Crowdstrike Holdings Inc Q1 2020 Earnings Call Transcript

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

Question: Heather Bellini - Goldman Sachs - Analyst : Great. Thank you so much, gentlemen, for taking my question and congratulations on your first quarter out of the gate. I wanted to follow-up on some of the comments you made about the ultimate expansion and things like IT ops and APM, I'm just wondering given just trying to think outside of the endpoint market as you referenced, how do you think you're positioned in that market versus the competition and just if you could share with us kind of is this kind of the customers kind of driving you into that market and, again, just share with us how you feel like your position to start taking share on that market over time? Thank you.

Question: Heather Bellini - Goldman Sachs - Analyst : Great. Thank you so much.

Question: Sterling Auty - JP Morgan - Analyst : Yes. Thanks. Hi, guys. Wonder if you could give us an update on how your partnerships are developing, especially with partners like Dell?

Question: Sterling Auty - JP Morgan - Analyst : Got you. And then one follow up, in terms of the module adoption for investors that are newer, what's the most popular modules that you see within the ones that get upsold once a customer comes on?

Question: Sterling Auty - JP Morgan - Analyst : Great. Thank you.

Question: Saket Kalia - Barclays - Analyst : Hey, guys. Thanks for taking my questions here. First, maybe for you Burt, we spoke about from the different modules in your prepared remarks, but can you talk about some of the different packages out there like Falcon Pro, Falcon Enterprise and of course, Complete? Maybe just qualitatively, what you're seeing from a high level in terms of adoption across some of those different packages or bundles that you offer?

Question: Saket Kalia - Barclays - Analyst : Got it.

Question: Saket Kalia - Barclays - Analyst : Got it. Got it. Maybe just to stay with you, George, you brought up the CrowdStrike store quickly in your prepared remarks. Realizing it's early, can we just talk a little bit about the pipeline of potential partners that you can work with there and maybe some broad brushes on, again, realizing it's early, how you sort of envision some of the commercial terms as those partners leverage some of the CrowdStrike data that you're able to collect?

Question: Saket Kalia - Barclays - Analyst : Very helpful guys. Thanks very much.

Question: Rachel Lauren - Credit Suisse - Analyst : Hi, this is Rachel Lauren on for [Brad]. Congrats on the quarter and it's really great seeing the outlook. I just wanted to ask, are you seeing Windows 10 adoption as an opportunity as customers reevaluate endpoint security and are you seeing more interest for Microsoft Defender ATP?

Question: Rachel Lauren - Credit Suisse - Analyst : Got you. Thank you. That's helpful. And I have a quick follow up. You guys reported a really strong net retention number, and I wanted to know, kind of are you seeing more adoption in terms of increasing endpoints or is that more coming from increasing module adoption?

Question: Rachel Lauren - Credit Suisse - Analyst : Got you. Thank you very much. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JULY 18, 2019 / 9:00PM, CRWD.OQ - Q1 2020 Crowdstrike Holdings Inc Earnings Call

Question: John Difucci - Jefferies - Analyst : Thank you. I have a question for George and as well for Burt. So, George, Burt pointed out that every incremental product the customers buys improves margins, and that makes a lot of sense because they all work off that foundation that you talked about, the graph database and the lightweight endpoint. And you pointed out 47% at the end of the last year or the fiscal year up from 30% as you have four or more products. And I know you said that the trend continues. Can you give us any more on that, because I happen to think that it's not just about the improved margins. It's also the stickiness. As you know, you've worked at other endpoint vendors too. The stickiness of endpoint is something that investors look at and they question how sticky is it going to be. But you're much more than that. The more you are much more than that, the more sticky I think you're going to be. So, can you give us any more color around that better than 47%?

