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CrowdStrike Q3 Earnings Beat: Will Strong Guidance Lift the Stock?
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CrowdStrike Holdings, Inc. (CRWD - Free Report) reported non-GAAP earnings of 93 cents per share in the third quarter of fiscal 2025, which surpassed the Zacks Consensus Estimate by 14.8% and came ahead of management’s guidance of 80-81 cents.
CRWD reported non-GAAP earnings of 82 cents in the year-ago quarter. The robust bottom-line performance was mainly driven by higher revenues.
CRWD’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 10.32%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
CrowdStrike’s fiscal third-quarter revenues of $1.01 billion rose 29% year over year and surpassed the consensus mark of $982.3 million. The top line was also higher than the company’s guidance of $979.2-$984.7 million. The strong adoption of the Falcon platform and better sales execution mainly aided top-line growth in the fiscal third quarter.
Following its better-than-expected third-quarter results, CRWD has raised its fiscal 2025 guidance. CRWD shares have gained 38.4% year to date, outperforming the Zacks Internet - Software industry's growth of 32.6%. The strong performance and guidance might drive the stock up in the near term.
Subscription revenues (95.3% of the total revenues) jumped 31.3% year over year to $962.74 million. Professional services revenues (4.7% of the total revenues) declined 9.7% year over year to $47.4 million.
As of Oct. 31, 2024, annual recurring revenues (ARR) were $4.02 billion, up 27% year over year. The company added $153 million to its net new ARR in the reported quarter.
CrowdStrike’s subscription customers, who adopted five or more cloud modules, represented 66% of the total subscription customers, those with six or more cloud modules accounted for 47% and those with seven or more cloud modules represented 31% as of Oct. 31, 2024.
CRWD’s Operating Details
CrowdStrike’s non-GAAP gross profit increased 28.5% to $786.5 million in the fiscal third quarter from $612 million in the year-ago quarter. The non-GAAP gross margin remained flat at 78%.
The non-GAAP subscription gross profit soared 30.9% year over year to $770.44 million, while the gross margin remained flat at 80% year over year. The non-GAAP professional gross profit declined 29.8% to $16.2 million, while the gross margin fell 1,000 basis points (bps) to 34% on a year-over-year basis.
CrowdStrike’s total non-GAAP operating expenses increased 35.7% to $591.7 million from $436.1 million reported in the year-ago quarter. As a percentage of revenues, non-GAAP operating expenses increased to 59% from 55% in the year-ago quarter.
Non-GAAP sales and marketing (S&M) expenses jumped 38.3% year over year to $336.3 million. Non-GAAP research and development (R&D) expenses climbed 33.1% year over year to $190 million. Non-GAAP general and administrative (G&A) expenses increased 30.6% year over year to $65.3 million. As a percentage of revenues, S&M and R&D expenses expanded 200 bps and 100 bps, while G&A expenses remained flat at 6%.
The non-GAAP operating income jumped 11% to $194.9 million, mainly driven by higher revenues. The non-GAAP operating margin for the quarter contracted 300 bps year over year to 19%.
CRWD’s Balance Sheet & Cash Flow
As of Oct. 31, 2024, cash and cash equivalents were $4.26 billion. CrowdStrike had a long-term debt of $743.6 million.
In the fiscal third quarter, CRWD generated operating and free cash flows of $326 million and $231 million, respectively.
CrowdStrike’s Q4 and FY25 Guidance
CrowdStrike initiated guidance for the fiscal fourth quarter and revised the projections for fiscal 2025. For the fiscal fourth quarter, CrowdStrike anticipates revenues between $1.0287 billion and $1.0354 billion. The non-GAAP operating income is expected in the band of $184-$189 million. Non-GAAP net income is forecasted in the range of $210.9-$215.8 million. The company expects non-GAAP earnings per share in the band of 84-86 cents. The consensus mark for fiscal fourth-quarter revenues and non-GAAP earnings is pegged at $1.03 billion and 86 cents per share, respectively.
For fiscal 2025, CRWD now expects revenues between $3,923.8 million and $3,930.5 million, up from the previously projected range of $3,890-$3,902.2 million. The updated non-GAAP operating income for fiscal 2025 is now projected in the band of $804.4-$809.4 million compared with the previously guided range of $774.7-$783.9 million
The company now expects non-GAAP net income in the range of $937.5-$942.6 million compared with the previous guidance of $908.8-$918.0 million. Non-GAAP earnings are now anticipated in the band of $3.74-$3.76, up from the previous guidance of $3.61-$3.65. The consensus mark for fiscal 2025 revenues and non-GAAP earnings is pegged at $3.90 billion and $3.62 per share, respectively.
Zacks Rank & Stocks to Consider
Currently, CRWD carries a Zacks Rank #3 (Hold).
NVIDIA (NVDA - Free Report) , Amphenol (APH - Free Report) and Celestica (CLS - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.
The consensus mark for NVIDIA’s 2025 earnings has been revised upward by 9 cents to a $2.93 per share over the past seven days, indicating a 111% year-over-year decline. NVDA shares have rallied 176.5% year to date.
The consensus mark for Amphenol’s 2024 earnings has been revised upward by 2 cents to $1.17 per share over the past seven days, indicating a 58% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 42.60%. APH shares have jumped 43% year to date.
The consensus mark for Celestica’s 2024 earnings has been revised upward by 20 cents to $3.85 per share over the past 30 days, indicating a 58.4% year-over-year increase. CLS shares have skyrocketed 197.1% year to date.
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CrowdStrike Q3 Earnings Beat: Will Strong Guidance Lift the Stock?
