UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in Its Charter)
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class of securities | Trading symbol(s) | Name of each national exchange and |
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Registrant’s telephone number, including area code: (
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ◻
Indicate by check mark whether the registrant has submitted electronically every interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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As of August 31, 2019, the number of shares of the registrant’s Class A common stock outstanding was
CROWDSTRIKE HOLDINGS, INC.
TABLE OF CONTENTS
2
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans and our objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "potentially," "estimate," "continue," "anticipate," "intend," "could," "would," "project," "plan," "expect" and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements.
These forward-looking statements include, but are not limited to, statements concerning the following:
o | our future financial performance, including our expectations regarding our revenue, cost of revenue, gross profit or gross margin, operating expenses (including changes in sales and marketing, research and development, and general and administrative expenses), and our ability to achieve, and maintain, future profitability; |
o | market acceptance of our cloud platform; |
o | the effects of increased competition in our markets and our ability to compete effectively; |
o | our ability to maintain the security and availability of our cloud platform; |
o | our ability to maintain and expand our customer base, including by attracting new customers; |
o | our ability to develop new solutions, or enhancements to our existing solutions, and bring them to market in a timely manner; |
o | anticipated trends, growth rates and challenges in our business and in the markets in which we operate; |
o | our business plan and our ability to effectively manage our growth and associated investments; |
o | beliefs and objectives for future operations; |
o | our relationships with third parties, including channel partners and technology alliance partners; |
o | our ability to maintain, protect and enhance our intellectual property rights; |
o | our ability to successfully defend litigation brought against us; |
o | our ability to successfully expand in our existing markets and into new markets; |
o | sufficiency of cash to meet cash needs for at least the next 12 months; |
o | our ability to expand internationally; |
o | our ability to comply with laws and regulations that currently apply or become applicable to our business both in the United States and internationally; |
o | our ability to implement, maintain, and improve our internal control over financial reporting; |
o | the attraction and retention of qualified employees and key personnel; and |
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o | the expected date of the expiration of the lock-up agreements entered into in connection with our initial public offering. |
These statements are based on our current plans, estimates and projections in light of information currently available to us. These forward-looking statements may be affected by risks, uncertainties and other factors discussed elsewhere in this Quarterly Report on Form 10-Q, including under “Risk Factors.” Furthermore, new risks and uncertainties emerge from time to time, and it is impossible for us to predict all risks and uncertainties or how they may affect us. If any of these risks or uncertainties occurs, our business, revenue and financial results could be harmed, and the trading price of our Class A common stock could decline. Forward-looking statements made in this Quarterly Report on Form 10-Q speak only as of the date on which such statements are made, and we undertake no obligation to update them in light of new information or future events, except as required by law.
4
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CrowdStrike Holdings, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
(unaudited)
| July 31, |
| January 31, | |||
| 2019 |
| 2019 | |||
Assets |
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Current assets: |
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Cash and cash equivalents | $ | | $ | | ||
Marketable securities |
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Accounts receivable, net of allowance for doubtful accounts of $ |
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Deferred contract acquisition costs, current |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Deferred contract acquisition costs, noncurrent |
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Goodwill |
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Intangible assets, net |
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Other assets |
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Total assets | $ | | $ | | ||
Liabilities, Redeemable Convertible Preferred Stock, and Stockholders’ Equity (Deficit) |
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Current liabilities: |
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Accounts payable | $ | | $ | | ||
Accrued expenses |
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Accrued payroll and benefits |
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Deferred revenue |
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Other current liabilities |
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Total current liabilities |
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Deferred revenue, noncurrent |
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Other liabilities, noncurrent |
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Total liabilities |
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Commitments and contingencies (Note 11) |
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Redeemable Convertible Preferred Stock |
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Redeemable convertible preferred stock, $ |
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Stockholders’ Equity (Deficit) |
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Preferred stock, $ | — | — | ||||
Common stock, $ | | |||||
Class A common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Accumulated other comprehensive income (loss) |
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Total stockholders’ equity (deficit) |
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Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit) | $ | | $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
CrowdStrike Holdings, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||
2019 |
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| 2019 |
| 2018 | ||||||
Revenue |
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Subscription | $ | | $ | | $ | | $ | | ||||
Professional services |
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Total revenue |
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Cost of revenue |
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Subscription |
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Professional services |
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Total cost of revenue |
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Gross profit |
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Operating expenses |
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Sales and marketing |
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Research and development |
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General and administrative |
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Total operating expenses |
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Loss from operations |
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Interest expense |
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Other expense, net |
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Loss before provision for income taxes |
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Provision for income taxes |
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Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Net loss per share attributable to Class A and Class B common stockholders, basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
6
CrowdStrike Holdings, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(in thousands)
(unaudited)
Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||
| 2019 |
| 2018 |
| 2019 |
| 2018 | |||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Other comprehensive loss: |
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Foreign currency translation adjustments |
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Unrealized loss on available-for-sale securities, net of tax |
| ( | ( | ( | ( | |||||||
Other comprehensive loss |
| ( |
| ( |
| ( |
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Total comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( |
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
CrowdStrike Holdings, Inc.
