CrowdStrike Holdings, Inc.

Good day and thank you for standing by. Welcome to the CrowdStrike Holdings first quarter fiscal 2022 financial results 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. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. And if you require any further assistance, please press star 0. I would like to hand the conference over to your speaker today, 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 Podbear, 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, and expected performance, including our outlook for the second quarter and fiscal year 2022 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 risk and uncertainty. 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 filings we make with the SEC from time to time, including the section titled Risk Factors in the company's quarterly and annual reports that we file with the SEC. Additionally, unless otherwise stated, excluding revenue, all financial measures discussed 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 press release, which may be found on our investor relations website at ir.crowdstrike.com or on our form 8K filed with the SEC today. Please also note that in light of our recent acquisition of Humio, management will provide additional information into our first quarter results. We do not intend to provide this additional information on an ongoing basis. With that, I'll turn the call over to George to begin.

Thank you, Maria, and thank you all for joining us today. We delivered an outstanding first quarter, and fiscal year 2022 is off to a record start for CrowdStrike. Building on last year's milestone performance, we started and finished the first quarter with strong momentum and and results exceeding our expectations. We saw strength in multiple areas of the business, added $143.8 million in net new ARR, and grew ending ARR 74% to exceed $1.19 billion. Burt will provide the details of our financial performance, and I will focus my remarks on three key points. First, customers are increasingly turning to CrowdStrike as their trusted security cloud platform of record. As we extend the platform beyond core protection, we're seeing strong momentum in cloud workloads, IT operations, and our expansion into DevOps. Our platform includes 19 modules and easily allows customers to consolidate agents and reduce spend. Second, Our leadership is recognized by both customers and industry analysts such as Gartner and Forrester. Our growing brand has become the cybersecurity gold standard, translating into a broad customer base that is scaling rapidly, deeper penetration within verticals, and our strong financial success. And third, the demand environment is robust, driven by strong secular trends, including digital and security transformation, cloud adoption, and an ongoing heightened threat environment. This includes the massive influx of ransomware and the operational impact of these attacks that have been seen over the past two years. We believe these dynamics will provide CrowdStrike a runway for long-term sustainable growth. Now let's discuss these topics in more detail. It only takes a quick glance at current headlines to know that the threat landscape is fierce and growing in intensity every day. High profile breaches and vulnerabilities like sunburst, pipeline and infrastructure attacks, and zero-day vulnerabilities in Microsoft Exchange are only the tip of the spear. Threat actors are well resourced and becoming more sophisticated. At the same time, ransomware as a service sites are making it easier for even novice e-criminals to run successful and lucrative campaigns which is contributing to the proliferation of ransomware activity. Our 2020 CrowdStrike Global Security Attitude Survey revealed that more than half of organizations surveyed worldwide had suffered a ransomware attack within the previous 12 months. At the same time, organizations need to transform their businesses in order to keep up with evolving business needs, such as work from anywhere and moving their critical applications and workloads to the cloud. Both of these factors exponentially expand a company's threat landscape and increase their risk of a breach. Today's threat environment highlights the need for organizations around the world to transform their security and adopt a zero-trust architecture in order to protect their digital assets, identities, and core infrastructure. The lessons learned from recent attacks emphasize why legacy or perceived good-enough next-gen tech is no match for today's adversaries, leading to a crisis of trust among these vendors, whereas CrowdStrike has emerged as a trusted leader. CrowdStrike's mission to stop breaches has never been more relevant. The Falcon platform is at the epicenter of restoring trust to the security posture of companies worldwide. The integration of threat intelligence and threat hunting into the Falcon platform provides us deep insights into the adversaries and how they operate. The extensive capabilities of the Falcon platform significantly set CrowdStrike apart from both legacy and next-gen vendors. This includes our acquisition of Preempt and Umeo, which could not have been more timely as companies are looking for new ways to shore up protection of their active directories, stop lateral movement, and have even greater real-time visibility and search into their endpoints, identities, applications, network