CrowdStrike Holdings, Inc. (CRWD - Free Report) reported non-GAAP earnings of 93 cents per share in the third quarter of fiscal 2025, which surpassed the Zacks Consensus Estimate by 14.8% and came ahead of management’s guidance of 80-81 cents.
CRWD reported non-GAAP earnings of 82 cents in the year-ago quarter. The robust bottom-line performance was mainly driven by higher revenues.
CRWD’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 10.32%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
CrowdStrike’s fiscal third-quarter revenues of $1.01 billion rose 29% year over year and surpassed the consensus mark of $982.3 million. The top line was also higher than the company’s guidance of $979.2-$984.7 million. The strong adoption of the Falcon platform and better sales execution mainly aided top-line growth in the fiscal third quarter.
Following its better-than-expected third-quarter results, CRWD has raised its fiscal 2025 guidance. CRWD shares have gained 38.4% year to date, outperforming the Zacks Internet - Software industry's growth of 32.6%. The strong performance and guidance might drive the stock up in the near term.
CrowdStrike Price, Consensus and EPS Surprise
CrowdStrike price-consensus-eps-surprise-chart | CrowdStrike Quote
Top-Line Details of CRWD
Subscription revenues (95.3% of the total revenues) jumped 31.3% year over year to $962.74 million. Professional services revenues (4.7% of the total revenues) declined 9.7% year over year to $47.4 million.
As of Oct. 31, 2024, annual recurring revenues (ARR) were $4.02 billion, up 27% year over year. The company added $153 million to its net new ARR in the reported quarter.
CrowdStrike’s subscription customers, who adopted five or more cloud modules, represented 66% of the total subscription customers, those with six or more cloud modules accounted for 47% and those with seven or more cloud modules represented 31% as of Oct. 31, 2024.
CRWD’s Operating Details
CrowdStrike’s non-GAAP gross profit increased 28.5% to $786.5 million in the fiscal third quarter from $612 million in the year-ago quarter. The non-GAAP gross margin remained flat at 78%.
The non-GAAP subscription gross profit soared 30.9% year over year to $770.44 million, while the gross margin remained flat at 80% year over year. The non-GAAP professional gross profit declined 29.8% to $16.2 million, while the gross margin fell 1,000 basis points (bps) to 34% on a year-over-year basis.
CrowdStrike’s total non-GAAP operating expenses increased 35.7% to $591.7 million from $436.1 million reported in the year-ago quarter. As a percentage of revenues, non-GAAP operating expenses increased to 59% from 55% in the year-ago quarter.
Non-GAAP sales and marketing (S&M) expenses jumped 38.3% year over year to $336.3 million. Non-GAAP research and development (R&D) expenses climbed 33.1% year over year to $190 million. Non-GAAP general and administrative (G&A) expenses increased 30.6% year over year to $65.3 million. As a percentage of revenues, S&M and R&D expenses expanded 200 bps and 100 bps, while G&A expenses remained flat at 6%.
The non-GAAP operating income jumped 11% to $194.9 million, mainly driven by higher revenues. The non-GAAP operating margin for the quarter contracted 300 bps year over year to 19%.
CRWD’s Balance Sheet & Cash Flow
As of Oct. 31, 2024, cash and cash equivalents were $4.26 billion. CrowdStrike had a long-term debt of $743.6 million.
In the fiscal third quarter, CRWD generated operating and free cash flows of $326 million and $231 million, respectively.
CrowdStrike’s Q4 and FY25 Guidance
CrowdStrike initiated guidance for the fiscal fourth quarter and revised the projections for fiscal 2025. For the fiscal fourth quarter, CrowdStrike anticipates revenues between $1.0287 billion and $1.0354 billion. The non-GAAP operating income is expected in the band of $184-$189 million. Non-GAAP net income is forecasted in the range of $210.9-$215.8 million. The company expects non-GAAP earnings per share in the band of 84-86 cents. The consensus mark for fiscal fourth-quarter revenues and non-GAAP earnings is pegged at $1.03 billion and 86 cents per share, respectively.
For fiscal 2025, CRWD now expects revenues between $3,923.8 million and $3,930.5 million, up from the previously projected range of $3,890-$3,902.2 million. The updated non-GAAP operating income for fiscal 2025 is now projected in the band of $804.4-$809.4 million compared with the previously guided range of $774.7-$783.9 million
The company now expects non-GAAP net income in the range of $937.5-$942.6 million compared with the previous guidance of $908.8-$918.0 million. Non-GAAP earnings are now anticipated in the band of $3.74-$3.76, up from the previous guidance of $3.61-$3.65. The consensus mark for fiscal 2025 revenues and non-GAAP earnings is pegged at $3.90 billion and $3.62 per share, respectively.
Zacks Rank & Stocks to Consider
Currently, CRWD carries a Zacks Rank #3 (Hold).
NVIDIA (NVDA - Free Report) , Amphenol (APH - Free Report) and Celestica (CLS - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.
NVDA, APH and CLS carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The consensus mark for NVIDIA’s 2025 earnings has been revised upward by 9 cents to a $2.93 per share over the past seven days, indicating a 111% year-over-year decline. NVDA shares have rallied 176.5% year to date.
The consensus mark for Amphenol’s 2024 earnings has been revised upward by 2 cents to $1.17 per share over the past seven days, indicating a 58% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 42.60%. APH shares have jumped 43% year to date.
The consensus mark for Celestica’s 2024 earnings has been revised upward by 20 cents to $3.85 per share over the past 30 days, indicating a 58.4% year-over-year increase. CLS shares have skyrocketed 197.1% year to date.