CrowdStrike's business model

We are investors in the cybersecurity industry through CrowdStrike, but Palo Alto Networks is their most significant competitor. The latter just posted some decent results with revenue up 15% year-on-year to $2.3 billion. Profit dipped slightly as the company poured more into R&D and operations.

The business was started back in 2005 by Nir Zuk, a former engineer at Check Point and Netscreen. He felt firewalls at the time were stuck in the past, so he went off and built a better one. Their strategy of bolt-on acquisitions keeps them competitive, though the trade-off is occasionally clunky integration.

CrowdStrike, our preferred stock in the sector, is a pure-play cloud-native company with much faster revenue growth and better operating leverage. Their Falcon platform is the gold standard in endpoint security, and it's rapidly expanding into adjacent categories like identity protection and cloud workload security.