edge, and cloud from a single data layer. Customers are increasingly turning to Zero Trust solutions to combat threat actors that leverage identity-based attacks and move laterally within their targeted environments. We won multiple Falcon Zero Trust deals in the quarter, including a global leader in auto manufacturing, a Fortune 500 manufacturer of high-tech materials and equipment, a provider of IT management software, and a municipality, among others. Additionally, when it comes to log management, companies are looking for technologies with the same characteristics as their security, reliability, scalability, speed, and real-time queries in a cost-efficient manner. Even though we just acquired Humio in March, customer interest is very high, and in Q1, we already secured new deals across multiple industries, including financial services, technology, and law enforcement. A new Humio customer that I would like to highlight is a Fortune 500 company that was using multiple legacy on-prem log management products to manage a variety of use cases across their security and dev teams. In addition to the complexity of using multiple products, this company was struggling with increasing data ingestion costs. Looking to migrate to a cloud-based solution that would reduce cost, enhance visibility, and be easy to implement, they chose Humio over a leading competitor in this space. Humio was selected for its index-free ingestion capabilities, faster search speeds, and customizable dashboards that provide them with greater insights and automation than any of the competitive products they evaluated. This customer is now able to meet their daily three terabyte data ingest needs with a single solution, allowing them to take full advantage of their data at the speed and scale of the cloud. Since our inception, driving innovation has been at the core of CrowdStrike's mission. As a result, we pioneered cloud endpoint security and have extended that to include workload protection. Our determined focus, and uncompromising commitment to excellence has led to a trusted leadership position in a platform that encompasses 19 modules spanning multiple markets, including identity, XDR, and log management. Driving innovation throughout our product offering and bringing new functionality to market that leads to better and faster outcomes for our customers will continue to be a top priority. In May, we announced Falcon Fusion, a unified and extensible cloud-scale framework that provides easy-to-use, custom automation to simplify enterprise security workflows and help security teams solve real-world problems with fewer resources and greater accuracy and speed. We also recently announced an expanded partnership with Google Cloud through a series of product integrations with the Falcon platform and Google Cloud's suite of security products. These integrations will help security and DevOps teams increase visibility of threat actors across cloud and hybrid deployments and enable them to act much more quickly to address them. As customers have begun adopting our cloud workload protection and cloud security posture management, demand for integrations with the GCP Security Suite has accelerated. We are confident that the partnership with Google will drive additional value and adoption by those who are standardizing on GCP, as well as those employing a hybrid cloud strategy. We continue to extend our cloud leadership position by announcing new features to our cloud security posture management module, Falcon Horizon. These new capabilities provide security teams the ability to easily manage and protect multiple cloud environments from a single cloud-based console. Powered by CrowdStrike's industry-leading threat intelligence, Falcon Horizon is the first CSPM solution to deliver behavioral detection using IOAs of threats to the cloud control plane. Horizon utilizes an adversary-focused approach for continuous, in-depth control plane threat detection across an organization's cloud accounts, services, and users for AWS and Azure. The expansion of our Falcon platform and growth of our brand leadership has brought in new customers at a rapid pace, driven incredible momentum with industry analysts and partners, and translated into strong financial results. We are gaining strong industry recognition across multiple well-respected sources. Our most recent achievements included once again taking a leader position in the 2021 Gartner Magic Quadrant for endpoint protection platforms. In the report, we are not just in the leaders quadrant. We are leading the pack on completeness of vision with CrowdStrike by far the furthest to the right. We believe that our position in the Magic Quadrant shows that we have clearly separated from the competition and that we in rarefied territory as a leader that continues to outpace legacy and next-gen competitors in execution, strategy, innovation, and vision. We also received the highest score for lean forward organizations in Gartner's critical capabilities for endpoint protection platforms report. Likewise, Forrester Research named CrowdStrike a leader in endpoint security software as a service in the Forrester Wave Q2 2021 report. We also received the highest scores possible within 17 criteria in the report. Forrester also named CrowdStrike a leader in both the Forrester Wave Q1 2021 Managed Detection and Response and External