CrowdStrike Holdings, Inc 10-Q for FY2024 Q2

CrowdStrike Holdings, Inc. (CRWD)

10-Q 2023-08-31 For: 2023-07-31

Added on April 09, 2026

About this 10-Q

CrowdStrike Holdings, Inc filed this 10-Q on August 31, 2023, covering the quarter ended July 31, 2023 (FY2024 Q2).

Headline figures

Quarter ended July 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $731.63M; up 36.7% from $535.15M a year earlier
Net income: $8.47M; compared with a net loss of $49.29M a year earlier
Diluted EPS: $0.03; compared with -$0.21 a year earlier

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Title of each class	Trading symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0005 per share	CRWD	The Nasdaq Stock Market LLC
		(Nasdaq Global Select Market)


Large Accelerated Filer	☑	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


		Page No.
	PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of July 31, 2023 and January 31, 2023	6
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended July 31, 2023 and July 31, 2022	7
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended July 31, 2023 and July 31, 2022	8
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended July 31, 2023 and July 31, 2022	9
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended July 31, 2023 and July 31, 2022	11
	Notes to Condensed Consolidated Financial Statements	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	44
Item 4.	Controls and Procedures	44

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	45
Item 2.	Unregistered Shares of Equity Securities and Use of Proceeds	76
Item 3.	Defaults Upon Senior Securities	76
Item 4.	Mine Safety Disclosures	76
Item 5.	Other Information	76
Item 6.	Exhibits	76
	Signatures	78


	July 31,		January 31,
	2023		2023
Assets
Current assets:
Cash and cash equivalents	$	3,167,215	$	2,455,369
Short-term investments	—		250,000
Accounts receivable, net of allowance for credit losses of $4.1 million and $2.6 million as of July 31, 2023 and January 31, 2023, respectively	539,463		626,181
Deferred contract acquisition costs, current	197,111		186,855
Prepaid expenses and other current assets	146,597		121,862
Total current assets	4,050,386		3,640,267
Strategic investments	59,541		47,270
Property and equipment, net	561,587		492,335
Operating lease right-of-use assets	46,179		39,936
Deferred contract acquisition costs, noncurrent	261,574		260,233
Goodwill	430,697		430,645
Intangible assets, net	79,139		86,889
Other long-term assets	31,355		28,965
Total assets	$	5,520,458	$	5,026,540
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	37,073	$	45,372
Accrued expenses	122,419		137,884
Accrued payroll and benefits	138,471		168,767
Operating lease liabilities, current	16,133		13,046
Deferred revenue	1,894,005		1,727,484
Other current liabilities	21,362		16,519
Total current liabilities	2,229,463		2,109,072
Long-term debt	741,750		741,005
Deferred revenue, noncurrent	613,637		627,629
Operating lease liabilities, noncurrent	32,688		29,567
Other liabilities, noncurrent	32,820		31,833
Total liabilities	3,650,358		3,539,106
Commitments and contingencies (Note 8)
Stockholders’ Equity
Preferred stock, $0.0005 par value; 100,000 shares authorized as of July 31, 2023 and January 31, 2023; no shares issued and outstanding as of July 31, 2023 and January 31, 2023.	—		—
Class A common stock, $0.0005 par value; 2,000,000 shares authorized as of July 31, 2023 and January 31, 2023; 226,043 shares and 222,759 shares issued and outstanding as of July 31, 2023 and January 31, 2023, respectively; Class B common stock, $0.0005 par value; 300,000 shares authorized as of July 31, 2023 and January 31, 2023; 12,732 shares and 13,018 shares issued and outstanding as of July 31, 2023 and January 31, 2023, respectively.	119		118
Additional paid-in capital	2,976,375		2,612,705
Accumulated deficit	(1,139,200)		(1,148,163)
Accumulated other comprehensive income (loss)	913		(1,019)
Total CrowdStrike Holdings, Inc. stockholders’ equity	1,838,207		1,463,641
Non-controlling interest	31,893		23,793
Total stockholders’ equity	1,870,100		1,487,434
Total liabilities and stockholders’ equity	$	5,520,458	$	5,026,540


