What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-09 compared with 2022-03-16 · 327 added, 440 removed, 895 unchanged (46% of the section changed)

6 unchanged sentences

Consolidated Statements of Comprehensive Loss for the years ended January 31, 2023, 2022 and 2021

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the years ended January 31, 2022, 2021 and 2020

Consolidated Statements of Stockholders’ Equity for the years ended January 31, 2023, 2022 and 2021

Consolidated Statements of Cash Flows for the years ended January 31, 2023, 2022 and 2021

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We have audited the accompanying consolidated balance sheets of CrowdStrike Holdings, Inc.

and its subsidiaries (the “Company”) as of January 31, 2022 and 2021, and the related consolidated statements of operations, of comprehensive loss, of redeemable convertible preferred stock and stockholders’ equity (deficit) and of cash flows for each of the three years in the period ended January 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of January 31, 2023 and 2022, and the related consolidated statements of operations, of comprehensive loss, of stockholders' equity and of cash flows for each of the three years in the period ended January 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of January 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Changes in Accounting Principles

As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2021 and the manner in which it accounts for revenues from contracts with customers in 2020.

Basis for Opinions

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A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures

that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Cash and cash equivalents $ 2,455,369 $ 1,996,633

Short-term investments 250,000 —

Accounts receivable, net of allowance for credit losses of $ 2.6 million and

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Accumulated deficit ( 1,148,163 ) ( 964,918 )

Accumulated other comprehensive (loss) income ( 1,240 ) 2,319

Accumulated other comprehensive loss ( 1,019 ) ( 1,240 )

Total CrowdStrike Holdings, Inc.

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Interest expense ( 25,319 ) ( 25,231 ) ( 1,559 )

Interest income 52,495 3,788 4,968

Other income, net 3,053 3,968 1,251

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Net loss ( 182,285 ) ( 232,378 ) ( 92,629 )

Net income attributable to noncontrolling interest 2,424 — —

Net income attributable to non-controlling interest 960 2,424 —

Net loss attributable to CrowdStrike $ ( 183,245 ) $ ( 234,802 ) $ ( 92,629 )

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Reversal of unrealized gain upon sale of debt securities, net of tax — — ( 1,320 )

Unrealized gain on available-for-sale securities, net of tax — — 1,321

Other comprehensive income (loss) 221 ( 3,559 ) 1,310

Comprehensive income attributable to noncontrolling interest 2,424 — —

Comprehensive income attributable to non-controlling interest 960 2,424 —

Total comprehensive loss attributable to CrowdStrike $ ( 183,024 ) $ ( 238,361 ) $ ( 91,319 )

1 unchanged sentence

CrowdStrike Holdings, Inc.

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

Consolidated Statements of Stockholders’ Equity

(in thousands)

Preferred Stock Common Stock Additional

Common Stock Additional

Capital Accumulated

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Income (Loss) Non-controlling Interest Total Stockholders’ Equity (Deficit)

Shares Amount Shares Amount

Shares Amount

Balances at January 31, 2020 212,948 $ 106 $ 1,378,479 $ ( 637,487 ) $ 1,009 $ 500 $ 742,607

Cumulative effect of accounting change- ASC 606 — — — — — 23,418 — — 23,418

Issuance of common stock upon initial public offering, net of underwriting discounts and issuance costs — — 20,700 11 659,207 — — — 659,218

Conversion of redeemable convertible preferred stock to common stock upon initial public offering ( 131,268 ) ( 557,912 ) 131,268 66 557,846 — — — 557,912

Reclassification of redeemable convertible preferred stock warrant liability to additional paid-in capital upon initial public offering — — — — 10,559 — — — 10,559

Net exercise of common stock warrants — — 322 — — — — — —

Issuance of common stock upon exercise of options 7,752 6 28,825 — — — 28,831

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Issuance of common stock under employee stock purchase plan 1,030 — 34,263 — — — 34,263

Issuance of common stock related to early exercised options — — 1,037 — — — — — —

Vesting of early exercised options — — 3,318 — — — 3,318

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Capitalized stock-based compensation — — 3,686 — — — 3,686

Settlement related to stockholders short-swing trade profit — — — — 2,283 — — — 2,283

Fair value of replacement equity awards attributable to pre-acquisition service — — 313 — — — 313

Net loss — — — ( 92,629 ) — — ( 92,629 )

Non-controlling interest — — — — — 800 800

Unrealized net gain on available-for-sale-securities, net of tax — — — — — — 1,321 — 1,321

Foreign currency translation adjustments — — — — — — ( 410 ) — ( 410 )

Other comprehensive income — — — — 1,310 — 1,310

Balances at January 31, 2021 223,724 $ 112 $ 1,598,259 $ ( 730,116 ) $ 2,319 $ 1,300 $ 871,874

Issuance of common stock upon exercise of options 2,598 1 15,898 — — — 15,899

Issuance of common stock under RSU release — — 1,994 — — — — — —

Issuance of common stock under RSU and PSU release 3,408 2 ( 2 ) — — — —

Issuance of common stock under employee stock purchase plan 904 — 50,277 — — — 50,277

Issuance of common stock for restricted stock awards 57 — — — — — —

Vesting of early exercised options — — 3,165 — — — 3,165

Issuance of common stock for founders holdbacks related to acquisitions 15 — 3,528 — — — 3,528

Stock-based compensation expense — — 305,792 — — — 305,792

1 unchanged sentence

Fair value of replacement equity awards attributable to pre-acquisition service — — 4,011 — — — 4,011

Net loss — — — — — ( 92,629 ) — — ( 92,629 )

Net income (loss) — — — ( 234,802 ) — 2,424 ( 232,378 )

Non-controlling interest — — — — — 8,155 8,155

4 unchanged sentences

Issuance of common stock under employee stock purchase plan 517 — 59,419 — — — 59,419

Issuance of common stock related to early exercised options — — 57 — — — — — —

Issuance of common stock for restricted stock awards 6 — — — — — —

Vesting of early exercised options — — 2,204 — — — 2,204

5 unchanged sentences

Non-controlling interest — — — — — 10,954 10,954

Other comprehensive loss — — — — — — ( 3,559 ) — ( 3,559 )

Other comprehensive income — — — — 221 — 221

Balances at January 31, 2023 235,777 $ 118 $ 2,612,705 $ ( 1,148,163 ) $ ( 1,019 ) $ 23,793 $ 1,487,434

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Non-cash operating lease cost 9,440 9,103 7,786

Change in fair value of redeemable convertible preferred stock warrant liability — — 6,022

Stock-based compensation expense 526,504 309,952 149,675

1 unchanged sentence

Gain on sale of debt securities, net — — ( 1,347 )

Amortization (accretion) of marketable securities purchased at a premium (discount) — 578 ( 1,247 )

Amortization of marketable securities purchased at a premium — — 578

Non-cash interest expense 2,813 2,469 853

Other non-cash charges — — ( 427 )

Change in fair value of strategic investments ( 1,830 ) ( 4,823 ) —

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Purchases of intangible assets ( 2,323 ) ( 680 ) ( 180 )

Purchases of marketable securities — ( 84,904 ) ( 779,701 )

Proceeds from sales of marketable securities — 639,586 9,581

Purchases of investments ( 250,000 ) — ( 84,904 )

Proceeds from sales of investments — — 639,586

Purchases of deferred compensation investments ( 64 ) — —

Maturities of marketable securities — — 91,605

1 unchanged sentence

Financing activities

Proceeds from the issuance of common stock upon initial public offering, net of underwriting discounts — — 665,092

Payments of debt issuance costs related to revolving line of credit — ( 219 ) ( 3,328 )

1 unchanged sentence

Proceeds from issuance of Senior Notes, net of debt financing costs — — 739,569

Payments of deferred offering costs — — ( 5,872 )

Repayment of loan payable ( 1,591 ) — —

Proceeds from issuance of common stock upon exercise of stock options 8,655 15,899 28,831

Proceeds from the issuance of common stock upon exercise of early exercisable stock options — — 10,264

Proceeds from issuance of common stock under the employee stock purchase plan 59,419 50,277 34,263

Settlement related to stockholder short-swing trade profit — — 2,283

Capital contributions from non-controlling interest holders 10,954 8,155 800

Net cash provided by financing activities 77,437 72,531 800,135

Effect of foreign exchange rates on cash and cash equivalents ( 4,774 ) 1,682 ( 66 )

Net increase in cash and cash equivalents 78,025 1,653,810 176,390

Cash and cash equivalents, beginning of period 1,918,608 264,798 88,408

Cash and cash equivalents, end of period $ 1,996,633 $ 1,918,608 $ 264,798

Effect of foreign exchange rates on cash, cash equivalents and restricted cash ( 1,495 ) ( 4,774 ) 1,682

Net increase in cash, cash equivalents and restricted cash 460,291 78,025 1,653,810

Cash, cash equivalents and restricted cash at beginning of period 1,996,633 1,918,608 264,798

Cash, cash equivalents and restricted cash at end of period $ 2,456,924 $ 1,996,633 $ 1,918,608

Cash, cash equivalents and restricted cash at the end of period:

Cash and cash equivalents 2,455,369 1,996,633 1,918,608

Restricted cash included in prepaid expenses and other assets 1,555 — —

Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows 2,456,924 1,996,633 1,918,608

Supplemental disclosure of cash flow information:

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Supplemental disclosure of non-cash investing and financing activities:

Conversion of redeemable convertible preferred stock to common stock $ — $ — $ 557,912

Conversion of redeemable convertible preferred stock warrant liabilities reclassified to additional paid-in capital $ — $ — $ 10,559

Net decrease in deferred offering costs, accrued but not paid $ — $ — $ ( 2,858 )

Net increase (decrease) in property and equipment included in accounts payable and accrued expenses $ 6,522 $ 1,042 $ ( 3,193 )

Net increase in property and equipment included in accounts payable and accrued expenses $ 22,421 $ 6,522 $ 1,042

Vesting of early exercised stock options $ 2,204 $ 3,165 $ 3,318

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Notes to Consolidated Financial Statements

Description of Business and Basis of Presentation

Description of Business and Significant Accounting Policies

CrowdStrike Holdings, Inc.

(the “Company”) was formed on November 7, 2011.

The Company provides a leading cloud-delivered solution for next-generation endpoint and cloud workload protection via a software as a service (“SaaS”) subscription-based model that spans multiple security markets, including corporate workload security, security and vulnerability management, managed security services, IT operations management, threat intelligence services, identity protection and log management.

The Company’s principal executive offices are in Austin, Texas.

The Company is a global cybersecurity leader that provides cloud-delivered protection of endpoints, cloud workloads, identity, and data via a software as a service (“SaaS”) subscription-based model that spans multiple security markets, including corporate workload security, security and vulnerability management, managed security services, IT operations management, threat intelligence services, identity protection and log management.

The Company conducts its business in the United States, as well as locations internationally, including in Australia, Germany, India, Israel, Romania, and the United Kingdom.

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generally accepted accounting principles (“U.S.

