Good day, everyone, and thank you for standing by. Welcome to CrowdStrike Fiscal First Quarter 2025 Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand it over to the Vice President of Investor Relations, Maria Riley. 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 second 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-GAAP 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 our 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.

Thank you, Maria, and thank you all for joining us for our first earnings call of fiscal year 2025. We started the year from a position of momentum and exceptional strength, outperforming our guided metrics. Our AI native platform wins at scale, every geography, every market segment and every solution area. CrowdStrike delivered a record Q1, record Q1 net new ARR of $212 million, growing 22% year-over-year. Record ending ARR of $3.65 billion, growing 33% year-over-year. Record subscription gross margin of 80% and record free cash flow of $322 million, reaching 35% of revenue and a free cash flow Rule of 68, making us the only cybersecurity vendor of scale delivering this level of growth and profitability. We achieved all of these records while closely managing every P&L line, delivering significant year-over-year operating leverage and our fifth consecutive quarter of GAAP profitability. Even as we continue investing in growth, we're adding sales capacity, investing in our market leading brand, and accelerating innovation while firmly on the path to $10 billion in ending ARR. The foundational theme underpinning CrowdStrike's result is the power of the Falcon platform to consolidate cybersecurity at scale. This is coupled with the market's unequivocal desire for a single AI powered software platform consolidator. We're landing with more modules than ever before. The number of deals involving cloud, Identity or Falcon Next-Gen SIEM modules more than doubled year-over-year and we're closing some of our largest deals ever. We're consistently hearing that customers want to partner with us as they consolidate, standardizing their cybersecurity future on the Falcon platform and investing their trust in CrowdStrike as cybersecurity's North Star. Let me explain why. We built the right architecture from the start, the industry's lightest weight, easiest to install sensor, embedded with AI, no system reboot required, a single…

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. Additionally, the results we are reporting today include the acquisition of Flow Security, which closed during the quarter and was de minimis to revenue and ARR. CrowdStrike delivered an exceptional start to the fiscal year, driven by strong execution and increased platform adoption as customers prioritize their cybersecurity budgets around consolidation on the Falcon platform, driving bigger deals and increased wallet share. We have demonstrated a consistent track-record of execution, profitably scaling the business to new heights. In Q1, we achieved net new ARR of $212 million, up 22% year-over-year, bringing ending ARR to $3.65 billion, up 33% over last year. Demand in the quarter was broad-based across the platform. Our strong win rates remain consistent with the prior quarter and we built a record Q2 pipeline. As George discussed, the Falcon platform's unique ability to consolidate multiple vendors along with the early success of our Falcon Flex program drove bigger consolidation deals in the quarter. Customers are embracing CrowdStrike's platform strategy more than ever as evidenced by the number of deals with eight or more modules, which grew 95% over Q1 of last year. Subscription customers with five, six and seven or more modules grew to 65%, 44% and 28% of subscription customers respectively and the number of deals involving cloud, identity or Falcon next-gen SIEM modules more than doubled year-over-year. Additionally, our dollar based gross and net retention rates were consistent with our expectations as we are executing well across landing, retaining and expanding with our customers. Moving to the P&L, total revenue grew 33% over Q1 of last year to reach $921.0 million. Subscription revenue growth accelerated to 34% over Q1 of…

Thank you. [Operator Instructions] And our first question comes from the line of Andrew Nowinski with Wells Fargo. Please proceed.

Okay, thank you, and congrats on another amazing quarter, particularly in a tough environment where every single one of your peers has put up pretty mediocre results this quarter. So you have so many interesting things going on with cloud and identity and SIEM, but I'll have my question. We'll stay focused on the SIEM offering, which I think you've done a really nice job building out. It clearly has a lot of advantages over the legacy vendors like Splunk and QRadar. And now it seems like the SIEM market in general has been revitalized. So I'm wondering how are you thinking about the opportunity with your SIEM solution going forward? And what are the -- what are you seeing in terms of Splunk and QRadar displacements, which are obviously some of the largest potential shared owners? Thanks.

Thanks, Andy. So when we look at this market, as I've said in my prepared remarks, we've seen more movement in the last year than 10 years. And I think a lot of the various factors in play in the market, M&A and various partnerships and the like have really contributed to a broad interest and adoption of our technology. If you look at what we've done and what we've talked about for some period of time 80%, 85% of the data that goes into a SIEM comes from the endpoints themselves. So having this type of capability natively built into our platform now gives us data gravity. And we've got all of our customers enabled for next-gen SIEM. And that's one of the things I really want to reinforce. All of our customers are now enabled. Now it becomes a sales motion to be able to convert them into next-gen SIEM customers. And given the movement in the marketplace, we've got many, many customers reaching out, dissatisfied with the current vendors and also interested in leveraging a completely integrated solution with the data they already have. So we think this is a massive, massive opportunity for us. And given what we're doing in this space and the innovations we're driving, particularly with AI and the data we have, we think it's going to be a many multiyear journey of opportunity for us in a very antiquated space and one that's right for disruption.

