Earnings report sharing/CRWD has turned losses into profits for 5 consecutive quarters! After-hours stock price rose more than 5%!

$CrowdStrike(CRWD.US) announced its latest Q1 earnings report after the market closed on June 1st. The data showed a 33% year-over-year increase in revenue, with net profit turning positive for the fifth consecutive quarter. The stock price surged over 6% after hours! So, what other data is worth noting? Let's take a look together!

CRWD is the abbreviation for CrowdStrike Holdings, Inc., a U.S.-based cybersecurity company founded in 2011. It specializes in providing cloud-native endpoint security solutions to help clients protect their computer networks from various cyber threats and malware.

Its core product is the Falcon platform, which leverages AI and machine learning to detect and defend against cyber threats. It not only identifies malware but also tracks and responds to advanced persistent threats (APTs) and other cyberattacks. Additionally, it provides real-time threat intelligence and advanced security to help organizations protect their data and information from attacks.

Q1 2025

Revenue grew 33% YoY to $921 million (vs. $845 million last quarter), surpassing market expectations of $905 million.

EPS increased 63% YoY to $0.93 (vs. $0.95 last quarter), beating market expectations of $0.89.

Net profit turned positive, rising from $490,000 last year to $42.82 million (vs. $53.7 million last quarter).

Non-GAAP net profit surged 70% to $232 million (vs. $236 million last quarter).

ARR (Annual Recurring Revenue) grew 33% YoY to $3.647 billion (vs. $3.435 billion last quarter), exceeding market expectations of $3.63 billion.

RPO (Remaining Performance Obligation) stood at approximately $4.7 billion (vs. $4.6 billion last quarter).

While specific numbers for subscribers and large clients were not disclosed, customer engagement improved: the proportion of clients using 5+ services rose from 64% to 65%, those using 6+ services increased from 43% to 44%, and 28% of clients now use over 7 services. The number of clients using 8+ services grew 95% YoY, indicating a steady quarterly climb in multi-service adoption.

Future Outlook

Next quarter’s revenue is projected at $958.3-$961.2 million, slightly above market expectations of $955 million, with a YoY growth rate of ~31%.

EPS is forecasted at $0.98-$0.99, also higher than the expected $0.91.

Full-year revenue guidance was raised to $3.976-$4.01 billion, above the consensus of $3.97 billion.

EPS is expected at $3.93-$4.03, also surpassing the $3.91 consensus.

Summary

This quarter’s performance exceeded market expectations across all metrics (revenue, EPS, RPO, operating margin), even hitting record highs. The Falcon platform’s differentiated architecture has built a moat, enabling CRWD to address industry-wide cybersecurity and IT challenges. While RPO growth hasn’t fully recovered to 2023 levels, it has improved for two consecutive quarters, signaling future revenue momentum. Net profit has been positive for five straight quarters, with Non-GAAP gross margins for subscription revenue holding at 80%, boosting profitability. Cost controls and operational efficiency drove the operating margin up from 17% to 22% YoY.

In terms of strategy, CRWD has a unique edge in AI, leveraging proprietary data, high-quality attack analysis, and leading AI tech to solidify its competitive moat. Having already met its long-term Non-GAAP operating margin target last year, CRWD now aims to expand margins further as more clients adopt Falcon, targeting $10 billion ARR within 5-7 years.

However, for SaaS stocks, ARR is a critical metric. This quarter’s ARR added $212 million (vs. $282 million last quarter), with YoY growth slowing to 33%. While stabilizing recently, net dollar retention rate (NDRR) dipped below the company’s 120% threshold last quarter—raising questions about existing clients’ spending willingness.

Last time, CRWD teased sharing industry data—here it is:

Per Canalys, global cybersecurity spending will grow 12% YoY in 2024 to $250 billion. Meanwhile, cyberattacks are rising faster, with publicly disclosed attacks up 96% YoY in Jan-Apr 2024 (vs. 68% in 2023), indicating room for increased security budgets.

Although cybersecurity spending is less impacted by macro factors, economic uncertainty is causing caution. PwC notes that while 79% of firms raised 2024 security budgets, only 10% plan increases of 15%+. PANW also flagged clients scrutinizing spending or delaying large projects.

Finally, CRWD estimates the AI-driven cybersecurity TAM will reach $225 billion by 2028 (22.5% CAGR). While CRWD won’t capture the entire market, its $3.05 billion revenue leaves ample growth potential.

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