CrowdStrike Holdings, Inc. (CRWD), a leading cybersecurity software vendor, released its financial results for the third quarter of fiscal year 2023. The company exceeded expectations and achieved several new milestones, demonstrating strong growth and profitability.

The total revenue for the quarter was $786.0 million, representing a 35% increase compared to the same period last year and slightly outpacing expectations. Subscription revenue, a key component of CrowdStrike's business, reached $733.5 million, reflecting 34% growth. This revenue growth indicates the increasing demand for CrowdStrike's cybersecurity solutions.

CrowdStrike achieved a significant milestone by surpassing $3 billion in Annual Recurring Revenue (ARR), an increase of 35% compared to the previous year. The company added $223.1 million in net new ARR in the third quarter, showcasing its ability to consistently attract new customers and expand its existing customer base.

CrowdStrike reported a record net income and achieved profitability in the third quarter. GAAP income from operations was $3.2 million, compared to a loss of $56.4 million in the same period of the previous fiscal year. Non-GAAP income from operations was $175.7 million, an impressive increase from $89.7 million in the third quarter of fiscal 2023.

The company's net income attributable to CrowdStrike was $26.7 million in Q3, a substantial improvement from a loss of $55.0 million in the same period last year. The diluted net income per share attributable to CrowdStrike was $0.11, compared to a loss of $0.24 in the third quarter of fiscal 2023. Non-GAAP net income attributable to CrowdStrike per share, diluted, was $0.82, a significant increase from $0.40 in the same period last year and 8 cents better than analyst forecasts.

CrowdStrike demonstrated strong cash flow performance, with net cash generated from operations totaling $273.5 million, compared to $242.9 million in the third quarter of fiscal 2023. Free cash flow reached $239.0 million, reflecting a healthy increase from $174.1 million in the same period last year. As of October 31, 2023, CrowdStrike held $3.17 billion in cash, cash equivalents, and short-term investments.

George Kurtz, CrowdStrike's president, chief executive officer, and co-founder, expressed his satisfaction with the company's exceptional performance in the third quarter. He highlighted the accelerating growth of net new ARR and the surpassing of the $3 billion ending ARR milestone. These achievements firmly establish CrowdStrike as a leader in the cybersecurity industry, offering a unique platform architecture and data advantage to meet the critical challenges of cybersecurity.

Looking ahead, CrowdStrike provided guidance for the fourth quarter of fiscal year 2023. The company expects earnings per share (EPS) of $0.81-0.82, ahead of street expectations of $0.78. Additionally, CrowdStrike anticipates fourth-quarter revenues to be in the range of $836.6 million to $840.0 million, slightly surpassing Consensus of $836.77 million.

Shares of CRWD fell from $213 to $200 in immediate reaction but have quickly recovered those losses. We saw similar price action in peer Zscaler (ZS) which reported yesterday afternoon. Shares of ZS fell 8% in immediate reaction to in line numbers but were able to close today"s session in positive territory. 

In conclusion, CrowdStrike delivered exceptional financial performance in the third quarter of fiscal year 2023. The company's impressive revenue growth, milestone achievements in ARR, and record profitability demonstrate its strong market position and the growing demand for its innovative cybersecurity solutions. With a solid cash position and positive outlook for the next quarter, CrowdStrike is well-positioned for continued success in the dynamic and evolving cybersecurity landscape.