Thank you. And one moment for our next question. And it comes from Saket Kalia with Barclays. Please proceed.

Okay, great. Hey, George. Hey, Burt. Thanks for taking my question here and nice start to the year.

Thank you.

Thanks, Saket.

George, sure thing. George, maybe for you. I thought the AWS win that you announced publicly intra quarter was interesting. And of course you've talked about them as a key customer and partner for CrowdStrike in the past. Can you just dig into how you've maybe expanded that relationship, particularly around cloud security? I think you referenced it a little bit in your prepared remarks, but could you maybe flesh that out a little bit? And also touch on how that's maybe setting CrowdStrike apart competitively in the cloud security market?

Sure. When we look at our cloud offerings, as we've talked about in the past, we've built an incredible portfolio of capabilities from code-to-cloud and everything in between, whether that's agent, agentless, title management, et cetera. So I think it's really reflective of what we've built and the technological advantages that our offerings have for our customers. When you look at someone like AWS, they're obviously looking for the best cloud technology in the market and we believe we have it and it's fantastic to be able to continue to expand our relationship there. This was also a Falcon Flex deal and I think again reflective of the fact that customers want to do more with us, they want to buy more, and we're giving them the opportunity to do this. And in fact, Saket, while we're on the call, we actually just won another award, best cloud security solution by SC Europe, followed up by another five wins. So as I've said for many years, and you've heard me say it, the best architecture, the best technology starts from the beginning and it can't be stitched together. And I think these wins really highlight what we've been able to do and how we've been able to deliver on what we've built since I started the company.

Thank you. One moment for our next question please. And it's from the line of Brian Essex with JPMorgan. Please proceed.

Hi, good afternoon, and thank you for taking the question. And congrats from me as well on a nice set of results. George, I was wondering if you could maybe just broadly talk about the emerging products on the platform. And now that they're becoming meaningful in scale, I think last year you kind of -- last quarter you referenced that they're each kind of IPOable segments in their own right. How often are you leading with the -- with individual solutions that are emerging solutions, whether it's LogScale or identity or cloud, versus leading with the platform and pulling some of those emerging products onto the platform? Just want to get a sense of maybe how the go-to-market might be changing there? Thank you.

Yeah, it's a good question. And I mean, I think in general we're leading with the platform, but maybe to focus in on the heart of your question, which is we have various use cases for the platform, so we may have a customer that comes to us and says, hey, we're using a legacy SIEM. We want something better, right. We may have a new prospect that says the same thing. We're using legacy SIEM and we want to explore what CrowdStrike can offer us. We have plenty of new customers that come to us and say, hey, we need a better solution in our cloud because what we have is not working or it doesn't give us the full spectrum of capabilities. So we can land with something specific to that customer's use case. And that's, a lot of times they're looking for something that they need to solve immediately. And of course, we're selling the value of the platform. So whether it's an existing customer or new one, we're focused on delivering the full value of the platform, but solving their use cases today and into the future and obviously consolidating on what they have in place. In terms of legacy, you heard some of the incredible stats and delivering more value at a lower cost.

Thank you. One moment for our next question please. And it comes from the line of Tal Liani with Bank of America. Please proceed.

Hi, guys. Two questions. First is, SBC went up 40%, and that's on the back of 28% increase last year. That's a material increase from previous quarters. Can you talk about stock based compensation and what's the driver for this? And then second on the results, so for your platform sales, total pricing is going up because you can bundle in more and more components. But does it mean for those who are selling point solutions that pricing is coming down? The fact that you and others are driving platform, does it result in individual component pricing coming down? Can you talk about the pricing environment? Thanks.

Thanks, Tal. Hopefully, you can hear me.

I can hear you. Can you hear me?

Yeah, I can hear you. Thanks. So let's talk about SBC. So first, as I think about SBC, I think about dilution, right. SBC in and of itself really doesn't tell you a whole lot until you get into dilution or until you look at EPS. So for us, dilution, as I've stated many times, we're looking at around 3% for the year and that's well within our -- in terms of our expectations. In terms of the pricing environment, the pricing environment for us is -- we're in a consistent area for ourselves. And how it impacts other point solutions, well, you can see by our results we're winning. People want to consolidate with us. People want to actually go to one single platform, one single agent, one single console. Those are -- all those things combined together, those are the things that are making us win. So as I think about the pricing environment, I think about an advantage to crowd, given our single platform, given the fact that we have 28 modules to choose from.