Certain prior year amounts in the consolidated statements of cash flows were reclassified to conform to the current period presentation.

These reclassifications had no effect on net cash provided by (used in) operating, investing, and financing activities and cash and cash equivalent amounts.

Effective February 1, 2020, the Company adopted the Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842).

Prior periods were not retrospectively recast, and accordingly, the consolidated statements of operations for the fiscal year ended January 31, 2020 was prepared using the prior lease accounting standard referred to as Accounting Standard Codification (“ASC”) Topic 840.

Upon adoption, the Company recorded operating lease ROU assets of $ 37.4 million and corresponding operating lease liabilities of $ 37.4 million on its consolidated balance sheet.

Summary of Significant Accounting Policies

Certain prior year information has been reclassified to conform to the current year presentation.

These reclassifications had no effect on previously reported results of operations or accumulated deficit.

Principles of Consolidation

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On a regular basis, management evaluates these estimates and assumptions.

Actual results may differ from these estimates and such difference could be material to the Company’s consolidated financial statements.

Estimates and assumptions used by management include, but are not limited to, revenue recognition, the allowance for credit losses, the useful lives of long-lived assets, the fair values of strategic investments, the period of benefit for deferred contract acquisition costs, the discount rate used for operating leases, the recognition and disclosure of contingent liabilities, income taxes, stock-based compensation, and the fair value of assets acquired and liabilities assumed for business combinations.

Due to the Coronavirus (“COVID-19”) pandemic, there has been uncertainty and disruption in the global economy and financial markets.

The Company is not aware of any specific event or circumstance that would require a material update to its estimates or judgments or an adjustment of the carrying value of its assets or liabilities as of January 31, 2022.

While there was not a material impact to the Company’s consolidated financial statements as of and for the year ended January 31, 2022, these estimates may change, as new events occur and additional information is obtained, as well as other factors related to COVID-19 that could result in material impacts to the Company’s consolidated financial statements in future reporting periods.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

Actual results may differ from these estimates and such differences could be material to the Company’s consolidated financial statements.

Concentration of Credit Risk and Geographic Information

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The Company’s sales team, along with its channel partner network of system integrators and value-added resellers (collectively, “channel partners”), sells the Company’s services worldwide to organizations of all sizes.

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents, accounts receivable, and strategic investments.

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents, short-term investments, accounts receivable, and strategic investments.

The Company’s cash is placed with high-credit-quality financial institutions and issuers, and at times exceed federally insured limits.

The Company has not experienced any credit loss relating to its cash equivalents and strategic investments.

The Company has not experienced any credit loss relating to its cash, cash equivalents, short-term investments, or strategic investments.

The Company performs periodic credit evaluations of its customers and generally does not require collateral.

Channel partners or direct customers who represented 10% or more of the Company’s accounts receivable were as follows:

Channel partner A (1)

There were no direct customers who represented 10% or more of the Company’s accounts receivable as of January 31, 2023.

One direct customer who represented 10% of more of the Company’s accounts receivable as of January 31, 2022 was as follows:

Customer A 9 % 10 %

_______________________________

(1) Channel Partner A and Customer A are controlled by the same company.

Channel partners who represented 10% or more of the Company’s total revenue were as follows:

Year Ended January 31,

2022 2021 2020

Channel partner B 7 % 8 % 10 %

There were no direct customers who represented 10% or more of the Company’s total revenue during the fiscal years ended January 31, 2022, January 31, 2021, and January 31, 2020.

Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less at date of purchase to be cash equivalents.

As of January 31, 2022, the Company had $ 950.6 million of cash equivalents.

As of January 31, 2021, the Company did not have any cash equivalents.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

There were no channel partners who represented 10% or more of the Company’s accounts receivable as of January 31, 2023 and January 31, 2022.

There were no channel partners or direct customers who represented 10% or more of the Company’s total revenue during the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021.

Cash Equivalents and Short-term Investments

The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.

Cash equivalents are mainly comprised of time deposits and money market funds.

The Company had $ 1.6 billion and $ 1.0 billion of cash equivalents as of January 31, 2023 and January 31, 2022, respectively.

Short-term investments consist of time deposits with original maturities greater than three months but less than one year.

The Company had $ 250.0 million of short-term investments as of January 31, 2023 and no short-term investments as of January 31, 2022.

Strategic Investments

In July 2019, the Company agreed to commit up to $ 10.0 million to a newly formed entity, CrowdStrike Falcon Fund LLC (the “Original Falcon Fund”) in exchange for 50 % of the sharing percentage of any distribution by the Original Falcon Fund.

In December 2021, the Company agreed to commit an additional $ 50.0 million to a newly formed entity, CrowdStrike Falcon Fund II LLC (“Falcon Fund II”) in exchange for 50 % of the sharing percentage of any distribution by the Falcon Fund II.

Further, entities associated with Accel also agreed to commit up to $ 10.0 million and $ 50.0 million, respectively, to the Original Falcon Fund and the Falcon Fund II (collectively, the “Falcon Funds”), and collectively own the remaining 50 % of the sharing percentage of the Falcon Funds.

Further, entities associated with Accel also agreed to commit up to $ 10.0 million and $ 50.0 million, respectively, to the Original Falcon Fund and Falcon Fund II (collectively, the “Falcon Funds”), and collectively own the remaining 50 % of the sharing percentage of the Falcon Funds.

Both Falcon Funds are in the business of purchasing, selling, and investing in minority equity and convertible debt securities of privately-held companies that develop applications that have potential for substantial contribution to CrowdStrike and its platform.

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The Company elected the measurement alternative for the non-marketable equity investments of the Falcon Funds where eligible.

Under the measurement alternative, the non-marketable equity investments are measured at cost, less any impairment, plus or minus adjustments resulting from price changes from observable transactions of identical or similar securities of the

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

All gains and losses on strategic investments, realized and unrealized, are recognized in Other income (expense), net.

Strategic investments are classified within Level 3 in the fair value hierarchy as only an impairment of observable adjustment is recognized based on price changes from observable transactions of identical or similar securities of the same issuer and other unobservable inputs including volatility, rights, and obligations of the investments.

The Company classifies the investments in the Falcon Funds as a non-current asset called Strategic Investments on the consolidated balance sheets as of January 31, 2022.

The Company has recognized an unrealized gain for its portion of ownership of the strategic investments in the amount of $ 2.4 million, net of gain attributable to non-controlling interest of $ 2.4 million, during the fiscal year ended January 31, 2022.

Strategic investments are classified within Level 3 in the fair value hierarchy as these investments do not have readily determinable market values.

The carrying amount of strategic investments is adjusted based on observable price changes from observable transactions of identical or similar securities of the same issuer and other unobservable inputs including volatility, rights, and obligations of the investments, or by impairments when identified events and circumstances indicate a decline in value has occurred.

The Company classifies the investments in the Falcon Funds as a non-current asset called Strategic investments on the consolidated balance sheets.

The Company has recognized a net unrealized gain for its portion of ownership of the strategic investments in the amount of $ 1.0 million and $ 2.4 million during the fiscal years ended January 31, 2023 and and January 31, 2022, respectively.

Net unrealized gain attributable to non-controlling interest was $ 1.0 million and $ 2.4 million during the fiscal years ended January 31, 2023 and January 31, 2022, respectively.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash equivalents, strategic investments, accounts receivable, accounts payable, accrued expenses, the redeemable convertible preferred stock warrant liability, and the Senior Notes.

The carrying values of cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value due to their short-term nature.

The Senior Notes are carried at the initially allocated liability value less unamortized debt discount and issuance costs on the Company’s consolidated balance sheet.

The Company’s financial instruments consist of cash equivalents, short-term investments, strategic investments, accounts receivable, accounts payable, accrued expenses, the Senior Notes, and investments for the Company’s deferred compensation plan.

The carrying values of cash equivalents, short-term investments, accounts receivable, accounts payable, and accrued expenses approximate fair value due to their short-term nature.

If these financial instruments were measured at fair value in the consolidated financial statements, cash equivalents, accounts receivable, accounts payable, accrued expenses and investments for the Company’s deferred compensation plan would be classified as Level 1 and short-term investments would be classified as Level 2.

The Senior Notes are carried at the initially allocated liability value less unamortized debt discount and issuance

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

costs on the Company’s consolidated balance sheets.

The Company discloses the fair value of the Senior Notes at each reporting period for disclosure purposes only.

Refer to Note 3, Investments and Fair Value Measurements, regarding the fair value of the Company’s non-marketable securities and Note 5, Debt, for the fair value of the Company’s Senior Notes.

The Company reports the redeemable convertible preferred stock warrant liability at fair value (see Note 3, Investments and Fair Value Measurements).

The warrants issued by the Company for redeemable convertible preferred stock in January 2015, December 2016, and March 2017 have been recorded as a liability based on “Level 3” inputs, which consist of unobservable inputs and reflect management’s estimates of assumptions that market participants would use in pricing the liability.

The fair value of the warrants was determined using the Black-Scholes option-pricing model, which is affected by changes in inputs to that model including the Company’s stock price, expected stock price volatility, risk-free rate, and contractual term.

Immediately prior to the closing of the IPO on June 14, 2019, the redeemable convertible preferred stock warrants converted into 336,386 warrants to purchase Class B common stock on a one -to-one basis.

The redeemable convertible preferred stock warrant liability was reclassified to additional paid-in capital upon the closing of the IPO.

The Company's investments related to the deferred compensation plan are invested within a Rabbi Trust.

Participants in the deferred compensation plan may select the securities in which their compensation deferrals are invested within the confines of the Rabbi Trust.

These securities are marked-to-market each reporting period.

Refer to Note 2, Investments and Fair Value Measurements, regarding the fair value of the Company’s non-marketable securities and deferred compensation investments and Note 4, Debt, for the fair value of the Company’s Senior Notes.

Accounts Receivable

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however, the Company may require payment prior to commencing service in certain instances to limit credit risk.

The Company regularly reviews the adequacy of the allowance for credit loss by considering various factors including the age of each outstanding invoice, each customer’s expected ability to pay, historical loss rates and expectations of forward-looking loss estimates to determine whether the allowance is appropriate.

Amounts deemed uncollectible are written off against the allowance for credit loss.

As of January 31, 2022 and January 31, 2021, the allowance for credit loss was $ 1.6 million and $ 1.2 million, respectively.

Software Implementation Costs

The Company contracts with third party information technology providers for various service arrangements including software, platform, and information technology infrastructure.

The Company capitalizes the implementation cost incurred to develop or obtain internal-use software in such arrangements which are recorded as part of property and equipment, net in the consolidated balance sheets.

All capitalized implementation costs are amortized over the term of the arrangement which includes reasonably certain renewals.

Costs incurred during the preliminary project and post implement stage are expensed as the activities are performed.

Deferred Offering Costs

Deferred offering costs consisted of fees and expenses incurred in connection with the sale of the Company’s common stock in an IPO, including legal, accounting, printing and other IPO-related costs.