	Three Months Ended July 31,				Six Months Ended July 31,
	2023		2022		2023		2022
Revenue
Subscription	$	689,972	$	506,199	$	1,341,147	$	966,021
Professional services	41,654		28,954		83,059		56,966
Total revenue	731,626		535,153		1,424,206		1,022,987

Cost of revenue
Subscription	153,306		120,087		295,406		228,029
Professional services	29,611		20,480		56,741		39,370
Total cost of revenue	182,917		140,567		352,147		267,399

Gross profit	548,709		394,586		1,072,059		755,588

Operating expenses
Sales and marketing	282,916		224,766		564,023		418,298
Research and development	179,362		137,864		358,427		261,263
General and administrative	101,804		80,263		184,438		148,217
Total operating expenses	564,082		442,893		1,106,888		827,778

Loss from operations	(15,373)		(48,307)		(34,829)		(72,190)
Interest expense	(6,444)		(6,335)		(12,831)		(12,633)
Interest income	36,638		7,727		67,159		9,234
Other income (expense)	(1,734)		3,380		(1,504)		5,085

Income (loss) before provision for income taxes	13,087		(43,535)		17,995		(70,504)

Provision for income taxes	4,611		4,778		9,020		8,218

Net income (loss)	8,476		(48,313)		8,975		(78,722)
Net income attributable to non-controlling interest	4		972		12		2,086
Net income (loss) attributable to CrowdStrike	$	8,472	$	(49,285)	$	8,963	$	(80,808)

Net income (loss) per share attributable to CrowdStrike common stockholders:
Basic	$	0.04	$	(0.21)	$	0.04	$	(0.35)
Diluted	$	0.03	$	(0.21)	$	0.04	$	(0.35)

Weighted-average shares used in computing net income (loss) per share attributable to CrowdStrike common stockholders:
Basic	237,911		232,554		237,174		231,850
Diluted	242,144		232,554		241,383		231,850


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Non-controlling Interest		Total Stockholders’ Equity
	Shares	Amount
Balances at April 30, 2023	237,099	$	118	$	2,752,716	$	(1,147,672)	$	139	$	29,058	$	1,634,359
Issuance of common stock upon exercise of options	210	—		1,474		—		—		—		1,474
Issuance of common stock under RSU and PSU release	1,011	—		—		—		—		—		—
Issuance of common stock under employee stock purchase plan	450	1		45,431		—		—		—		45,432



Issuance of common stock for founders holdbacks related to acquisitions	5	—		889		—		—		—		889
Issuance of common stock to board of directors	—	—		88		—		—		—		88
Stock-based compensation expense	—	—		163,811		—		—		—		163,811
Capitalized stock-based compensation	—	—		11,966		—		—		—		11,966

Net income	—	—		—		8,472		—		4		8,476
Non-controlling interest	—	—		—		—		—		2,831		2,831
Other comprehensive income	—	—		—		—		774		—		774
Balances at July 31, 2023	238,775	$	119	$	2,976,375	$	(1,139,200)	$	913	$	31,893	$	1,870,100


	July 31, 2023								January 31, 2023
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total

Assets(1)
Cash equivalents (2)
Money market funds	$	2,800,155	$	—	$	—	$	2,800,155	$	64,752	$	—	$	—	$	64,752

U.S. Treasury securities	—		3		—		3		—		—		—		—
Other assets
Deferred compensation investments	996		—		—		996		64		—		—		64
Total assets	$	2,801,151	$	3	$	—	$	2,801,154	$	64,816	$	—	$	—	$	64,816


	July 31, 2023		January 31, 2023
Data center and other computer equipment	$	432,093	$	297,585
Capitalized internal-use software and website development costs	145,977		113,276
Leasehold improvements	27,014		24,944
Purchased software	9,696		6,384
Furniture and equipment	7,926		7,412
Construction in progress	210,837		259,013
	833,543		708,614
Less: Accumulated depreciation and amortization	(271,956)		(216,279)
Property and equipment, net	$	561,587	$	492,335