Thank you. One moment for our next question please. And it's from Hamza Fodderwala with Morgan Stanley.

Hey, everyone. Good afternoon and very solid result and strong start to the year. George, you spoke a little bit about public sector. There was an article last month about the state department looking to really broaden their security vendors beyond Microsoft, which you mentioned in your prepared remarks. I'm curious how is that conversation going with some of those federal agencies who are looking at CrowdStrike? And how is the pipeline trending, particularly ahead of the September fiscal year close in Fed?

Well, when we think about the federal market, obviously the buying cycles happen mostly in the third quarter for them, but we continue to maintain our momentum and gain momentum in those areas. Many of the challenges that we've seen over the years from organizations outside of the public sector continue to plague the government. And when you look at the additional budget that's being released into these governments, given cybersecurity's importance, we think we can play a meaningful part in those opportunities. So from our perspective, we continue to gain, and I think, deliver technologies. And now, if you look at next-gen SIEM, we think there's a massive opportunity in the federal space for our products.

Thank you. One moment for our next question please. And it's from the line of Matt Hedberg with RBC.

Great guys. Thanks for taking my question. I'll offer my congrats as well. Obviously a difficult selling environment. You guys are doing really well. George, I had a question for you. The success you had with Charlotte AI, I think you said 90% POV close rates is great to hear. I know it's still early, but I guess in the spirit of a customer's overall Gen-AI journey, one of the things we're hearing is that could potentially slow down deal cycles for broader software -- the broader software landscape. I'm wondering as your customers adopt your AI platform, maybe even more specifically Charlotte AI, are they seeing faster time to production for Gen-AI applications, does it speed up a customer's Gen-AI journey?

Yeah, I think what we're seeing is that customers are really embracing the fact that we can reduce their operational workload for their SOC analysts. We can take hours of mundane brunt work and turn it into minutes and not only answer questions with the collective wisdom and knowledge that CrowdStrike has developed over the many years, but also drive automation. We talked about the Falcon Fusion SOAR technology built in. So when they look at what we've built and how we can save time and how we can drive AI automation into an AI native SOC, I think this is really important for them. And you know overall I think it's a fantastic technology. And as I mentioned, we won a few other awards while we're on the call. We actually won best AI category for SC awards specific to Charlotte. So we're delivering on our promises and this is real technology in the hands of customers today.

Thank you. One moment for our next question. It's from Fatima Boolani with Citi. Please proceed.

Thank you for taking my questions. George, I'm going to ask you a very high level question just with regards to the $10 billion ARR target. You've reemphasized it, you've reaffirmed it with a lot of confidence, and there's a lot of reasons to anticipate why that's going to be a very likely outcome. But I wanted to ask you very specifically, what do you feel like will help your relative velocity in attaining that sort of bogey? So frankly, what would have to go really right for that outcome to be realized within three years versus five years, you know, appreciating that you haven't put a time frame on it. And, I can appreciate there's no shortage of product. You've seen so much momentum in Falcon Flex and a lot of the platform anecdotes that you platformization anecdotes there. I say that, that you shared, but would love to kind of get your perspective on what could change your relative velocity to that ARR target.

Sure, I think, there's probably two key points there, and then I'll see if Burt wants to chime in when we look at our ability to consolidate. And I talked about in the call, Falcon Flex, I think is a game changer for a lot of customers buying more, buying bigger, leveraging the platform, and you see velocity of adoption using Falcon Flex. So really excited about that and what it's going to mean for CrowdStrike. The second piece, again, as I talked about in my prepared remarks, is that Next-Gen SIEM is natively built in. So rather than sending data out somewhere else and paying for the transport costs and all the complexity around that, the bulk of the use cases and the data that's generated that goes into a SIEM is already in the platform of choice for customers. And we see that being a meaningful opportunity for us. It's a massive market opportunity. And then other things like data protection, I talked about that. That is an industry or technology that's ripe for disruption. It's the definition of legacy, and we've got a fantastic product around it. And combine that with Falcon for IT, leveraging the single agent architecture to do more than just security. These are all meaningful drivers for our growth. Any other comments, Burt on that?

Yeah. Thanks, George. So one of the things that we talked about at Falcon was the $10 billion ARR number in five to seven years. And along with that, we give an illustrative example of some of the things that will get us other than what George has talked about in terms of TAM. We talked about cloud being around in that same timeframe, $2.5 billion to $3 billion. We talked about identity being $1 billion to $1.5 billion. We talked about Next-Gen SIEM being $1 billion to $1.5 billion. So you start adding up those numbers and you get more and more confidence in terms of being able to attain that number. That's how we think about it internally.

