I'd be a lot more concerned with the QoQ revenue growth if CRWD hadn't delivered the guide I was looking for. Yes, Q2 dropped below 10% for the first time at 9.7%. However, I'd expect it to get back to 11-12% in Q3.
As stated in the recap, I would have liked higher RPO growth too. Not to make excuses, but there's a chance it's being driven by shorter contract lengths due to the uncertain economy (future commitments dropped for DDOG as well). When asked specifically about RPO on the call, the CFO pointed toward net new ARR growth as the better measure of the underlying business. At 14.5% QoQ growth and a record $218M, net new ARR certainly looks healthier. Having literally owned CRWD from the day of IPO, I have no reason not to trust management on this one.
Here's the exchange:
Analyst Gregg Moskowitz
"Congrats on a very good ARR performance. I did want to ask about RPO, which historically has risen by double digits sequentially in Q2 period, although this quarter went up mid-single digits. Were there any changes to average duration? Is this perhaps somewhat reflective of the increased levels of approval that you noted earlier? Or is there anything else that you would call out?"
CFO Burt Podbere
"Gregg, thanks for the question. So really, I think the focus really is on net new. That really -- net new ARR, that's really the one that tells the health of the business as opposed to RPO or as opposed to billings or what have you. And we're excited about the fact that we're going in with a record pipeline.
We've just posted the strongest net new ARR quarter in company history. So I think that when you think about reaching a record $218 million in net new with any outsized deals, you're really showing strong health in the business. And so overall, we're just really pleased with the results. And that's the metric that we zoom in on. That's the metric that our whole company is rallying around, and that's the focus for us."
Excellent recap as always. Another strong execution by an elite company. Regarding price action AH, at EV/S fw 20x it's priced to perfection. I will be adding on weakness if it gets to 14-15x
Have you deployed any of your cash yet SN? CRWD not popping seems like a potential opportunity b/c the report seems strong.
I bought a tiny amount of CRWD today but had a full allocation already. I'm trying not to get too overweight in anything right now.
I've added a little to S ($26-$27 range) and MDB ($325) recently as well. We'll see how they do today.
Thoughts on low QoQ revenue growth and RPO growth?
I'd be a lot more concerned with the QoQ revenue growth if CRWD hadn't delivered the guide I was looking for. Yes, Q2 dropped below 10% for the first time at 9.7%. However, I'd expect it to get back to 11-12% in Q3.
As stated in the recap, I would have liked higher RPO growth too. Not to make excuses, but there's a chance it's being driven by shorter contract lengths due to the uncertain economy (future commitments dropped for DDOG as well). When asked specifically about RPO on the call, the CFO pointed toward net new ARR growth as the better measure of the underlying business. At 14.5% QoQ growth and a record $218M, net new ARR certainly looks healthier. Having literally owned CRWD from the day of IPO, I have no reason not to trust management on this one.
Here's the exchange:
Analyst Gregg Moskowitz
"Congrats on a very good ARR performance. I did want to ask about RPO, which historically has risen by double digits sequentially in Q2 period, although this quarter went up mid-single digits. Were there any changes to average duration? Is this perhaps somewhat reflective of the increased levels of approval that you noted earlier? Or is there anything else that you would call out?"
CFO Burt Podbere
"Gregg, thanks for the question. So really, I think the focus really is on net new. That really -- net new ARR, that's really the one that tells the health of the business as opposed to RPO or as opposed to billings or what have you. And we're excited about the fact that we're going in with a record pipeline.
We've just posted the strongest net new ARR quarter in company history. So I think that when you think about reaching a record $218 million in net new with any outsized deals, you're really showing strong health in the business. And so overall, we're just really pleased with the results. And that's the metric that we zoom in on. That's the metric that our whole company is rallying around, and that's the focus for us."
Thank you!
Excellent recap as always. Another strong execution by an elite company. Regarding price action AH, at EV/S fw 20x it's priced to perfection. I will be adding on weakness if it gets to 14-15x
Fantastic analysis. Your estimates are on the spot. That's amazing. Let's see what $S does tomorrow.
Thanks. Glad you find it useful.
I love your recaps!🙏🙏
Excellent write up. Thanks StockNovice.