Upon the close of the IPO on June 14, 2019, total deferred offering costs of $ 5.9 million were reclassified to stockholders’ equity and recorded against the proceeds from the offering.

The Company regularly reviews the adequacy of the allowance for credit losses by considering various factors including the age of each outstanding invoice, each customer’s expected ability to pay, historical loss rates, and expectations of forward-looking loss estimates to determine whether the allowance is appropriate.

Amounts deemed uncollectible are written off against the allowance for credit losses.

Segment Information

The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer.

The CODM reviews financial information presented on a consolidated basis for the purposes of allocating resources and evaluating financial performance.

Accordingly, management has determined that the Company operates as one operating and reportable segment.

Business Combinations

The Company allocates the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date.

The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

The purchase price allocation process requires management to make significant estimates and assumptions with respect to intangible assets.

Although the Company believes the assumptions and estimates it has made are reasonable, they are based in part on historical experience, market conditions, and information obtained from management of the acquired companies and are inherently uncertain.

Examples of judgments used to estimate the fair value of intangibles assets include, but are not limited to, future expected cash flows, expected customer attrition rates, estimated obsolescence rates, and discount rates.

These estimates are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

During the measurement period, which is one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill.

Upon the conclusion of the measurement period, any subsequent adjustments are recorded in the consolidated statements of operations.

Goodwill and Intangible Assets

The Company evaluates and tests goodwill for impairment at least annually, on January 31, or more frequently if circumstances indicate that goodwill may not be recoverable.

A qualitative assessment is performed to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of its one reporting unit is less than its carrying value.

In assessing the qualitative factors, the Company considers the impact of certain key factors including macroeconomic conditions, industry and market considerations, management turnover, changes in regulation, litigation matters, changes in enterprise value, and overall financial performance.

If the Company determines it is more likely than not that the fair value of its one reporting unit is less than its carrying value, a quantitative test is performed by estimating the fair value of its reporting unit, including goodwill, and comparing it to its carrying value.

If the fair value is lower than the carrying value, the excess is recognized as an impairment loss.

No impairment losses were recorded during the fiscal years ended January 31, 2023, January 31, 2022, or January 31, 2021.

See Note 3, Balance Sheet Components, and Note 12, Acquisitions, to the consolidated financial statements for more information.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

Acquired intangible assets mainly consisting of developed technology and customer relationships, are stated at fair value at the acquisition date and are amortized on a straight-line basis over their estimated economic lives, which are generally one to 20 years.

The Company reviews the carrying amounts of intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

The impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair value.

No impairment indicators were identified by the Company and no impairment losses were recorded by the Company during the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021.

Property and Equipment, Net

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Major renewals and improvements are capitalized and depreciated over their estimated useful lives.

Upon retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts, and any gain or loss is recorded in operating expenses in the consolidated statement of operations.

The Company reviews for impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the asset (or asset group) may not be recoverable.

Events and changes in circumstances considered by the Company in determining whether the carrying value of long-lived assets may not be recoverable, include, but are not limited to:

significant changes in performance relative to expected operating results, significant changes in the use of the assets, significant negative industry or economic trends, and changes in the Company’s business strategy.

Events and changes in circumstances considered by the Company in determining whether the carrying value of long-lived assets may not be recoverable, include, but are not limited to, significant changes in performance relative to expected operating results, significant changes in the use of the assets, significant negative industry or economic trends, and changes in the Company’s business strategy.

Impairment testing is performed at an asset level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (an “asset group”).

An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset (or asset group) and its eventual disposition is less than its carrying amount.

An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset (or asset group) and its eventual disposition are less than its carrying amount.

No impairment indicators were identified by the Company and no impairment losses were recorded by the Company during the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021.

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Costs incurred in the preliminary stages of development are expensed as incurred.

Once an application has reached the development stage, internal and external costs, if direct, are capitalized until the software and website are substantially complete and ready for its intended use.

Once an application has reached the development stage, internal and external costs, if direct, are capitalized until the internal-use software and website are substantially complete and ready for their intended use.

The Company contracts with third party information technology providers for various service arrangements including software, platform, and information technology infrastructure.

The Company capitalizes the implementation costs incurred to develop or obtain internal-use software in such arrangements, which are recorded as part of property and equipment, net in the consolidated balance sheets.

All capitalized implementation costs are amortized over the term of the arrangement, which includes reasonably certain renewals.

Costs incurred during the preliminary project and post-implementation stages are expensed as the activities are performed.

Capitalization ceases upon completion of all substantial testing.

4 unchanged sentences

Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

Deferred Contract Acquisition Costs

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Commissions, including referral fees paid to referral partners, earned upon the initial acquisition of a contract or subsequent upsell are amortized over an estimated period of benefit of four years while commissions earned for renewal contracts are amortized over the contractual term of the renewals.

Sales commissions associated with professional service contracts are amortized ratably over an estimated period of benefit of six months .

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

Sales commissions associated with professional service contracts are amortized ratably over an estimated period of benefit of eight months .

Deferred Revenue

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The Company’s subscription contracts are typically invoiced to its customers at the beginning of the term, or in some instances, such as in multi-year arrangements, in installments.

Professional services are either invoiced upfront, invoiced in installments, or invoiced as the services are performed.

Professional services are invoiced upfront, invoiced in installments, or invoiced as the services are performed.

Accordingly, the Company’s deferred revenue balance does not include revenue for future years of multi-year non-cancellable contracts that have not yet been billed.

3 unchanged sentences

To the extent the Company bills customers in advance of the contract commencement date, the accounts receivable and corresponding deferred revenue amounts are netted to zero on the consolidated balance sheets, unless such amounts have been paid as of the balance sheet date.

Redeemable Convertible Preferred Stock Warrants

Warrants related to the Company’s redeemable convertible preferred stock are classified as liabilities on the Company’s consolidated balance sheets.

The warrants are subject to reassessment at each balance sheet date, and any change in fair value is recognized as a component of Other income (expense), net, in the consolidated statements of operations.

The Company will continue to adjust the liability for changes in fair value until the earlier of the expiration or exercise of the warrants, or upon their automatic conversion into warrants to purchase common stock in connection with a qualified initial public offering such that they qualify for equity classification and no further remeasurement is required.

The redeemable convertible preferred stock warrant liability was reclassified to additional paid-in capital.

Within the same month, the Company received notice from the holders of 336,386 warrants as to their intentions to exercise the warrants for shares of common stock of the Company.

Such shares were settled via net settlement method, which was elected by the holders to reduce the number of shares issued upon exercise to reflect net settlement of the exercise price, resulting in the issuance of 322,278 shares of the Company’s common stock.

Revenue Recognition

7 unchanged sentences

(2) Identify the performance obligations in the contract

Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from the Company or from third parties, and are distinct in the context of the contract,

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

whereby the transfer of the services is separately identifiable from other promises in the contract.

The Company’s performance obligations consist of (i) subscriptions and (ii) professional services.

(3) Determine the transaction price

The transaction price is determined based on the consideration which the Company is expected to be entitled to in exchange for transferring services to the customer.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

The transaction price is determined based on the consideration to which the Company is expected to be entitled in exchange for transferring services to the customer.

Variable consideration is included in the transaction price if it is probable that a significant future reversal of cumulative revenue under the contract will not occur.

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Research and development expenses consist primarily of personnel and related headcount costs, costs of professional services associated with the ongoing development of the Company’s technology, and allocated overhead.

All advertising costs are expensed as incurred and are included in sales and marketing expense in the consolidated statements of operations .

Most advertising costs are expensed as incurred, except for certain production costs that are deferred and expensed at the first time the advertising takes place.

The Company incurred $ 53.8 million, $ 50.5 million, and $ 27.9 million of advertising costs during the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021, respectively.

Stock-Based Compensation

Compensation related to stock-based awards to employees and directors are measured and recognized in the Company’s consolidated statements of operations based on the fair value of the awards granted.

Compensation related to stock-based awards to employees and directors is measured and recognized in the Company’s consolidated statements of operations based on the fair value of the awards granted.

The Company estimates the fair value of its stock options using the Black-Scholes option-pricing model.

The stock-based compensation expense relating to stock options are recognized on a straight-line basis over the period during which the employee or director is required to provide service in exchange for the award, usually the vesting period, which is generally four years .

The stock-based compensation expense relating to stock options is recognized on a straight-line basis over the period during which the employee or director is required to provide service in exchange for the award, usually the vesting period, which is generally four years .

Restricted stock units (“RSUs”) are generally subject to a service-based vesting condition.

The service-based vesting condition is generally with a vesting term of four years .

The valuation of such RSUs is based solely on the fair value of the Company’s stock price on the date of grant and the corresponding compensation expense are being amortized on a straight-line basis.

The service-based vesting condition is generally four years .

The valuation of these RSUs is based solely on the Company’s stock price on the date of grant, and the corresponding compensation expense is amortized on a straight-line basis.

Performance-based stock units (“PSUs”) are generally subject to both a service-based vesting condition and a performance-based vesting condition.

The fair value of the award is equal to the grant date fair market value of the Company’s stock price.

PSUs generally vest over a four-year period and subject to continued service through the applicable vesting dates.

The stock-based compensation expense relating to PSUs are recognized using the accelerated attribution method over the requisite service period when it is probable that the performance condition will be satisfied.

The fair value of the award is equal to the Company’s stock price on the date of grant.

PSUs generally vest over a four-year period, subject to continued service through the applicable vesting dates.

The stock-based compensation expense relating to PSUs is recognized using the accelerated attribution method over the requisite service period when it is probable that the performance condition will be satisfied.

The Special PSU Awards are subject to the Company’s achievement of specified stock price hurdles and a service-based vesting condition.

The Company measured the fair value of the Special PSU Awards using a Monte Carlo simulation valuation model.

The stock-based compensation expense relating to the Special PSU Awards are recognized using the accelerated attribution method over the requisite service period.

The stock-based compensation expense relating to the Special PSU Awards is recognized using the accelerated attribution method over the longer of the derived service period and the explicit service period.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

Employee Stock Purchase Plan (“ESPP”) grants are measured based on grant date at fair value using the Black-Scholes option-pricing model.

The resulting fair value is recognized using the accelerated attribution method over a two -year offering period and accounted for as having four separate tranches starting on the same initial enrollment date.

Employee Stock Purchase Plan (“ESPP”) grants are measured based on the fair value at grant date using the Black-Scholes option-pricing model.

The resulting stock-based compensation expense is recognized using the accelerated attribution method over a two-year offering period and is accounted for as having four separate tranches starting on the same initial enrollment date.

The requisite service periods for the four tranches are approximately 6 , 12 , 18 , and 24 months.

The Company accounts for forfeitures as they occur for all stock-based awards.

Business Combinations

The Company allocates the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date.

The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

The purchase price allocation process requires management to make significant estimates and assumptions with respect to intangible assets.

Although the Company believes the assumptions and estimates it has made are reasonable, they are based in part on historical experience, market conditions and information obtained from management of the acquired companies and are inherently uncertain.

