Thank you for standing by and welcome to CrowdStrike's Fourth Quarter and Fiscal Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the call over to Maria Riley, Vice President of Investor Relations. Please go ahead.

Good afternoon, and thank you for your participation today. With me on the call are George Kurtz, President and Chief Executive Officer and Co-Founder of CrowdStrike; and Burt Podbere, Chief Financial Officer. Before we get started, I would like to note that certain statements made during this conference call that are not historical facts, including those regarding our future plans, objectives, growth, including projections, and expected performance, including our outlook for the first quarter and fiscal year 2025 and any assumptions for fiscal periods beyond that, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our outlook only as of the date of this call. While we believe any forward-looking statements we make are reasonable, actual results could differ materially because the statements are based on current expectations and are subject to risks and uncertainties. We do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise. Further information on these and other factors that could affect the company's financial results is included in the filings we make with the SEC from time to time, including the section titled risk factors in the company's quarterly and annual report. Additionally, unless otherwise stated, excluding revenue, all financial measures disclosed on this call will be non-GAAP. A discussion of why we use non-GAP financial measures and a reconciliation schedule showing GAAP versus non-GAAP results is currently available in our earnings press release, which may be found on the investor relations website at ir.crowdstrike.com or on our form 8-K filed with the SEC today. With that, I will now turn the call over to George.

Thank you, Maria. And thank you all for joining us today. CrowdStrike delivered an exceptional fourth quarter that far exceeded our expectations. It was another quarter of records. Record net new ARR of $282 million, continuing our acceleration trend, growing 27% year-over-year. Record operating margin of 25%, up 10 percentage points year-over-year. Record free cash flow reaching 33% of revenue and a free cash flow Rule of 66. Record GAAP profitability and record cloud identity and next-gen SIEM ending ARR of greater than $850 million together, more than doubling year-over-year. These results illustrate CrowdStrike's substantial and widening competitive moat, exceptional business acceleration, and validated market leadership. Building on my founding vision, CrowdStrike is the only single platform, single agent technology in cybersecurity that solves use cases well beyond endpoint protection. Falcon is the easiest and fastest cybersecurity technology to deploy, and our single AI native platform makes vendor consolidation instant, frictionless and natural. The feedback we receive from customers, prospects and partners alike is consistent, eagerness to deploy the Falcon platform, ease of adopting more Falcon platform modules, and excitement from continuous innovation with new Falcon capabilities delivered weekly. Leaving stitched together point products and PowerPoint platforms behind, CrowdStrike customers realize the benefits of superior outcomes and lower TCO. A recent IDC report echoes this, showcasing $6 of return for every dollar invested in the Falcon platform. That is ROI. Free is never free. Customers understand the difference between product pricing and the total lifetime cost of operating inferior technology. Given the Falcon platform's ROI and TCO savings, we believe we will continue to see favorable pricing dynamics. I'm thrilled with our performance, which is a testament to the execution and passion from the very best team in cybersecurity. Unified by our focused mission, we stop breaches. My gratitude to…

Thank you, George. And good afternoon, everyone. As a quick reminder, unless otherwise noted, all numbers except revenue mentioned during my remarks today are non-GAAP. CrowdStrike delivered an exceptional fourth quarter and a record finish to the year, highlighting our outstanding execution, growing market leadership, and accelerating adoption of the Falcon platform. For the full fiscal year, we achieved 34% and 36% ending ARR and revenue growth, respectively, while delivering significant leverage on the bottom line. Operating income grew 86% year-over-year to reach a record $660.3 million, or 22% of revenue, and net income attributable to CrowdStrike and EPS more than doubled to reach a record $751.8 million or $3.09 per diluted share. Free cash flow grew 39% year-over-year to reach $938.2 million or 31% of revenue, exceeding our target for the year. Additionally, we are very proud to have achieved the important milestone of GAAP profitability for the past four quarters and full fiscal year in less than five years following our IPO. Our achievements in fiscal year 2024 represent another high watermark for CrowdStrike. Through our consistent focus on execution, we have efficiently scaled the business, growing ending ARR by over 10 time from our IPO in fiscal year 2019, delivering significant operating leverage and growing our free cash flow margin profile to above 30%. We continue to aggressively invest in our innovation engine and flight the company to achieve its vision of reaching $10 billion in ARR over the next five to seven years. Moving to the specifics of the fourth quarter, we achieved record net new ARR of $282 million, up 27% off of last year's record Q4, representing our second consecutive quarter of accelerating growth. And we finished the quarter with $3.44 billion in ending ARR, up 34% over last year. Demand in the quarter…

