It is always nice when a stock beats expectations. On Tuesday night Crowdstrike reported a stellar set of numbers. Their revenue grew 74%, thanks to an 82% increase in customers. Management expect revenue to grow by at least 50% in the next 12 months.
If you are unfamiliar with the company, here is a recap. Crowdstrike is an AI-powered cybersecurity company. They provide realtime protection to company data by monitoring all the computers/cellphones on a network.
The service is a premium-priced product, paid for on a subscription basis. In other words, clients pay a lot of money on an ongoing basis. What a brilliant model! In a recent interview with the Crowdstrike founder and CEO, he said that some companies skimp on security, get hacked and then call Crowdstrike to clean up the mess. From there, those companies are customers for life.
Each new customer gives Crowdstrike more information to analyse, improving the quality of their product and growing the moat between it and the competition. Think of Google vs Bing?
Crowdstrike is one of our higher risk, fringe holdings. If you have the stomach for volatility, it is something we could add to your portfolio.