These estimates are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

Upon the conclusion of the measurement period, any subsequent adjustments are recorded in the consolidated statement of operations.

Goodwill and Intangible Assets

The Company evaluates and tests the recoverability of goodwill for impairment at least annually, on January 31, or more frequently if circumstances indicate that goodwill may not be recoverable.

If the fair value is lower than the carrying value, the excess is recognized as an impairment loss.

No impairment was recorded during the fiscal years ended January 31, 2022, January 31, 2021, or January 31, 2020.

The change in the goodwill balance during the fiscal year ended January 31, 2022 was due to the acquisitions of Humio Limited (“Humio”) and Secure Circle, LLC (“SecureCircle”) and changes in foreign currency exchange rates.

The change in the goodwill balance during the fiscal year ended January 31, 2021 was due to the acquisition of Preempt Security, Inc.

(“Preempt Security”) and changes in foreign currency exchange rates.

See Note 4, Balance Sheet Components, and Note 14, Acquisitions, to the consolidated financial statements for more information.

Intangible assets, net, consisting of developed technology, customer relationships, and other acquired intangibles, are stated at cost less accumulated amortization on the consolidated balance sheets.

All intangible assets have been determined to have definite lives and are amortized on a straight-line basis over their estimated economic lives, which are generally one to 20 years.

Amortization expense related to developed technology is included in cost of revenue, amortization expense related to customer relationships is included in sales and marketing expenses, and amortization expense related to other acquired intangibles is included in cost of revenue, research and development expense and general and administrative expense.

The Company reviews the carrying amounts of intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

The Company measures the recoverability of intangible assets by comparing the carrying amount of each asset to the future undiscounted cash flows it expects the asset to generate.

If the Company considers any of these assets to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair value.

Deferred Compensation

In December 2022, the board of directors approved the CrowdStrike Inc.

Deferred Compensation Plan (the “Plan”), effective January 1, 2023.

The Plan is a non-qualified, deferred compensation arrangement that permits eligible employees to make 100 % vested salary and incentive compensation deferrals within established limits.

The Company does not make contributions to the Plan.

The Plan’s assets consist of marketable securities held in a Rabbi Trust and are included in Other long-term assets in the consolidated balance sheets because they are intended to fund the Plan’s long-term liabilities.

They are not available for use in the Company’s daily operations and are not intended to be sold within a short period of time after purchase.

The marketable securities were recorded at fair value based on quoted market prices and were immaterial as of January 31, 2023.

The deferred compensation liability was also immaterial as of January 31, 2023, and is included in Other liabilities, noncurrent in the consolidated balance sheets.

Gains and losses on deferred compensation investments are included in Other income (expense), net, and corresponding changes in the deferred compensation liability are included in Operating expenses and Cost of revenue.

Changes in the fair value of the deferred compensation asset and liability were immaterial for the year ended January 31, 2023.

Operating Leases

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The Company determines if an arrangement is or contains a lease at inception by evaluating various factors, including whether a vendor’s right to substitute an identified asset is substantive.

Lease classification is determined at the lease commencement date, which is the

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

date the leased assets are made available for use.

Lease classification is determined at the lease commencement date, which is the date the leased assets are made available for use.

Operating leases are included in Operating lease right-of-use assets, Operating lease liabilities, current, and Operating lease liabilities, noncurrent in the consolidated balance sheets.

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Lease payments consist of the fixed payments under the arrangement, less any lease incentives, such as tenant improvement allowances.

Variable costs, such as maintenance and utilities based on actual usage, are not included in the measurement of right-to-use assets and lease liabilities but are expensed when the event determining the amount of variable consideration to be paid occurs.

Variable costs, such as maintenance and utilities based on actual usage, are not included in the measurement of right-to-use (“ROU”) assets and lease liabilities but are expensed when the event determining the amount of variable consideration to be paid occurs.

As the implicit rate of the leases is not determinable, the Company uses an incremental borrowing rate (“IBR”) based on the information available at the lease commencement date in determining the present value of lease payments.

Lease expenses are recognized on a straight-line basis over the lease term.

The Company uses the non-cancelable lease term when recognizing the right-of-use (“ROU”) assets and lease liabilities, unless it is reasonably certain that a renewal or termination option will be exercised.

The Company accounts for lease components and non-lease components as a single lease component.

The Company uses the non-cancelable lease term when recognizing the ROU assets and lease liabilities, unless it is reasonably certain that a renewal or termination option will be exercised.

The Company accounts for the lease and non-lease components as a single lease component.

Leases with a term of twelve months or less are not recognized on the consolidated balance sheets but are recognized as expense on a straight-line basis over the term of the lease.

3 unchanged sentences

Debt issuance costs, net of accumulated amortization, were $ 4.5 million and $ 4.6 million as of January 31, 2023 and January 31, 2022, respectively.

Debt issuance cost associated with the Senior Notes are recorded as a reduction to the carrying value of the Senior Notes on the consolidated balance sheets.

The unamortized issuance costs relating to the Senior Notes were $ 2.3 million as of January 31, 2022.

All deferred financing costs are being amortized to interest expense.

The effective interest method is used for debt issuance cost related to the Senior Notes.

Debt issuance costs related to the revolving credit facility are being amortized over the term of the financing arrangement under the straight-line method.

The Company’s amortization of these costs were $ 1.0 million, $ 0.8 million and $ 0.4 million for the fiscal years ended January 31, 2022, 2021 and 2020, respectively.

Debt issuance costs associated with the Senior Notes are recorded as a reduction to the carrying value of the Senior Notes on the consolidated balance sheets.

The unamortized issuance costs relating to the Senior Notes were $ 2.0 million and $ 2.3 million as of January 31, 2023 and January 31, 2022, respectively.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

All deferred financing costs are amortized to interest expense.

The effective interest method is used for debt issuance costs related to the Senior Notes.

Debt issuance costs related to the revolving credit facility are amortized over the term of the financing arrangement under the straight-line method.

The Company’s amortization of these costs was $ 1.3 million, $ 1.0 million, and $ 0.8 million for the fiscal years ended January 31, 2023, 2022, and 2021, respectively.

Foreign Currency Translation and Transactions

The functional currencies of the Company’s foreign subsidiaries are each country’s local currency.

The functional currencies of the Company’s foreign subsidiaries are generally the country’s local currency.

Assets and liabilities of the subsidiaries are translated into U.S.

2 unchanged sentences

Revenue and expenses are translated at the average exchange rates during the period.

The resulting translation adjustments are recorded in accumulated other comprehensive income (loss).

The resulting translation adjustments are recorded in Accumulated other comprehensive loss.

Foreign currency transaction gains or losses, whether realized or unrealized, are reflected in the consolidated statements of operations within Other income (expense), net, and have not been material for all periods presented.

4 unchanged sentences

The Company establishes a liability for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due.

The Company’s assumptions, judgments and estimates relative to the current provision for income taxes take into account current

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

tax laws, the Company’s interpretation of current tax laws and possible outcomes of current and future audits conducted by foreign and domestic tax authorities.

The Company’s assumptions, judgments, and estimates relative to the current provision for income taxes take into account current tax laws, the Company’s interpretation of current tax laws, and possible outcomes of current and future audits conducted by foreign and domestic tax authorities.

The Company has established reserves for income taxes to address potential exposures involving tax positions that could be challenged by tax authorities.

1 unchanged sentence

Internal Revenue Service (“IRS”) and other domestic and foreign tax authorities.

The Company regularly assess the likelihood of outcomes resulting from these examinations to determine the adequacy of its provision for income taxes and have reserved for potential adjustments that may result from such examinations.

The Company regularly assesses the likelihood of outcomes resulting from these examinations to determine the adequacy of its provision for income taxes and have reserved for potential adjustments that may result from such examinations.

The Company believes such estimates to be reasonable;

however, the final determination of any of these examinations could significantly impact the amounts provided for income taxes in the Company’s consolidated financial statements.

Segment Information

The Company’s chief operating decision maker (“CODM”) is its chief executive officer.

The CODM reviews financial information presented on a consolidated basis for the purposes of allocating resources and evaluating financial performance.

Accordingly, management has determined that the Company operates as one operating and reportable segment.

Net Loss per Share

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As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share.

Recently Adopted Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes, which enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law.

The Company adopted this guidance on February 1, 2021, which did not have a material effect on its consolidated financial statements.

Recently Issued Accounting Pronouncements

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For public business entities, this ASU is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years.

The Company is currently evaluating the impact of the adoption of this ASU on its consolidated financial statements.

This ASU is not expected to have a material impact on the Company’s consolidated financial statements upon adoption.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

Investments and Fair Value Measurements

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The standard also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company.

Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

Observable inputs are inputs market participants would use in valuing the asset or liability based on market data obtained from sources independent of the Company.

Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability based upon the best information available in the circumstances.

The hierarchy is broken down into three levels as follows:

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Money market funds $ 64,752 $ — $ — $ 64,752 $ 300,027 $ — $ — $ 300,027

Deferred compensation investments 64 — — 64 — — — —

Total assets $ 64,816 $ — $ — $ 64,816 $ 300,027 $ — $ — $ 300,027

_______________________________________

(1) Included in “Cash and cash equivalents” on the consolidated balance sheets.

(1) $ 250.0 million of time deposits, which are included in short-term investments, are excluded since they are carried at cost and approximate fair value.

(2) Cash equivalents exclude $ 1.6 billion of time deposits, which are carried at cost and approximate fair value.

There were no transfers between the levels of the fair value hierarchy during the periods presented.

The following summarizes the changes in strategic investments, which are Level 3 within the fair value hierarchy (in thousands):

Year Ended January 31

The following summarizes the net carrying value of the strategic investments, which are Level 3, within the fair value hierarchy (in thousands):

Total initial cost $ 40,617 $ 18,809

Unrealized gains due to changes in fair value 4,823 —

Unrealized net gains due to changes in fair value 6,653 4,823

Carrying value $ 47,270 $ 23,632

The following summarizes the changes in the redeemable convertible preferred stock warrant liability, which is classified as a Level 3 instrument:

Year Ended January 31

2022 2021 2020

Balance at beginning of period $ — $ — $ 4,537

Adjustment resulting from change in fair value recognized in the consolidated statement of operations — — 6,022

Reclassification of redeemable convertible preferred stock warrant liability to additional paid-in capital upon IPO — — ( 10,559 )

Balance at end of period $ — $ — $ —

The fair value of the redeemable convertible preferred stock warrant liability was estimated using the Black-Scholes option-pricing model and was based on significant inputs not observable in the market, and therefore was classified as a Level 3 instrument.

The inputs include the Company’s preferred stock price, expected stock price volatility, risk-free interest rate, and

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

contractual term.

A loss of $ 6.0 million was recorded as a component of Other income (expense), net, because of the remeasurement of the redeemable convertible preferred stock warrant liability during the fiscal year ended January 31, 2020.