[Operator Instructions] Our first question comes from the line of Saket Kalia of Barclays. Your question please, Saket.

Okay, great. Hey, guys, thanks for taking my question here and congrats to the team on a strong finish to the year.

Thanks, Saket.

George, short thing. George, maybe for you. I think the number that sticks out the most to me from the quarter is the $850 million in ARR from maybe what I'll call platform products. So the question is, can you just talk about the competitive landscape in a couple of those areas like cloud security and SIEM? I mean, definitely a rising tide in some of those markets, but also some good competitors. What do you think is giving CrowdStrike a right to win in those markets?

Thanks, Saket. Obviously, a key part of our success has been that all of the modules [indiscernible] are platform, which is really key driver. And when I started the company, it was really about creating this data platform that allowed us to ingest data at scale and then create multiple use cases. And really what you're seeing is many, many years of hard work that allow us to solve use cases beyond just core endpoint protection. So when we think about cloud security, customers are really looking to rationalize the alphabet soup of cloud products that are out there. And they're looking not only for posture management, but runtime protection. And they want it all integrated into a data platform. So I think given what we've done and some of the acquisitions including now Flow, we are obviously well positioned in that area and a lot of interest from our customers, and we've seen a lot of success. When we think about the SEIM market, and maybe more importantly, the legacy SEIM market, customers are just frustrated with the existing technologies, the cost structure around those. And what they're looking for really is a data platform like CrowdStrike and now LogScale’s natively integrated into the product. It's a better way to give them the outcome they want, which is faster results, better overall outcomes, and a lower TCO. So I think it's this data concept that we've been talking about for many years that everyone now is starting to see the fruits of our labor and how we can solve use cases well beyond just endpoint protection. Bert?

Yeah. So I would agree, George. I think at the end of the day, for us, when we're thinking about the different products that are in our portfolio, it's really about the platform. We sell the platform. Regardless of what are the products that are in the platform, they all kind of work off of each other, and we're just out there solving as many outcomes as we possibly can.

Great. Thank you.

Thank you. Our next question comes from the line of Brian Essex of JPMorgan. Please go ahead, Brian.

Great. Good afternoon. Thank you for the question -- for taking the question and great to see the strong results from the team. George, you're articulating a few thoughts on consolidation pricing in your prepared remarks, but wanted to ask a little more directly and maybe follow up to Saket's question. Both for you and Bert, one of the other vendors in this space has talked about a strategy of platformization. So maybe with that in context, how does this impact your go-to-market and pricing?

Well, thanks, Brian. As you might imagine, I heard a lot about platformization over the last week. To me it's kind of a made-up-so-gazey term, but what I believe our competitors are talking about is bundling, discounting, and giving products away for free, which is nothing new in software and security software. It's been done for the last 30 years. So when we think about what we've seen in the past with other competitors, we know free isn't free. And what customers are saying is more consoles, more point products masquerading as platforms create fatigue in their environment. And one of the things again that we've been focused on is that, single agent architecture, single platform, single console that allows us to stop the breach, but more importantly, drive down the operational cost and supply many use cases or solve many use cases that are out there. So, I've been around the block for a bit. I've seen this movie of wrap and roll and bundling together with multiple products that were acquired and last time I saw that I was at McAfee. So I don't know, Bert, you have anything to add to that?