Threat Intelligence Services reports. We were also recognized as Best Cloud Computing Security Solution and Best Managed Security Service at the 2021 SC Awards, where Sean Henry, our President of Services and Chief Security Officer, received the Security Executive of the Year Award as well. Falcon achieved 100% detection coverage in all 20 steps of the MITRE ATT&CK evaluations, showcasing the effectiveness of our platform. And lastly, the Falcon platform achieved 100% protection rate in the AV Comparative Business Real-World Protection Test for the March-April 2021 period and the highest AAA rating in the Q1 enterprise endpoint protection evaluation from independent testing organization SE Labs. We are proud of our continued strong track record of proven efficacy. Our participation in highly regarded industry evaluations showcase our commitment to stop breaches and drive transparency with customers. A crucial part of our commitment is to continually test our solution, validate its capabilities, and find opportunities to improve. It's unfortunate that some vendors declined to compete in these public tests, including so-called next-gen players. This lack of scrutiny is a significant disservice to all customers who would benefit from greater transparency. We believe the industry's strong recognition of CrowdStrike validates our vision, empowering organizations to embrace security transformation and stop sophisticated adversaries through the power of a cloud-native platform. We believe the rapid expansion of our partner ecosystem also demonstrates our growing leadership position. As we discussed in our webinar in April, our partner-sourced ARR grew 86% in fiscal year 2021. Partners naturally gravitate to market leaders as it helps them bring in new customers. And likewise, customer choice helps propel vendor prominence within the partner community. Our leadership position is driving strong engagement with partners of all sizes, which is contributing to our growing presence among the highest levels, including boards and CIOs. As we announced a couple of weeks ago, we strengthened our alliance with another trusted industry leader, EY. Falcon is now one of EY's preferred cybersecurity platforms. The expanded collaboration also introduces extension into new geography areas as well as three new joint offerings. With these new offerings, we expect to leverage eWISE consultants to drive CrowdStrike subscription sales, similar to how we leverage our own professional services team, which in FY21, on average, drove $5.51 in subscription ARR for every dollar spent on initial incident response or proactive service engagement among organizations that first became a professional services customer after February 1st, 2019. Additionally, our partnership with Zscaler continues to deepen as we both invest in our technology and commercial relationship. We announced multiple new technology integrations with Zscaler this quarter and are also excited to report that they are now a CrowdStrike customer. Additionally, one of our marquee wins in the quarter was brought to us through our tech alliance with Zscaler. This Fortune 100 global insurer chose CrowdStrike to help further its digital transformation initiatives and fortify its security, replacing a patchwork of four legacy and next-gen vendors. Falcon was selected over Microsoft to replace these incumbents for its ability to consolidate multiple agents, improve performance, and protect their endpoints in cloud environments with one single agent. The voice that matters most is the customers, and they are increasingly turning to CrowdStrike as their trusted security platform of record and validating our leadership. In the first quarter, we reached a new milestone as our subscription customers well surpassed the 10,000 mark. We added 1,524 net new subscription customers, including the customers we acquired from Gumeo. On an organic basis, the net new subscription customers added in the quarter grew 69% year-over-year. We now proudly serve 11,420 subscription customers worldwide. Our growth across the market is very diversified as we are winning customers of all sizes and industries. In Q1, we also saw a strong demand in the public sector, landing several U.S. federal wins in both civilian and defense and expansion business with the largest healthcare agency. We are optimistic in our ability to expand within these accounts over time, especially given the renewed focus to bolster the nation's cyber defenses as outlined in the White House's cybersecurity executive order. Adding customers at this rate and among companies of all sizes and verticals is not an easy task. Our go-to-market engine is executing on all fronts to seize on the strong demand we see in the market so we can help even more customers restore trust in their security posture. The investments we have made in the frictionless deployment of our platform and frictionless sales motion, which includes trial to pay and in-app trials, have never been more important. The same can be said for our strong partner ecosystem with leading partners like AWS and EY. These advantages minimize barriers to adoption expand our reach, and shorten the sales process, which we believe provides us an edge over the competition. We believe we can execute on market demand faster than any other vendor, whereas even next-gen competitors struggle with a complex sales process