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Subscription Growth to Boost CrowdStrike's (CRWD) Q1 Earnings
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CrowdStrike Holdings, Inc. (CRWD - Free Report) is set to announce its first-quarter fiscal 2025 earnings on Jun 4. The cybersecurity company is expected to show strong performance, driven by the high demand for its cloud-based security solutions, which is likely to boost its subscription revenues.
Subscription Growth to Aid Q1 Revenues
CrowdStrike’s impressive subscription revenue growth is anticipated to be a key contributor to its strong first-quarter performance. With more employees accessing company networks remotely, the need for robust cybersecurity solutions has increased, fueling the demand for CrowdStrike’s offerings. The company’s strong deal pipeline reflects this trend.
The strength of CrowdStrike’s portfolio, particularly its Falcon platform with 10 cloud modules, is likely to have helped attract new clients in the first quarter. Falcon, the first multi-tenant, cloud-native, AI-driven security solution in the industry, safeguards various environments, including on-premises, cloud-based and virtualized settings, across multiple endpoints like desktops, laptops, servers, virtual machines and IoT devices.
CrowdStrike’s Falcon platform offers 10 cloud modules through a software-as-a-service (SaaS) subscription model, categorized into three main areas — Endpoint Security, Security & IT Operations and Threat Intelligence. This broad range of solutions positions CrowdStrike as a one-stop-shop for diverse security needs, giving it a competitive edge over rivals such as Proofpoint, FireEye and F5 Networks, which offer more limited types of solutions.
At the end of the fourth quarter of fiscal 2024, a significant portion of CrowdStrike’s subscription customers were adopting multiple cloud modules, with 64% of customers using five or more modules, 43% using six or more and 27% using seven or more. This widespread adoption indicates the value and effectiveness of CrowdStrike’s comprehensive security solutions.
CrowdStrike’s subscription-based business model is expected to continue driving profitability in the first quarter. This model, which generates recurring revenues and higher margins (more than 70%) compared to hardware-centric models, contributed approximately 94% to the company’s total revenues in the last reported financial results for the fourth quarter of fiscal 2024. Moreover, the non-GAAP gross margin improved by 300 basis points year over year to 78% in the fourth quarter.
Our first-quarter fiscal 2025 estimate for Subscription revenues is pegged at $844.8 million, which indicates a year-over-year improvement of 29.7%. The company’s first-quarter non-GAAP gross margin is anticipated to improve 200 bps year over year to 78%, per our model.
Zacks Rank & Other Stocks to Consider
CrowdStrike currently carries a Zacks Rank #2 (Buy). Shares of CRWD have soared 22.9% year to date (YTD).
The consensus mark for NVIDIA’s fiscal 2025 earnings has moved north 11.6% to $26.84 per share over the past 30 days, which indicates a 107.1% increase from the fiscal 2024 level. It has a long-term earnings growth rate of 36.7%. The NVDA stock has soared 121.4% in the YTD period.
The Zacks Consensus Estimate for Tyler Technologies’ 2024 earnings has moved north 4 cents to $9.19 per share in the past 30 days, which implies year-over-year growth of 17.8%. It has a long-term earnings growth rate of 15%. The TYL stock has risen 14.9% YTD.
The Zacks Consensus Estimate for Datadog’s 2024 earnings has moved north 12 cents to $1.54 per share in the past 30 days, which calls for an increase of 16.7% on a year-over-year basis. The company has a long-term earnings growth rate of 9.6%. DDOG’s shares have dropped 9.2% YTD.
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Subscription Growth to Boost CrowdStrike's (CRWD) Q1 Earnings
CrowdStrike Holdings, Inc. (CRWD - Free Report) is set to announce its first-quarter fiscal 2025 earnings on Jun 4. The cybersecurity company is expected to show strong performance, driven by the high demand for its cloud-based security solutions, which is likely to boost its subscription revenues.
Subscription Growth to Aid Q1 Revenues
CrowdStrike’s impressive subscription revenue growth is anticipated to be a key contributor to its strong first-quarter performance. With more employees accessing company networks remotely, the need for robust cybersecurity solutions has increased, fueling the demand for CrowdStrike’s offerings. The company’s strong deal pipeline reflects this trend.
The strength of CrowdStrike’s portfolio, particularly its Falcon platform with 10 cloud modules, is likely to have helped attract new clients in the first quarter. Falcon, the first multi-tenant, cloud-native, AI-driven security solution in the industry, safeguards various environments, including on-premises, cloud-based and virtualized settings, across multiple endpoints like desktops, laptops, servers, virtual machines and IoT devices.
CrowdStrike Price and EPS Surprise
CrowdStrike price-eps-surprise | CrowdStrike Quote
CrowdStrike’s Falcon platform offers 10 cloud modules through a software-as-a-service (SaaS) subscription model, categorized into three main areas — Endpoint Security, Security & IT Operations and Threat Intelligence. This broad range of solutions positions CrowdStrike as a one-stop-shop for diverse security needs, giving it a competitive edge over rivals such as Proofpoint, FireEye and F5 Networks, which offer more limited types of solutions.
At the end of the fourth quarter of fiscal 2024, a significant portion of CrowdStrike’s subscription customers were adopting multiple cloud modules, with 64% of customers using five or more modules, 43% using six or more and 27% using seven or more. This widespread adoption indicates the value and effectiveness of CrowdStrike’s comprehensive security solutions.
CrowdStrike’s subscription-based business model is expected to continue driving profitability in the first quarter. This model, which generates recurring revenues and higher margins (more than 70%) compared to hardware-centric models, contributed approximately 94% to the company’s total revenues in the last reported financial results for the fourth quarter of fiscal 2024. Moreover, the non-GAAP gross margin improved by 300 basis points year over year to 78% in the fourth quarter.
Our first-quarter fiscal 2025 estimate for Subscription revenues is pegged at $844.8 million, which indicates a year-over-year improvement of 29.7%. The company’s first-quarter non-GAAP gross margin is anticipated to improve 200 bps year over year to 78%, per our model.
Zacks Rank & Other Stocks to Consider
CrowdStrike currently carries a Zacks Rank #2 (Buy). Shares of CRWD have soared 22.9% year to date (YTD).
Some other top-ranked stocks in the broader technology sector are NVIDIA (NVDA - Free Report) , Tyler Technologies (TYL - Free Report) and Datadog (DDOG - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The consensus mark for NVIDIA’s fiscal 2025 earnings has moved north 11.6% to $26.84 per share over the past 30 days, which indicates a 107.1% increase from the fiscal 2024 level. It has a long-term earnings growth rate of 36.7%. The NVDA stock has soared 121.4% in the YTD period.
The Zacks Consensus Estimate for Tyler Technologies’ 2024 earnings has moved north 4 cents to $9.19 per share in the past 30 days, which implies year-over-year growth of 17.8%. It has a long-term earnings growth rate of 15%. The TYL stock has risen 14.9% YTD.
The Zacks Consensus Estimate for Datadog’s 2024 earnings has moved north 12 cents to $1.54 per share in the past 30 days, which calls for an increase of 16.7% on a year-over-year basis. The company has a long-term earnings growth rate of 9.6%. DDOG’s shares have dropped 9.2% YTD.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.