Yeah, I think, George, look, at the end of the day, we sell on value. And we've never been a company that's done deep discounting. We've never been a company that has increased our prices to get more ARRs. That's not us. And at the end of the day, for us, we're here to help customers get the greatest amount of outcomes at the lowest TCO period. And to George's point, free is not free, and good is not good enough.

Thanks, Bert.

Thank you. Our next question comes from the line of Rob Owens of Piper Sandler. Please go ahead, Rob.

Yeah, good afternoon and thanks for taking my question. I was wondering if you could address the modest step up in billing's duration. After a year of compressing durations, your total billings outgrew your short-term billings and it does appear that customers are committing for longer contracts, wondering if that's a function of your consolidated platform or another dynamic in the market. Thanks.

Hey, Rob. So I think it's a couple of things. One is, for sure it's about the platform. But second, Q4 is historically we've seen a lot more of the multi-year deals. We also see more renewals in Q4 as well. But billings in general, remember it's a noisy metric right? It's heavily influenced by duration and timing of deals within the given quarter. But having said that, at the end of the day, we do manage the business to ARR. And that's the one that we focus in on. Billings for us is just an aftermath. You're right. It was a strong billing quarter, but that's not really how we run the business.

Thank you. Our next question comes from the line of Joel Fishbein of Truist. Please go ahead, Joel.

Thank you, and congrats on the great execution as well. George, just a follow-up for you on the data market or the DLP market, and congrats on the acquisition of Flow. Just curious how that will be integrated. You didn't really mention how big that is for you guys, but obviously a very big market that is right for disruption and maybe talk about the competitive dynamics of that market as well.

Sure. Well, we're excited about this because not only do we get the classification of data, but we also get the runtime protection in the cloud. So it's a perfect fit for our data protection module. And again, what I talked about in prepared remarks was that, there's a lot of similarities to what I saw when I started the company in legacy AV to legacy DLP. I don't even like the term DLP we call data protection, because it's really about how data flows and data in motion not only in a company's organization but through all of their cloud and all of the applications. So I think it's a perfect fit. We're excited about the team. We're excited about the technology that will be integrated, of course, as part of our platform. We spent a lot of time on that, making sure the customer has got the right user experience. And we'll get this acquisition closed out in the next couple of weeks, and then we'll be heads down with the integration. But so far, so good on our data protection module. We've got some wins there and a tremendous amount of interest in replacing the legacy DLP technologies.

Thank you. Our next question comes from the line of Andrew Nowinski of Wells Fargo. Your question, please, Andrew.

Thank you for taking the question. This is just a really amazing quarter again, particularly in light of some of the noise that's been in the market. So I wanted to ask about the expanded partnerships with Dell that you announced today, and also about the -- I think, the Pax8 partnership that you announced at your user conference last year. I guess first, how did both partners contribute to results in the quarter relative to your expectations? And then second, have you factored in a contribution from those partners into your F 20Y25 outlook? A - George Kurtz I'll take the first part and I'll turn it over to Burt. So we obviously are very excited about the Dell partnership. I'll start with them. I talked about that earlier. And really, we're in the early innings. We're winning deals, large enterprise, all the way down the SMB, taking advantage of their reach and their go-to-market motion. So still early days, and we've already put up some big numbers from that partnership. When we look at Pax8 and the like, again, it's still early days, but we've seen tremendous success, particularly down-marketing the SMB, and what customers are looking for, even if the smaller customers are looking to solve big problems, they can't be hit by ransomware, they can't have an impact to their business. So it's a perfect model for us to get to those SMBs. And it's, like I said, early days, but tremendous results so far. Bert?

Yeah. So I think that we're very excited about both the partnerships, both Dell and Pax8. They represent additional routes to market, but it's still early days on both of them, as George had mentioned. But they're one of many routes to market. We do believe that they're going to bring deals to us. And we're excited to have them on board as partners.