Balance Sheet Components

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

Prepaid software licenses $ 26,085 $ 20,596

Prepaid expenses 18,829 12,220

Prepaid marketing 17,629 10,852

Other current assets 12,783 4,566

Prepaid hosting services 4,026 5,383

Prepaid expenses and other current assets $ 79,352 $ 53,617

Property and Equipment, Net

5 unchanged sentences

Furniture and equipment 7,412 7,291

Construction in process 99,030 35,528

Construction in progress 259,013 99,030

708,614 402,355

1 unchanged sentence

Property and equipment, net $ 492,335 $ 260,577

Construction in process mainly includes data center equipment purchased that has not yet been placed in service.

Construction in progress primarily includes data center equipment purchased that has not yet been placed in service.

Data center equipment that was purchased but not yet been placed into service was $ 245.4 million and $ 89.8 million as of January 31, 2023 and January 31, 2022, respectively.

Depreciation and amortization expense of property and equipment was $ 77.2 million, $ 54.4 million, and $ 38.7 million, during the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021, respectively.

There were no impairments for property and equipment during the fiscal years ended January 31, 2022, January 31, 2021, and January 31, 2020 .

The Company capitalized $ 49.3 million, $ 30.7 million, and $ 14.0 million in internal-use software and website development costs during the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021, respectively.

1 unchanged sentence

The net book value of capitalized internal-use software and website development costs was $ 66.3 million and $ 38.6 million as of January 31, 2023 and January 31, 2022, respectively.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

Intangible Assets, Net

6 unchanged sentences

Total $ 118,201 $ 31,312 $ 86,889

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

January 31, 2022 Weighted-Average Remaining Useful Life

5 unchanged sentences

Amortization expense of intangible assets was $ 16.6 million, $ 12.9 million, and $ 1.4 million, during the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021, respectively.

Amortization expense of other acquired intangible assets is recorded within cost of revenue, research and development expense and general and administrative expense in the consolidated statements of operations.

The estimated aggregate future amortization expense of intangible assets as of January 31, 2022 is as follows (in thousands):

The estimated aggregate future amortization expense of intangible assets as of January 31, 2023 was as follows (in thousands):

Fiscal 2024 $ 16,442

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Total amortization expense $ 86,889

The developed technology, customer relationships, and other acquired intangible assets are amortized over their estimated useful lives, generally on a straight-line basis for periods ranging from 2 to 20 years.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

The changes in goodwill during the fiscal year ended January 31, 2023 consisted of the following (in thousands):

1 unchanged sentence

Goodwill acquired (1)

Goodwill adjustment for the SecureCircle acquisition 81

Foreign currency translation ( 120 )

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__________________________________

(1) Goodwill acquired resulted from the acquisition of Humio and SecureCircle.

Refer to Note 14, Acquisitions, for additional information.

Other Assets, Noncurrent

Other assets, noncurrent consisted of the following (in thousands):

Other assets $ 13,348 $ 8,627

Deferred income tax asset 4,802 1,328

Deferred finance cost 4,620 4,355

Deposits 2,576 2,802

Other assets, noncurrent $ 25,346 $ 17,112

(1) Goodwill acquired resulted from the acquisition of Reposify Ltd.

Refer to Note 12 for additional information.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

Accrued Expenses

1 unchanged sentence

Web hosting services $ 65,589 $ 23,711

Other accrued expenses 14,451 11,372

Accrued legal and accounting 14,166 5,709

Accrued purchases of property and equipment 20,157 10,878

Accrued interest expense 10,375 687

Accrued professional services 13,281 10,664

Accrued marketing 11,435 9,801

Other accrued expenses 11,247 13,988

Accrued interest expense 10,375 10,375

Accrued partner commissions 5,800 3,965

Accrued expenses $ 137,884 $ 83,382

6 unchanged sentences

Accrued payroll and benefits $ 168,767 $ 104,563

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

In April 2020, the Company began deferring payment on its share of payroll taxes owed, as permitted by the CARES Act, through December 31, 2020.

As of January 31, 2023, all applicable payments have been made and there are no deferred payments to be paid.

As of January 31, 2022, the Company had deferred $ 5.1 million of payroll taxes in Other current liabilities.

Other Current Liabilities

Other current liabilities consisted of the following (in thousands):

Other current liabilities $ 12,820 $ 9,652

Income tax payable 5,781 2,639

Accrued taxes 4,914 2,837

Customer deposits 1,414 2,371

Other current liabilities $ 24,929 $ 17,499

Secured Revolving Credit Facility

4 unchanged sentences

The A&R Credit Agreement extended the maturity date of April 19, 2022 to January 2, 2026.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

On January 6, 2022, the Company modified the A&R Credit Agreement (the “Amended A&R Credit Agreement”) among CrowdStrike, Inc., as borrower, CrowdStrike Holdings, Inc., as guarantor, and Silicon Valley Bank and the other lenders party thereto.

4 unchanged sentences

The financial covenants require the Company to maintain a minimum consolidated interest coverage ratio of 3.00 :1.00, a maximum senior secured leverage ratio of 3.00 :1.00 (through January 31, 2023), and a maximum total leverage ratio of 5.50 :1.00 stepping down to 3.50 :1.00 over time.

The Company was in compliance with the financial covenants as of January 31, 2022.

The Company was in compliance with all of its financial covenants as of January 31, 2023.

The Amended A&R Credit Agreement is secured by substantially all of the Company’s current and future consolidated assets, property and rights, including, but not limited to, intellectual property, cash, goods, equipment, contractual rights, financial assets, and intangible assets of the Company and certain of its subsidiaries.

1 unchanged sentence

No amounts were outstanding under the Amended A&R Credit Agreement as of January 31, 2023.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

On January 20, 2021, the Company issued $ 750.0 million in aggregate principal amount of 3.00 % Senior Notes maturing in February 2029.

11 unchanged sentences

Interest expense related to contractual interest expense, amortization of debt issuance

costs and accretion of debt discount was $ 24.0 million and $ 0.8 million, respectively, during the fiscal year ended January 31, 2022 and January 31, 2021, respectively.

costs, and accretion of debt discount was $ 24.0 million during both fiscal years ended January 31, 2023 and January 31, 2022.

In certain circumstances involving a change of control event, the Company will be required to make an offer to repurchase all or, at the holder’s option, any part, of each holder’s notes of that series at 101 % of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.

8 unchanged sentences

As of January 31, 2023, the Company was in compliance with all of its financial covenants under the Indenture associated with the Senior Notes.

Based on the trading prices of the Senior Notes, the fair value of the Senior Notes as of January 31, 2022 was approximately $ 708.7 million.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

Based on the trading prices of the Senior Notes, the fair value of the Senior Notes was approximately $ 645.4 million and $ 708.7 million as of January 31, 2023 and January 31, 2022, respectively.

While the Senior Notes are recorded at cost, the fair value of the Senior Notes was determined based on quoted prices in markets that are not active;

accordingly, the Senior Notes is categorized as Level 2 for purposes of the fair value measurement hierarchy.

accordingly, the Senior Notes are categorized as Level 2 for purposes of the fair value measurement hierarchy.

The Company’s geographical breakdown of its loss before provision for income taxes for the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021 is as follows (in thousands):

4 unchanged sentences

Loss before provision for income taxes $ ( 159,883 ) $ ( 160,023 ) $ ( 87,869 )

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

The components of the provision for income taxes during the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021 are as follows (in thousands):

20 unchanged sentences

Non-deductible expenses 2,800 2,783 2,212

Change in unrecognized tax benefits — — ( 2,659 )

Change in valuation allowance 102,892 210,680 168,869

2 unchanged sentences

Provision for income taxes $ 22,402 $ 72,355 $ 4,760

The Company recognized an income tax expense of $ 72.4 million, $ 4.8 million, and $ 2.0 million for the fiscal years January 31, 2022, January 31, 2021 and January 31, 2020, respectively.

The tax expense for the fiscal years ended January 31, 2021 and January 31, 2020 was primarily attributable to pre-tax foreign earnings and withholding taxes related to customer payments in certain foreign jurisdictions in which the Company conducts business.

The tax expense for the fiscal year ended January 31, 2022 was primarily attributable to pre-tax foreign earnings and the intercompany sale of intellectual property from Humio.

The Company transferred acquired intellectual property from the foreign subsidiary to the U.S.

Although the transfer of the intellectual property between consolidated entities did not result in any gain in the consolidated statement of operations, the Company generated a taxable gain in the foreign jurisdiction resulting in an additional tax expense of $ 57.2 million.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

The Company recognized income tax expense of $ 22.4 million, $ 72.4 million, and $ 4.8 million for the fiscal years January 31, 2023, January 31, 2022 and January 31, 2021, respectively.

The tax expense for the fiscal year ended January 31, 2021 was primarily attributable to pre-tax foreign earnings and withholding taxes related to customer payments in certain foreign jurisdictions in which the Company conducts business.

The tax expense for the fiscal years ended January 31, 2023 and January 31, 2022 was primarily attributable to pre-tax foreign earnings, withholding taxes related to customer payments in certain foreign jurisdictions and intercompany sales of intellectual property from acquisitions, whereby the Company transferred acquired intellectual property from the respective foreign subsidiary to the U.S.

Although the transfers of the intellectual property between consolidated entities did not result in any gain in the consolidated statements of operations, the Company generated a taxable gain in the respective foreign jurisdiction, resulting in an additional tax expense of $ 4.7 million and $ 57.2 million for the fiscal years ended January 31, 2023 and January 31, 2022, respectively.

Significant components of the Company’s deferred tax assets and liabilities as of January 31, 2023 and January 31, 2022 are as follows (in thousands):

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Capitalized commissions ( 99,397 ) ( 1,632 )

Intangible assets — ( 3,697 )

Operating right-of-use assets ( 12,285 ) ( 9,256 )

1 unchanged sentence

Total deferred tax liabilities ( 136,998 ) ( 19,657 )

Net deferred tax assets (liabilities) $ 4,727 $ 1,240

Net deferred tax assets $ 4,453 $ 4,727

At each reporting date, the Company has established a valuation allowance against its U.S.

net deferred tax assets due to the uncertainty surrounding the realization of those assets.

During the fiscal year ended January 31, 2020, the Company has established a valuation allowance against its net U.K.

deferred tax assets due to uncertainty surrounding the realization of those assets.

federal and state and U.K.net deferred tax assets due to the uncertainty surrounding the realization of those assets.

The Company periodically evaluates the recoverability of the deferred tax assets and, when it is determined to be more-likely-than-not that the deferred tax assets are realizable, the valuation allowance is reduced.

During the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021, the valuation allowance increased by $ 139.2 million, $ 357.0 million, and $ 206.2 million, respectively.

The increase in the valuation allowance during the fiscal years ended January 31, 2022, January 31, 2021 and January 31, 2020 was primarily driven by losses generated in the United States and United Kingdom.

As of January 31, 2022, January 31, 2021, and January 31, 2020 the valuation allowance for deferred taxes balance was $ 770.9 million, $ 413.8 million, and $ 207.6 million, respectively.

The increases in the valuation allowance during the fiscal years ended January 31, 2023 and January 31, 2022 were primarily driven by losses generated in the U.S.

