CrowdStrike ( NASDAQ:CRWD ) has become the gold standard in endpoint and cloud workload protection, a branch of cybersecurity concerned with safeguarding devices like desktops and servers, as well as cloud applications and services. The stock has soared 380% since making its public debut in 2019 and could be just getting started. Where to invest $1,000 right now
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Olivia Zitkus: CrowdStrike is a cybersecurity company that uses AI, artificial intelligence, to power its security platforms. The AI helps the clients safeguard their devices and their data, in both private and in public works spaces.
I think the real differentiator for this conversation, and for the emphasis that CrowdStrike likes to put on its business, is the AI itself. It’s continuous AI analytics operate on a trillion high-fidelity signals every single day. All of that information is sent to its proprietary threat graph, where breaches are recognized and then they’re stopped.
So, that sifts through information a lot like a human brain might just at a way faster rate, and it can predict and hunts and hunt down and investigate all these different threats. CrowdStrike has, I think 19 different modules now, something like that, cloud-based, endpoint-based, security, IT, operations, all that stuff. Falcon is probably the best known endpoint cloud system in its lineup. I’ll talk a little bit more they just had another investor product presentation this past Wednesday, I’ll talk about that a little bit later. But Falcon leans on AI to just become more efficient at recognizing and responding to threats overtime, because AI thrives on data and more data and more data.
Since it was built in the Cloud, it’s often a more effective and cheaper cybersecurity solutions than on-premises or on-prem, as they like to call, it security products. I’m going to share my screen now. Great. Awesome.
The slide that you all can see now, cross-check at a glance. Let’s just chat about super optimistic stuff first. In the recent quarter, CrowdStrike reported $1.34 billion annual recurring revenue, ARR. We like to put extra attention on that form of revenue for SaaS companies, because it tells us the value of the recurring revenue of the business’s term subscriptions normalized over the whole calendar year. If you’re not normally a tech investor, that term might look a little strange to you, but it’s good to become familiar with.
The company has got over 13,000 subscription customers now, and 66% of those are subscribed to four or more modules. You see 70% year-over-year ARR growth on this slide; I think the company is expecting about 56% to 61% year-over-year growth for the full year 2022, which is a little bit of a drop from that, but nothing terrible given I think the insane last year that CrowdStrike has had. I’m going to go to the next slide here.
What I want to do is talk about competitors and problems a little bit. Obviously, their take is that other products are expensive, they are less effective, they are less efficient. When I think of competitors to CrowdStrike, I think of SentinelOne which is a smaller competitor but it offers a hybrid approach to security with both in the Cloud and on-site. Then Palo Alto Networks as well. They work well with on-site firewall appliances, but they’re also expanding into AI. Trevor, do you have any other thoughts on any other competitors that I’m missing for CrowdStrike?
Trevor Jennewine: I think Microsoft Defender, I think that’s probably their biggest competitor. Then I think there’s some other legacy ones like McAfee . I don’t want to take too much time [LAUGHTER] here.
Olivia Zitkus: No, do it. Go for it.
Trevor Jennewine: I mentioned that they have a founder CEO, George Kurtz. He tells the story, in 2011 he was on a flight and he was sitting in the business class, he was sitting next to a gentleman who opened up his laptop. I should have said this first, George Kurtz used to be an executive for McAfee, so he used to work for McAfee. He was […]
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