Dive Brief:
- Enterprises are not cutting cybersecurity budgets heading into 2023, and if they are, CrowdStrike co-founder and CEO George Kurtz isn’t hearing about it.
- “We haven’t seen any customers come back and say, ‘hey, our budgets are cut next year.’ We just haven’t seen it,” Kurtz said Tuesday during CrowdStrike’s third quarter fiscal year 2023 earnings call.
- Transactional deals with smaller organizations are being delayed, with average time to close those deals growing by 11% during the quarter that ended Oct. 31, according to Kurtz. “As Q3 progressed and fears of a recession grew, this dynamic became more pronounced,” he said.
Dive Insight:
Despite doldrums about the economic outlook surfacing in almost every company and industry, Kurtz said more stringent compliance requirements and growing cybercriminal activity will continue to drive additional spending on cybersecurity.
“While the cybersecurity market is not immune to macro pressures, it is a mission-critical technology. The adversaries don't stop,” he said.
Deals with smaller organizations are being delayed, but not lost. CrowdStrike executives said they expect small to medium-sized businesses (SMBs) to continue pushing deals into 2023.
A JumpCloud report published in November found SMBs split on whether their organizations will increase investments in cybersecurity, though IT spending is expected to remain strong.
Enterprises are looking to consolidate their spend with fewer vendors and seeking more multiphased deals to spread out financial commitments, according to Kurtz.
“They're going to spend the money; they'd rather spend it with fewer vendors,” and achieve better outcomes, he said.
CrowdStrike reported a net GAAP loss of $55 million, reflecting a 9% year-over-year increase in losses during the quarter. Revenue jumped 53% year over year to almost $581 million.
Subscription-based revenue accounted for 94% of CrowdStrike’s total revenue. The company ended the quarter with more than 21,000 subscription customers, representing a 44% year-over-year increase.