As of January 31, 2023, January 31, 2022, and January 31, 2021 the valuation allowance for deferred taxes was $ 910.1 million, $ 770.9 million, and $ 413.8 million, respectively.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

As of January 31, 2023, the Company had aggregate federal and California net operating loss carryforwards of $ 1.6 billion and $ 248.2 million, respectively, which may be available to offset future taxable income for income tax purposes.

The federal and California net operating loss carryforwards begin to expire in fiscal 2031 through fiscal 2043.

In addition, for federal losses generated after December 31, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Act”) modified the maximum deduction of net operating loss, eliminated carryback, and provided an indefinite carryforward.

As of January 31, 2022, net operating loss carryforwards for other states total $ 868.0 million which begin to expire in fiscal 2023 through fiscal 2042.

As of January 31, 2022, net operating loss carryforwards for United Kingdom total $ 81.1 million which are carried forward indefinitely.

As of January 31, 2022, the Company had federal and California research and development credit (“R&D credit”) carryforwards of $ 65.6 million and $ 13.7 million, respectively.

As of January 31, 2023, net operating loss carryforwards for other states totaled $ 1.0 billion, which begin to expire in fiscal 2024 through fiscal 2043.

As of January 31, 2023, net operating loss carryforwards for the U.K.

totaled $ 80.9 million, which are carried forward indefinitely.

As of January 31, 2023, the Company had federal and California research and development (“R&D”) credit carryforwards of $ 87.4 million and $ 18.8 million, respectively.

The federal R&D credit carryforwards will begin to expire in fiscal 2035 though fiscal 2043.

The California R&D credits are carried forward indefinitely.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

Realization of these net operating loss and research and development credit carryforwards depends on future income, and there is a risk that the Company’s existing carryforwards could expire unused and be unavailable to offset future income tax liabilities.

The Internal Revenue Code imposes limitations on a corporation’s ability to utilize net operating loss (“NOLs”) and credit carryovers if it experiences an ownership change as defined in Section 382.

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The Company’s net operating losses and credit carryovers are not currently subject to a limitation due to an ownership change.

The total gross unrecognized tax benefit as of January 31, 2022, January 31, 2021 and January 31, 2020 were $ 26.3 million, $ 24.4 million, and $ 5.5 million, respectively.

As of January 31, 2022, the Company had $ 1.9 million of unrecognized tax benefits, which, if recognized, would affect the Company’s effective tax rate.

Total gross unrecognized tax benefits as of January 31, 2023, January 31, 2022, and January 31, 2021 were $ 36.9 million, $ 26.3 million, and $ 24.4 million, respectively.

As of January 31, 2023, the Company had $ 4.2 million of unrecognized tax benefits, which, if recognized, would affect the Company’s effective tax rate due to the full valuation allowance.

The Company’s policy is to classify interest and penalties related to unrecognized tax benefits as part of the income tax provision in the consolidated statements of operations.

The Company had incurred insignificant amounts of interest and penalties related to unrecognized tax benefits as of January 31, 2022 and did not accrue interest and penalties in prior periods.

During the fiscal years ended January 31, 2022 and 2021, the net increase in uncertain tax benefits was a result of research and development credits.

During the fiscal year ended January 31, 2020, the uncertain tax benefits balance decreased due to the application of IRS directive in determining the research credit.

The Company had incurred an insignificant amount of interest and penalties related to unrecognized tax benefits as of January 31, 2023 and January 31, 2022, and did not accrue interest and penalties in prior periods.

During the fiscal year ended January 31, 2023, January 31, 2022, and January 31, 2021 the net increase in uncertain tax benefits was a result of research and development credits.

The potential change in unrecognized tax benefits during the next 12 months is not expected to be material.

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Balance as of February 1, 2020 $ 5,469

Decreases in current period tax positions ( 2,659 )

Balance as of January 31, 2020 5,469

Increases in prior period tax positions

Increase in current period tax positions 12,052

Increases in current period tax positions 12,052

Balance as of January 31, 2021 24,447

1 unchanged sentence

Decreases in prior period tax positions ( 9,772 )

Increase in current period tax positions 11,463

Increases in current period tax positions 11,463

Balance as of January 31, 2022 26,324

Decreases in prior period tax positions ( 2,122 )

Increases in current period tax positions 12,699

Balance as of January 31, 2023 $ 36,901

The Company files income tax returns in the U.S.

federal jurisdiction and various state jurisdictions.

federal, foreign, and various state jurisdictions.

Tax years 2011 and onwards remain subject to examination by U.S.

1 unchanged sentence

The Company does not provide for federal and state income taxes on the undistributed earnings of its foreign subsidiaries as such earnings are to be reinvested offshore indefinitely.

As a result of the Tax Act, if the Company repatriated these earnings, the tax impact of future distributions of foreign earnings would generally be limited to withholding tax from local jurisdictions, and the resulting income tax liability would be insignificant.

Equity Transactions

In connection with the IPO, on June 14, 2019, the Company filed an Amended and Restated Certificate of Incorporation which authorizes the issuance of 2,000,000,000 shares of Class A common stock with a par value of $ 0.0005 per share, 300,000,000 shares of Class B common stock with a par value of $ 0.0005 per share, and 100,000,000 shares of undesignated preferred stock with a par value of $ 0.0005 per share.

The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion rights.

Each share of Class A common stock is entitled to one vote per share.

Each share of Class B common stock is entitled to ten votes per share and is convertible

If the Company repatriated these earnings, the tax impact of future distributions of foreign earnings would generally be limited to withholding tax from foreign jurisdictions, and the resulting income tax liability would be insignificant.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

into one share of Class A common stock.

Class A and Class B common stockholders are not entitled to receive dividends unless declared by the Company’s board of directors.

Claims Settlement

In December 2019, a security holder paid the Company $ 2.3 million to settle a claim under Section 16(b) of the Securities Exchange Act of 1934.

Section 16(b) requires certain persons and entities whose securities trading activities result in “short swing” profits to repay such profits to the issuer of the security.

This payment was recorded as an increase to stockholders’ equity and as cash provided by financing activities in the consolidated statement of cash flows for the fiscal year ended January 31, 2020.

Operating Leases

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Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised and therefore are not factored into the determination of lease payments.

Cash paid for amounts included in the measurement of operating lease liabilities were $ 11.8 million and $ 11.0 million for the fiscal years ended January 31, 2022 and January 31, 2021, respectively.

Cash paid for amounts included in the measurement of operating lease liabilities were $ 12.0 million, $ 11.8 million, and $ 11.0 million for the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021, respectively.

Operating lease liabilities arising from obtaining operating right of-use assets were $ 18.5 million and $ 4.9 million for the fiscal years ended January 31, 2023 and January 31, 2022, respectively.

The weighted-average remaining lease term are 3.0 years and 4.1 years as of January 31, 2022 and January 31, 2021, respectively.

The weighted-average discount rates are 5.4 % and 5.9 % as of January 31, 2022 and January 31, 2021, respectively.

The component of lease costs was as follows (in thousands):

The weighted-average remaining lease terms were 3.5 years and 3.0 years as of January 31, 2023 and January 31, 2022, respectively.

The weighted-average discount rates were 4.5 % and 5.4 % as of January 31, 2023 and January 31, 2022, respectively.

The components of lease costs were as follows (in thousands):

Year Ended January 31,

2023 2022 2021

Operating lease cost $ 11,084 $ 11,262 $ 10,308

2 unchanged sentences

Total lease cost $ 21,707 $ 18,054 $ 15,272

Total rent expense recognized prior to the adoption of Topic 842 were $ 10.3 million for the year ended January 31, 2020.

There was no sublease income for the fiscal year ended January 31, 2022 or January 31, 2021.

As of January 31, 2022, the Company has not entered into any non-cancelable operating leases with a term greater than 12 months that have not yet commenced.

There was no sublease income for the fiscal years ended January 31, 2023, January 31, 2022, or January 31, 2021.

As of January 31, 2023, the Company has entered into non-cancelable operating leases with terms greater than 12 months that have not yet commenced with undiscounted future minimum payments of $ 10.9 million, which are excluded from the table above.

The operating leases will commence between February 2023 and April 2023 with lease terms between 5 and 6 years.

The maturities of the Company’s non-cancelable operating lease liabilities are as follows (in thousands):

5 unchanged sentences

Fiscal 2028 4,432

Thereafter 4,859

Total operating lease payments 46,984

12 unchanged sentences

The 2011 Plan was terminated on June 10, 2019, which was the business day prior to the effectiveness of the Company’s registration statement on Form S-1 used in connection with the Company’s IPO, and stock-based awards are no longer granted under the 2011 Plan.

Any shares underlying stock options that expire or terminate or are forfeited or repurchased under the 2011 Plan will be automatically transferred to the 2019 Plan.

Any shares underlying stock options that expire, terminate, or are forfeited or repurchased under the 2011 Plan will be automatically transferred to the 2019 Plan.

Stock Options

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Treasury yield curve in effect at the time of grant for the estimated option life.

The fair value of each option was estimated on the date of grant using the following assumptions during the period:

The fair value of stock options was generally estimated on the date of grant using the following assumptions during the period:

Year Ended January 31,

2022 2021 2020

Expected term (in years) 3.82 – 5.63

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0.2 % – 0.4 %

2.0 % – 2.4 %

Expected stock price volatility 36.1 % – 37.1 %

35.8 % – 37.3 %

37.7 % – 37.9 %

Dividend yield — % — %

Stock options granted during the fiscal year ended January 31, 2023 were immaterial.

The following table is a summary of stock option activity for the fiscal year ended January 31, 2023:

9 unchanged sentences

Options exercisable at January 31, 2023 2,528 $ 8.09

Options outstanding include 362,406 options that were unvested as of January 31, 2022.

The aggregate intrinsic value of options vested and exercisable was $ 480.5 million, $ 711.4 million, and $ 469.6 million as of January 31, 2022, January 31, 2021, and January 31, 2020, respectively.

The weighted-average remaining contractual term of

Options outstanding include 307,991 options that were unvested and exercisable as of January 31, 2023.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

options vested and exercisable was 5.7 years, 6.4 years, and 6.7 years as of January 31, 2022, January 31, 2021, and January 31, 2020, respectively.

The aggregate intrinsic value of options vested and exercisable was $ 247.2 million, $ 480.5 million, and $ 711.4 million as of January 31, 2023, January 31, 2022, and January 31, 2021, respectively.

The weighted-average remaining contractual term of options vested and exercisable was 4.8 years, 5.7 years, and 6.4 years as of January 31, 2023, January 31, 2022, and January 31, 2021, respectively.

The weighted-average grant date fair values of all options granted was $ 116.26 , $ 180.08 , and $ 66.31 per share during the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021, respectively.

The total intrinsic value of all options exercised was $ 166.8 million, $ 570.9 million, and $ 847.5 million during the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021, respectively.