Thank you. Our next question comes from the line of Tal Liani of Bank of America. Please go ahead, Tal.

Hi, guys. So we had discussions this kind of past few weeks about the pricing environment of the XDR market and the ability to offset this with add-on modules. And the question is, you touched on it, but I want to ask, do you feel the contribution of Microsoft and Cortex from Palo Alto and others, do you feel their impact on pricing of individual components of your package? And is there a story about price compression of each individual component offset by the bundle or that you just don't see the XDR pricing pressure that Paolo Alta was talking about? Thanks.

Well, again, I mean I can -- I try to focus on what we've been able to do. And as the leader in the space, we've been solving problems for a long time. And when we look about -- we look at the impact that ransomware and some of these very prominent breaches have had, you're talking about hundreds of millions of dollars for companies. So to buy a platform that has the capabilities to stop breaches is really what customers are looking at. And when we think about sort of one-off modules or things of that nature, for us, we're looking at the total package and the solution of what we put together. And of course, it's a competitive environment, but you have to have a competitive product, you have to have the right level of innovation, and you have to have the right go-to-market motion, which we talked about in some of the prepared remarks. So it has been competitive. It has -- will be competitive. But at the end of the day, what we're finding is that customers want the right outcome. And we've seen the free is not free, and we see that good enough is not good enough. And I think customers are smart enough to realize the difference between price and total cost. And that's what we've been able to show with every dollar spent on CrowdStrike is a $6 return on their investment. And we're going to continue to deliver value and outcomes for customers.

Thank you. Our next comes from the line of Alex Henderson of Needham. Please go ahead, Alex.

Great. Thank you so much. So first thing you ever said to me, George, was that you're a platform, not an endpoint company. I think you've been proving it with high alacrity over the last year. With the comments coming in about plantation. It sounds like the response that you're having here is that the companies that are trying to do that are really just offering bundles of products, but they're not truly integrated. You're platform is based off of cloud native, microservices, API driven. And I think if you were to talk to the degree to which you integrate any acquisition into that platform, it would be radically different than what we're hearing or seeing from some of the other players. So can you talk about why the microservice cloud-native architecture in a single platform integrated upfront is the way to go and how hard it is for companies that are trying to disparate packages into a platform that wasn't designed as a platform from the get-go because I think ultimately, that's the key differentiator here. And I would think that with the acquisition of flow, you'll be able to integrate it much more rapidly because it's API-driven because it's microservice based. Can you talk to that?

Yes. Sure, I can. Thanks, Alex. It's a great . And I do remember our early conversations finally, and you're absolutely right about being the platform for cybersecurity when I started the company. So when we think about architecture, architecture does matter and really what we've created is a very data-centric architecture that allows us to get data at scale into our platform leverage our AI and then create the outcomes. It's that collect once we use many. We have a single platform. Our competitors have many other platforms as they call them. We have a single agent. Our competitors have five, six, seven, eight, depending on the competitors. So when we look at our architecture, it was really designed from the beginning to solve the problems of today and the future problems. And the result of that is ease of use, the outcome that a customer is looking for, stopping breaches and lowering the cost and future bringing what they want. I've -- in a prior life, I've been involved in companies that acquired a lot of products. And I can tell you, it is near impossible to stitch all this stuff together, particularly at the agent level unless you're very diligent about it. And I can tell you from a CrowdStrike perspective, we've been very diligent about our acquisitions, as you've seen, and thoughtful on the pricing. But also what's important to realize is that we bought products and we really haven't sold some of them for the better part of 18 months because we wanted to focus on the integration, things like identity. And now we see the fruits of our labor. So it's this focused, long-term diligent approach to our acquisitions, I think, that have helped us because we started with a very innovative cloud-native platform from the beginning.

Thank you. Our next comes from the line of Roger Boyd of GBS. Please go ahead, Roger.

