Cloud Stocks: Analysis Of Crowdstrike’s Humio Acquisition

 

According to a recent Mordor Intelligence report, the global endpoint detection and response (EDR) market is expected to grow from $1.81 billion in 2020 to $6.90 billion by 2026, at a CAGR of over 25%. The global pandemic has accelerated the need for endpoint security services and enterprises are increasingly adopting more decentralized and edge-based security techniques. Endpoint security players like CrowdStrike (Nasdaq: CRWD) are benefitting from this adoption.

CrowdStrike’s Financials

Last month, CrowdStrike reported its fourth quarter results that surpassed market expectations. Revenues grew an impressive 74% over the year to $264.9 million, ahead of the Street’s forecast of $250.55 million. On an adjusted basis, EPS was $0.13, compared with the market’s forecast of an EPS of $0.09.

Subscription revenues grew 77% to $244.7 million. Professional services for the quarter grew from $13.6 million last year to $20.3 million.

Annual Recurring Revenue (ARR) increased 75% to $1.05 billion, of which $142.7 million was net new ARR added in the quarter.

Among key metrics, it added 1,480 net new subscription customers to end with 9,896 subscription customers. Its subscription customers that have adopted four or more cloud modules increased to 63% and those who have adopted five or more cloud modules increased to over 47%.

For the fiscal year, CrowdStrike announced revenues of $874.4 million, growing 82%, and an EPS of $0.27.

For the current quarter, CrowdStrike expects revenue of $287.8-$292.1 million with an adjusted net income per share of $0.05-$0.06. It expects to end the year with revenues of $1.31-$1.32 billion and a net income of $0.27-$0.30 per share. Analysts were forecasting revenues of $291.38 million for the quarter with a net income of $0.06 per share and revenues of $1.32 billion for the year with a net income of $0.30 per share.

CrowdStrike’s Expanding Products

Recently, CrowdStrike announced the acquisition of England-based Humio for $400 million. Founded in 2016 by Christian Hvitved and Kresten Krab Thorup, Humio enables data aggregation, exploration, reporting, and analysis from several sources that ingest data instantly. It provides customers with a cost-competitive log management and analysis solution, while requiring less hardware and engineering resources. The acquisition will allow CrowdStrike to expand its eXtended Detection and Response (XDR) capabilities by ingesting and correlating data from logs, applications, and feeds to provide actionable insights as well as real-time protection.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations and risk appetite. This article expresses my own opinions based on my own ...

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