CrowdStrike Holdings Inc at Citi Global TMT Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Fatima Boolani - Citigroup - Analyst : It's been two months nearly two months since the outage happened. Want to get your perspective and a sense from you on what's the most consistent feedback that you've received from your customers and the partner community? And how is a lot of this feedback now being incorporated in the way you're running the business, investing in R&D and then ultimately economically engaging with customers and partners?

Question: Fatima Boolani - Citigroup - Analyst : And but just to be clear, the customer commitment packages are specifically designed for caveats to impacted customers, right? This isn't a

Question: Fatima Boolani - Citigroup - Analyst : I wanted to come back to the customer commitment packages because it is very much a multidimensional not the stock pressure, but there's a framework involved here, right with a number of different factors. I want to come back to that. But before I going back to the quarter's performance, I mean incident happened July 19. We closed the quarter on July 31, you still put up 11% growth on net new ARR. So can you give us kind of the postmortem of what actually happened over the course of the last two weeks in so far, as you were still able to execute and transact on a normal course of business, almost business as usual read and I think you gave some quantification around some hiccups that would obviously be natural that I want to go back to that point because, you know, notwithstanding all this is still net-net we are at 11%.

Question: Fatima Boolani - Citigroup - Analyst : But the anecdotes around the seven to nine figure expansions after the incident, I think is a very remarkable set of outcomes for you, right. So after the customer had gone through their five stages of grief, right, what compared then to say, okay, well, I'm not only going to come back, but I'm going to come back in a big way because I think some of the anecdotes you referenced were affected customers who still came back and still continue to expand. So what were some of the defining features of those conversations that were so powerful that we were able to small handedly overcompensate for the disruption in our business?

Question: Fatima Boolani - Citigroup - Analyst : But going back to the customer commitment packages, the CCP, we did talk about, you know, it's bespoke so there's a framework in terms of the menu on more modules, flexible payment terms. Now V optionality is great for customers, but as an organization will go to market organization, how are you giving these options that making sure they're within the bounds of a framework so that not every conversation becomes a snowflake conversation that every conversation is different and the spirit of the question here is sort of questions spending most of their time qualifying a customer talking about the options with the CCP, parameters are going to be for them that's, frankly, less time that they're using to build pipe. Well, so how are you putting some guardrails around that you know, the CCP conversations don't actually suck up the sales resource time in doing more valuable things like generating pipe and business?

Question: Fatima Boolani - Citigroup - Analyst : A time only right now.

Question: Fatima Boolani - Citigroup - Analyst : But from a revenue guidance perspective, you know free outage and now there has been 100 -- roughly $110 million revision to the top line you specifically explicitly quantified $60 million of that tied to the CCP with the balance being kind of the amalgam of cell cycle elongation and more scrutiny. I'd love for you to go in a little bit more detail on that, but specifically on the CCP side, because we talked about kind of the different dimensions a customer can elect in CCP. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 4:30PM, CRWD.OQ - CrowdStrike Holdings Inc at Citi Global TMT Conference Can you give us a sense of what that the meatiest part of that $60 million where it's coming from, is it straight up hard discounts, is it [Oregon] revenue for incremental modules that are being taken on help us frame that because I think you've talked very explicitly on a revenue. Degradation mechanics, but if you can add some more specificity on that $60 million and what's actually moving the needle?

Question: Fatima Boolani - Citigroup - Analyst : That's s sizzling teaser.

Question: Fatima Boolani - Citigroup - Analyst : Proportion of the base. That sounds.

Question: Fatima Boolani - Citigroup - Analyst : But one of the questions I've been getting as well, you know, since the earnings call is, CCP is the right move. It's you're doing right by the customer exactly on their terms. But is there a time bound on CCP right? Are you is this going to now perennially be part of the sales motion or is it going to just be an adjunct of falcon flex and by the time we anniversary, sometime next year, back to your commentary about, hey, you do see prospects for back half reaccelerate and ARR revenue growth. How much of time bound should we expect on CCP? Because I think some of the challenges and certainly the challenges you're having with respect to visibility on how the impact is going to be on financials because of the different variables and dimensions inside CCP, how should investors think about kind of the longevity on CCP? And I'm asking you this because I think you've been very clear in the way you're saying, hey, this is your opportunity to strike and be aggressive and the market is now and CCP alongside flex, is a conduit for you to do that, right? So it's almost like, hey, are we now going to be in this open-ended time frame where you are going to be more aggressive in the marketplace?

Question: Fatima Boolani - Citigroup - Analyst : Again, I know it's early days. The market structure and behaviour from your peers and competitors is also changing. How much of what you're doing with CCP and even falcon flex and really doubling down on making this sort of the go to market message and offensive strategy. But in some ways naturally, a defensive strategies, because I think we've all heard some of your larger peers and this days talk about, hey, they're ready to play ball, right? Because there has been a shake up, right. So from your perspective? Is, you know, we can look at your margins, right, you did bring your margins down by a bigger factor than you took down revenue, right? So is there something to be said there about the fact that you are being more offensive but also defensive?

Question: Fatima Boolani - Citigroup - Analyst : So you know, as we work down the P&L, you know the capital efficiency of the business kind of speaks for itself, right. But clearly, you're taking some deliberate measures, you know from a customer retention, customer loyalty, insuring standpoint. So when we think about the short term impacts and the medium term impacts and the way you're managing OpEx, right? You just alluded to some of that, right? There's some consultant costs, legal costs, et cetera. But over the medium term, as you, you know, put more resources behind shoring up and you know bolstering the R&D organisation. You know, how does that maybe change the calculus in terms of what you're thinking about, the medium term envelope and how that would impact unit economics against the top line pressures it's self-inflicted, right. But how does that sort of move downstream? Because again, there's a time bound question here, right? We're used to be producing a lot of profitability and margin expansion and free cash flow conversion. So you know, how do you kind of navigate those turns.

Question: Fatima Boolani - Citigroup - Analyst : We're eager to hear.

Question: Fatima Boolani - Citigroup - Analyst : On the $10 billion, you know, big hairy audacious goal five to seven years you still in the band? But yeah, let me ask you this question. What would need to happen for you to get hold to the five year time frame again so you'll eliminate that two year gap and get to the in this case in a good way low end of the range?

Question: Fatima Boolani - Citigroup - Analyst : On the $10 billion objective you know about a quarter of your business today is you know what I've characterised as some of your emerging products, right? They were born in the last three to five years, if even right, so, very new vintage. So when you think about the $10 billion target when you think about the monetization switches that are going to flip on after customers have had a taste of more modules under falcon flex under CCP and the expectation that you will be able to monetize this on the other side not now. When you look at the $10 billion objective at fiscal 31. Where does that mix go? And what do you think is going to be the star product because we know identity is really punching well above it with weight class right now. But you know in the future again if you have your druthers, what's that going to look like in terms of the biggest driving force? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 4:30PM, CRWD.OQ - CrowdStrike Holdings Inc at Citi Global TMT Conference

Question: Fatima Boolani - Citigroup - Analyst : 29 at IPO.

Question: Fatima Boolani - Citigroup - Analyst : Flexible future.

Question: Fatima Boolani - Citigroup - Analyst : There, thank you so much for really appreciate your candid perspectives. This is a fantastic conversation.