and even more complex deployments that are difficult to scale out of the lab. Our growing leadership as the trusted security partner of choice is also reflected in our continued success in driving module adoptions. Subscription customers that have adopted four or more modules, five or more modules, and six or more modules increased to 64%, 50%, and 27% respectively in the first quarter. We are growing our footprint to cover more customer assets with new and existing customers alike. This includes adoption of newer technologies such as Falcon Cloud Runtime Protection, Zero Trust, and Humio. In the last quarter, we more than double ARR from our newly launched cloud workload modules. We are rapidly scaling our overall cloud footprint with greater than 20% of all servers we protect being in the public cloud. We are also expanding our DevOps capabilities and seeing success selling into DevOps environments as we continue to help customers reduce their attack surface and unify cloud security posture management and breach protection. Let me share a few customer examples that demonstrate how the power of the Falcon platform translated into strategic customer wins. A Q1 deal I'd like to highlight was an expansion with Cloudera, a cloud native enterprise data company that provides insights using machine learning and analytics. Viewing effective security as essential to their operations, Cloudera has been a CrowdStrike customer for their traditional endpoints for multiple years. Looking to further leverage the CrowdStrike Falcon platform to protect their ephemeral cloud environment, Cloudera purchased a fully managed solution for Falcon Horizon, cloud workload protection, Discover for Cloud, and Container and Falcon Complete to provide them with a fully managed and hassle-free solution. Our next customer win is with a Fortune 150 multinational manufacturing company. After trying to deploy Microsoft Defender for over a year, they found themselves frustrated with the level of complexity and the cumbersome agents resulting in less than a third of their endpoints protected. On top of that, the recent zero-day Microsoft Exchange vulnerabilities exposed them to risk of a potential breach, and they would have to wait months before Microsoft could deliver a patch to fully resolve the issue. This is when they turned to CrowdFront. With our single lightweight agent that doesn't require a reboot, this new customer found Falcon easy to deploy, fast, and effective. As a result, they purchased five modules and deployed globally in a matter of weeks. The last customer win I will share with you is a healthcare services provider. This new customer was looking to quickly move off their Sentinel-1 implementation after experiencing several outages caused by sensor updates impacting their critical business operations. Frustrated at the lack of scalability, need for manual updates, and continuous crashes with Sentinel-1, this customer chose CrowdStrike over other providers, including Carbon Black and Palo Alto Networks. Falcon outshined the competition given its ease of use and frictionless, fast, and rebootless deployment. Purchasing eight modules, including Spotlight, Horizon, and Discover for Cloud and Containers, Falcon is now protecting their multi-OS estate of traditional endpoints as well as their previously unprotected cloud workloads. In summary, the fundamental reasons why we have earned our leadership position and are winning customers at a rapid pace over both legacy and next-gen vendors are The Falcon platform's ability to fully utilize the power of the cloud and AI to stop breaches and provide community immunity. Our ability to easily and rapidly deploy our lightweight agent at scale across both endpoints and workloads without requiring a reboot, while other next-gen vendors fail to scale and require reboots. Our platform is easy to use and easy to manage all from a single user interface and our ability to leverage the power of the cloud to collect data once and solve many real world business problems that deliver better outcomes and immediate ROI for customers. Customers recognize that ThreatGraph and our ability to stream data to the cloud in real time are unique to CrowdStrike. This is very different from other vendors including upstarts that silo their data and upload data in delayed batches. Any vendor with an on-prem solution is currently unable to fully utilize the power of the cloud. With one data store, CrowdStrike analyzes data almost instantaneously across our entire customer base, providing real-time protection, community immunity, and better training data for our AI algorithms. This allows us to deepen our competitive mode. While a robust demand environment may serve as a temporary lifeline to inferior technologies, when I look at the competitive landscape, I couldn't be more confident in our leadership position. I do not see another vendor in the market with our vision, platform, scale, or ability to execute at scale. Our leadership as a trusted security platform of record and strong financial performance stands as a testament to CrowdStrike's dedication to innovation protecting customers, and transforming the security industry. I'd like to thank every CrowdStriker for all that they do day in and day out to make us the best in the business. With that, I will turn the call over to Bert to discuss our financial results in more detail.