CrowdStrike Holdings Inc.

The stable outlook on CrowdStrike Holdings Inc. reflects our expectation that CrowdStrike will generate revenue, EBITDA and free cash flow growth that are well above industry averages, driven by increasing focus on security within organizations. We would consider upgrading CrowdStrike to 'BBB-' over the next 12 months if it continues to increase its revenue and EBITDA at scale while maintaining S&P Global Ratings-adjusted leverage of less than 1.5x (incorporating its acquisitions and shareholder returns). Although we view a downgrade as unlikely over the next two years due to its strong balance sheet and exceptional liquidity, we would consider lowering our rating on CrowdStrike if its financial policy becomes more aggressive than we currently expect, either to support greater shareholder returns

...CrowdStrike reported solid annual recurring revenue (ARR) growth throughout calendar year 2021, which we expect it to sustain in 2022. The company reported strong results for the third quarter of 2021, including revenue of about $380 million and an ARR growth rate of 67%. ARR has now grown to $1.5 billion. We expect that management will continue to focus on expanding its business and improving its profitability, which leads us to forecast fiscal-year 2023 revenue approaching $2 billion and S&P Global Ratings-adjusted EBITDA margins rising to about 20%....

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