CrowdStrike Holdings (NASDAQ:CRWD) is poised to disclose its third-quarter fiscal 2024 financial results after the market closes on November 28. The company foresees third-quarter revenues ranging between $775.4 million and $778 million, with the Zacks Consensus Estimate standing at $777.2 million—an impressive 33.8% surge from the previous year’s figure.
Anticipating non-GAAP earnings of approximately 74 cents per share, CrowdStrike aligns with the Zacks Consensus Estimate, signaling an 85% improvement compared to the year-ago quarter’s non-GAAP earnings of 40 cents per share. Notably, the company has consistently outperformed the Zacks Consensus Estimate in the last four quarters, boasting an average surprise of 20.1%.
Let’s delve into the factors influencing CrowdStrike’s upcoming announcement:
Solid Demand Driving Results
CrowdStrike’s third-quarter fiscal 2024 performance is expected to benefit from sustained robust demand for its products amid the thriving global security market. The rising number of individuals accessing employers’ networks has heightened the need for security, potentially boosting demand for CRWD’s products. A substantial pipeline of deals further supports this trend.
Substantial Subscription Revenue Growth
The third-quarter results are likely to showcase remarkable growth in subscription revenues, contributing significantly to the top line. The upswing in net new subscription customers is anticipated to act as a positive factor. Our estimates project Subscription revenues at $733.2 million, reflecting a noteworthy year-over-year improvement of 34%. Additionally, revenues from the Professional Services segment are expected to increase by 27.5% YoY to $42.7 million in the third quarter.
Strategic Collaboration with Amazon Web Services
CrowdStrike’s collaboration with Amazon Web Services (“AWS”) is expected to yield positive outcomes, with its products available on the AWS platform. The expansion in transaction volume through Amazon’s AWS Marketplace, coupled with growth in co-selling opportunities with AWS salesforce and increased adoption of AWS service integrations, likely contributed to CRWD’s earnings in the third quarter.
Expense Challenges
However, the company might face challenges stemming from heightened expenses related to enhancing sales and marketing capabilities and increased investments in research and development. These factors could potentially exert downward pressure on CrowdStrike’s bottom line for the fiscal third quarter.
In conclusion, while CrowdStrike anticipates favorable financial results driven by strong demand and strategic collaborations, investors should remain vigilant about the potential impact of increased expenses on the company’s overall performance. The third-quarter earnings release will provide a comprehensive insight into CrowdStrike’s fiscal health and its ability to navigate the evolving dynamics of the cybersecurity landscape.
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