CrowdStrike pres. talks simpler, stronger cybersecurity with AI
CrowdStrike Holdings (CRWD) beat expectations for revenue and profits in its first quarter results on Tuesday. The cybersecurity company saw its subscription revenue increase by 34% year over year and raised its full-year guidance. CrowdStrike president Michael Sentonas joins Market Domination to discuss the results in more detail.
Sentonas characterizes the quarter as “really strong.” As cyber attackers are “getting stronger every day,” the company has put a premium on its “Charlotte” AI service, Sentonas says. The CrowdStrike president notes that AI accelerates the time it takes to defend against adversaries and makes the company’s services easier to use.
CrowdStrike’s Falcon platform has also eased the procurement cycle for CrowdStrike’s clients, who Sentonas says want more models and to do more with those capabilities. If CrowdStrike were to make acquisitions, Sentonas emphasizes that prospective companies must align with the easy-to-use nature of CrowdStrike’s platform stack.
For more expert insight and the latest market action, click here to watch this full episode of Market Domination.
This article was written by Gabriel Roy
Video Transcript
On Tuesday, crowd strike holdings delivered first quarter earnings that beat Wall Street’s expectations despite a pullback in spending that has challenged many of the cyber security rivals.
Joining us now to discuss further is Michael Santon, crowd strike, president and Michael.
Thank you for joining us here today.
Um, just give us your big picture overview of your results, please.
Yeah, we had a great quarter ending a RR, uh, finished at 3.65 billion, which grew 33% year on year.
Net new a RR in Q one was 212 million and free cash flow was 322 million.
It was 35% growth year on year.
So all in all very strong.
Especially when you look at free cash flow Rule of 68.
Um, let me ask you about Charlotte.
A I This is fascinating to me because, uh, I mean, the the story of the day is probably invidia, and so everything is a I centric now, But how do you How do you bring conversational A I, um, into the cybersecurity realm?
Well, we know in cyber there’s a massive, uh, skill shortage we know that it’s a complex, uh, area, and Attackers are getting smarter every day.
So we’ve spent a lot of time really different to a lot of people in the industry.
In our SEC sector, we’re thinking about how do we use a I to accelerate the time it takes, uh, and and like a a defender to defend against the latest threats and techniques from adversaries, We know the adversaries are getting faster, so we need to use a I to help, uh, the defenders get better and make it easier.
We need to make cybersecurity something that the average user the average, you know, level one analyst can can get their hands around and give them a chance to protect themselves.
And that’s what we’re doing with Charlotte, Um, and Michael it it’s Julie here.
So, um, when you look at these numbers, is it a factor of you all taking market share from competitors?
Is it a factor of you getting more business from existing customers?
What is helping you?
What helped you grow last quarter and what’s gonna help boost the numbers going forward?
Well, I believe we’re doing both, and if you look at the, uh, the deals that we have with greater than eight modules that grew 95%.
And what that’s telling us is that the Falcon platform, the Crowdstrike Falcon platform, has become the platform of of of record in the cybersecurity industry.
Customers are telling us that they want to do more with Crowdstrike.
They are buying more modules.
They are deploying more of our capabilities and they’re turning off uh, other, uh, workloads, other products from other vendors.
And we’re seeing that happen more and more.
And Mike, you mentioned Falcon.
I saw a lot of talk about Falcon and Falcon Flex in the, uh, in the call.
What?
What Can you explain to us what that means when you talk about that platform?
And how is that different from what you all had in the past?
Well, we have 28 modules today so that the platform has grown tremendously over the last few years.
Customers are telling us, as I said, they wanna do more.
They wanna buy more modules.
They’re also saying, Look, we know the quality of technology that you bring out.
We know that you’re gonna come out with more modules.
We know you’re probably gonna do some acquisitions, Help us, uh, buy more from you and make it easier so that when you do come out with a new module, we don’t have to keep going back to procurement.
We don’t have to keep going through, uh, complex, uh, procurement cycles.
So flex gives our customers, uh, access to all of the products.
It gives them the best possible price because they’re committing to do more with us for longer periods of time.
And we’re just making it easier for them to to get the best product in the industry that’s so easy to roll out.
And they can do more with Crowdstrike.
What do you think about in terms of acquisitions?
Um, just not only the specific fields where you might wanna go, but just your general strategy.
How you’re thinking about them.
Well, for us, it’s it’s important to make sure that we we stay close to who we’ve always been, and that’s to stop breaches and give customers, uh, access to technology that is the easiest to use.
Like I said at the start, it’s a very complex area, and there’s so many products out there that are just too hard to use and that, uh, chaos that I an organisation, has to deal with because they’re working with 1015, 20 different vendors.
It’s too hard.
Crowd track is easy to roll out.
You can get the product rolled out in a few seconds.
So when we think about M and A, it’s important to us that whatever we do, it has to be part of our technology stack.
It has to be part of the Falcon platform.
There are so many vendors that talk about all of their different platforms, but they forget one thing, and that is how to help the customer they do.
1015, 20 acquisitions and effectively, they make the customer into a systems integrator who’s trying to make poorly acquired and poorly integrated technology work.
So for us, if there’s technology, that’s interesting, if there’s a good business out there, but importantly, we can integrate it and it’s part of our stack.
It’s probably a good fit for Crowdstrike and Michael.
Overall, can you give us sort of a temperature check on enterprise spending here?
Because it feels like, at least in terms of what we’ve been hearing from companies, this earnings season.
It’s kind of been all over the map.
So what are you hearing?
Are you hearing that even your clients are still still spending with you that they’re trying to sort of retrench or or save money?
Well, the market’s certainly, uh, tough.
Uh, we we haven’t seen any change, whether it’s, uh, positive or negative.
The market has been the same for quite a few quarters now.
Uh, but like I said, uh, our customers are wanting to do more with us, And the reality is you only have to just look at the news to see all of the different attacks that keep happening.
Uh, it’s a pretty challenging, uh, landscape out there.
And organisations are really worried about, uh whether they’re gonna be compromised, whether they are gonna lose intellectual property, whether they are going to have business downtime.
So that’s why we’re seeing more and more conversations.
But certainly the market conditions, uh, haven’t improved.
In the first quarter, you had annual recurring revenue of $3.65 billion.
What are your plans to maintain your growth, uh, trajectory for annual recurring revenue, or even exceed the current growth rate?
Well, for us it It it comes down to making sure that we continue to to meet the the need of our customers.
And that’s to stop breaches.
It means that we have to continue to innovate and come out with, uh, technology that is, uh, best in class.
We’ve released a lot of technology.
You talked about Shark Island earlier, but we’re solving IT challenges with falconry T We introduced data protection a new module to help with data loss and data loss prevention.
Uh, we continue to innovate with technology like NextGen seam.
There’s a massive opportunity to solve the next gen seam problem that organisations have struggled Struggled I should really say the data problem and the seam problem, uh, with with more modern technology like what we have with falcon NextGen seam.
So we continue to innovate.
Last year was a was a big year of innovation.
Uh, we continue to focus on bringing out the right technology to help solve those problems and staying true to to meeting the needs of our customers.
Michael Santon of Crowdstrike.
Thanks for joining us.
Thank you