Question: John Difucci - Jefferies - Analyst : Okay, okay, great. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JULY 18, 2019 / 9:00PM, CRWD.OQ - Q1 2020 Crowdstrike Holdings Inc Earnings Call And, Burt, I think Tal mentioned about the guidance being the surprise here. As you know, from the S1, we had to look at what the numbers for the quarter would be. And you actually did a little better than that. But the real surprise here is that the guidance, which is much better than where we were anyway. And I think most people, adding almost 10 percentage points of growth to revenue for the year. And we know how that works. So, I guess, the question is, I mean, you got two weeks left to this quarter. You have insight into this quarter and obviously, you got it for that, but the pipeline. I mean, I guess, that's reflective of that. So, can you give us a little more color around the pipeline and what you're seeing as far as momentum in the market right now?

Question: John Difucci - Jefferies - Analyst : Great. Okay. Thanks. And nice job, guys.

Question: Matt Hedberg - RBC Capital Markets - Analyst : Hey, guys. Thanks for taking my question. I see we're running a little late. So, I'll try to keep it to one. I can have multiple later, but well done in your first quarter. I wanted to ask the question about module a little different way. Burt, can you provide some color on the level of catch of multiple products for new customers, you don't have to disclose it, but I'm wondering if you kind of help us out versus the trends that your -- or understanding a lot of your products have been introduced in the last couple of years. But kind of curious if new customers are coming in at a higher rate than maybe you'll expected as well? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JULY 18, 2019 / 9:00PM, CRWD.OQ - Q1 2020 Crowdstrike Holdings Inc Earnings Call

Question: Matt Hedberg - RBC Capital Markets - Analyst : Great. Thanks a lot, guys.

Question: Andrew Nowinski - Piper Jaffrey - Analyst : Great. Thank you. And congrats on the nice start. So, I just wanted to follow up on your comment about how malware is running circles around the fossilized vendor solutions that are in the market. Has the recent news related to Symantec created enough disruption so that you're noticing and improvement in your win rates, particularly over Symantec?

Question: Andrew Nowinski - Piper Jaffrey - Analyst : Okay. Thanks. Keep up the good work, guys.

Question: Terry Tillman - SunTrust - Analyst : Yes. Thank you, gentlemen and congrats as well in the IPO and the strong results. Maybe, Burt, my question for you is we're just looking at our models that are now updating and post the final results for 1Q and then the guidance. How do we think about seasonality from a standpoint of some of the inputs like new customers as we drive our IRR numbers throughout the year? Is your business kind of still not at a point where there is a lot of seasonality and things just continue to ramp each quarter, or any comments around seasonality? Thank you.

Question: Terry Tillman - SunTrust - Analyst : Thanks.

Question: Terry Tillman - SunTrust - Analyst : Does it make a difference from a hiring perspective? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JULY 18, 2019 / 9:00PM, CRWD.OQ - Q1 2020 Crowdstrike Holdings Inc Earnings Call

Question: Terry Tillman - SunTrust - Analyst : Great. Thank you.

Question: Alex Henderson - Needham - Analyst : Thank you very much. I have a question I wanted to ask that was, the only thing that came back at me with any dissidents when we've been talking about the Company over the last couple of months, and really the question was around your relationship with Splunk. As I understand, the threat graph, a big piece of the customization of the threat graph was around the time variable and making sure that you had very accurate understanding of when things happened in order to anticipate the roll out of attacks. To the extent that you're tied in with Splunk, how important is that relationship with Splunk given your time based relationship or is there some things that you're getting from the logs that you're just not picking up otherwise? Thanks. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JULY 18, 2019 / 9:00PM, CRWD.OQ - Q1 2020 Crowdstrike Holdings Inc Earnings Call

Question: Shaul Eyal - Oppenheimer - Analyst : Thank you. Good afternoon, gentlemen. Congrats on a strong set of results as well as the outlook. George, thanks for your three customer examples in a number of verticals you provided us with earlier in the call. Of this 443 net new different customers, can you talk to us broadly about the average size of customers? Was it SMB? Was it midmarket? Or maybe high end enterprise? Just some color along these lines. Thank you.