CRWD earnings name for the interval ending March 31, 2024.
Picture supply: The Motley Idiot.
CrowdStrike (CRWD -1.01%)
Q1 2025 Earnings Name
Jun 04, 2024, 5:00 p.m. ET
Contents:
- Ready Remarks
- Questions and Solutions
- Name Individuals
Ready Remarks:
Operator
Good day, everybody, and thanks for standing by. Welcome to CrowdStrike fiscal first quarter 2025 outcomes convention name. Presently, all contributors are in a listen-only mode. After the audio system’ presentation, there might be a question-and-answer session.
[Operator instructions] Please be suggested that at present’s convention is being recorded. I’d now like handy it over to the vp of investor relations, Maria Riley. Please go forward.
Maria Riley — Vice President, Investor Relations
Good afternoon, and thanks on your participation at present. With me on the decision are George Kurtz, president and chief govt officer and co-founder of CrowdStrike; and Burt Podbere, chief monetary officer. Earlier than we get began, I want to be aware that sure statements made throughout this name that aren’t historic details, together with these relating to our future plans, targets, progress, together with projections and anticipated efficiency, together with our outlook for the second quarter and financial yr 2025 and any assumptions for fiscal intervals past which are forward-looking statements throughout the which means of the Non-public Securities Litigation Reform Act of 1995. These forward-looking statements characterize our outlook solely as of the date of this name.
Whereas we imagine any forward-looking statements we make are affordable, precise outcomes may differ materially as a result of the statements are based mostly on present expectations and are topic to dangers and uncertainties. We don’t undertake and expressly disclaim any obligation to replace or alter our forward-looking statements, whether or not because of new data, future occasions, or in any other case. Additional data on these and different elements that would have an effect on the corporate’s monetary outcomes is included within the filings we make with the SEC sometimes, together with the part titled Threat Elements within the firm’s quarterly and annual studies. Moreover, except in any other case said, excluding income, all monetary measures disclosed on this name might be non-GAAP.
A dialogue of why we use non-GAAP monetary measures and a reconciliation schedule displaying GAAP versus non-GAAP outcomes is at the moment accessible in our earnings press launch which can be discovered on our Investor Relations web site at ir.crowdstrike.com or on our Type 8-Okay filed with the SEC at present. With that, I’ll now flip the decision over to George.
George Kurtz — Co-Founder, President, and Chief Government Officer
Thanks, Maria, and thanks all for becoming a member of us for our first earnings name of fiscal yr 2025. We begin the yr from a place of momentum and distinctive power, outperforming our guided metrics. Our AI-native platform wins at scale each geography, each market section, and each answer space. CrowdStrike delivered a file Q1: file Q1 internet new ARR of $212 million, rising 22% yr over yr; file ending ARR of $3.65 billion, rising 33% yr over yr; file subscription gross margin of over 80%; and file free money circulation of $322 million, reaching 35% of income and a free money circulation Rule of 68, making us the one cybersecurity vendor of scale delivering this degree of progress and profitability.
We achieved all of those data whereas carefully managing each P&L line delivering important year-over-year working leverage and our fifth consecutive quarter of GAAP profitability. Whilst we proceed investing in progress, we’re including gross sales capability, investing in our market-leading model, and accelerating innovation whereas firmly on the trail to $10 billion in ending ARR. The foundational theme underpinning CrowdStrike’s outcomes is the ability of the Falcon platform to consolidate cybersecurity at scale. That is coupled with the market’s unequivocal want for a single AI-powered software program platform consolidator.
We’re touchdown with extra modules than ever earlier than. The variety of offers involving cloud, identification, or Falcon Subsequent-Gen SIEM modules greater than doubled yr over yr, and we’re closing a few of our largest offers ever. We’re persistently listening to that clients wish to companion with us as they consolidate, standardizing their cybersecurity future on the Falcon platform and investing their belief in CrowdStrike as cybersecurity’s North Star. Let me clarify why.
We constructed the fitting structure from the beginning, the {industry}’s lightest weight, best to put in sensor embedded with AI, no system reboot required a single AI-native platform console, not disparate sew collectively or siloed multi-platforms. Our structure constructed from the beginning, with what I check with as gold-plated plumbing, permits the Falcon platform to gracefully land, retrieve knowledge as soon as, after which slight infinite safety, IT, knowledge, and compliance capabilities with none friction. That is the definition of a real platform, and our platform technique from inception continues to ship the outcomes. Offers with eight-plus modules grew 95% yr over yr.
Our 28 modules are best-in-class on a stand-alone foundation as rated by relevant main {industry} analysts, but mixed and natively constructed into single Falcon platform, our answer modules work even higher collectively, unlocking buyer worth traits of a virtuous flywheel. The sum of platform adoption is even better than the person elements. The Falcon platform’s differentiated structure creates a technological aggressive moat round our potential to be cybersecurity’s premier platform consolidator. That is one thing you’ll be able to’t purchase or repair later.
You will need to construct it proper from the beginning. Our platform structure delivers the next distinctive buyer outcomes. By means of consolidation, the Falcon platform delivers sooner and simpler cybersecurity than ever earlier than, our AI-native platform is persistently evolving to shut the hole between detection and response, compressing alert to decision time scales from days and hours to seconds and actual time. And now with Charlotte AI, clients are experiencing extra platform utility at sooner speeds, shrinking hours of their safety workdays into minutes.
Risk searching is supercharged. Response and remediation are revolutionized. The AI-powered inventory is not a imaginative and prescient, it is a actuality. We stand out in our potential to safe numerous assault providers with the {industry}’s highest safety ranges, spanning cloud, knowledge, machine, identification, third-party sources, and past, natively alerting in a single place and robotically responding throughout the platform at machine velocity.
There is not any console, hide-and-go-seek, no separate platforms with their very own UI languages, no multi-agent bloat, and no sew knowledge silos. By means of consolidation, the Falcon platform delivers excessive value financial savings. The extra modules clients undertake, the extra value financial savings they notice. The Falcon platform consolidates level and pseudo platform distributors throughout level cloud safety fragments like CWP, CSPM, ASPM, ESPM, and CIEM merchandise, identification safety, SIEM, menace intel feeds, knowledge safety and VLP, vulnerability administration, assault service administration, compliance, endpoint administration suite and legacy AV and next-gen AV and EDR.
