To The Moon

$CrowdStrike Holdings, Inc.(CRWD)$ The company's performance in Q3 FY2025 has drawn a lot of attention from the market.The company's shares were down around 6% after hours, nice to have largely repaired the losses since the downtime before that.

Financials vs. market expectations

In Q3 FY2025, CrowdStrike's total revenue reached $1.01 billion, an increase of 31% year-over-year and significantly ahead of market expectations of $983 million.After experiencing a major system failure on July 19, CrowdStrike has managed to maintain customer loyalty and continued business growth, and reflects an irreplaceable position in the cybersecurity space.

Financials

• Total revenue: $1.01 billion ($983 million expected)

• Adjusted EPS: $0.93 ($0.81 expected)

• Annual Recurring Revenue (ARR): $4.02 billion, up 27% year-over-year

  

Change in Guidance

The company's guidance for the 4Q ending Jan 25 is for median revenue of $1.035 billion, higher than the $1.03 billion expected, and EPS of $0.84 to $0.86, lower than the $0.87 expected by the market.

However, the company also raised its full-year guidance for fiscal 2025, expecting full-year revenue of $3.923 billion to $3.931 billion, versus market expectations of $3.897 billion.

Business performance

Growth was driven by continued innovation and market demand for its core product, the Falcon platform.Despite the short-term challenges posed by system failures, the Company continued to excel in several assessments.For example, in MITRE Engenuity's ATT&CK assessment, the Falcon platform achieved 98% detection coverage, which is much faster than the competition

• Subscription Revenue: while management expects Q3 YoY growth to be only 1.87%, this is viewed as an investment in customer loyalty aimed at retaining impacted customers through discounts and add-on modules.

• Customer retention: the company performed well in terms of customer retention, maintaining customer relationships and attracting new customers despite experiencing technical glitches.

The results exceeding expectations were primarily attributable to several factors:

1. Technical strength: The technical capabilities and market acceptance of the Falcon platform keep it ahead of the competition.

2. Customer Loyalty Strategy: The Company has adopted a series of measures to maintain customer relationships, including the provision of discounts and additional services to address the potential risk of churn due to system failures.

3. Strong market demand: Demand for cybersecurity continues to grow, especially against the backdrop of accelerating digital transformation and increasing reliance on security solutions by enterprises.

Market Sentiment

The market reacted more positively to CrowdStrike's earnings release, but there were some concerns.Despite the results exceeding expectations, the stock price fell more than 5% after the earnings report.This may reflect investor uncertainty about future growth and concerns about high valuation levels[6].

The company's expectations and guidance are relatively positive, but the current share price may already reflect this underlying expectation, while the company's share price has largely repaired since the downtime.The market generally believes that CrowdStrike's position in the cybersecurity space remains solid, and its high value may require further consideration.

Future Outlook

Looking forward, CrowdStrike is expected to continue to benefit from the following trends:

• Artificial Intelligence and Cloud Computing: the demand for cybersecurity solutions will continue to increase as organizations increasingly adopt cloud services and artificial intelligence technologies.

• Strategic partnerships: CrowdStrike's partnerships with companies such as Hewlett Packard Enterprise will further enhance its technological capabilities and market competitiveness.

• Continuous Innovation: The company will continue to invest in research and development to stay at the forefront of technology and meet changing market demands.