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Why Is CrowdStrike (CRWD) Up 1.4% Since Last Earnings Report?
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It has been about a month since the last earnings report for CrowdStrike Holdings (CRWD - Free Report) . Shares have added about 1.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CrowdStrike due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
CrowdStrike reported second-quarter fiscal 2024 results, wherein both revenues and earnings surpassed the Zacks Consensus Estimate and marked significant year-over-year improvements.
CrowdStrike reported second-quarter fiscal 2024 non-GAAP earnings of 74 cents per share, beating the Zacks Consensus Estimate by 32.14% and jumping 105.6% year over year.
The company’s fiscal second-quarter revenues of $731.2 million rose 36.7% year over year and surpassed the consensus mark by 0.85%.
Subscription revenues (94.3% of the total revenues) jumped 36.3% year over year to $689.9 million. Professional services revenues (5.7% of the total revenues) rose 43.9% year over year to $41.65 million.
Annual recurring revenues (ARR) increased 37% year over year to $2.93 billion. The company added $196 million to its net new ARR in the reported quarter.
CrowdStrike’s subscription customers, who adopted five or more cloud modules, represented 63% of the total subscription customers, those with six or more cloud modules accounted for 41% and those with seven or more cloud modules represented 24% as of Jul 31, 2023.
Operating Details
CrowdStrike’s non-GAAP gross margin improved 200 basis points (bps) on a year-over-year basis to 78%.
The non-GAAP subscription gross margin expanded 200 bps to 78% on a year-over-year basis. The non-GAAP professional gross margin improved 200 bps to 43%.
Non-GAAP sales and marketing expenses jumped 25.8% year over year to $231 million. Non-GAAP research and development expenses surged 35.3% year over year to $132.3 million. Non-GAAP general and administrative expenses increased 22.7% year over year to $49.1 million.
The non-GAAP operating income was $155.65 million, up 78.2% year over year. The non-GAAP operating margin for the quarter improved 500 bps to 21.3%.
Balance Sheet & Cash Flow
As of Jul 31, 2023, cash and cash equivalents were $3.17 billion compared with $2.93 billion as of Apr 30, 2023. CrowdStrike had a long-term debt of $741.7 million.
In the fiscal second quarter, CRWD generated operating and free cash flows of $245 million and $189 million, respectively.
Updated Fiscal 2024 Guidance
For fiscal 2024, CRWD now expects revenues between $3,030.7 million and $3,042.9 million, up from the previous guidance range of $3,000.5-$3,036.7 million. Non-GAAP earnings are now anticipated in the band of $2.80-$2.84 per share, up from the earlier forecasted range of $2.32-$2.43 per share. The non-GAAP operating income for fiscal 2024 is now projected in the band of $601.3-$610.5 million compared with the earlier guidance range of $498.9-$526.2 million.
For the fiscal third quarter, CrowdStrike anticipates revenues between $775.4 million and $778 million. The non-GAAP operating income is expected in the band of $154.4-$156.3 million. For the bottom line, the company expects non-GAAP earnings to be 74 cents per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 365.39% due to these changes.
VGM Scores
Currently, CrowdStrike has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, CrowdStrike has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
CrowdStrike is part of the Zacks Internet - Software industry. Over the past month, Splunk , a stock from the same industry, has gained 20.8%. The company reported its results for the quarter ended July 2023 more than a month ago.
Splunk reported revenues of $910.59 million in the last reported quarter, representing a year-over-year change of +14%. EPS of $0.71 for the same period compares with $0.09 a year ago.
Splunk is expected to post earnings of $1.11 per share for the current quarter, representing a year-over-year change of +33.7%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Splunk. Also, the stock has a VGM Score of D.
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Why Is CrowdStrike (CRWD) Up 1.4% Since Last Earnings Report?
It has been about a month since the last earnings report for CrowdStrike Holdings (CRWD - Free Report) . Shares have added about 1.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CrowdStrike due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
CrowdStrike Q2 Earnings Beat, Revenues Increase Y/Y
CrowdStrike reported second-quarter fiscal 2024 results, wherein both revenues and earnings surpassed the Zacks Consensus Estimate and marked significant year-over-year improvements.
CrowdStrike reported second-quarter fiscal 2024 non-GAAP earnings of 74 cents per share, beating the Zacks Consensus Estimate by 32.14% and jumping 105.6% year over year.
The company’s fiscal second-quarter revenues of $731.2 million rose 36.7% year over year and surpassed the consensus mark by 0.85%.
Subscription revenues (94.3% of the total revenues) jumped 36.3% year over year to $689.9 million. Professional services revenues (5.7% of the total revenues) rose 43.9% year over year to $41.65 million.
Annual recurring revenues (ARR) increased 37% year over year to $2.93 billion. The company added $196 million to its net new ARR in the reported quarter.
CrowdStrike’s subscription customers, who adopted five or more cloud modules, represented 63% of the total subscription customers, those with six or more cloud modules accounted for 41% and those with seven or more cloud modules represented 24% as of Jul 31, 2023.
Operating Details
CrowdStrike’s non-GAAP gross margin improved 200 basis points (bps) on a year-over-year basis to 78%.
The non-GAAP subscription gross margin expanded 200 bps to 78% on a year-over-year basis. The non-GAAP professional gross margin improved 200 bps to 43%.
Non-GAAP sales and marketing expenses jumped 25.8% year over year to $231 million. Non-GAAP research and development expenses surged 35.3% year over year to $132.3 million. Non-GAAP general and administrative expenses increased 22.7% year over year to $49.1 million.
The non-GAAP operating income was $155.65 million, up 78.2% year over year. The non-GAAP operating margin for the quarter improved 500 bps to 21.3%.
Balance Sheet & Cash Flow
As of Jul 31, 2023, cash and cash equivalents were $3.17 billion compared with $2.93 billion as of Apr 30, 2023. CrowdStrike had a long-term debt of $741.7 million.
In the fiscal second quarter, CRWD generated operating and free cash flows of $245 million and $189 million, respectively.
Updated Fiscal 2024 Guidance
For fiscal 2024, CRWD now expects revenues between $3,030.7 million and $3,042.9 million, up from the previous guidance range of $3,000.5-$3,036.7 million. Non-GAAP earnings are now anticipated in the band of $2.80-$2.84 per share, up from the earlier forecasted range of $2.32-$2.43 per share. The non-GAAP operating income for fiscal 2024 is now projected in the band of $601.3-$610.5 million compared with the earlier guidance range of $498.9-$526.2 million.
For the fiscal third quarter, CrowdStrike anticipates revenues between $775.4 million and $778 million. The non-GAAP operating income is expected in the band of $154.4-$156.3 million. For the bottom line, the company expects non-GAAP earnings to be 74 cents per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 365.39% due to these changes.
VGM Scores
Currently, CrowdStrike has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, CrowdStrike has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
CrowdStrike is part of the Zacks Internet - Software industry. Over the past month, Splunk , a stock from the same industry, has gained 20.8%. The company reported its results for the quarter ended July 2023 more than a month ago.
Splunk reported revenues of $910.59 million in the last reported quarter, representing a year-over-year change of +14%. EPS of $0.71 for the same period compares with $0.09 a year ago.
Splunk is expected to post earnings of $1.11 per share for the current quarter, representing a year-over-year change of +33.7%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Splunk. Also, the stock has a VGM Score of D.