Drill Down Earnings, Ep. 204: Crowdstrike Q2 earnings essentials ($CRWD)

[Music] welcome to drill down earnings we have second quarter results from crowd strike everyone knows the name crowd strike thanks to the nightmare the company caused the world uh just a few weeks ago let's talk about the results we got from this company I'm Cory Johnson Chief Market strategist and I want to look at these numbers because this is the uh second largest company in all of cyber security competing with paloalto networks and an interesting one as well Wall Street likes a beat or a miss this was a beat Wall Street wanted 956 million in revenues they got 964 Wall Street 97 cents it got a dollar four whatever the business is what's interesting here not the Miss or the beat so the actual numbers for the quarter I mentioned $964 million in Revenue that's up 32% uh and their annual recurring revenues uh grew 32% as well on a year-over-year basis uh they had $218 million in net new annual recurring revenues so those are the accounts that are going to uh pay them for a while and it's those are kind of the two numbers we track in addition to revenues but 32% Revenue growth is really strong and interestingly the ARR growth matched exactly matched the growth in revenues for the company uh and this company's profitable now for longest time this company was losing money but gaining share and gaining uh in revenues now it's doing all of that at the same time and showing a profit a modest profit to be sure but uh some profits better than none and they've got five quarters of it despite some high expenses that came up in the last quarter how did the stock react the stock sold off a little bit 4% down down 4% after I was trading that's after an 84% year and the the crash caused by uh all the Microsoft systems that ran this update uh a few months ago uh from crowd strike was kind of the number one topic on the conference call and uh CEO George Curts we love George Curts he's friend of the show been of the drill down podcast a few times nice guy so you know I'm a sucker for a nice person and George kurur is definitely that but he was a little defensive on the call uh talking about the hack talking about the mischaracterization of the hack and it seemed to me I'm going to let you listen yourself it seemed to me that he was calling out his competitor pal Alto networks saying they were putting a false narrative out in the market and it was hard to see in the results I I'll show you another way to look at the results in a moment but listen to what he had to say about the false narratives according to crowd strike about the crowd strike caused uh um crash in mic systems and and what that meant and what the real story was behind it so despite a lot of the false narratives and misinformation from our competitors I want to be clear that this was not a kernel update this was a code update uh it was not a code update it was a configuration update and we already covered the Remediation in uh in our PRI prior remarks um when we think about the architecture of what we've built and rearching it uh I've got to set the record on that as well we have best-in-class architecture and we lead the industry for a reason we have greater efficacy greater manageability and greater scaleability than our competitors and I just want to give you an example of that if you look at the latest miter results uh Falcon had 98% coverage our nextg competitor had 79% coverage it took Falcon 4 minutes uh for metime to detection it took our competitor 47 minutes um and the list goes on and on if we think about the architecture as well you know we have a very lightweight agent requires 100 Megs of storage our competitor as a heavy agent requires 3 gigaby of storage in the windows environment so um we didn't become number one in the market by having a Poe architecture we became number one by having a great architecture we talked about uh what we've changed here in terms of our configuration updates and we feel confident about that going forward and our customers feel confident about that so um you know we'll continue to work with Microsoft as part of the ecosystem as they look to provide further enhancements around uh Colonel AIS so I'm not going to go any further into the weeds except to say that the the thing that happened is uh the way that Microsoft uh allows crowd strike into the kernel of its Windows operating system was the the the access to that caused this crash um and uh well didn't have to cause a crash but if they had not had access to those kernels it wouldn't have been such a problem but indeed that's how the Microsoft system works and that's what happened with crowd strike nonetheless uh interesting stuff there from George C Curts co-founder and CEO of crowdstrike the other co-founder by the way Demitri alich if I said his name right and I'm sure I didn't with this great book I just finished it a few weeks ago called world of the brink how American can meet China in the race for the 21st century got to check this book out recommended read yeah but you get book reviews here too who knew but what's it all mean what's your big drill down earnings takeway I'm going to have that for you with the drill down earnings bite right after this the drill down is brought to you by futurum group where analysts researchers advisers content creators and marketing experts help Business Leaders anticipate and understand shifts in their Industries and build strategies to leverage disruptive innovation with deep analysis futurum group's extensive industry experience delivers reliable research and data thought leadership and actionable advice to help you with your strategy and go to market efforts futurum group so crowd strike just from reporting Q2 earnings here's the essential summary the stuff you really need to know $964 million in revenues almost to a billion dollar in revenues with 32% year-over-year growth just fantastic growth for this corner with profits but they're while they're arrs their annual recurring revenues uh rece uh at 32% growth as well the new ARR is growing at only 11% and maybe that's the one place you can see the impact on the crowd strike results from the crowd strike caused crash uh that happened uh just a few weeks ago all right thanks for listening to drill on earnings I'm Corey Johnson and you can check me out at X at Corey TV check us out on drill downod on Instagram and Tik Tok but leave some comments for us on what used to be called Twitter and is now called X and we can uh hear what you've got to say and see what you want us to do in the future