Shares of cybersecurity company CrowdStrike Holdings (CRWD 4.01%) jumped on Wednesday after the company reported strong financial results for its fiscal first quarter of 2025. As of 10:20 a.m. ET, CrowdStrike stock was up 5%.
Growing and profitable
In Q1, CrowdStrike generated revenue of $921 million, which was up 33% year over year and well ahead of guidance of $906 million. But it's not just Q1's growth that excites investors; it's also the outlook.
NASDAQ: CRWD
Key Data Points
CrowdStrike's management modestly raised its full-year revenue guidance to about $4 billion. This means that the company expects full-year revenue growth of roughly 31%. In other words, growth won't taper off much from Q1.
Finally, CrowdStrike had record free cash flow (a measure of profitability) of $322 million in Q1. This equates to a stellar 35% margin and shows investors why this business is a top dog in the cybersecurity space.
Can CrowdStrike keep it going?
There's good reason to believe that CrowdStrike's revenue growth will stay strong, at least for this year and a little beyond. As a subscription-software business, it has good visibility into the next year or so. Annual recurring revenue is growing at the same rate as quarterly revenue, which is good. And it has remaining performance obligations of $4.7 billion, up a stunning 42% year over year.
These performance obligations represent contracted money that should come in over time. Therefore, CrowdStrike's growth potential looks strong based on the business it already has. And given how many products it offers and how big the cybersecurity space is, it still has plenty of room for long-term growth as well.