The aggregate intrinsic value of stock options outstanding as of January 31, 2022, January 31, 2021, and January 31, 2020 was $ 678.0 million, $ 1.4 billion, and $ 816.3 million, respectively, which represents the excess of the fair value of the Company’s common stock over the exercise price of the options multiplied by the number of options outstanding.

The aggregate intrinsic value of stock options outstanding as of January 31, 2023, January 31, 2022, and January 31, 2021 was $ 279.4 million, $ 678.0 million, and $ 1.4 billion, respectively, which represents the excess of the fair value of the Company’s common stock over the exercise price of the options, multiplied by the number of options outstanding.

The weighted-average remaining contractual term of stock options outstanding was 5.0 years, 6.1 years, and 7.0 years as of January 31, 2023, January 31, 2022, and January 31, 2021, respectively.

Total unrecognized stock-based compensation expense related to unvested options was $ 2.5 million as of January 31, 2023.

This expense is expected to be amortized on a straight-line basis over a weighted-average vesting period of 1.4 years.

Total unrecognized stock-based compensation expense related to unvested options was $ 24.3 million as of January 31, 2021.

This expense is expected to be amortized on a straight-line basis over a weighted-average vesting period of 1.7 years.

This expense is expected to be amortized over a weighted-average vesting period of 1.6 years.

Early Exercise of Employee Options

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There were no issued shares of common stock related to early exercised stock options during the fiscal year ended January 31, 2023 or January 31, 2022.

As of January 31, 2022, the number of shares of common stock related to early exercised stock options subject to repurchase was 197,994 shares for $ 2.2 million.

As of January 31, 2023, there were no shares of common stock related to early exercised stock options subject to repurchase.

As of January 31, 2022, the number of shares of common stock related to early exercised stock options subject to repurchase was 197,994 shares for $ 2.2 million.

Common stock purchased pursuant to an early exercise of stock options is not deemed to be outstanding for accounting purposes until those shares vest.

The Company includes unvested shares subject to repurchase in the number of shares outstanding in the consolidated balance sheet and statements of stockholders’ equity (deficit).

The Company includes unvested shares subject to repurchase in the number of shares outstanding in the consolidated balance sheets and statements of stockholders’ equity.

Restricted Stock Units

Restricted Stock Units (“RSUs”) granted under the 2019 Plan are generally subject to only service-based vesting condition.

RSUs granted under the 2019 Plan are generally subject to only a service-based vesting condition.

The service-based vesting condition is generally satisfied based on one of four vesting schedules:

(i) vesting of one-fourth of the RSUs on the first “Company vest date” (defined as March 20, June 20, September 20, or December 20) on or following the one-year anniversary of the vesting commencement date with the remainder of the RSUs vesting in twelve equal quarterly installments thereafter, subject to continued service, (ii) vesting in sixteen equal quarterly installments, subject to continued service, (iii) vesting in eight equal quarterly installments, subject to continued service, or (iv) vesting sixteen quarterly installments with 10 % in the first year, 15 % in the second year, 25 % in the third year and 50 % in the fourth year, subject to continued service.

The valuation of such RSUs is based solely on the fair value of the Company’s stock price on the date of grant.

Expense for RSUs are generally amortized on a straight-line basis.

Total unrecognized stock-based compensation expense related to unvested RSUs was $ 702.3 million as of January 31, 2022.

This expense is expected to be amortized (subject to acceleration or straight-line basis) over a weighted-average vesting period of 2.3 years.

Total unrecognized stock-based compensation expense related to unvested RSUs was $ 393.9 million as of January 31, 2021.

This expense is expected to be amortized on an accelerated attribution method over a weighted-average vesting period of 2.6 years.

(i) vesting of one-fourth of the RSUs on the first “Company vest date” (defined as March 20, June 20, September 20, or December 20) on or following the one-year anniversary of the vesting commencement date, with the remainder of the RSUs vesting in twelve equal quarterly installments thereafter, subject to continued service, (ii) vesting in sixteen equal quarterly installments, subject to continued service, (iii) vesting in eight equal quarterly installments, subject to continued service, or (iv) vesting in sixteen quarterly installments with 10 % in the first year, 15 % in the second year, 25 % in the third year, and 50 % in the fourth year, subject to continued service.

The valuation of these RSUs is based solely on the fair value of the Company’s stock on the date of grant.

Total unrecognized stock-based compensation expense related to unvested RSUs was $ 1.3 billion as of January 31, 2023.

This expense is expected to be amortized over a weighted-average vesting period of 2.8 years.

Performance-based Stock Units

Performance-based stock units (“PSUs”) granted under the 2019 Plan are generally subject to both a service-based vesting condition and a performance-based vesting condition.

PSUs will vest upon the achievement of specified performance targets

PSUs granted under the 2019 Plan are generally subject to both a service-based vesting condition and a performance-based vesting condition.

PSUs will vest upon the achievement of specified performance targets and subject to continued service through the applicable vesting dates.

The associated compensation cost is recognized over the requisite service period when it is probable that the performance condition will be satisfied.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

and subject to continued service through the applicable vesting dates.

The compensation cost is recognized over the requisite service period when it is probable that the performance condition will be satisfied.

Expense for PSUs is being amortized under the accelerated attribution method and may be adjusted over the vesting period based on interim estimates of performance against pre-set objectives.

Total unrecognized stock-based compensation expense related to unvested PSUs was $ 60.8 million as of January 31, 2023.

This expense is expected to be amortized over a weighted-average vesting period of 1.2 years.

Total unrecognized stock-based compensation expense related to unvested PSUs was $ 24.8 million as of January 31, 2021.

This expense is expected to be amortized over a weighted-average vesting period of 1.3 years.

Special PSU Awards

In fiscal 2022 the Company’s board of directors granted 655,000 performance stock units (the “Special PSU Awards”) to certain executives under the 2019 Plan.

The Special PSU Awards will vest upon the satisfaction of the Company’s achievement of specified stock price hurdles, which is based on the average of the closing stock price per share of the Company’s Class A common stock during any 45 consecutive trading day period during the applicable performance period, and a service-based vesting condition.

The Special PSU Awards will vest upon the satisfaction of the Company’s achievement of specified stock price hurdles, which are based on the average of the closing stock price per share of the Company’s Class A common stock during any 45 consecutive trading day period during the applicable performance period, and a service-based vesting condition.

The service condition applicable to each tranche of the Special PSU Awards will be satisfied in installments as follows, subject to continued employment with the Company through each applicable vesting date:

(i) 50 % of the Special PSU Awards underlying the applicable tranche will service vest on the first anniversary of the vesting commencement date applicable to such tranche of the Special PSU Awards (i.e., February 1, 2022, February 1, 2023, February 1, 2024, and February 1, 2025) and (ii) the remaining PSUs with respect to such tranche will thereafter service vest in four equal quarterly installments of 12.5 %.

The Company measured the fair value of the Special PSU Awards using a Monte Carlo simulation valuation model.

The risk-free interest rates used were 0.85 % - 1.51 %, which was based on the zero-coupon-risk-free interest rate derived from the Treasury Constant Maturities yield curve for the expected term of the award on the grant date.

The Company measured the fair value of the Special PSU Awards on the grant date using a Monte Carlo simulation valuation model.

The risk-free interest rates used were 0.85 % - 1.51 %, which were based on the zero-coupon-risk-free interest rate derived from the Treasury Constant Maturities yield curve for the expected term of the award on the grant date.

The expected volatility was a blended volatility rate of 54.89 % - 55.36 %, which includes 50 % weight on the Company’s historical volatility calculated from daily stock returns over a 2.21 - 2.58 year look-back from the grant date and 50 % weight based on the Company’s implied volatility as of the grant date.

Stock-based compensation expense relating to the Special PSU Awards are recognized using the accelerated attribution method over the longer of the derived service period and the explicit service period.

Total unrecognized stock-based compensation expense related to the unvested portion of the Special PSU Awards was $ 66.2 million as of January 31, 2023.

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RSUs and PSUs outstanding at January 31, 2023 10,050 $ 158.08

RSUs and PSUs expected to vest at January 31, 2022 7,886 $ 125.04

___________________________

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

(1) Performance adjustment represents adjustments in shares outstanding due to the actual achievement of performance-based awards, the achievement of which was based upon predefined financial performance targets.

(1) The performance adjustment represents adjustments in shares outstanding due to the actual achievement of performance-based awards, the achievement of which was based upon pre-defined financial performance targets.

Employee Stock Purchase Plan

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The number of shares of common stock available for issuance under the ESPP is subject to an annual increase on the first day of each fiscal year beginning on February 1, 2020, equal to the lesser of:

(i) one percent ( 1 %) of outstanding shares of the Company’s capital stock as of the last day of the immediately preceding fiscal year or (ii) such other amount as its board of directors may determine.

(i) one percent ( 1 %) of the outstanding shares of the Company’s capital stock as of the last day of the immediately preceding

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

fiscal year or (ii) such other amount as its board of directors may determine.

In May 2021, the Company’s compensation committee adopted an amendment and restatement of the ESPP, which was approved by the Company’s stockholders in June 2021.

The amended and restated ESPP clarified the original intent that the annual increase will in no event exceed 5,000,000 shares of the Company’s Class A common stock in any year.

The ESPP provides for consecutive offering periods that will typically have a duration of approximately 24 months in length and is comprised of four purchase periods of approximately six months in length.

The ESPP provides for consecutive offering periods that will typically have a duration of approximately 24 months in length and are comprised of four purchase periods of approximately six months in length.

The offering periods are scheduled to start on the first trading day on or after June 11 and December 11 of each year.

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Amounts deducted and accumulated by the participant are used to purchase shares of common stock at the end of each six-month purchase period.

The purchase price of the shares shall be 85 % of the lower of the fair market value of the Class A common stock on (i) the first trading day of the applicable offering period and (ii) the last trading day of each purchase period in the related offering period.

The purchase price of the shares is 85 % of the lower of the fair market value of the Class A common stock on (i) the first trading day of the applicable offering period and (ii) the last trading day of each purchase period in the related offering period.

Participants may end their participation at any time during an offering period and will be paid their accrued contributions that have not yet been used to purchase shares of common stock.

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If an employee elects to increase his or her contribution, the Company treats this as an accounting modification.

The pre- and post-modification fair values are calculated on the date of the modification, and the incremental expense is then amortized over the remaining purchase period.

Incremental expense as a result of such modification was $ 6.2 million and $ 3.5 million for the fiscal years ended January 31, 2022 and January 31, 2021, respectively.

The ESPP offers a two-year look-back feature as well as a rollover feature that provides for an offering period to be rolled over to a new lower-priced offering if the offering price of the new offering period is less than that of the current offering period.

An ESPP rollover occurred when the Company’s closing stock price on December 10, 2021 was below the closing stock price on June 11, 2021, which triggered a new 24-month offering period through December 10, 2023 and resulted in an immaterial modification charge during the fiscal year ended January 31, 2022.

The ESPP also offers a two-year look-back feature, as well as a rollover feature that provides for an offering period to be rolled over to a new lower-priced offering if the offering price of the new offering period is less than that of the current offering period.

