☁️ CrowdStrike: Secure In The Cloud?

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☁️ CrowdStrike: Secure In The Cloud?

CrowdStrike (CRWD) shares continue to surge following an impressive Q4 earnings report. Earlier this month, the company completed the acquisition of  London-based Humio for $400M which provides real-time observability solutions for cloud security professionals.

Background: Founded in 2011, Sunnyvale, CA-based CrowdStrike provides next-generation cloud security technology to over 9K clients in 176 countries. In just 10 years, CrowdStrike outpaced the growth of giants like McAfee (MCFE) and Microsoft’s (MSFT) Windows Defender and cybersecurity arm. CrowdStrike had raised $481M in funding before going public in June 2019 at $34 per share.

The pandemic provided a shot-in-the-arm as it broadly did to tech companies. With remote working becoming the norm, enterprises’ reliance on the cloud increased manyfold. And that put CrowdStrike front and center as IT teams across companies big and small looked to bring their systems onto the cloud with the security infrastructure in place.

The recent cyberattacks on SolarWinds (one of CrowdStrike’s clients) proved to be a blessing in disguise for the company. CrowdStrike’s security solution was effective in this situation, and that was music to the ears of investors. The company’s shares surged 34% in December as a result.

What Happened?: The winning spree continues for CrowdStrike after beating estimates for Q4 earnings. Crowdstrike was able to bring in 1,480 new subscribers helping it cross the $1B in annual run rate (ARR). The partnership with Amazon’s AWS was a huge success, as ARR through AWS Marketplace grew by 650% in the fiscal year ending of January 31.

Q4 Key Stats:
– Revenue was $264.9M, up 74% YoY Vs. $250.4M estimates
– EPS $0.13 cents Vs $0.8 cents estimates

With the recent acquisition of Humio, CrowdStrike is set to deliver XDR (extended detection and response) – which helps detect threats faster than ever. The acquisition was paid $352M in cash and $40M in stock and options.

CrowdStrike is projecting a successful Q1 with revenue expected to be around $290M  compared to analyst estimates of $267.9M. The company also predicted $1.31B in revenue for 2022, against $1.22B (consensus estimates). CrowdStrike’s success seems to lie in its ability to add and retain customers while constantly innovating and expanding. No wonder analysts are bumping up the rating on this stock.

Market reaction: CRWD ended the day at $196.31, down 2.11%. After the results were announced, the shares are up 5.55% in pre-market trading.

Company Snapshot 📈

CRWD $196.31 − 4.24 (2.11%)

MSFT $237.71 + 2.90 (1.24%)

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Later Today 🕒

  • Before Market Open: Progressive Corp Earnings (PGR)
  • 6:00 PM IST: Building permits (SAAR)
  • 11:30 PM IST: Federal Reserve announcement

Fun Fact of The Day 🌞

Ice cream was once called “cream ice.”

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