Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why CrowdStrike Stock Jumped Today

By Joe Tenebruso - Dec 3, 2020 at 1:50PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The cybersecurity leader is helping to defend the cloud -- and delivering handsome gains to investors along the way.

What happened 

Shares of CrowdStrike ( CRWD -5.88% ) climbed on Thursday, following the release of the cloud security specialist's strong third-quarter results. As of 1:10 p.m. EST, CrowdStrike's stock price was up more than 14%.

So what

CrowdStrike's revenue soared 86% year over year to $232.5 million, fueled by an 87% increase in subscription revenue, to $213.5 million. CrowdStrike added 1,186 net new subscription customers in the third quarter, bringing its total customer base to 8,416 as of the end of October. That's up 85% from the prior year.

A person is pointing towards a digital lock.

As more companies shift their operations to the cloud, demand for CrowdStrike's cybersecurity services is booming. Image source: Getty Images.

"CrowdStrike's robust growth at scale underscores our growing leadership in the Security Cloud category and the immense value we deliver to customers seeking to transform, consolidate, and fortify their security posture," CEO George Kurtz said in a press release.

Importantly, CrowdStrike's profit margins are improving as it scales its business. Its subscription gross margin expanded to 77%, up from 74% in the year-ago quarter. In turn, it was able to deliver an adjusted operating profit of $18.9 million, compared to a loss of $16.5 million in the prior-year period.

Now what

As more companies shift their operations to the cloud, demand for CrowdStrike's cybersecurity solutions will continue to grow. The cloud guardian helps to prevent costly data breaches by using artificial intelligence to secure mobile and other internet-connected devices. With cyberattacks becoming more sophisticated every day, CrowdStrike's protection services are set to become even more vital in the coming years.

 
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

CrowdStrike Holdings, Inc. Stock Quote
CrowdStrike Holdings, Inc.
CRWD
$197.05 (-5.88%) $-12.30

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
640%
 
S&P 500 Returns
139%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/03/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.