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Three Months Ended July 31, 2019 and 2018
(in thousands)
(unaudited)
Redeemable | Accumulated | ||||||||||||||||||||||
Convertible | Additional | Other | Total | ||||||||||||||||||||
Preferred Stock | Common Stock | Paid-in | Accumulated | Comprehensive | Stockholders' | ||||||||||||||||||
| Shares |
| Amount |
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| Shares |
| Amount |
| Capital |
| Deficit |
| Income (Loss) |
| Equity (Deficit) | |||||||
Balances at April 30, 2019 |
| | $ | | | $ | | $ | | $ | ( | $ | ( | $ | ( | ||||||||
Issuance of common stock upon initial public offering, net of underwriting discounts and issuance costs | — | — | | | | — | — | | |||||||||||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering | ( | ( | | | | — | — | | |||||||||||||||
Reclassification of redeemable convertible preferred stock warrant liability to additional paid-in capital upon initial public offering | — | — | — | — | | — | — | | |||||||||||||||
Net exercise of common stock warrants | — | — | | — | — | — | — | — | |||||||||||||||
Issuance of common stock upon exercise of options |
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Issuance of common stock related to early exercised options | — | — | | — | — | — | — | — | |||||||||||||||
Vesting of early exercised options |
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Stock-based compensation expense |
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Capitalized stock-based compensation |
| — | — | — | — | | — | — |
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Net loss |
| — | — | — | — | — | ( | — |
| ( | |||||||||||||
Other comprehensive loss |
| — | — | — | — | — | — | ( |
| ( | |||||||||||||
Balances at July 31, 2019 |
| — | $ | — | | $ | | $ | | $ | ( | $ | ( | $ | |
Redeemable | Accumulated | ||||||||||||||||||||||
Convertible | Additional | Other | Total | ||||||||||||||||||||
Preferred Stock | Common Stock |
| Paid-in |
| Accumulated |
| Comprehensive |
| Stockholders' | ||||||||||||||
| Shares |
| Amount |
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| Shares |
| Amount |
| Capital |
| Deficit |
| Income (Loss) |
| Deficit | |||||||
Balance at April 30, 2018 |
| | $ | | | $ | | $ | | $ | ( | $ | | $ | ( | ||||||||
Issuance of Series E redeemable convertible preferred stock, net of issuance costs of $ |
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Issuance of common stock upon exercise of options |
| — | — | | — | | — | — |
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Issuance of restricted stock awards |
| — | — | | — | — | — | — |
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Vesting of early exercised options |
| — | — | — | — | | — | — |
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Stock-based compensation expense |
| — | — | — | — | | — | — |
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Repurchase of stock options | — | — | — | — | ( | — | — | ( | |||||||||||||||
Net loss |
| — | — | — | — | — | ( | — |
| ( | |||||||||||||
Other comprehensive loss |
| — | — | — | — | — | — | ( |
| ( | |||||||||||||
Balance at July 31, 2018 |
| | $ | | | $ | | $ | | $ | ( | $ | | $ | ( |
The accompanying notes are an integral part of these condensed consolidated financial statements.
8
CrowdStrike Holdings, Inc.
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Six Months Ended July 31, 2019
(in thousands)
(unaudited)
Redeemable | Accumulated | ||||||||||||||||||||||
Convertible | Additional | Other | Total | ||||||||||||||||||||
Preferred Stock | Common Stock | Paid-in | Accumulated | Comprehensive | Stockholders' | ||||||||||||||||||
| Shares |
| Amount |
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| Shares |
| Amount |
| Capital |
| Deficit |
| Income (Loss) |
| Equity (Deficit) | |||||||
Balances at January 31, 2019 |
| | $ | | | $ | | $ | | $ | ( | $ | | $ | ( | ||||||||
Cumulative effect of accounting change |
| — | — | — | — | — | | — |
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Issuance of common stock upon initial public offering, net of underwriting discounts and issuance costs | — | — | | | | — | — | | |||||||||||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering | ( | ( | | | | — | — | | |||||||||||||||
Reclassification of redeemable convertible preferred stock warrant liability to additional paid-in capital upon initial public offering | — | — | — | — | | — | — | | |||||||||||||||
Net exercise of common stock warrants | — | — | | — | — | — | — | — | |||||||||||||||
Issuance of common stock upon exercise of options |
| — | — | | | | — | — |
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Issuance of common stock related to early exercised options | — | — | | — | — | — | — | — | |||||||||||||||
Vesting of early exercised options |
| — | — | — | — | | — | — |
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Stock-based compensation expense |
| — | — | — | — | | — | — |
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Capitalized stock-based compensation |
| — | — | — | — | | — | — |
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Net loss |
| — | — | — | — | — | ( | — |
| ( | |||||||||||||
Other comprehensive loss |
| — | — | — | — | — | — | ( |
| ( | |||||||||||||
Balances at July 31, 2019 |
| — | $ | — | | $ | | $ | | $ | ( | $ | ( | $ | |
Redeemable | Accumulated | ||||||||||||||||||||||
Convertible | Additional | Other | Total | ||||||||||||||||||||
Preferred Stock | Common Stock |
| Paid-in |
| Accumulated |
| Comprehensive |
| Stockholders' | ||||||||||||||
| Shares |
| Amount |
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| Shares |
| Amount |
| Capital |
| Deficit |
| Income (Loss) |
| Deficit | |||||||
Balance at January 31, 2018 |
| | $ | | | $ | | $ | | $ | ( | $ | | $ | ( | ||||||||
Cumulative effect of accounting change |
| — | — | — | — | | ( | — |
| — | |||||||||||||
Issuance of Series E redeemable convertible preferred stock, net of issuance costs of $ | | | — | — | — | — | — | — | |||||||||||||||
Issuance of common stock upon exercise of options |
| — | — | | — | | — | — |
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Issuance of common stock related to early exercise options |
| — | — | | — | — | — | — |
| — | |||||||||||||
Issuance of restricted stock awards |
| — | — | | — | — | — | — |
| — | |||||||||||||
Vesting of early exercised options |
| — | — | — | — | | — | — |
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Stock-based compensation expense |
| — | — | — | — | | — | — |
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Repurchase of stock options | — | — | — | — | ( | — | — | ( | |||||||||||||||
Net loss |
| — | — | — | — | — | ( | — |
| ( | |||||||||||||
Other comprehensive loss |
| — | — | — | — | — | — |