As an {industry}, organizations are shopping for many guarantees, Sadly, they’re left with wasteful shelfware, level product studying curves, and options that fail to ship end-to-end outcomes. The longtime cybersecurity adage of protection and depth has led to a brand new phenomenon, costly depth consolidating on the Falcon platform reverses the ever-increasing value curve. A current IDC report quantifies CrowdStrike excessive value financial savings for each greenback invested in Falcon Options, our clients acknowledge $6 of value financial savings. Our clients got here to us asking for brand new methods to undertake the Falcon platform even sooner.
As a substitute of buying Falcon module by module, we developed the Falcon Flex subscription mannequin. Falcon Flex clients get pleasure from the perfect costs for the merchandise they need at present and tomorrow whereas eliminating procurement and authorized cycles for module use. The result for CrowdStrike is even broader platform adoption. Not like distributors who pedal wasteful ELAs, our clients make the most of what they buy as a result of whenever you purchase what you need and wish, whenever you wish to want it, utilization is pure.
We’re not reclassifying, recounting, or repositioning present enterprise to concoct perceived platform worth. When a platform delivers actual worth, you do not have to offer it away. Within the three quarters since we have constructed the Falcon Flex program, the purchasers who’ve subscribed to this new licensing mannequin characterize over $500 million in deal worth, rising our share of buyer pockets whereas consolidating and simplifying their safety. Making use of IDC’s evaluation would indicate Falcon Flex has assisted clients in saving greater than $3 billion that may have been spent on different merchandise.
Now, that is excessive value financial savings and indicative of the platform momentum we’re seeing with new and present clients. By means of consolidation, the Falcon platform delivers innovation to unravel tomorrow’s cybersecurity in addition to broader IP and knowledge issues. Our place as cybersecurity’s consolidation platform retains CrowdStrike innovating to steer the {industry} ahead. This focus has allowed us to ship game-changing merchandise at fast tempo.
Inside months of our Bionic acquisition, we absolutely built-in ASPM into our Falcon Cloud Safety Suite. Over the previous few months, we introduced our LogScale Subsequent-Gen SIEM into the console of all of our clients, feeding their utilization of Falcon to interchange legacy SIEMs. And extra lately, following yet one more main Microsoft breach in CIS’ Cyber Security Overview Board’s findings, we acquired an outpouring of requests from the marketplace for assist. We determined sufficient is sufficient, there is a widespread disaster of confidence amongst safety and IT groups throughout the Microsoft safety buyer base.
On the request of organizations saddled with Microsoft E5 licensing, we delivered Falcon for Defender, a platform on ramp to assist organizations of all sizes begin using Falcon to safe their Microsoft Defender utilization. Falcon for Defender is delivered through the CrowdStrike sensor encompassing our industry-leading OverWatch threat-hunting providers in addition to mission-critical reporting to assist safety groups do their job. With Falcon for Defender organizations utilizing Microsoft now have what we name V-Squared, validation, and verification, a lacking third-party safety layer for his or her safety packages. And with our sensor already deployed on buyer methods, we’re dropping anchor on the beachfront actual property to not solely rework cybersecurity but additionally cease breaches.
Suggestions has been overwhelmingly optimistic. CISAs now have the power to cut back monoculture threat from solely utilizing Microsoft merchandise and cloud providers. Our innovation continues at breakneck tempo multiplying the explanations for the market to consolidate on Falcon. 1000’s of organizations are consolidating on the Falcon platform.
There are a couple of that stood out from the quarter: a seven-figure deal in a Fortune 100 healthcare firm who’s utilizing Microsoft and skilled a breach. Our industry-leading IR workforce deployed greater than 46,000 sensors in days, stopping the adversary, restarting enterprise, and importantly, holding this enterprise out of promotional vendor fanfare. This buyer instantly adopted Falcon Full Id, Falcon Cloud Safety, LogScale Subsequent-Gen SIEM, and Charlotte AI. Along with eradicating Microsoft safety merchandise, they had been in a position to transfer off their vulnerability administration vendor and their legacy SIEM-2.
The consolidation consequence a 75% discount in agent footprint by consolidating to our single agent and a 700% enchancment in imply time to detect and reply taking common alert triage occasions from four-plus hours all the way down to minutes. We stopped the breach, displacing greater than three distributors alongside the way in which, and now this buyer experiences not solely decrease TCO but additionally cybersecurity outcomes they hadn’t thought potential. A seven-figure deal in a big Center Jap energy and utilities supplier that skilled many incidents utilizing a regional level product endpoint vendor. These incidents had been every preventable with the Falcon platform’s AI defenses.
Standardizing the Falcon platform, this buyer adopted CrowdStrike for endpoint, identification, cloud, and next-gen SIEM, consolidating 5 safety distributors all the way down to only one in a couple of brief months throughout the deal cycle. Lastly, our give attention to fixing cybersecurity and IT use instances impressed a multinational providers buyer headquartered in Japan to consolidate on the CrowdStrike in a seven-figure growth deal, buying 4 further modules, they efficiently eradicated TM, a legacy AV vendor, and their vulnerability administration supplier. This deal illustrates present clients taking the chance to additional consolidate on Falcon past simply safety. We’ve the platform, knowledge gravity, and belief to make consolidation turnkey for safety and IT groups alike.
These offers spotlight the tempo and scale of Falcon consolidation. It is not on a PowerPoint slide, it is inside a single console with a single sensor and delivered on a single platform. What we see are prospects and clients utilizing consolidation as a chance to remodel buying and selling expense and depth for cybersecurity that is higher, sooner, and cheaper. Consolidation is not only a phenomenon taking place with finish clients.
It is also a precedence embraced and prioritized by our companions, too. In our MSSP enterprise, considered one of our fastest-growing segments, companions are coming to us emigrate their clients off legacy and substandard level merchandise in addition to multi-platform distributors. In a big seven-figure deal eSentire, and industry-leading MSSP chosen the Falcon platform emigrate a whole bunch of Carbon Black clients in mass, representing an extra of almost 0.5 million endpoints. This can be a prime instance of an industry-leading MDR that developed their very own award-winning providers on the Falcon platform, consolidating on CrowdStrike.