Thank you. One moment for our next question please. And it's from Gabriela Borges with Goldman Sachs. Please proceed.

Hi. Good afternoon. Thank you for taking the question. George and Burt, I wanted to follow-up on one of the earlier questions on AI, and more specifically, when you talk to your customers and they start planning out their generative AI projects, how does that impact their cybersecurity plans? To what extent are you seeing scenarios where you may be seeing a pause in budget or maybe an acceleration in budget? And maybe as part of that, George, if you could just touch on, help us understand the technical differences between protecting, call-it a classic cloud workload versus a cloud workload that's running an LLM, or connecting to an LLM. Thank you.

Sure. So we see the opportunity growing. And a number of years ago, we talked about the cloud opportunity. We thought that was underrepresented by some of the market researchers. And now when we think about the proliferation of new hardware. Just look at how much new hardware has been procured over the last six to eight months, right. A lot of that is going towards generative-AI workloads. And you've seen the announcements with NVIDIA. These workloads continue to be something that need to be secured and will be, I think, a huge opportunity for CrowdStrike, given what we've built and the fact that not only can we tell you what may be misconfigured, but our cloud workload protection is really a hallmark of what we do at CrowdStrike, and it's providing real prevention capabilities into these workloads, which consistently come under attack. So that's the way I would look at it, as a huge opportunity for us. And we've spent many, many years protecting cloud workloads and we've adapted that into protecting Gen-AI workloads and providing additional information on how those workloads run and how they need to be protected. So big opportunity for us today and in the future.

Thank you. One moment for our next question please. And it's from Alex Henderson with Needham. Please proceed.

Great. Thank you so much. You guys had an outstanding quarter here and in an environment where a lot of people are struggling. So what I was hoping you could talk to a little bit is what you're seeing as you're talking to CISOs, you're talking to CEOs, C-Suite type people about what is causing their reticence to spend short-term. I know you're gaining share and doing well, but many aren't. And I'm wondering if that's a function of their challenges in figuring out how they're going to implement AI and to what extent that's causing a slowdown in decision making process? Or is it macro or alternatively is it a -- they are determined what they're going to spend on and they're shifting money away from other things, including some security in some -- if you look at the results of some of the other players. So what is exactly going on in the field right now with the decision making process?

Sure. Well, what we've seen and Burt talked about in the prepared remarks is that customers are looking to consolidate and save money on CrowdStrike. And at the same time, Alex, as we mentioned, it's still challenging macro environment. But I think the results you're seeing from us is the fact that the consolidation technologies and platform that we're delivering is working. We're providing more for our customers and consolidating other spend that they have and they're taking that share of wallet and putting it with CrowdStrike from other vendors. And we gave you some, I think, really interesting stats around that. That's the simple version of it. We've got the right technology, we've got the ability to reduce their costs. We've got a partner network which is delivering massive value for us. And when you put it all together, yes, it's challenging. But if you've got the right solution with the right offerings, we think we can be very successful. And I think the quarter that you just saw is reflective of what we've been saying for a long time and what we delivered.

Thank you. One moment for our last question in queue. And it comes from the line of John DiFucci with Guggenheim Securities.

Thanks. Thanks for taking my question. So George, you and your team have put up consistency in numbers. We just haven't seen from anyone over what's been described as a challenging IT spending environment. And I'm talking about the last couple of years, especially this quarter. I think we understand how early on you expanded the definition and the scope of the market you address. And also more recently, you did something similar in broadening your market influence to customers of all sizes. But if the backdrop remains the same, at least for the rest of this year, and it doesn't get better like a lot of people thought it would at the beginning of the year, is it more of the same for you, or are there other levers that you can or need to pull to continue to put up the impressive numbers that you have?

Sure. So thanks, John. I think you said it right. We, Burt and I and the rest of the team focused on consistency and delivering value to our customers if we can provide the right technology and solve use cases, and more importantly, listen to them. If you look at Falcon Flex, which I talked about, which we're really excited and I know is going to continue to drive results for us, that was an outcome of listening to our customers. We actually worked with several customers on putting that together, buying it how they want it, the way they want it, reducing friction in the procurement cycle. So that's what we're going to focus on. And I think I'll leave you with if we take care of the customer, the rest takes care of itself. And that's again a hallmark of what we try to do at CrowdStrike and what Burt and I are focused on every day.

And thank you. With that, I will conclude Q&A session and I'll pass it back to George Kurtz for his final comments.

Thank you so much for joining our call and we look forward to seeing you next quarter. Be safe.

And thank you everyone for joining. You may now disconnect.