CrowdStrike displaces classic software from the market

CrowdStrike has posted excellent results for the second fiscal quarter of 2022. The company’s revenue grew by 70% year-on-year amid growth in new services and developments. Earnings per share were $ 0.11, beating market expectations of $ 0.09. The management of the company improved its annual outlook in connection with the entry of CrowdStrike into new adjacent markets by expanding its product portfolio with solutions in the cloud security and adding new developments such as XDR / identity to the line.

We like the business of the company. First, CrowdStrike is the market leader in data protection (EPP) and is gradually replacing traditional antivirus software vendors in market share. Second, teleworking is accelerating digital transformation by requiring more flexible cloud protections such as the CrowdStrike Falcon platform or the Zero Trust Assessment. Thirdly, the company’s product portfolio is actively growing and developing. More innovative and competitive designs such as the Humio are on the shelf. Our long-term CrowdStrike development model implies growth of the company’s operating margin by levels above 20%.

CrowdStrike was founded in 2011 by George Kurtz (CEO) to reinvent security for the cloud era in a new category called the Security Cloud. CRWD’s vision is to transform the IT security industry via the cloud just like CRM in 1999 (Salesforce), service management industry in 2004 (ServiceNow), and HR function in 2005 (Workday). The founders realized an inherent disadvantage where cyber attackers have an edge against traditional products and CRWD’s differentiation is the ability to turn this disadvantage into strength against adversaries through the network effects of crowdsourced data using its proprietary Threat Graph technology. CRWD leverages the network effects of crowdsourced data from its customer base applied to modern technologies such as AI/ML, cloud computing, and graph databases to detect threats and stop breaches. Hence, CRWD’s ethos of collect (data) once, reuse many (use cases). CRWD’s headquarters are in Sunnyvale, CA and there are 3,394 employees as of 1/31/2021.