George Kurtz: CrowdStrike Seeing ‘Immense Demand’ From SMBs

The security giant is investing heavily in its channel efforts to reach smaller customers, the CrowdStrike co-founder and CEO said Tuesday.

CrowdStrike is seeing huge growth through managed security service providers as it increasingly targets small and medium-sized businesses with its cloud-native cybersecurity platform, co-founder and CEO George Kurtz said Tuesday.

Annual recurring revenue generated through MSSPs more than doubled in the company’s fiscal 2023, which ended Jan. 31, and CrowdStrike now generates 83 percent of its overall revenue through channel partners, Kurtz said during the Austin, Texas-based company’s quarterly call with analysts.

[Related: CrowdStrike CEO George Kurtz: Microsoft’s Security Offerings Are A ‘Leaky Lifeboat’]

“Strategically expanding and investing in our partner ecosystem, with a goal of further expanding our reach within the enterprise — as well as down-market in the SMB — is one of our top initiatives in FY24,” he said.

Kurtz made the comments as CrowdStrike reported results for the fourth quarter of its fiscal 2023, ended Jan. 31, which beat Wall Street analyst estimates on both revenue and profits. CrowdStrike’s stock price rose 7 percent in after-hours trading Tuesday, to $133.75 a share.

CrowdStrike is aiming to reach more SMBs in part through its Falcon Go platform, an affordably priced version of its Falcon unified security platform that’s landed more than 1,000 net new customers for the company in just over two quarters, Kurtz said Tuesday.

“We believe this early success reaching the ‘S’ in the SMB demonstrates the immense demand for CrowdStrike’s best-in-class endpoint protection, even among the smallest and [most] cost-conscious organizations,” he said.

To help accelerate the vendor’s expansion in the SMB market, Kurtz noted that CrowdStrike hired Daniel Bernard in the newly created role of chief business officer in January. Bernard — who CrowdStrike poached from rival security vendor SentinelOne — has taken on overseeing both the CrowdStrike channel program and the company’s SMB growth initiative overall, Kurtz said.

While CrowdStrike is still in the “early innings of our SMB journey,” the opportunity looks “very favorable,” he said.

For CrowdStrike’s fiscal Q4, revenue climbed 48 percent, year-over-year, to $637.4 million, the company reported. That slightly surpassed analyst expectations for the quarter.

ARR also grew by 48 percent from a year earlier for CrowdStrike, reaching $2.56 billion as of the end of January, including $221.7 million in net new ARR during the quarter.

“CrowdStrike is executing exceptionally well in a challenging macro environment,” Kurtz said, pointing to indicators including quarterly records in net new ARR and net new customers.

Ultimately, the “dual mandate of high efficacy and low total cost of ownership” that many customers now have for security “plays to CrowdStrike’s strength as a leading consolidator,” he said.

On earnings, the company reported non-GAAP net income of 47 cents per diluted share for its fiscal Q4, above the 43 cents per diluted share that had been expected by analysts.