After hitting an all-time high of nearly $300 per share earlier this year, shares of CrowdStrike (CRWD 2.30%) have slid sharply recently. Trading at about $225 headed into the company's earnings report later this week, the stock is approximately down 25% from its all-time high.
Can tech company's upcoming earnings report help revitalize interest in the stock? Or could the fast-growing cybersecurity specialist's financial performance underwhelm?
Ahead of CrowdStrike's earnings report on Wednesday, here's a preview of some of the key items investors may want to check on.
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Revenue growth
One of the most important numbers for investors to watch will be CrowdStrike's revenue growth. After growing total revenue 74% year over year in fiscal 2021, growth has moderated this year. In both the first and second quarters of fiscal 2022, CrowdStrike's revenue increased 70%.
Analysts, on average, expect CrowdStrike to report revenue of about $364 million (the high end of management's guidance for the period), translating to 56% growth. This expected slowdown comes as CrowdStrike is up against a tough comparison, when revenue increased 86% year over year to $232.5 million. If revenue growth slows this much, it could spook some investors. So investors should hope that CrowdStrike handily beats analysts' average estimate for the top-line figure.
New subscription customers
Investors should also pay close attention to the company's momentum with subscription customers. CrowdStrike added a record 1,660 net new subscription customers during fiscal Q2, up from 1,524 customer additions in the first quarter of fiscal 2022.
"The success of our platform strategy and our growing brand leadership have led to a groundswell of customers turning to CrowdStrike as their trusted security platform of record," said CrowdStrike co-founder and CEO George Kurtz in the company's fiscal second-quarter of earnings release. Based on this confidence from management, investors should hope for net new customers to be similarly robust in fiscal Q3.
Module adoption
Finally, investors should check on CrowdStrike's module adoption metrics. Every quarter, management typically reports the percentage of subscription customers that have adopted four or more, five or more, and six or more modules. With each module essentially being a separate revenue stream, the greater adoption the better. In fiscal Q2, 66%, 53%, and 29% of CrowdStrike's subscription customer base had adopted four or more, five or more, and six or more modules, respectively.
Investors should look for all three of these important metrics to increase. A nice boost to the last metric -- customers who have adopted six or more modules -- would be particularly encouraging. A large number of customers with six or more modules would suggest that the company is growing its footprint with its "stickiest" customers.
CrowdStrike reports its fiscal third-quarter results after market close on Wednesday, Dec. 1.
