CrowdStrike Holdings Inc reported exceptional financial results for Q1 2025, with total revenue reaching $921 million, marking a 33% increase year-over-year (YoY). The company hosted a strong performance in its subscription segment, with ending Annual Recurring Revenue (ARR) of $3.65 billion, up 33% YoY and net new ARR of $212 million growing 22% YoY. The company's free cash flow reached $322 million, equating to 35% of revenue, underpinning its operational efficiency and solid financial health. Management underscored the power of their AI-driven Falcon platform, which has enabled significant consolidation in the cybersecurity market, evidenced by a 95% growth in deals utilizing eight or more modules compared to the previous year. Furthermore, CrowdStrike delivered its fifth consecutive quarter of GAAP profitability, reinforcing its trajectory towards a target of $10 billion in ARR.
Key Performance Indicators
Revenue
921.04M
QoQ: 8.96% | YoY:32.99%
Gross Profit
696.03M
75.60% margin
QoQ: 9.43% | YoY:33.00%
Operating Income
6.94M
QoQ: -77.70% | YoY:-38.59%
Net Income
42.82M
QoQ: -20.26% | YoY:8 620.98%
EPS
0.18
QoQ: -18.18% | YoY:8 471.43%
Revenue Trend
Margin Analysis
Key Insights
Total Revenue: $921 million, up 33% YoY
Subscription Revenue: $872 million, growing at 34% YoY
Net Income: $42.8 million, YoY increase of 8,621%
GAAP EPS: $0.18
Non-GAAP EPS: $0.93
Financial Highlights
1. Revenue and Profitability:
- Total Revenue: $921 million, up 33% YoY
- Subscription Revenue: $872 million, growing at 34% YoY
- Net Income: $42.8 million, YoY increase of 8,621%
- GAAP EPS: $0.18
- Non-GAAP EPS: $0.93
2. Cash Flow:
- Free Cash Flow: $322 million, representing 35% of revenue
- Cash and Cash Equivalents: $3.70 billion
3. Margins:
- Gross Profit Margin: 78%, with Subscription Margin at 80%
- Operating Margin: 22%, reflecting operational efficiencies.
The executive team highlighted CrowdStrike's strategies, stating, "Every CISO, CIO, and Board member I speak with is experimenting with using AI in new ways. The only way to safely harness the transformative nature of AI is through best-in-class security that operates at the speed and scale of AI built natively with AI with CrowdStrike."
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
921.04M
32.99%
8.96%
Gross Profit
696.03M
33.00%
9.43%
Operating Income
6.94M
-38.59%
-77.70%
Net Income
42.82M
8 620.98%
-20.26%
EPS
0.18
8 471.43%
-18.18%
Key Financial Ratios
currentRatio
1.71
grossProfitMargin
75.6%
operatingProfitMargin
0.75%
netProfitMargin
4.65%
returnOnAssets
0.63%
returnOnEquity
1.69%
debtEquityRatio
0.31
operatingCashFlowPerShare
$1.58
freeCashFlowPerShare
$1.33
priceToBookRatio
27.97
priceEarningsRatio
413.99
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key Theme: Platform Consolidation and AI Adoption
1. Consolidation Trend: Management emphasized a strong desire from customers to consolidate their cybersecurity needs on the Falcon platform to reduce costs and complexities. George Kurtz noted, "We're consistently hearing that customers want to partner with us as they consolidate, standardizing their cybersecurity future on the Falcon platform."
2. AI Integration: The implementation of AI technology, specifically through the Falcon Flex subscription model, has increased customer interest and module adoption rates. The CEO remarked, "Through consolidation, the Falcon platform delivers innovation to solve tomorrow's cybersecurity..."
"We're achieving record Q1 net new ARR of $212 million, growing 22% year-over-year," - George Kurtz, CEO
â George Kurtz
"For every $1 invested in Falcon Solutions, our customers recognized $6 of cost savings," - George Kurtz, CEO
â George Kurtz
Forward Guidance
CrowdStrike provided a positive outlook for Q2 FY 2025, forecasting revenue in the range of $958.3 million to $961.2 million, representing a growth rate of approximately 31% YoY. Management expects continued operational improvements and net new ARR growth in the low-teens percentage range, bolstered by a robust sales pipeline and the success of the Falcon Flex program. The long-term goal remains steadfast with CrowdStrike targeting $10 billion in ending ARR within the next several years, supported by increased investment in innovation and channel partnerships.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
CRWD Focus
75.60%
0.75%
1.69%
413.99%
SPLK
72.40%
-27.50%
1.26%
-17.84%
ADBE
87.80%
36.80%
4.01%
104.29%
PLTR
81.70%
12.80%
2.80%
119.88%
ZS
77.60%
-9.27%
-4.15%
-174.91%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Overall, CrowdStrike's strong performance, complemented by strategic emphasis on consolidation and AI integration, posits a favorable investment outlook. The company's financial health, characterized by consistent revenue growth, strong margins, and operational efficiencies, combined with a growing market for cybersecurity solutions driven by heightened awareness of cyber threats, presents a compelling case for continued investment. Investors should closely monitor the company's execution against its ambitious growth targets and the response of the market to its innovative Falcon platform.
Key Investment Factors
Growth Potential
CrowdStrike's innovative Falcon platform, paired with the rise of AI adoption across industries, positions the company for sustained growth in subscription revenue and customer expansion.
Profitability Risk
Potential risks include broader economic conditions that may impact IT spending, increasing competition in the cybersecurity realm, and potential challenges in integrating new technology solutions amidst changing customer needs and industry standards.
Financial Position
CrowdStrike has a sound financial position, characterized by strong cash reserves of $3.70 billion, robust free cash flow generation, and healthy margins indicating operational efficiency.
SWOT Analysis
Strengths
Strong ARR growth of 33% YoY
High gross profit and subscription margins
Robust cash flow generation and balance sheet liquidity
Weaknesses
Low net income compared to revenue
Dependence on new module adoption for growth
Incremental operational leverage needed
Opportunities
Expansion of AI-driven solutions in growing cybersecurity market
Developing partnerships with key industry leaders
Further penetration into existing customer accounts through consolidation of products
Threats
Intense competition from established and emerging cybersecurity firms