CrowdStrike Holdings Inc Q1 2025 Earnings Call Transcript

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

Question: Andrew Nowinski - Wells Fargo Securities, LLC - Analyst : Okay, thank you and congrats on another amazing quarter, particularly in a tough environment where every single one of your peers has put up pretty mediocre results this quarter. So you have so many interesting things going on with Cloud and Identity and SIEM but a lot of my questions will stay focused on the SIEM offering, which I think you've done a really nice job building out. It clearly has a lot of advantages over the legacy vendors like Splunk and QRadar, and now it seems like the SIEM market in general has been revitalized. So I'm wondering, how are you thinking about the opportunity with your SIEM solution going forward, and what are the -- what are you seeing in terms of Splunk and QRadar displacements, which are obviously some of the largest potential share owners? Thanks.

Question: Saket Kalia - Barclays Capital Inc - Analyst : Okay. Great. Hey George, Hey Burt, thanks for taking my question here and nice start to the year.

Question: Saket Kalia - Barclays Capital Inc - Analyst : Sure thing, George, maybe for you, I thought the AWS win that you announced publicly intra-quarter was interesting. And of course, you've talked about them as a key customer and partner for CrowdStrike in the past. Can you just dig into how you've maybe expanded that relationship, particularly around Cloud Security? I think you referenced it a little bit in your prepared remarks, but could you maybe flesh that out a little bit and also touch on how that's maybe setting CrowdStrike apart competitively in the cloud security market?

Question: Brian Essex - J.P. Morgan Securities LLC - Analyst : Hi, good afternoon, and thank you for taking the question and congrats from me as well on a nice set of results. George, I was wondering if you could maybe just broadly talk about the emerging products on the platform and now that they're becoming meaningful in scale. I think last year or last quarter you referenced that they're each kind of IPO-able segments in their own right. How often are you leading with individual solutions that are emerging solutions, whether it's LogScale or Identity or Cloud versus leading with the platform and pulling some of those emerging products onto the platform? Just wanted to get a sense of maybe how this go-to-market might be changing there. Thank you.

Question: Tal Liani - BofA Global Research - Analyst : Hi, guys. Two questions. First is SBC went up 40% and that's on the back of 28% increase last year. That's a material increase from previous quarters. Can you talk about stock-based compensation and what's the driver for this? And then second, on the results, the -- so for your platform sales, total pricing is going up because you can bundle in more and more components. But does it mean, for those who are selling point solutions, that pricing is coming down? The fact that you and others are driving platform, does it result in individual component pricing coming down? Can you talk about the pricing environment? Thanks.

Question: Hamza Fodderwala - Morgan Stanley & Co. LLC - Analyst : Hey, everyone. Good afternoon and very solid results and a strong start to the year. George, you spoke a little bit about public sector. There was an article last month about the State Department looking to really broaden their security vendors beyond Microsoft, which you mentioned in your prepared remarks. I'm curious, how is that conversation going with some of those federal agencies who are looking at CrowdStrike, and how is the pipeline trending, particularly ahead of the September fiscal year close in Fed?

Question: Matt Hedberg - RBC Capital Markets Wealth Management - Analyst : Great, guys, thanks for taking my question. I'll offer my congrats as well. Obviously, a difficult selling environment. You guys are doing really well. George, I had a question for you. You know, the success you had with Charlotte AI, I think you said 90% POV close rates, is great to hear. And I know it's still early, but I guess in the spirit of a customer's overall GenAI journey, one of these we're hearing is that that could potentially slow down deal cycles for the broader software landscape. I'm wondering, as your customers adopt your AI platform, maybe more specifically, Charlotte AI, are they seeing faster time to production for GenAI application? In other words, does it speed up a customer's GenAI journey?

Question: Fatima Boolani - Citi Investment Research - Analyst : Thank you for taking my questions. George, I'm going to ask you a very high-level question just with regards to the $10 billion ARR target. You've reemphasized it, you've reaffirmed it with a lot of confidence, and there's a lot of reasons to anticipate why that's going to be a very likely outcome. But I wanted to ask you, very specifically, what do you feel like will help your relative velocity in attaining that sort of bogey? So frankly, what would have to go really right for that outcome to be realized within three years versus five years? You know, appreciating that you haven't put a timeframe on it, and I can appreciate there's no shortage of product. You've seen so much momentum in Falcon Flex and a lot of the platform anecdotes that you -- platformization anecdotes, dare I say that, that you shared, but would love to kind of get your perspective on what could change your relative velocity to that ARR target?

Question: Gabriela Borges - Goldman Sachs & Company, Inc - Analyst : Hi, good afternoon and thank you for taking my question. George and Burt, I wanted to follow up on one of the earlier questions on AI and more specifically, when you talk to your customers and they start planning out their generative AI projects, how does that impact their cybersecurity plans? To what extent are you seeing scenarios where you may be seeing a pause in budget or maybe an acceleration in budget? And maybe as part of that, George, if you could just touch on -- help us understand the technical differences between protecting, call it a classic cloud workload versus a cloud workload that's running an LLM or connecting to an LLM. Thank you.

Question: Alex Henderson - Needham & Company Inc. - Analyst : Great. Thank you so much, You guys had an outstanding quarter here and in an environment where a lot of people are struggling. So what I was hoping you could talk to a little bit is what you're seeing as you're talking to CISOs, or you're talking to CEOs, C-suite type people, about what is causing their reticence to spend short term. I know you're gaining share and doing well, but many aren't, and I'm wondering if that's a function of their challenges in figuring out how they're going to implement AI and to what extent that's causing a slowdown in the decision-making process, or is it macro, or alternatively, is it they are determined what they're going to spend on and they're shifting money away from other things, including some security and some -- if you look at the results of some of the other players. So what is exactly going on in the field right now with the decision-making process?

Question: John DiFucci - Guggenheim Securities, LLC - Analyst : Thanks for taking my question. So George, you and your team have put up consistency in numbers we just haven't seen from anyone over what's been described as a challenging IT spending environment. And I'm talking about the last couple of years, especially this quarter. I think we understand how early on you expanded the definition and the scope of the market you address and also more recently, you did something similar in broadening your market influence to customers of all sizes. But if the backdrop remains the same, at least for the rest of this year, and it doesn't get better like a lot of people thought it would at the beginning of the year, is it more of the same for you? Or are there other levers that you can or need to pull to continue to put up the impressive numbers that you have?