In our expanded partnership with Mandiant and Google Cloud introduced on the RSA convention, Mandiant is migrating its Mandiant Managed Protection MDR clients to the Falcon platform. Recognizing our market management and the necessity to ship providers on the perfect expertise platform, CrowdStrike is the pure option to migrate their clients off legacy AV and different level merchandise. In our channel ecosystem at massive, we’re seeing companions deprioritizing different distributors on their line playing cards to consolidate their time, head depend, and go-to-market give attention to CrowdStrike. Our high 50 companions in each geo are rising and telling us they’re doing much less and fewer with different distributors, as an alternative rising their focus and enterprise outcomes on Falcon.
Companions are a key driver of market consolidation, each representing our expertise to their finish clients and likewise consolidating their efforts away from anecdotal declining level characteristic distributors. The facility to consolidate on a single platform requires having the fitting applied sciences on the proper time, delivered on the fitting platform. Our investments in hyper-growth answer companies proceed to ship market-leading capabilities and file outcomes. This is our Q1 shade on cloud safety, identification safety, and LogScale Subsequent-Gen SIEM in addition to a number of platform innovation areas.
Cloud utilization is reaching unprecedented highs. That is largely pushed by the AI revolution of the previous few quarters. At present, each firm is or is rapidly turning into an AI firm. Each CISO, CIO, and board member I communicate with is experimenting with utilizing AI in new methods.
Everyone knows that AI is transformative, and this transformation is occurring in private and non-private clouds. The cloud is foundational expertise for constructing AI fashions, operationalizing AI, and integrating AI into present applied sciences. The one approach to safely harness the transformative nature of AI is thru best-in-class safety that operates on the velocity and scale of AI constructed natively with AI with CrowdStrike. As hyperscalers print outstanding outcomes, as NVIDIA continues to amaze, and as AI {hardware} spend reaches Gold Rush ranges, estimated to be north of $60 billion within the final 12 months, CrowdStrike is on the epicenter of securing the workloads driving the AI revolution for the following dialog.
Jensen Huang, founder and CEO of NVIDIA, lately validated this, stating in our Q1 partnership announcement that “pairing NVIDIA accelerated computing and Generative AI with CrowdStrike cybersecurity may give enterprises unprecedented visibility and to threats to assist them higher defend their companies.” And this is the reason {industry} leaders throughout each vertical, together with the GenAI corporations themselves, are selecting Falcon Cloud Safety to safe their heterogeneous cloud setting, consolidating a number of level merchandise on the Falcon platform. Here’s a lighthouse instance. One of many world’s main hyperscalers grew their adoption of the Falcon platform, standardizing on the Falcon cloud safety in an eight-figure deal. In a public press launch, this buyer and companion extolled the unified nature of our safety platform and their potential to consolidate a number of cloud safety level merchandise on Falcon cloud safety.
Our joint go-to-market partnership has advanced to give attention to Falcon Cloud safety the place CrowdStrike rises above different distributors to allow safe cloud consumption. Driving our cloud safety buyer wins is the market embracing our runtime-centric cloud detection and response imaginative and prescient that focuses on real-time cloud visibility and safety, providing options like cloud assault path evaluation, API-based aspect scanning, and most lately built-in ASPM and CVR, units us aside as the one answer available in the market that spans code software to the infrastructure on which every part runs. Our newest acquisition of Movement furthers our aggressive moat, including within the {industry}’s solely runtime DSPM, securing knowledge each at relaxation and in movement. Falcon Cloud Safety has surpassed a backyard of unicorns, decacorns, and legacy distributors as one of many largest cloud safety companies available in the market.
As of Q1, Falcon has been chosen by 62 of the Fortune 100 as their cloud safety supplier of selection. CrowdStrike pioneered the creation of the Id detection and response class. Our identification safety module continues to be the one single-agent answer available on the market, giving us a serious aggressive benefit. Our lively listing experience has advanced to now assist more and more common cloud identification options equivalent to Microsoft Entra ID, previously often known as Azure AD, giving us the power to assist numerous clients wherever their identities reside.
Our sustained give attention to identification safety continues to pay dividends, not solely successful offers but additionally with {industry} analysts, the place CrowdStrike was named the Total Chief in KuppingerCole’s inaugural ITDR Compass. A key buyer went from the quarter features a seven-figure cope with a big healthcare supplier who’s caught in a Broadcom contract and more and more being pushed towards a multi-platform {hardware} supplier’s patchwork merchandise. Our Id Risk Safety module was a sport changer for this buyer, deploying us to greater than 100,000 gadgets and permitting us to interchange these different two distributors. Id safety led to an 85% higher imply time to reply for identity-based assaults and motivated this buyer’s important cyber transformation.
One of many answer areas I am most enthusiastic about is our LogScale Subsequent-Gen SIEM enterprise. There is definitely no scarcity of market exercise within the SIEM area the place consolidation is afoot with M&A exercise impacting Splunk and extra lately, Exabeam and QRadar, extra occurred within the SIEM market over the previous few months than in a long time. Within the wake of this consolidation, the demand setting is true. Every of those consolidation strikes create rapid alternative zones.
Organizations are iconic classically questioning their legacy SIEM selections and on the lookout for new, higher, and cheaper methods to run their inventory within the AI period. With CrowdStrike representing greater than 80% of the info going into at present’s SIEM, we’re naturally positioned to disrupt consolidate, and chart the way forward for the SIEM market. It is because our LogScale Subsequent-Gen SIEM is already natively within the Falcon platform, already ingesting, visualizing, and actioning all first-party CrowdStrike knowledge for all of our clients. Whereas different distributors should purchase their manner into this market, buying legacy expertise, our flag is already firmly planted and flying.
Our objective is to win the hearts and minds of shoppers by way of superior expertise and outcomes, not ELAs, compelled migrations, and traps. This is why we’re successful. We’ve the fitting expertise. Our next-gen SIEM instantly solves one of many largest and most expensive SIEM challenges ingestion of knowledge.
CrowdStrike knowledge natively resides within the platform, requiring zero transportation prices, zero storage value, and 0 configuration. We’ve additionally made it simple to ingest knowledge from third-party sources. As soon as the info is within the platform, customers profit from our head-turning incident workbench, offering curated alert visualization delivering on the guarantees of XDR like by no means seen earlier than. Our next-gen SIEM is created for safety customers by safety customers, making operating a cybersecurity program simpler and extra data-driven.