	July 31, 2023						Weighted-Average Remaining Useful Life
	Gross Carrying Amount		Accumulated Amortization		Net Amount
							(in months)
Developed technology	$	101,460	$	33,027	$	68,433	62
Customer relationships	12,038		4,730		7,308		56
Other acquired intangible assets	5,245		1,847		3,398		140
Total	$	118,743	$	39,604	$	79,139


	Total
Fiscal 2024 (remaining six months)	$	8,219
Fiscal 2025	16,422
Fiscal 2026	15,322
Fiscal 2027	13,147
Fiscal 2028	12,634
Thereafter	13,395
Total amortization expense	$	79,139


	Amounts

Goodwill as of January 31, 2023	$	430,645


Foreign currency translation	52
Goodwill as of July 31, 2023	$	430,697


	July 31, 2023		January 31, 2023
Web hosting services	$	58,804	$	65,589
Accrued professional services	14,996		13,281

Accrued marketing	13,759		11,435
Other accrued expenses	13,221		11,247
Accrued interest expense	10,375		10,375
Accrued partner commissions	5,653		5,800
Accrued purchases of property and equipment	5,611		20,157
Accrued expenses	$	122,419	$	137,884


	July 31, 2023		January 31, 2023
Accrued commissions	$	58,202	$	77,287
Accrued payroll and related expenses	41,136		39,907
Accrued bonuses	26,540		34,098
Employee Stock Purchase Plan	12,593		17,475
Accrued payroll and benefits	$	138,471	$	168,767


	Number of Shares	Weighted-Average Exercise Price Per Share
	(in thousands)
Options outstanding at January 31, 2023	2,869	$	8.52

Exercised	(585)	$	7.05
Canceled	(4)	$	10.59
Options outstanding at July 31, 2023	2,280	$	8.90
Options vested and expected to vest at July 31, 2023	2,280	$	8.90
Options exercisable at July 31, 2023	2,055	$	8.62


	Number of Shares	Weighted- Average Grant Date Fair Value Per Share
	(in thousands)
RSUs and PSUs outstanding at January 31, 2023	10,050	$	158.08
Granted	3,206	$	133.99
Released	(1,944)	$	136.39
Performance adjustment (1)	155	$	211.22
Forfeited	(901)	$	163.35
RSUs and PSUs outstanding at July 31, 2023	10,566	$	156.24
RSUs and PSUs ending vested and expected to vest at July 31, 2023	10,463	$	155.53


	Six Months Ended July 31,
	2023		2022
Expected term (in years)	0.5 - 2.0		0.5 - 2.0
Risk-free interest rate	0.2% - 5.2%		0.1% - 3.4%
Expected stock price volatility	46.3% - 61.2%		39.6% - 67.4%
Dividend yield	—	%	—	%


	Three Months Ended July 31,				Six Months Ended July 31,
	2023		2022		2023		2022
	Carrying Amount				Carrying Amount
Beginning balance	$	2,403,791	$	1,692,597	$	2,355,113	$	1,529,321
Additions to deferred revenue	835,477		686,708		1,576,735		1,337,818
Recognition of deferred revenue	(731,626)		(535,153)		(1,424,206)		(1,022,987)
Ending balance	$	2,507,642	$	1,844,152	$	2,507,642	$	1,844,152


	Total Commitments

Fiscal 2024 (remaining six months)	$	47,753
Fiscal 2025	99,074
Fiscal 2026	81,019
Fiscal 2027	41,642
Fiscal 2028	33,465
Thereafter	48,571
Total purchase commitments	$	351,524


	July 31, 2023	July 31, 2022
Shares of common stock subject to repurchase from outstanding stock options	—	66
RSUs and PSUs subject to future vesting	3,960	8,569
Shares of common stock issuable from stock options	—	3,275
Share purchase rights under the Employee Stock Purchase Plan	100	1,062
Potential common shares excluded from diluted net income (loss) per share	4,060	12,972


	As of July 31,
	2023			2022
Annual recurring revenue	$	2,930,132		$	2,139,906
Year-over-year growth	37		%	59		%


