in the quarter, and non-GAAP net income attributable to CrowdStrike was $111.6 million. Non-GAAP diluted EPS was $0.47. The gap comes largely from stock-based compensation, which totalled $152.3 million in the quarter.
Cash generation was the standout. Operating cash flow was $273.3 million in the quarter, up 71.1%, and $941.0 million for the fiscal year, up 63.7%. Free cash flow, a non-GAAP measure the company defines as operating cash flow less purchases of property and equipment, capitalized internal-use software costs and purchases of deferred compensation investments, was $209.5 million in the quarter. Capital expenditures were $55.4 million in the quarter, up 107.3%, and $235.0 million for the fiscal year, up 109.6%. Deferred revenue rose 54.0% year over year to $2.36 billion, a sign of continued upfront billing. Remaining performance obligations were $3.40 billion, up 47.8%. The dollar-based net retention rate was 125.3% as of January 31, 2023.
Guidance sets up a demanding fiscal 2024. For the first quarter of fiscal 2024, non-GAAP income from operations is guided to $107.1 million to $109.5 million and non-GAAP net income attributable to CrowdStrike to $121.1 million to $123.5 million. For the full fiscal year 2024, non-GAAP income from operations guidance is $474.0 million to $518.7 million and non-GAAP net income attributable to CrowdStrike guidance is $535.9 million to $580.7 million. Non-GAAP diluted earnings per share is guided to $0.50 to $0.51 for the first quarter and $2.21 to $2.39 for the full fiscal year. The company has not provided comparable GAAP measures because it says certain items are out of its control or cannot be reasonably predicted.
The risk list is familiar but real. CrowdStrike flags its limited experience with new product introductions, the risk of defects or vulnerabilities in those offerings, the length and unpredictability of sales cycles, and its ability to attract new customers and retain existing ones. Macroeconomic conditions, inflation, geopolitical uncertainty and integration of acquisitions all sit on that list. The company also expects to keep incurring operating losses as it funds sales and marketing and research and development, with an accumulated deficit of $1.1 billion as of January 31, 2023. One disclosure that matters for future comparisons: starting in the first quarter of fiscal 2024, CrowdStrike will stop reporting subscription customer count as a key metric, arguing that managed service security providers and smaller customers make it a weaker signal of business strength.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2023 | Q3 FY2023 | QoQ | Q4 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $637.4M | $580.9M | +9.7% | $431.0M | +47.9% |
| Gross profit | $461.8M | $422.7M | +9.3% | $318.4M | +45.0% |
| Gross margin | 72.5% | 72.8% | -0.3 pp | 73.9% | -1.4 pp |
| Research & development | $191.8M | $155.3M | +23.6% | $105.0M | +82.7% |
| Sales & marketing | $246.4M | $239.7M | +2.8% | $162.6M | +51.6% |
| General & administrative | $85.0M | $84.1M | +1.0% | $74.3M | +14.4% |
| Total operating expenses | $523.3M | $479.1M | +9.2% | $341.9M | +53.0% |
| Operating income (loss) | -$61.5M | -$56.4M | -9.0% | -$23.5M | -161.3% |
| Operating margin | -9.7% | -9.7% | +0.1 pp | -5.5% | -4.2 pp |
| Net income (loss) | -$48.9M | -$54.6M | +10.4% | -$41.7M | -17.2% |
| Net margin | -7.7% | -9.4% | +1.7 pp | -9.7% | +2.0 pp |
| Diluted EPS | -$0.21 | -$0.24 | +$0.03 | -$0.18 | -$0.03 |
| Net retention rate | 120.0% | 120.0% | ±0.0 pp | 120.0% | ±0.0 pp |
Risks
Economic weakness, inflation, and rising interest rates have caused and may continue to cause customers to delay or cut security and IT spending, lengthen sales cycles, increase churn, and reduce demand, and the company may need more flexible payment terms. The filing notes this could disproportionately affect cloud-based security solutions like CrowdStrike's Falcon platform.
Sales cycles are long and unpredictable, especially for large enterprises and government entities that require significant evaluation and budget scrutiny. Uncertain economic conditions may further lengthen sales cycles and shift demand, making revenue recognition difficult to predict.
The security market is intensely competitive, with larger competitors that have more resources and may bundle or discount products, potentially reducing gross profits. Gross margin for fiscal 2023 year to date was 73.2%, down 0.4 percentage points, and FY2023 Q4 gross margin was 72.4%, down 1.4 percentage points.
As a cybersecurity provider, CrowdStrike has been and expects to continue to be a target of sophisticated cyberattacks, including from nation-state actors, and geopolitical tensions may intensify such efforts. An actual or perceived compromise of its systems or data could damage reputation and customer confidence.
The Falcon platform relies on third-party data centers, primarily Amazon Web Services, and the company has committed to purchase a minimum of $600.0 million of AWS cloud services through September 2026, with $297.6 million utilized as of January 31, 2023. Termination or less favorable renewal of these arrangements could interrupt service and increase costs.
The company depends on key technical, sales, and management personnel, especially President and CEO George Kurtz, and faces intense competition for cybersecurity and cloud software talent. Its incident response and proactive services team is small and difficult to replace.
Customers have no obligation to renew subscriptions, may renew for shorter terms, or may cease using certain cloud modules. Dollar-based net retention rate was 125.3% as of January 31, 2023, and can fluctuate due to large customer contracts.
Approximately 30% of fiscal 2023 total revenue came from international customers, exposing the company to regulatory, data localization, anti-bribery, tax, and foreign currency risks. Expansion into additional international markets requires significant management attention and financial resources.
The company has $750.0 million aggregate principal amount of Senior Notes due in fiscal 2030, and its revolving facility and indenture contain restrictive covenants and cross-default provisions. Failure to comply or generate sufficient cash could accelerate indebtedness and create liquidity problems.
As of January 31, 2023, CrowdStrike had $1.6 billion of U.S. federal and $248.2 million of California net operating loss carryforwards that may expire unused or be limited by ownership changes. OECD proposals for a global minimum tax of at least 15 percent could also increase its tax obligations.
Through the Falcon Funds, the company invests in early to late stage private companies and may not realize a return; valuations are complex and can cause volatility in results. Other income, net decreased during fiscal 2023 compared to fiscal 2022 primarily due to a decrease in net positive mark-to-market adjustments of strategic investments.
CrowdStrike relies on a limited number of suppliers for equipment used to operate its cloud platform and does not have long-term contracts guaranteeing supply. Component shortages and delivery delays could delay opening new data centers, increasing capacity, or replacing defective equipment.
SaaS KPIs
All quarters →Free Cash Flow Margin
Non-GAAP Operating Margin
Non-GAAP Subscription Gross Margin
Dollar-Based Net Retention Rate
ARR
Summary, forecast, risks and KPIs are extracted from CrowdStrike Holdings, Inc.'s SEC filings for Q4 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.