Great. Thanks for taking the question. And again, congrats on a really strong end of the year. I wanted to talk about Charlotte. The customers that we've spoken to that were part of that early access program pretty positive on both what the product can do today as well as the pipeline and where it could go in the future? George, you said at a couple of positive stats around automation. Any updated view on your ability to monetize the Charlotte product or the time line to monetization from here? Thanks.

Well, yes, that is the goal. We already have paying customers in Charlotte. We just released it. So the good news for us, and I think the good news for our customers is they see the value and they're willing to pay for it. Obviously, we're in the early innings of this, but the way we've architected as a foundational component of our platform, it allows us to create expertise around different areas of the platform as well as automation. Leveraging the native automation capabilities that we have. So our overall goal, again, is how do you drive automation in the stock, how do you modernize the stock? And how do you take the collective wisdom of CrowdStrike and its years of knowledge in fast categories and bring that to bear for customers big and small. And so far, we've gotten the response from customers where they understand the time savings and the value that it can bring. So more to come on this. Obviously, we just GA-ed it over the last week or so. But overall, I'm very encouraged by what we're hearing and seeing from customers.

Thank you. Our next comes from the line of Matt Hedberg of RBC. Please go ahead, Matt.

Great. Thanks for taking my question. I'll offer my congrats as well, guys. Burt, your new ARR commentary was helpful for Q1. I'm curious, this time last year, I believe you talked about flat net new ARR growth for fiscal 2024. And obviously, I think you guys did about 6% this year. Any just sort of like directional guardrails you give us from a full year perspective in terms of sort of just thinking about from a net new perspective.

Hi, Matt. Thanks. So with respect to ARR, obviously, we don't guide to it. But we have talked about in the past where we've started the year in Q1 and build and that's kind of really all I can really comment on ARR. You can kind of infer where we're going with our guide. And -- but at the end of the day, our guide, the methodology has remained consistent, and that's how we think about it.

So it sounds like Q1 -- it sounds like your commentary on linearity, you would expect Q1 to low point for net new growth or net new dollars for the year.

Yes, That would be accurate.

Excellent. Thanks, guys.

Thank you very much.

Thank you. Our next -- actually, pardon me. Our last comes from the line of John DiFucci of Guggenheim.

Thank you for taking my question. Listen, as everybody said, these are really impressive results, no matter how you look at it, but especially as compared to others out there. I'd like to ask another about the past is -- I know, George, you think, but the past is the past. It's great. It's great to see. But I'd like to ask another about the future. I know Charlotte AI is the sexy new product. It's everybody or AI winner are you a loser I mean. And we'll see how that develops. But given your lightweight agent and all the data you collect or even could collect. It just seems that Falcon for IT could be a whole new world for you, which might make it harder given it might perhaps be a different buyer, but certainly worth it. I guess how should we think about the development of this product going forward, given your -- I know it just was generally available, too, but I'm sure you've had early conversations with customers.

Well, I've got to tell you that the customer excitement around Falcon for IT is off the charts. When we talked about at Falcon and now that's generally available, customers are looking for a better solution in this area. And one of the things that we found is that the security team has been solving a lot of IT problems and challenges for IT for a long time, and we really needed to carve out a home for IT. So when you look at some of our competitors in that market, it's -- obviously, it's a pretty big market, but having a single agent and the ability to actually solve IT problems, which many of our customers were doing already is fantastic. So again, early days, but the feedback and the interest is off the charts for Falcon for IT, and it goes to the heart of how we built the platform. To collect data doesn't have to be security data. It can be almost any data related to either our agent first-party data or now third-party data we can ingest. And that solves many use cases beyond what we originally came to market with. So I think the sky is the limit there.

Thank you. I would now like to turn the conference back to George Kurtz for closing remarks. Sir?

So I want to thank all of you for your time today. We appreciate your interest and certainly look forward to seeing you at our upcoming investor events. Thank you so much.

This concludes today's conference call. Thank you for participating. You may now disconnect.