CrowdStrike Holdings reported better than expected earnings for the fiscal first quarter Tuesday, defying a tough spending environment in the IT security sector.
Total revenue for the quarter rose 33% to $921 million for the quarter ended April 30, up from $692.6 million in the year-ago quarter. Annual recurring revenue grew 33% year-over-year to $3.65 billion as of April 30.
The cybersecurity firm continued to consolidate enterprise business on its Falcon platform, despite rival players launching discounted and free incentives rival players launched in the space. Kurtz said rival companies are using enterprise license agreements to help lock in customers.
“Unlike vendors who peddle wasteful ELAs, our customers utilize what they purchase, because when you buy what you want and need, when you want and need it, utilization is natural,” CrowdStrike CEO George Kurtz said during the conference call. “We’re not reclassifying, recounting or repositioning existing business to concoct perceived platform value. When a platform delivers real value, you don’t have to give it away.”
Rival Palo Alto Networks set off a downward pricing spiral across the sector when it launched a plan to offer free incentives and deferred billing to sign companies to multiyear deals on its consolidated platform. Palo Alto said a number of rival firms countered its offering with their own incentives sending the market into a tailspin.
CrowdStrike is working to move customers away from multipoint security products onto its unified platform. Deals with at least eight modules grew 95% year-over-year, according to CFO Burt Podbere.
CrowdStrike also increased its pace of hiring, growing its total headcount by 15% year-over-year, according to Podbere.
Kurtz claimed recent attacks against Microsoft, and the resulting Cyber Safety Review Board report blasting the company’s handling of the attack, is driving “an outpouring of requests” from the market for help. Kurtz is a longtime critic of Microsoft and has rarely missed an opportunity to take a swipe at the rival software company.
“We decided enough is enough,” Kurtz said. “There’s a widespread crisis of confidence among security and IT teams within the Microsoft customer base.”
CrowdStrike launched a product called Falcon for Defender, which it claims will help stop attacks missed by Microsoft Defender.
CrowdStrike also said it signed a seven-figure deal with a Fortune 100 healthcare company that was using Microsoft and experienced a breach.
As the market recently went through a surge of partner consolidation and merger activity, CrowdStrike last month signed expanded strategic partnerships with AWS and Google Cloud.
CrowdStrike reported non-GAAP earnings of $231.7 million or 93 cents a share in the fiscal first quarter ending April 30, compared with $136.4 million or 57 cents in the year ago quarter.
The company is raising its guidance for fiscal 2025, with revenue now expected to fall between $3.98 billion to $4.01 billion.
