Updates: CRWD - Cutting Through The Noise – EDR Is Slowing Down But Non-EDR Is Saving The Day
Summary
- It's clear that CRWD's core EDR business is slowing down more than what the headline numbers suggest.
- It seems as though the new strategy for EDR/XDR, announced earlier in the year, might be winning more customers, but revenue growth is suffering due to the aggressive pricing.
- However, its non-EDR lines of business are offsetting this slowdown with tremendous growth. In this report, we dive into some deep analysis to support this view.
- We also review CRWD's non-EDR business - cloud, identity, and LogScale, its next-gen SIEM.
2Q24 Overview
CRWD comfortably beat the growth and margin guidance for 2Q24. The company have also impressed investors with an incrementally more positive outlook for 3Q24 and FY24. CRWD grew revenue 37% YoY to $732m, which was $10m greater than guidance, and equates to 200 bps of unexpected growth. This translates to annualized QoQ growth rate of 23%, which is solid given the economic environment. However, going into 2Q24, the bar was set quite low, equating to a guided annualized QoQ growth of just 17%. We’re unsure whether this was because of sandbagging or that management were genuinely uncertain about the initial success of the new strategy involving changes in pricing, SMB GTM, and the channel. For a deep dive on CRWD’s new strategy, check out our 3-part publication released in April and May of this year.