And paired with Charlotte AI, going from an concept to motion, context to conquest, and naturally, detection to response is supercharged for the AI period. And our current companion symposium in Asia and Europe, we acquired standing ovations with viewers commenting that next-gen SIEM is our largest industry-changing innovation. We’ve the content material with over 500 integrations we welcome knowledge from all sources to name the Falcon platform dwelling. Whereas many opponents are closed and complex in what knowledge they ingest, we’re open, the melting pot of cyber and IT knowledge.
Our ecosystem is a proxy for the cybersecurity market at massive. For years, we have collaborated carefully with ISVs of all types from start-ups and innovators in our Falcon Fund portfolio to {industry} stalwarts throughout cybersecurity within the broader IT market. With a whole bunch of native vendor-specific connectors in addition to a generic login gesture, bringing knowledge into next-gen SIEM is simpler and sooner than ever earlier than. And as soon as the info is in, cybersecurity experiences are enriched with the Falcon platform illustrating alert-specific, assault surface-specific, and campaign-specific occasions coupled with automated response by way of Fusion SOAR playbooks and Charlotte AI actions.
So far, Fusion SOAR is utilized by 47% of our high 5,000 clients. We’ve created greater than 135,000 customized workflows, processing greater than 155 billion indicators weekly to automate actions throughout the Falcon platform and third-party merchandise. We’ve the fitting providers, serving to organizations transfer into their next-gen SIEM as a partner-led alternative. At present’s SIEMs had been put in, configured, and oftentimes managed by companions.
Companions see the place the puck goes and have approached CrowdStrike to construct their next-gen SIEM practices. These practices span knowledge governance, knowledge motion, dashboard configuration, and automation response creation in addition to managed SIEM providers. System integrators like Deloitte, EY, HCLTech in addition to SIEM-specific companions like Internet Builder are main the motion with CrowdStrike as their next-gen SIEM platform of selection. This is an instance of a noteworthy buyer win.
The International 2000 manufacturing and machine system conglomerate, with greater than 100,000 staff left Splunk for LogScale Subsequent-Gen SIEM in an eight-figure deal. Along with Accenture, we had been in a position to efficiently and swiftly migrate quite a few knowledge sources in addition to ongoing SIEM administration to the Falcon platform, delivering the end result of consolidation value financial savings in addition to longer knowledge retention and sooner alert response occasions. We’ve the expertise platform, the content material, the companions, the purchasers, and the native knowledge gravity to remodel the SIEM market, and it is taking place proper now. Outdoors of our cloud identification and next-gen SIEM hypergrowth companies, new platform innovation areas are rapidly chickening out.
Demand for every of those merchandise is exceeding our expectation, pushed by each the modern nature of our expertise but additionally secular consolidation market elements and frustration with legacy incumbents. First, knowledge safety. Frustration with legacy DLP stays at a fever pitch or logging into these merchandise as akin to taking a time machine again to the ’90s. In a bit greater than 1 / 4, we bought our knowledge safety module to a number of hundred clients, lots of that are Fortune 1000 accounts delivering outcomes indicative of a hyper-growth start-up.
We win as a result of we scratched the consolidation itch, delivering the compliance requirements with out something new to deploy and handle. Information safety, coupled with Movement’s DSPM are necessary elements of our potential to natively safe AI as properly. And with knowledge turning into more and more necessary for AI mannequin improvement, clients need greater than again within the catastrophe restoration for the info. Information safety is laying the groundwork for an additional multibillion adjoining Falcon market.
Subsequent, Falcon for IT. The will to maneuver away from endpoint administration level merchandise is pronounced and exceeding our expectations. Organizations want to Falcon to ship enterprise search, patching deployment, machine well being, and extra, all from the identical sensor. It is a very logical add-on and our pipeline is already within the eight figures since delivery this module a bit greater than 1 / 4 in the past.
And lastly, Charlotte AI, each CISO is keen to see their staff turn out to be extra productive. Each CISO desires their cybersecurity to be sooner. The productiveness good points are actual and the advantages of creating cybersecurity simpler, conversational, and immediate multiply the cybersecurity outcomes the Falcon platform creates. Whereas nonetheless early, our POV shut fee is near 90% and reflecting pleasure for Charlotte AI.
Regardless of every of those options areas being younger within the Falcon nest, the suggestions from prospects, clients, and companions present us we’re on the fitting path for these applied sciences to be significant progress drivers and aggressive differentiators. CrowdStrike’s innovation engine is simply another excuse why clients trust in Falcon as cybersecurity’s platform consolidator for at present and tomorrow. In closing, I am excited concerning the consolidation CrowdStrike is driving available in the market. The enterprise outcomes we’re delivering and most significantly, the Falcon platform’s sign impression of stopping breaches.
Over the previous 12 months, our industry-leading incident responders in our companion community use Falcon to reply to hundreds of breaches, cementing CrowdStrike because the {industry}’s incident response authority. These engagements typically convert to internet new Falcon clients. Delivering a Q1 just like the one we’re asserting at present is a powerful reflection not solely of the technological superiority of the Falcon platform but additionally of the fervour, the tenacity, and the mission centered from the easiest workforce in cybersecurity. Whereas the expertise conflict is ongoing, CrowdStrike stays a profession vacation spot.
Many distributors take nice satisfaction in Finest Place to Work designations. I would prefer to level to a determine that dimensionalizing CrowdStrike as cybersecurity could be very Finest Place to Work. Over the previous 5 quarters, we acquired greater than 687,000 purposes from people who wish to work for CrowdStrike. These professionals determined that CrowdStrike professionals determined that CrowdStrike can be the best venue to construct a profession.
In hiring low single-digit hundreds of those people, our acceptance fee is low, a decrease acceptance fee than to each Ivy League establishment. It is figures like this one which ship a transparent message to me, to CrowdStrikers, to clients, the companions, the prospect, to the cybersecurity neighborhood, and to the market at massive, the easiest expertise builds the easiest cybersecurity, and we’ve ample runway forward of us to revolutionize, innovate and, in fact, consolidate this yr and properly into the longer term. I am going to now flip the decision over to Burt for our monetary updates. Thanks.
