CrowdStrike (CRWD) Q1 2025 Earnings Call Transcript

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CrowdStrike (CRWD -1.01%)
Q1 2025 Earnings Call
Jun 04, 2024, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, everyone, and thank you for standing by. Welcome to CrowdStrike fiscal first quarter 2025 results conference call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session.

[Operator instructions] Please be advised that today’s conference is being recorded. I would now like to hand it over to the vice president of investor relations, Maria Riley. Please go ahead.

Maria Riley — Vice President, Investor Relations

Good afternoon, and thank you for your participation today. With me on the call are George Kurtz, president and chief executive officer and co-founder of CrowdStrike; and Burt Podbere, chief financial officer. Before we get started, I would like to note that certain statements made during this call that are not historical facts, including those regarding our future plans, objectives, growth, including projections and expected performance, including our outlook for the second quarter and fiscal year 2025 and any assumptions for fiscal periods beyond that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our outlook only as of the date of this call.

While we believe any forward-looking statements we make are reasonable, actual results could differ materially because the statements are based on current expectations and are subject to risks and uncertainties. We do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise. Further information on these and other factors that could affect the company’s financial results is included in the filings we make with the SEC from time to time, including the section titled Risk Factors in the company’s quarterly and annual reports. Additionally, unless otherwise stated, excluding revenue, all financial measures disclosed on this call will be non-GAAP.

A discussion of why we use non-GAAP financial measures and a reconciliation schedule showing GAAP versus non-GAAP results is currently available in our earnings press release which may be found on our Investor Relations website at ir.crowdstrike.com or on our Form 8-K filed with the SEC today. With that, I will now turn the call over to George.

George Kurtz — Co-Founder, President, and Chief Executive Officer

Thank you, Maria, and thank you all for joining us for our first earnings call of fiscal year 2025. We start the year from a position of momentum and exceptional strength, outperforming our guided metrics. Our AI-native platform wins at scale every geography, every market segment, and every solution area. CrowdStrike delivered a record Q1: record Q1 net new ARR of $212 million, growing 22% year over year; record ending ARR of $3.65 billion, growing 33% year over year; record subscription gross margin of over 80%; and record free cash flow of $322 million, reaching 35% of revenue and a free cash flow Rule of 68, making us the only cybersecurity vendor of scale delivering this level of growth and profitability.

We achieved all of these records while closely managing every P&L line delivering significant year-over-year operating leverage and our fifth consecutive quarter of GAAP profitability. Even as we continue investing in growth, we’re adding sales capacity, investing in our market-leading brand, and accelerating innovation while firmly on the path to $10 billion in ending ARR. The foundational theme underpinning CrowdStrike’s results is the power of the Falcon platform to consolidate cybersecurity at scale. This is coupled with the market’s unequivocal desire for a single AI-powered software platform consolidator.

We’re landing with more modules than ever before. The number of deals involving cloud, identity, or Falcon Next-Gen SIEM modules more than doubled year over year, and we’re closing some of our largest deals ever. We’re consistently hearing that customers want to partner with us as they consolidate, standardizing their cybersecurity future on the Falcon platform and investing their trust in CrowdStrike as cybersecurity’s North Star. Let me explain why.

We built the right architecture from the start, the industry’s lightest weight, easiest to install sensor embedded with AI, no system reboot required a single AI-native platform console, not disparate stitch together or siloed multi-platforms. Our architecture built from the start, with what I refer to as gold-plated plumbing, allows the Falcon platform to gracefully land, retrieve data once, and then slight infinite security, IT, data, and compliance capabilities without any friction. This is the definition of a true platform, and our platform strategy from inception continues to deliver the results. Deals with eight-plus modules grew 95% year over year.

So, that’s what we’re going to focus on. And I think I’ll leave you with if we take care of the customer, the rest takes care of itself, and that’s, again, a hallmark of what we try to do at CrowdStrike and what Burt and I are focused on every day.

Operator

And thank you. With that, I will conclude the Q&A session, and we’ll pass it back to George Kurtz for his final comments.

George Kurtz — Co-Founder, President, and Chief Executive Officer

Thank you so much for joining our call, and we look forward to seeing you next quarter. Be safe.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Maria Riley — Vice President, Investor Relations

George Kurtz — Co-Founder, President, and Chief Executive Officer

Burt W. Podbere — Chief Financial Officer

Andy Nowinski — Wells Fargo Securities — Analyst

Saket Kalia — Barclays — Analyst

Brian Essex — JPMorgan Chase and Company — Analyst

Tal Liani — Bank of America Merrill Lynch — Analyst

Burt Podbere — Chief Financial Officer

Hamza Fodderwala — Morgan Stanley — Analyst

Matt Hedberg — RBC Capital Markets — Analyst

Fatima Boolani — Citi — Analyst

Gabriela Borges — Goldman Sachs — Analyst

Alex Henderson — Needham and Company — Analyst

John DiFucci — Guggenheim Partners — Analyst

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