CrowdStrike Holdings, Inc. 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk We have operations in the United States and internationally, and we are exposed to market risk in the ordinary course of business. Interest Rate Risk Our cash and cash equivalents primarily consist of cash on hand and highly liquid investments in corporate debt securities and bank deposits. Our investments are exposed to market risk due to fluctuations in interest rates, which may affect our interest income and the fair value of our investments. As of January 31, 2021, we had cash and cash equivalents of $1.9 billion and no marketable securities. The carrying amount of our cash equivalents reasonably approximates fair value due to the short maturities of these instruments. The primary objectives of our investment activities are the preservation of capital, the fulfillment of liquidity needs, and the fiduciary control of cash and investments. We do not enter into investments for trading or speculative purposes. Due to the short-term nature of our investment portfolio, the effect of a hypothetical 100 basis point change in interest rates would not have had a material effect on the fair market value of our portfolio as of January 31, 2021. We therefore do not expect our results of operations or cash flows to be materially affected by a sudden change in market interest rates. Our debt obligations consist of variety of financial instruments that expose us to interest rate risk, including, but not limited to our revolving credit facility and the Senior Notes. Interest on the revolving credit facility is tied to short term interest rate benchmarks including prime rate or LIBOR. Interest on the term loans is fixed. Foreign Currency Risk To date, nearly all of our sales contracts have been denominated in U.S. dollars. A portion of our operating expenses are incurred outside the United States, denominated in foreign currencies and subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the British Pound, Australian Dollar, and Euro. The functional currency of our foreign subsidiaries is that country’s local currency. Foreign currency transaction gains and losses are recorded to Other income (expense), net. During the year ended January 31, 2021, foreign currency exchange rate gain recorded to Other comprehensive income (loss) was $2.6 million. A hypothetical 10% decrease in the U.S. dollar against other currencies would have resulted in an increase in operating loss of approximately $17.2 million for the year ended January 31, 2021. We have not entered into derivative or hedging transactions, but we may do so in the future if our exposure to foreign currency becomes more significant. 87 Table of Contents