Burt W. Podbere — Chief Monetary Officer
Thanks, George, and good afternoon, everybody. As a fast reminder, except in any other case famous, all numbers, besides income talked about throughout my remarks at present are non-GAAP. Moreover, the outcomes we’re reporting at present embody the acquisition of Movement Safety, which closed throughout the quarter and was de minimis to income and ARR. CrowdStrike delivered an distinctive begin to the fiscal yr, pushed by sturdy execution and elevated platform adoption, as clients prioritize their cybersecurity budgets round consolidation on the Falcon platform, driving larger offers and elevated pockets share.
We’ve demonstrated a constant observe file of execution, profitably scaling the enterprise to new heights. In Q1, we achieved internet new ARR of $212 million up 22% yr over yr, bringing ending ARR to $3.65 billion, up 33% over final yr. Demand within the quarter was broad-based throughout the platform. Our sturdy win charges remained in line with the prior quarter, and we constructed a file Q2 pipeline.
As George mentioned, the Falcon platform’s distinctive potential to consolidate a number of distributors together with the early success of our Falcon Flex program drove larger consolidation offers within the quarter. Clients are embracing CrowdStrike’s platform technique greater than ever as evidenced by the variety of offers with eight or extra modules, which grew 95% over Q1 of final yr. Subscription clients with 5, six, and 7 or extra modules grew to 65% and 28% of subscription clients, respectively, and the variety of offers involving cloud, identification, or Falcon Subsequent-Gen SIEM modules greater than doubled yr over yr. Moreover, our dollar-based gross and internet retention charges had been in line with our expectations as we’re executing properly throughout touchdown, retaining, and increasing with our clients.
Transferring to the P&L. Whole income grew 33% over Q1 of final yr to succeed in $921.0 million. Subscription income progress accelerated to 34% over Q1 of final yr to succeed in $872.2 million. Skilled providers income was $48.9 million representing 18% year-over-year progress.
The geographic mixture of first-quarter income consisted of roughly 68% from the U.S. and 32% from worldwide geographies. File complete gross margin of 78% elevated by 26 foundation factors yr over yr. File subscription gross margin of 80% elevated 32 foundation factors over the prior yr, pushed by investments in knowledge heart and workload optimization and a constant pricing setting.
Whole non-GAAP working bills within the first quarter had been $522.5 million or 57% of income in comparison with 61% of income within the prior yr. As deliberate, in Q1, we elevated our tempo of hiring, rising complete head depend by 15% yr over yr as we spend money on scaling the enterprise to $10 billion in ending ARR and seize the huge alternatives forward of us. Within the first quarter, non-GAAP working earnings grew 72% yr over yr to succeed in $198.7 million, and working margin elevated by 5 share factors yr over yr to succeed in 22%. We, as soon as once more, delivered GAAP profitability, which grew to $42.8 million, up considerably over Q1 of final yr.
Non-GAAP internet earnings attributable to CrowdStrike grew to $231.7 million or $0.93 on a diluted per-share foundation. Money and money equivalents grew to a file $3.70 billion and free money circulation grew 42% over Q1 of final yr to succeed in a file $322.5 million or 35% of income rising to realize a Rule of 68 on a free money circulation foundation. Earlier than I transfer to our outlook, I would like to supply a couple of modeling notes. First, we’re inspired by the momentum we see throughout the enterprise and happy by our sturdy execution to start out the fiscal yr. Whereas the macro setting stays difficult, the distinctive capabilities and knowledge gravity of the Falcon platform, coupled with our Falcon Flex program are driving bigger platform deal sizes, persistently sturdy win charges, and file ranges of pipeline for the yr.
With that in thoughts, we proceed to keep up a constant and prudent method to our outlook and assumptions amid a macro setting that continues to be difficult. Whereas we didn’t particularly information to internet new ARR, our internet new ARR year-over-year progress assumptions for the second quarter of the fiscal yr are not less than double digits, as much as the low teenagers. And second, we’re sustaining our free money circulation margin goal of 31% to 33% of income for the complete fiscal yr 2025 and count on Q1 to Q2 seasonality much like final yr. Transferring to our outlook.
For the second quarter of FY ’25, we count on complete income to be within the vary of $958.3 million to $961.2 million reflecting a year-over-year progress fee of 31%. We count on non-GAAP earnings from operations to be within the vary of $208.3 million to $210.5 million, and non-GAAP internet earnings attributable to CrowdStrike to be within the vary of $245.7 million to $247.8 million. We count on diluted non-GAAP internet earnings per share attributable to CrowdStrike to be roughly $0.98 to $0.99, using a weighted common share depend of roughly 250 million shares on a diluted foundation. We’re elevating our steering for the complete fiscal yr 2025.
We at the moment count on complete income to be within the vary of $3,976.3 million to $4010.7 million, reflecting a progress fee of 30% to 31% over the prior fiscal yr. Non-GAAP earnings from operations is predicted to be between $890.1 million and $916.5 million. We count on fiscal 2025 non-GAAP internet earnings attributable to CrowdStrike to be between $985.6 million and $1,012 million. Using roughly 251 million weighted common shares on a diluted foundation, we count on non-GAAP internet earnings per share attributable to CrowdStrike to be within the vary of $3.93 to $4.03.
George and I’ll now take your questions.
Questions & Solutions:
Operator
Thanks. [Operator instructions] Please stand by whereas we compile the Q&A roster. And our first query comes from the road of Andrew Nowinski with Wells Fargo. Please proceed.
Andy Nowinski — Wells Fargo Securities — Analyst
OK. Thanks, and congrats on one other superb quarter, significantly in a troublesome setting the place each single considered one of your friends has put up fairly mediocre outcomes this quarter. So, you’ve got so many attention-grabbing issues occurring with cloud and identification and SIEM. However my query will keep centered on the SIEM providing, which I feel you’ve got achieved a very nice job constructing out.
It clearly has lots of benefits over the legacy distributors like Splunk and QRadar. And now, it looks as if the SIEM market on the whole has been revitalized. So, I am questioning, how are you fascinated with the chance together with your SIEM answer going ahead? And what are the — what are you seeing by way of Splunk and QRadar displacements, that are clearly a few of the largest potential share homeowners? Thanks.
