CrowdStrike Stock: Buy or Sell After Q2 Earnings?

CrowdStrike's Q2 Earnings: A Strong Beat

CrowdStrike Holdings, Inc. (CRWD) reported its Q2 FY23 earnings on August 30, 2022, beating analyst estimates on both revenue and earnings. The company reported revenue of $535.2 million, up 58% year-over-year (YoY) and above the consensus estimate of $522.6 million. Non-GAAP earnings per share (EPS) came in at $0.36, up 33% YoY and above the consensus estimate of $0.33.

Strong Growth in Key Metrics

CrowdStrike's strong Q2 results were driven by continued growth in key metrics. Annual recurring revenue (ARR) grew 54% YoY to $2.27 billion, while the number of customers with $1 million+ ARR grew 60% YoY to 238. The company also added 1,729 net new customers in the quarter, bringing its total customer count to 17,933.

Expansion into New Markets

CrowdStrike has been expanding its product portfolio and entering new markets in recent quarters. In Q2, the company launched several new products, including Falcon Horizon, a cloud-native extended detection and response (XDR) solution, and Falcon Complete, a managed security services offering.

The company has also been expanding its geographic reach, and in Q2 it announced plans to open a new office in Japan. This expansion is expected to help CrowdStrike capitalize on the growing demand for cybersecurity solutions in Asia-Pacific.

Partnerships and Acquisitions

CrowdStrike has been partnering with other technology companies to expand its reach and integrate its solutions with other platforms. In Q2, the company announced a partnership with Google Cloud to integrate its Falcon platform with Google Cloud's security solutions.

The company also acquired SecureCircle, a provider of identity security solutions, in Q2. This acquisition is expected to enhance CrowdStrike's identity and access management (IAM) capabilities.

Q3 Guidance

For Q3 FY23, CrowdStrike expects revenue to be in the range of $577 million to $583 million, representing growth of 47% to 49% YoY. Non-GAAP EPS is expected to be in the range of $0.37 to $0.39.

Analyst Commentary

Analysts have been positive on CrowdStrike's Q2 results and outlook. Following the earnings release, several analysts raised their price targets for the stock.

• Piper Sandler: Raised price target from $242 to $262
• Morgan Stanley: Raised price target from $245 to $275
• Wells Fargo: Raised price target from $230 to $260

Conclusion

CrowdStrike's Q2 earnings were a strong beat, driven by continued growth in key metrics and expansion into new markets. The company's partnerships and acquisitions are also positioning it for continued growth in the future. While the stock is not cheap, CrowdStrike's strong fundamentals and long-term growth potential make it a compelling investment for investors.

Tables

Table 1: CrowdStrike's Key Financial Metrics

Table 2: CrowdStrike's Geographic Revenue Breakdown

Table 3: CrowdStrike's Product Revenue Breakdown

Table 4: CrowdStrike's Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLTV)