Company Quick10K Filing
Quick10K
CrowdStrike Holdings
10-Q 2019-07-31 Quarter: 2019-07-31
S-1 2019-05-14 Public Filing
10-Q 2019-04-30 Quarter: 2019-04-30
8-K 2019-09-05 Earnings, Exhibits
8-K 2019-07-18 Earnings, Exhibits
8-K 2019-06-14 Amend Bylaw, Exhibits
TEP Tucson Electric Power 1,446
UEEC United Health Products 263
JUVF Juniata Valley Financial 115
ETST Earth Science Tech 36
ISCO International Stem Cell 7
ALPP Alpine 4 Technologies 0
CPN Calpine 0
SVTE Service Team 0
BHAC Barington/Hilco Acquisition 0
TMCC Toyota Motor Credit 0
CRWD 2019-07-31
Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Shares of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 crwd-20190731ex311f5baed.htm
EX-31.2 crwd-20190731ex312ee1d30.htm
EX-32.1 crwd-20190731ex3219151e1.htm

CrowdStrike Holdings Earnings 2019-07-31

CRWD 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One) 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38933

CROWDSTRIKE HOLDINGS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

 

 

45-3788918
(I.R.S. Employer
Identification Number)

 

 

150 Mathilda Place, Suite 300
Sunnyvale, California 94086
(Address of principal executive offices)

 

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class of securities

Trading symbol(s)

Name of each national exchange and
principal U.S. market for the securities

Class A common stock, par value $0.0005 per share

CRWD

The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)

Registrant’s telephone number, including area code: (888) 512-8906

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes        No     

Indicate by check mark whether the registrant has submitted electronically every interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files) Yes        No    

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

    

Accelerated Filer

Non-accelerated Filer

Smaller reporting company

(Do not check if a smaller reporting company)

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes       No    

As of August 31, 2019, the number of shares of the registrant’s Class A common stock outstanding was 20,700,000, and the number of shares of the registrant’s Class B common stock outstanding was 205,245,332.

Table of Contents

CROWDSTRIKE HOLDINGS, INC.

TABLE OF CONTENTS

 

 

Page No.

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements (unaudited)

Condensed Consolidated Balance Sheets as of July 31, 2019 and January 31, 2019

5

Condensed Consolidated Statements of Operations for the Three and Six Months Ended July 31, 2019 and July 31, 2018

6

Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended July 31, 2019 and July 31, 2018

7

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Three and Six Months Ended July 31, 2019 and July 31, 2018

8

Condensed Consolidated Statements of Cash Flows for the Six Months Ended July 31, 2019 and July 31, 2018

10

Notes to Condensed Consolidated Financial Statements

11

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

42

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

65

Item 4.

Controls and Procedures

65

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

67

Item 1A.

Risk Factors

67

Item 2.

Unregistered Shares of Equity Securities and Use of Proceeds

100

Item 3.

Defaults Upon Senior Securities

101

Item 4.

Mine Safety Disclosures

101

Item 5.

Other Information

101

Item 6.

Exhibits

102

Signatures

103

2

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans and our objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "potentially," "estimate," "continue," "anticipate," "intend," "could," "would," "project," "plan," "expect" and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements.

These forward-looking statements include, but are not limited to, statements concerning the following:

oour future financial performance, including our expectations regarding our revenue, cost of revenue, gross profit or gross margin, operating expenses (including changes in sales and marketing, research and development, and general and administrative expenses), and our ability to achieve, and maintain, future profitability;
omarket acceptance of our cloud platform;
othe effects of increased competition in our markets and our ability to compete effectively;
oour ability to maintain the security and availability of our cloud platform;
oour ability to maintain and expand our customer base, including by attracting new customers;
oour ability to develop new solutions, or enhancements to our existing solutions, and bring them to market in a timely manner;
oanticipated trends, growth rates and challenges in our business and in the markets in which we operate;
oour business plan and our ability to effectively manage our growth and associated investments;
obeliefs and objectives for future operations;
oour relationships with third parties, including channel partners and technology alliance partners;
oour ability to maintain, protect and enhance our intellectual property rights;
oour ability to successfully defend litigation brought against us;
oour ability to successfully expand in our existing markets and into new markets;
osufficiency of cash to meet cash needs for at least the next 12 months;
oour ability to expand internationally;
oour ability to comply with laws and regulations that currently apply or become applicable to our business both in the United States and internationally;
oour ability to implement, maintain, and improve our internal control over financial reporting;
othe attraction and retention of qualified employees and key personnel; and

3

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othe expected date of the expiration of the lock-up agreements entered into in connection with our initial public offering.

These statements are based on our current plans, estimates and projections in light of information currently available to us. These forward-looking statements may be affected by risks, uncertainties and other factors discussed elsewhere in this Quarterly Report on Form 10-Q, including under “Risk Factors.” Furthermore, new risks and uncertainties emerge from time to time, and it is impossible for us to predict all risks and uncertainties or how they may affect us. If any of these risks or uncertainties occurs, our business, revenue and financial results could be harmed, and the trading price of our Class A common stock could decline. Forward-looking statements made in this Quarterly Report on Form 10-Q speak only as of the date on which such statements are made, and we undertake no obligation to update them in light of new information or future events, except as required by law.

4

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CrowdStrike Holdings, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except per share data)

(unaudited)

    

July 31, 

    

January 31, 

 

2019

 

2019

Assets

 

  

 

  

Current assets:

 

  

 

  

Cash and cash equivalents

$

732,808

$

88,408

Marketable securities

 

94,003

 

103,247

Accounts receivable, net of allowance for doubtful accounts of $1.0 million as of July 31, 2019 and January 31, 2019

 

115,256

 

92,476

Deferred contract acquisition costs, current

 

34,017

 

28,847

Prepaid expenses and other current assets

 

29,348

 

18,410

Total current assets

 

1,005,432

 

331,388

Property and equipment, net

 

107,989

 

73,735

Deferred contract acquisition costs, noncurrent

 

41,766

 

9,918

Goodwill

 

7,780

 

7,947

Intangible assets, net

 

738

 

1,048

Other assets

 

7,881

 

9,183

Total assets

$

1,171,586

$

433,219

Liabilities, Redeemable Convertible Preferred Stock, and Stockholders’ Equity (Deficit)

 

  

Current liabilities:

 

  

Accounts payable

$

1,126

$

6,855

Accrued expenses

 

32,568

 

32,541

Accrued payroll and benefits

 

20,057

 

19,284

Deferred revenue

 

279,951

 

218,700

Other current liabilities

 

8,079

 

4,040

Total current liabilities

 

341,781

 

281,420

Deferred revenue, noncurrent

 

89,811

 

71,367

Other liabilities, noncurrent

 

11,897

 

10,313

Total liabilities

 

443,489

 

363,100

Commitments and contingencies (Note 11)

 

  

Redeemable Convertible Preferred Stock

 

  

Redeemable convertible preferred stock, $0.0005 par value; no shares and 137,419 shares authorized as of July 31, 2019 and January 31, 2019, respectively; no shares and 131,268 shares issued and outstanding as of July 31, 2019 and January 31, 2019, respectively; liquidation preference $0 and $545,000 as of July 31, 2019 and January 31, 2019, respectively

 

 

557,912

Stockholders’ Equity (Deficit)

 

  

Preferred stock, $0.0005 par value; 100,000 shares and no shares authorized as of July 31, 2019 and January 31, 2019, respectively; no shares issued and outstanding as of July 31, 2019 and January 31, 2019, respectively

Common stock, $0.0005 par value, no share authorized issued, or outstanding as of July 31, 2019; 220,000 shares authorized and 47,421 issued and outstanding as of January 31, 2019

24

Class A common stock, $0.0005 par value; 2,000,000 shares and no shares authorized as of July 31, 2019 and January 31, 2019, respectively; 20,700 shares, and no shares issued and outstanding as of July 31, 2019 and January 31, 2019, respectively; Class B common stock, $0.0005 par value; 300,000 shares and no shares authorized as of July 31, 2019 and January 31, 2019, respectively; 205,193 shares, and no shares issued and outstanding as of July 31, 2019 and January 31, 2019, respectively

 

103

 

Additional paid-in capital

 

1,302,098

 

31,211

Accumulated deficit

 

(573,574)

 

(519,126)

Accumulated other comprehensive income (loss)

 

(530)

 

98

Total stockholders’ equity (deficit)

 

728,097

 

(487,793)

Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)

$

1,171,586

$

433,219

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Table of Contents

CrowdStrike Holdings, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

Three Months Ended July 31, 

Six Months Ended July 31, 

2019

    

2018

    

2019

    

2018

Revenue

  

 

  

 

  

 

  

Subscription

$

97,575

$

49,161

$

183,566

$

88,919

Professional services

 

10,533

 

6,540

 

20,619

 

14,071

Total revenue

 

108,108

 

55,701

 

204,185

 

102,990

Cost of revenue

 

  

 

  

 

  

 

  

Subscription

 

24,946

 

14,604

 

48,637

 

29,775

Professional services

 

6,636

 

3,971

 

12,219

 

8,194

Total cost of revenue

 

31,582

 

18,575

 

60,856

 

37,969

Gross profit

 

76,526

 

37,126

 

143,329

 

65,021

Operating expenses

 

  

 

  

 

  

 

  

Sales and marketing

 

65,274

 

40,113

 

122,117

 

76,730

Research and development

 

31,630

 

18,963

 

55,505

 

36,578

General and administrative

 

30,261

 

8,477

 

42,122

 

15,254

Total operating expenses

 

127,165

 

67,553

 

219,744

 

128,562

Loss from operations

 

(50,639)

 

(30,427)

 

(76,415)

 

(63,541)

Interest expense

 

(164)

 

(236)

 

(165)

 

(428)

Other expense, net

 

(451)

 

(1,852)

 

(56)

 

(2,042)

Loss before provision for income taxes

 

(51,254)

 

(32,515)

 

(76,636)

 

(66,011)

Provision for income taxes

 

(635)

 

(362)

 

(1,230)

 

(483)

Net loss

$

(51,889)

$

(32,877)

$

(77,866)

$

(66,494)

Net loss per share attributable to Class A and Class B common stockholders, basic and diluted

$

(0.40)

$

(0.75)

$

(0.87)

$

(1.52)

Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted

 

130,091

 

44,105

 

89,335

 

43,864

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

Table of Contents

CrowdStrike Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)

Three Months Ended July 31, 

Six Months Ended July 31, 

    

2019

    

2018

    

2019

    

2018

Net loss

$

(51,889)

$

(32,877)

$

(77,866)

$

(66,494)

Other comprehensive loss:

 

  

 

  

 

  

 

  

Foreign currency translation adjustments

 

(343)

(358)

(623)

(690)

Unrealized loss on available-for-sale securities, net of tax

 

(1)

(2)

(5)

(2)

Other comprehensive loss

 

(344)

 

(360)

 

(628)

 

(692)

Total comprehensive loss

$

(52,233)

$

(33,237)

$

(78,494)

$

(67,186)

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

Table of Contents

CrowdStrike Holdings, Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

Three Months Ended July 31, 2019 and 2018

(in thousands)

(unaudited)

Redeemable

Accumulated

Convertible

Additional

Other

Total

Preferred Stock

Common Stock

Paid-in

Accumulated

Comprehensive

Stockholders'

    

Shares

    

Amount

  

  

Shares

    

Amount

    

Capital

    

Deficit

    

Income (Loss)

    

Equity (Deficit)

Balances at April 30, 2019

 

131,268

$

557,912

48,127

$

24

$

36,670

$

(521,685)

$

(186)

$

(485,177)

Issuance of common stock upon initial public offering, net of underwriting discounts and issuance costs

20,700

11

659,207

659,218

Conversion of redeemable convertible preferred stock to common stock upon initial public offering

(131,268)

(557,912)

131,268

66

557,846

557,912

Reclassification of redeemable convertible preferred stock warrant liability to additional paid-in capital upon initial public offering

10,559

10,559

Net exercise of common stock warrants

322

Issuance of common stock upon exercise of options

 

3,739

2

7,055

 

7,057

Issuance of common stock related to early exercised options

1,037

Vesting of early exercised options

 

710

 

710

Stock-based compensation expense

 

29,859

 

29,859

Capitalized stock-based compensation

 

192

 

192

Net loss

 

(51,889)

 

(51,889)

Other comprehensive loss

 

(344)

 

(344)

Balances at July 31, 2019

 

$

205,193

$

103

$

1,302,098

$

(573,574)

$

(530)

$

728,097

Redeemable

Accumulated

Convertible

Additional

Other

Total

Preferred Stock

Common Stock

    

Paid-in

    

Accumulated

    

Comprehensive

    

Stockholders'

    

Shares

    

Amount

  

  

Shares

    

Amount

    

Capital

    

Deficit

    

Income (Loss)

    

Deficit

Balance at April 30, 2018

 

118,693

$

351,016

44,774

$

22

$

11,067

$

(412,666)

$

638

$

(400,939)

Issuance of Series E redeemable convertible preferred stock, net of issuance costs of $104

 

12,150

199,896

 

Issuance of common stock upon exercise of options

 

699

763

 

763

Issuance of restricted stock awards

 

136

 

Vesting of early exercised options

 

90

 

90

Stock-based compensation expense

 

2,224

 

2,224

Repurchase of stock options

(2,330)

(2,330)

Net loss

 

(32,877)

 

(32,877)

Other comprehensive loss

 

(360)

 

(360)

Balance at July 31, 2018

 

130,843

$

550,912

45,609

$

22

$

11,814

$

(445,543)

$

278

$

(433,429)

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

Table of Contents

CrowdStrike Holdings, Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

Six Months Ended July 31, 2019

(in thousands)

(unaudited)

Redeemable

Accumulated

Convertible

Additional

Other

Total

Preferred Stock

Common Stock

Paid-in

Accumulated

Comprehensive

Stockholders'

    

Shares

    

Amount

  

  

Shares

    

Amount

    

Capital

    

Deficit

    

Income (Loss)

    

Equity (Deficit)

Balances at January 31, 2019

 

131,268

$

557,912

47,421

$

24

$

31,211

$

(519,126)

$

98

$

(487,793)

Cumulative effect of accounting change

 

23,418

 

23,418

Issuance of common stock upon initial public offering, net of underwriting discounts and issuance costs

20,700

11

659,207

659,218

Conversion of redeemable convertible preferred stock to common stock upon initial public offering

(131,268)

(557,912)

131,268

66

557,846

557,912

Reclassification of redeemable convertible preferred stock warrant liability to additional paid-in capital upon initial public offering

10,559

10,559

Net exercise of common stock warrants

322

Issuance of common stock upon exercise of options

 

4,445

2

8,565

 

8,567

Issuance of common stock related to early exercised options

1,037

Vesting of early exercised options

 

854

 

854

Stock-based compensation expense

 

33,611

 

33,611

Capitalized stock-based compensation

 

245

 

245

Net loss

 

(77,866)

 

(77,866)

Other comprehensive loss

 

(628)

 

(628)

Balances at July 31, 2019

 

$

205,193

$

103

$

1,302,098

$

(573,574)

$

(530)

$

728,097

Redeemable

Accumulated

Convertible

Additional

Other

Total

Preferred Stock

Common Stock

    

Paid-in

    

Accumulated

    

Comprehensive

    

Stockholders'

    

Shares

    

Amount

  

  

Shares

    

Amount

    

Capital

    

Deficit

    

Income (Loss)

    

Deficit

Balance at January 31, 2018

 

118,693

$

351,016

44,231

$

22

$

8,482

$

(378,948)

$

970

$

(369,474)

Cumulative effect of accounting change

 

101

(101)

 

Issuance of Series E redeemable convertible preferred stock, net of issuance costs of $104

12,150

199,896

Issuance of common stock upon exercise of options

 

1,198

1,514

 

1,514

Issuance of common stock related to early exercise options

 

38

 

Issuance of restricted stock awards

 

142

 

Vesting of early exercised options

 

104

 

104

Stock-based compensation expense

 

3,943

 

3,943

Repurchase of stock options

(2,330)

(2,330)

Net loss

 

(66,494)

 

(66,494)

Other comprehensive loss

 

(692)

 

(692)

Balance at July 31, 2018

 

130,843