George Kurtz — Co-Founder, President, and Chief Government Officer
Thanks, Andy. So, after we have a look at this market, as I’ve stated in my ready remarks, we have seen extra motion within the final yr than 10 years. And I feel lots of the varied elements in play available in the market, M&A, and numerous partnerships and the like have actually contributed to a broad curiosity and adoption of our expertise. Should you have a look at what we have achieved and what we have talked about for some time frame, 80%, 85% of the info that goes right into a SIEM comes from the endpoints themselves.
So, having this kind of functionality natively constructed into our platform now offers us knowledge gravity. And we have all of our clients enabled for next-gen SIEM and that is one of many issues I actually wish to reinforce all of our clients are actually enabled. Now, it turns into a gross sales movement to have the ability to convert them into next-gen SIEM clients. And given the motion within the market, we have many, many shoppers reaching out dissatisfied with their present distributors and likewise thinking about leveraging a very built-in answer with the info they have already got.
So, we expect this can be a huge, huge alternative for us. And given what we’re doing within the area and the improvements we’re driving, significantly with AI and the info we’ve, we expect it’ll be a many multiyear journey of alternative for us in a really antiquated area and one which’s ripe for disruption.
Operator
Thanks. One second for our subsequent query. And it comes from Saket Kalia with Barclays. Please proceed.
Saket Kalia — Barclays — Analyst
OK, nice. Hey, George. Hey, Burt. Thanks for taking my query right here, and good begin to the yr.
George Kurtz — Co-Founder, President, and Chief Government Officer
Positive factor.
Saket Kalia — Barclays — Analyst
George, possibly for you. , I believed the AWS win that you simply introduced publicly intra-quarter was attention-grabbing. And naturally, you’ve got talked about them as a key buyer and companion for CrowdStrike previously. Are you able to simply dig into how you’ve got possibly expanded that relationship, significantly round cloud safety? I feel you referenced it a bit bit in your ready remarks, however may you possibly flesh that out a bit bit? And in addition, contact on how that is possibly setting CrowdStrike aside competitively within the cloud safety market.
George Kurtz — Co-Founder, President, and Chief Government Officer
Positive. And after we have a look at our cloud choices, as we have talked about previously, we have constructed an unimaginable portfolio of capabilities from code to cloud and every part in between, whether or not that is agent-agentless entitle administration, and many others. So, I feel it is actually reflective of what we have constructed and the technological benefits that our choices have for our clients. Once you have a look at somebody like AWS, they’re clearly on the lookout for the perfect cloud expertise available in the market, and we imagine we’ve it.
And it is unbelievable to have the ability to proceed to develop our relationship there. This was additionally a Falcon Flex deal. And I feel, once more, reflective of the truth that clients wish to do extra with us, they wish to purchase extra and we’re giving them the chance to do that. And actually, second, whereas we’re on the decision, we really simply received one other award Finest Cloud Safety Answer by SC Europe adopted up by one other 5 wins.
So, as I’ve stated for a few years, and you have heard me say it, the perfect structure, the perfect expertise begins from the start, and it may possibly’t be stitched collectively. And I feel these wins actually spotlight what we have been in a position to do and the way we have been in a position to ship on what we have constructed since I began the corporate.
Operator
Thanks. One second for our subsequent query, please. And it’s from the road of Brian Essex with JPMorgan. Please proceed.
Brian Essex — JPMorgan Chase and Firm — Analyst
Hello. Good afternoon, and thanks for taking the query. And congrats from me as properly on a pleasant set of outcomes. George, I used to be questioning when you may possibly simply broadly speak concerning the rising merchandise on the platform.
And now that they are turning into significant in scale, I feel final yr, you form of — or final quarter, you referenced that they are every form of IP-able segments in their very own proper. How typically are you main with particular person options which are rising options, whether or not it is LogScale or identification or cloud versus main with the platform and pulling a few of these rising merchandise onto the platform? Simply wish to get a way of possibly how the go-to-market is perhaps altering there. Thanks.
George Kurtz — Co-Founder, President, and Chief Government Officer
Yeah, it is a good query. And I imply, I feel on the whole, we’re main with the platform, however possibly to focus in on the guts of your query, which is we’ve numerous use instances for the platform. So, we could have a buyer that involves us and says, “Hey, we’re utilizing a legacy SIEM. We would like one thing higher.” Proper? We could have a brand new prospect that claims the identical factor.
We’re utilizing legacy SIEM, and we wish to discover what CrowdStrike can provide us. We’ve loads of new clients that come to us and say, “Hey, we’d like a greater answer in our cloud as a result of what we’ve just isn’t working or does not give us the complete spectrum of capabilities.” So, we will land with one thing particular to that buyer’s use case. And that is — lots of occasions they’re on the lookout for one thing that they should remedy instantly. And naturally, we’re promoting the worth of the platform.
So, whether or not it is an present buyer or a brand new one, we’re centered on delivering the complete worth of the platform however fixing their use instances at present and into the longer term and clearly consolidating on what they’ve in place by way of legacy. You heard a few of the unimaginable stats and delivering extra worth at a decrease value.
Operator
Thanks. One second for our subsequent query, please. And it comes from the road of Tal Liani with Financial institution of America. Please proceed.
Tal Liani — Financial institution of America Merrill Lynch — Analyst
Hello, guys. Two questions. First is SBC went up 40%, and that is on the again of 28% improve final yr. That is a fabric improve from earlier quarters.
Are you able to discuss stock-based compensation? And what is the driver for this? After which second, on the outcomes. So, on your platform gross sales, complete pricing goes up as a result of you’ll be able to bundle in increasingly elements. However does it imply for individuals who are promoting level options that pricing is coming down? The truth that you and others are driving platform, does it end in particular person element pricing coming down? Are you able to speak concerning the pricing setting? Thanks.
Burt W. Podbere — Chief Monetary Officer
Thanks Tal. Hopefully, you’ll be able to hear me.
Tal Liani — Financial institution of America Merrill Lynch — Analyst
I can hear you. Are you able to hear me?
Burt W. Podbere — Chief Monetary Officer
Yep, I can hear you. Thanks. So, let’s discuss SBC. So, first, as I take into consideration SBC, I take into consideration dilution, proper? SBC in and of itself actually does not let you know an entire lot till you get into dilution or till you have a look at EPS.
So, for us, dilution, as I’ve said many occasions, we’re round 3% for the yr, and that is properly inside our — by way of our expectations. When it comes to the pricing setting, the pricing setting for us is — we’re in a constant space for ourselves. And the way it impacts different level options, what you’ll be able to see by our outcomes, the place — when individuals wish to consolidate with us individuals wish to really go to at least one single platform, one single agent, one single console. These are — all these issues mixed collectively, these are the issues which are making us win.
So, as I take into consideration the pricing setting, I take into consideration a bonus to Crowd given our single platform given the truth that we’ve 28 modules to select from.
Operator
Thanks. One second for our subsequent query, please. And it’s from Hamza Fodderwala with Morgan Stanley.
Hamza Fodderwala — Morgan Stanley — Analyst
Hey, everybody, good afternoon, and really stable outcomes and a powerful begin to the yr. George, you spoke a bit bit about public sector. There was an article final month concerning the State Division trying to actually broaden their safety distributors past Microsoft, which you talked about in your ready remarks. I am curious how is that dialog going with a few of these federal businesses who’re CrowdStrike.
And the way is the pipeline trending significantly forward of the September fiscal yr closing fed?
George Kurtz — Co-Founder, President, and Chief Government Officer
Properly, after we take into consideration the federal market, clearly, the shopping for cycles occurred largely within the third quarter for them, however we proceed to keep up our momentum and achieve momentum in these areas. Lots of the challenges that we have seen through the years from organizations outdoors of the general public sector proceed to plague the federal government. And whenever you have a look at the extra finances that is being launched into these governments given cybersecurity’s significance, we expect we will play a significant half in these alternatives. So, from our perspective, we proceed to realize and, I feel, ship applied sciences.
And now, when you have a look at next-gen SIEM, we expect there is a huge alternative within the federal area for our merchandise.
Operator
Thanks. One second for our subsequent query, please. And it’s from the road of Matt Hedberg with RBC.
Matt Hedberg — RBC Capital Markets — Analyst
Nice, guys. Thanks for taking my query. I provide my congrats as properly. Clearly, a troublesome promoting setting, you guys are doing rather well.
George, I had a query for you. The success you had with Charlotte AI, I feel you stated 90% POV shut charges is nice to listen to. I do know it is nonetheless early, however I assume within the spirit of a buyer’s total GenAI journey, one of many issues we’re listening to is that that would probably decelerate deal cycles for broader software program — the broader software program panorama. I am questioning, as your clients undertake your AI platform, possibly extra particularly Charlotte AI, are they seeing sooner time to manufacturing for GenAI software? In different phrases, does it velocity up a buyer’s GenAI journey?
George Kurtz — Co-Founder, President, and Chief Government Officer
Sure. I feel what we’re seeing is that clients are actually embracing the truth that we will cut back their operational workload for his or her inventory analysts. We are able to take hours of mundane entrance work and switch it into minutes. And never solely reply questions with the collective knowledge and data that CrowdStrike has developed over the various years but additionally drive automation.
We talked concerning the Falcon Fusion or expertise in-built. So, after they have a look at what we have constructed and the way we will save time, and the way we will drive AI automation into an AI-native SoC, I feel that is actually necessary for them. And total, I feel it is a unbelievable expertise. And as I discussed, we received a couple of different awards, whereas we had been on the decision, we really received Finest AI class for SC Awards particular to Charlotte.
So, we’re delivering on our guarantees, and that is actual expertise within the fingers of shoppers at present.
Operator
Thanks. One second for our subsequent query. From Fatima Boolani with Citi. Please proceed.
Fatima Boolani — Citi — Analyst
Thanks for taking my questions. George, I will ask you a really high-level query simply almost about the $10 billion ARR goal. You have reemphasized it, you’ve got reaffirmed it with lots of confidence, and there is lots of causes anticipate why that is going to be a really probably consequence. However I needed to ask you very particularly — what do you are feeling like will assist your relative velocity achieve that form of bogey? So, frankly, what must go actually proper for that consequence to be realized inside three years versus 5 years, appreciating that you have not put a timeframe on it.
And I can admire there is no scarcity of product. You have seen a lot momentum in Falcon Flex and lots of the platform anecdotes that — platformization anecdotes, dare I say that, that you simply shared. However would like to form of get your perspective on what may change your relative velocity to that ARR goal.
George Kurtz — Co-Founder, President, and Chief Government Officer
Positive. I feel there’s most likely two key factors there, after which I am going to see if Burt desires to chime in. Once we have a look at our potential to consolidate, and I talked about within the name, Falcon Flex, I feel is a sport changer for lots of shoppers, shopping for extra, shopping for larger, leveraging the platform and also you see velocity of adoption utilizing Falcon Flex. So, actually enthusiastic about that and what it’ll imply for CrowdStrike.
The second piece, once more, as I talked about in my ready remarks, is that next-gen SIEM is natively in-built. So, fairly than sending knowledge out some other place and paying for the transport prices and all of the complexity round that, the majority of the use instances and the info that is generated that goes right into a SIEM is already within the platform of selection for patrons, and we see that being a significant alternative for us to huge market alternative. After which different issues like knowledge safety. I talked about that.
That’s an {industry} or expertise that is ripe for disruption. It is the definition of legacy. And we have a unbelievable product round it and mix that with Falcon for IT, leveraging the single-agent structure to do extra than simply safety these are all significant drivers for progress. Some other feedback, Burt, on that?
Burt W. Podbere — Chief Monetary Officer
Yeah. Thanks, George. So, one of many issues that we talked about at Falcon was the $10 billion ARR quantity in 5, seven years. And together with that, we give an illustrative instance of a few of the issues that can get us aside from what George simply talked about by way of TAM.
We talked about cloud being round in that very same timeframe, $2.5 billion to $3 billion. We talked about identification being $1 billion to $1.5 billion. We talked about next-gen SIEM being $1 billion to $1.5 billion. So, you begin including up these numbers and also you get increasingly confidence by way of with the ability to attain that quantity.
That is how we give it some thought internally.
Operator
Thanks. One second for our subsequent query, please. And it’s from Gabriela Borges with Goldman Sachs. Please proceed.