	Three Months Ended July 31,				Change $		Change %		Six Months Ended July 31,				Change $		Change %
	2023		2022						2023		2022

Revenue
Subscription	$	689,972	$	506,199	$	183,773	36	%	$	1,341,147	$	966,021	$	375,126	39	%
Professional services	41,654		28,954		12,700		44	%	83,059		56,966		26,093		46	%
Total revenue	731,626		535,153		196,473		37	%	1,424,206		1,022,987		401,219		39	%
Cost of revenue
Subscription	153,306		120,087		33,219		28	%	295,406		228,029		67,377		30	%
Professional services	29,611		20,480		9,131		45	%	56,741		39,370		17,371		44	%
Total cost of revenue	182,917		140,567		42,350		30	%	352,147		267,399		84,748		32	%
Gross profit	548,709		394,586		154,123		39	%	1,072,059		755,588		316,471		42	%
Operating expenses
Sales and marketing	282,916		224,766		58,150		26	%	564,023		418,298		145,725		35	%
Research and development	179,362		137,864		41,498		30	%	358,427		261,263		97,164		37	%
General and administrative	101,804		80,263		21,541		27	%	184,438		148,217		36,221		24	%
Total operating expenses	564,082		442,893		121,189		27	%	1,106,888		827,778		279,110		34	%
Loss from operations	(15,373)		(48,307)		32,934		(68)	%	(34,829)		(72,190)		37,361		(52)	%
Interest expense	(6,444)		(6,335)		(109)		2	%	(12,831)		(12,633)		(198)		2	%
Interest income	36,638		7,727		28,911		374	%	67,159		9,234		57,925		627	%
Other income, net	(1,734)		3,380		(5,114)		(151)	%	(1,504)		5,085		(6,589)		(130)	%
Income (loss) before provision for income taxes	13,087		(43,535)		56,622		(130)	%	17,995		(70,504)		88,499		(126)	%
Provision for income taxes	4,611		4,778		(167)		(3)	%	9,020		8,218		802		10	%
Net income (loss)	8,476		(48,313)		56,789		(118)	%	8,975		(78,722)		87,697		(111)	%
Net income attributable to non-controlling interest	4		972		(968)		(100)	%	12		2,086		(2,074)		(99)	%
Net income (loss) attributable to CrowdStrike	$	8,472	$	(49,285)	$	57,757	(117)	%	$	8,963	$	(80,808)	$	89,771	(111)	%


Statement of Operations	Six Months Ended July 31, 2023
	(in thousands)
Revenue	$	1,424,206
Cost of revenue	373,008
Operating expenses	1,122,078
Loss from operations	(70,880)
Net loss	(22,731)
Net loss attributable to CrowdStrike	(22,731)


Balance Sheet	July 31, 2023		January 31, 2023
	(in thousands)
Current assets (excluding intercompany receivables from non-Guarantors)	$	3,921,348	$	3,541,670
Intercompany receivables from non-Guarantors	9,518		5,817
Noncurrent assets	1,461,431		1,443,684
Current liabilities	2,163,942		2,027,443
Noncurrent liabilities (excluding intercompany payable to non-Guarantors)	1,401,234		1,417,627
Intercompany payable to non-Guarantors	247,042		289,242



*						The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” or purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any of CrowdStrike Holdings, Inc.’s filings under the Securities Act of 1933, as amended, irrespective of any general incorporation language contained in such filing.


			CROWDSTRIKE HOLDINGS, INC.

			By:			/s/ Burt W. Podbere
						Burt W. Podbere Chief Financial Officer (Principal Financial Officer)

			By:			/s/ Anurag Saha
						Anurag Saha Chief Accounting Officer (Principal Accounting Officer)


CROWDSTRIKE HOLDINGS, INC.

By:			/s/ George Kurtz
Name:			George Kurtz
Title:			President, Chief Executive Officer, and Director (Principal Executive Officer)


Date: August 30, 2023
	By:	/s/ George Kurtz
	Name:	George Kurtz
	Title:	President, Chief Executive Officer, and Director (Principal Executive Officer)