Gabriela Borges — Goldman Sachs — Analyst
Hello. Good afternoon. Thanks for taking my query. George and Burt, I needed to comply with up on one of many earlier questions on AI.
And extra particularly, whenever you speak to your clients, and so they begin planning out the Generative AI tasks, how does that impression the kind of securities plans? To what extent are you seeing eventualities the place chances are you’ll be seeing a pause in finances or possibly an acceleration in finances? And possibly as a part of that, George, when you may simply contact on, assist us perceive the technical variations between defending, name it, a basic cloud workload versus a cloud workload that is operating in LLM or connecting to an LLM? Thanks.
George Kurtz — Co-Founder, President, and Chief Government Officer
Positive. So, we see the chance rising. And quite a few years in the past, we talked concerning the cloud alternative. We thought that was underrepresented by a few of the market researchers.
And now, after we take into consideration the proliferation of recent {hardware}, simply have a look at how a lot new {hardware} has been procured during the last six to eight months, proper? Loads of that’s going towards generative AI workloads. And you’ve got seen the bulletins with NVIDIA. These workloads proceed to be one thing that must be secured and might be, I feel, an enormous alternative for CrowdStrike, given what we have constructed and the truth that not solely can we let you know what could also be misconfigured however our cloud workload safety is admittedly is a trademark of what we do at CrowdStrike, and it is offering actual prevention capabilities into these workloads, which persistently come beneath assault. So, that is the way in which I’d have a look at it, as an enormous alternative for us, and we have spent many, a few years defending cloud workloads and we have tailored that into defending Gen AI workloads.
And offering further data on how these workloads run and the way they should be protected. So, huge alternative for us at present and sooner or later.
Operator
Thanks. One second for our subsequent query, please. And it’s from Alex Henderson with Needham. Please proceed.
Alex Henderson — Needham and Firm — Analyst
Nice. Thanks a lot. You guys had an impressive quarter right here and in an setting the place lots of people are struggling. So, what I hoped you may speak to a bit bit is what you are seeing as you are speaking to CISOs, you are speaking to CEOs, C-suite-type individuals about what’s inflicting their reticence to spend brief time period.
I do know you are gaining share and doing properly, however many aren’t. And I am questioning if that is a operate of their challenges in determining how they are going to implement AI and to what extent that is inflicting a slowdown in decision-making course of, or is it macro? Or alternatively, is it they’re decided what they are going to spend on and so they’re shifting cash away from different issues, together with some safety and a few — when you have a look at the outcomes of a few of the different gamers? So, what is strictly occurring within the discipline proper now with the decision-making course of?
George Kurtz — Co-Founder, President, and Chief Government Officer
Positive. Properly, what we have seen, and Burt talked about within the ready remarks, is that clients want to consolidate and get monetary savings on CrowdStrike. And on the identical time, Alex, as we talked about, it is nonetheless a difficult macro setting. However I feel the outcomes you are seeing from us is the truth that the consolidation applied sciences and platform that we’re delivering is working.
We’re offering extra for our clients and consolidating different spend that they’ve, and so they’re taking that share of pockets and placing it with CrowdStrike from different distributors. And we gave you some, I feel, actually attention-grabbing stats round that. That is the straightforward model of it. We have the fitting expertise we have the power to cut back their prices.
We have a companion community, which is delivering huge worth for us. And whenever you put all of it collectively, sure, it is difficult. However when you’ve obtained the fitting answer with the fitting choices, we expect we may be very profitable. And I feel the quarter that you simply simply noticed is reflective of what we have been saying for a very long time and what we delivered.
Operator
Thanks. One second for our final query in queue. And it comes from the road of John DiFucci with Guggenheim Securities.
John DiFucci — Guggenheim Companions — Analyst
Thanks. Thanks for taking my query. So, George, you and your workforce have put a consistency in numbers. We simply have not seen from anybody over what’s been described as a difficult IT spending setting, and I am speaking concerning the final couple of years, particularly this quarter, I feel we perceive how early on you expanded the definition and the scope of the market you handle.
And in addition, extra lately, you probably did one thing related in broadening your market affect to clients of all sizes. But when the backdrop stays the identical not less than for the remainder of this yr and it does not get higher like lots of people thought it might at first of the yr, is it extra of the identical for you? Or are there different levers you can or want to drag to proceed to place up the spectacular numbers that you’ve?
George Kurtz — Co-Founder, President, and Chief Government Officer
Positive. So, thanks, John. I feel you stated it proper. Burt and I and the remainder of the workforce give attention to consistency and delivering worth to our clients.
If we will present the fitting expertise and remedy use instances and extra importantly, take heed to them, when you have a look at Falcon Flex, which I talked about, which we’re actually excited and I do know goes to proceed to drive outcomes for us. That was an consequence of listening to our clients. We really labored with a number of clients on placing that collectively. Shopping for it, how they need it, the way in which they need it, decreasing friction within the procurement cycle.
So, that is what we will give attention to. And I feel I am going to go away you with if we deal with the shopper, the remaining takes care of itself, and that is, once more, a trademark of what we attempt to do at CrowdStrike and what Burt and I are centered on each day.
Operator
And thanks. With that, I’ll conclude the Q&A session, and we’ll go it again to George Kurtz for his closing feedback.
George Kurtz — Co-Founder, President, and Chief Government Officer
Thanks a lot for becoming a member of our name, and we stay up for seeing you subsequent quarter. Be secure.
Operator
[Operator signoff]
Period: 0 minutes
Name contributors:
Maria Riley — Vice President, Investor Relations
George Kurtz — Co-Founder, President, and Chief Government Officer
Burt W. Podbere — Chief Monetary Officer
Andy Nowinski — Wells Fargo Securities — Analyst
Saket Kalia — Barclays — Analyst
Brian Essex — JPMorgan Chase and Firm — Analyst
Tal Liani — Financial institution of America Merrill Lynch — Analyst
Burt Podbere — Chief Monetary Officer
Hamza Fodderwala — Morgan Stanley — Analyst
Matt Hedberg — RBC Capital Markets — Analyst
Fatima Boolani — Citi — Analyst
Gabriela Borges — Goldman Sachs — Analyst
Alex Henderson — Needham and Firm — Analyst
John DiFucci — Guggenheim Companions — Analyst