During the fiscal year ended January 31, 2023, there were ESPP rollovers because the Company’s closing stock price on the purchase date was lower than the Company’s closing stock price on the first day of the offering periods.

As a result, these offering dates were rolled over to a new 24-month offering period through December 12, 2024.

This rollover was accounted for as a modification to the original offerings.

The total incremental expense as a result of the rollover and contribution modifications was $ 58.6 million, which will be recognized over the new or remaining offering periods.

Employee payroll contributions ultimately used to purchase shares are reclassified to Stockholders’ equity on the purchase date.

ESPP employee payroll contributions accrued of $ 14.8 million and $ 11.0 million as of January 31, 2022 and January 31, 2021, respectively, and are included within accrued payroll and benefits in the consolidated balance sheets.

The following table summarizes the assumptions used in the Black-Scholes option-pricing model to determine fair value of the Company’s common shares to be issued under the ESPP for the offering periods beginning in June 2019:

ESPP employee payroll contributions accrued as of January 31, 2023 and January 31, 2022 totaled $ 17.5 million and $ 14.8 million, respectively, and are included within Accrued payroll and benefits in the consolidated balance sheets.

The following table summarizes the assumptions used in the Black-Scholes option-pricing model to determine the grant-date fair value of the ESPP:

Year Ended January 31,

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Dividend yield — % — % — %

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

Stock-Based Compensation Expense

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Total stock-based compensation expense $ 526,504 $ 309,952 $ 149,675

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

Revenue, Deferred Revenue and Remaining Performance Obligations

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The Company recognizes the contractual amount charged to the partners as revenue ratably over the term of the arrangement once access to the Company’s solution has been provided to the end customer.

The Company also uses referral partners who refer customers in exchange for a referral fee.

The Company negotiates pricing and contracts directly with the end customer.

The Company also uses referral and marketplace partners.

Referral partners refer customers in exchange for a referral fee, while marketplace partners process the transactions and charge a transaction processing fee.

For both sets of partners, the Company negotiates pricing and contracts directly with the end customer.

The Company recognizes revenue from the sales to the end customers ratably over the term of the contract once access to the Company’s solution has been provided to the end customer.

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Total revenue $ 2,241,236 100 % $ 1,451,594 100 % $ 874,438 100 %

No single country other than the United States represented 10% or more of the Company’s total revenue during the fiscal years ended January 31, 2022, January 31, 2021 or January 31, 2020.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

No single country other than the United States represented 10% or more of the Company’s total revenue during the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021.

Contract Balances

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Such amounts are recognized as revenue over the contractual period.

The Company recognized revenue of $ 696.7 million and $ 410.7 million for the fiscal years ended January 31, 2022 and January 31, 2021, respectively, that were included in the corresponding contract liability balance at the beginning of the period.

The Company recognized revenue of $ 1.1 billion and $ 696.7 million for the fiscal years ended January 31, 2023 and January 31, 2022, respectively, which was included in the corresponding contract liability balance at the beginning of the period.

The Company receives payments from customers based upon contractual billing schedules.

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Contract assets include amounts related to the contractual right to consideration for both completed and partially completed performance obligations that may not have been invoiced.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

Changes in deferred revenue were as follows (in thousands):

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The Company’s subscription contracts with its customers have a typical term of one to three years , and most subscription contracts are non-cancelable.

Customers typically have the right to terminate their contracts for cause as a result of the Company’s failure to perform.

Customers generally have the right to terminate their contracts for cause as a result of the Company’s failure to perform.

As of January 31, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 3.4 billion.

The Company expects to recognize approximately 65 % of the remaining performance obligations in the 12 months following January 31, 2022 and 34 % between 13 to 36 months, with the remainder to be recognized thereafter.

The Company expects to recognize approximately 63 % of the remaining performance obligations in the 12 months following January 31, 2023 and 36 % of the remaining performance obligations between 13 to 36 months, with the remainder to be recognized thereafter.

Costs to Obtain and Fulfill a Contract

The Company capitalizes referral fees paid to partners and sales commission and associated payroll taxes paid to internal sales personnel, contractors or sales agents that are incremental to the acquisition of channel partner and direct customer contracts and would not have occurred absent the customer contract.

The Company capitalizes referral fees paid to partners and sales commissions and associated payroll taxes paid to internal sales personnel, contractors, or sales agents that are incremental to the acquisition of channel partner and direct customer contracts and would not have occurred absent the customer contract.

These costs are recorded as Deferred contract acquisition costs, current and Deferred contract acquisition costs, noncurrent on the consolidated balance sheets.

Sales commissions for renewal of a contract are not considered commensurate with the commissions paid for the acquisition of the initial contract or follow-on upsell given the substantive difference in commission rates in proportion to their respective contract values.

Commissions, including referral fees paid to referral partners, earned upon the initial acquisition of a contract or subsequent upsell are amortized over an estimated period of benefit of 4 years while commissions earned for renewal contracts are amortized over the contractual term of the renewals.

Sales commissions associated with professional service contracts are amortized ratably over an estimated period of benefit of six months and included in sales and marketing expense in the consolidated statements of operations.

Commissions, including referral fees paid to referral partners, earned upon the initial acquisition of a contract or subsequent upsell are amortized over an estimated period of benefit of four years , while commissions earned for renewal contracts are amortized over the contractual term of the renewals.

Sales commissions associated with professional service contracts are amortized ratably over an estimated period of benefit of eight months and are included in Sales and marketing expense in the consolidated statements of operations.

In determining the period of benefit for commissions paid for the acquisition of the initial contract, the Company took into consideration the expected subscription term and expected renewals of customer contracts, the historical duration of relationships with customers, customer retention data, and the life of the developed technology.

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The Company did no t recognize any material impairment losses of deferred contract acquisition costs during the year ended January 31, 2023.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

The following table summarizes the activity of deferred contract acquisition costs (in thousands):

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Total deferred contract acquisition costs $ 447,088 $ 319,180

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

Commitments and Contingencies

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As of January 31, 2023, the Company is committed to spend $ 179.9 million on such agreements through fiscal 2031.

These obligations are included in purchase obligations below.

In the normal course of business, the Company enters into non-cancelable purchase commitments with various parties to purchase products and services such as technology, equipment, office renovations, corporate events, and consulting services.

A summary of noncancellable purchase obligations in excess of one year as of January 31, 2022 with expected date of payment is as follows (in thousands):

These obligations are included in purchase commitments below.

In the normal course of business, the Company also enters into non-cancelable purchase commitments with various parties to purchase products and services such as advertising, technology, equipment, office renovations, corporate events, and consulting services.

A summary of non-cancelable purchase obligations in excess of one year as of January 31, 2023, with expected date of payment is as follows (in thousands):

Fiscal 2024 $ 78,095

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Letters of Credit

As of January 31, 2022 and January 31, 2021, the Company had an unused standby letter of credit for $ 0.4 million securing its facility in Sunnyvale, California.

As of January 31, 2022 and January 31, 2021, the Company had an unused standby letter of credit for $ 0.8 million and $ 1.0 million, respectively, securing the facility housing its principal executive offices in Austin, Texas.

In November 2016, Fair Isaac Corporation (“FICO”) filed a petition before the Trademark Trial and Appellate Board (“TTAB”) at the U.S.

Patent and Trademark Office, seeking cancellation of the Company’s registration of its “CrowdStrike

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

Falcon” trademark, and a notice of opposition of the Company’s trademark application for “Falcon OverWatch.” The Company denies that any of the relief FICO seeks is appropriate, and has itself moved to cancel, or in the alternative amend, FICO’s “Falcon” trademark registrations before the TTAB.

The proceedings have been consolidated and are in the discovery phase.

The Company is vigorously defending the case, but given the early stage, although a loss may reasonably be possible, the Company is unable to predict the likelihood of success of FICO’s claims or estimate a loss or range of loss.

As a result, no material liability has been recorded as of January 31, 2022 or January 31, 2021.

As of January 31, 2023 and January 31, 2022 , the Company had unused standby letters of credit for $ 0.4 million securing its facility in Sunnyvale, California, and $ 0.8 million securing its principal executive offices in Austin, Texas.

In June 2022, the Company and Fair Isaac Corporation (“FICO”) resolved a trademark dispute that was pending before the Trademark Trial and Appellate Board (“TTAB”) at the U.S.

Patent and Trademark Office.

The TTAB dismissed all proceedings between the parties in July 2022.

In March 2022, Webroot, Inc.

and Open Text, Inc.

(collectively, “Webroot”) filed a lawsuit against the Company in federal court in the Western District of Texas alleging that certain of the Company’s products infringe six patents held by them.

(collectively, “Webroot”) filed a lawsuit against the Company and CrowdStrike, Inc.

in federal court in the Western District of Texas alleging that certain of the Company’s products infringe six patents held by them.

In the complaint, Webroot sought unspecified damages, attorneys’ fees, and a permanent injunction.

The Company is evaluating Webroot’s claims and intends to vigorously defend against them.

In May 2022, CrowdStrike, Inc.

asserted counterclaims alleging that certain of Webroot’s products infringe two of its patents.

In the filing, CrowdStrike, Inc.

sought unspecified damages, reasonable fees and costs, and a permanent injunction.

In September 2022, Webroot amended its complaint to assert six additional patents.

The Company intends to vigorously defend against Webroot’s allegations.

As of January 31, 2023, the Company is unable to predict the outcome of Webroot’s claims or reasonably estimate a loss or a range of loss.

In addition, the Company is involved in various other legal proceedings and subject to claims that arise in the ordinary course of business.

For any claims for which the Company believes a liability is both probable and reasonably estimable, the Company records a liability in the period for which it makes this determination.

There is no pending or threatened legal proceeding to which the Company is a party that, in the Company’s opinion, is likely to have a material adverse effect on its consolidated financial statements;

There is no pending or threatened legal proceeding to which the Company is a party that, in the Company’s opinion, is reasonably possible to have a material effect on its consolidated financial statements;

however, the results of litigation and claims are inherently unpredictable.

Regardless of the outcome, litigation can have an adverse impact on the Company’s business because of defense and settlement costs, diversion of management resources, and other factors.

In addition, the expense of litigation and the timing of this expense from period to period are difficult to estimate, subject to change and could adversely affect the Company’s consolidated financial statements.

In addition, the costs of litigation and the timing of these costs from

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

period to period are difficult to estimate, subject to change and could adversely affect the Company’s consolidated financial statements.

Warranties and Indemnification

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Geographic Information

The Company’s long-lived assets are composed of property and equipment, net, and operating lease right-of-use assets, are summarized by geographic area as follows (in thousands):

The Company’s property and equipment, net and operating lease right-of-use assets, are summarized by geographic area as follows (in thousands):

United States $ 433,756 $ 256,282

International 36,030 28,609

Germany 67,278 16,845

Other countries 31,237 19,185

Total property and equipment, net and operating lease right-of-use assets $ 532,271 $ 292,312

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

No single country other than the United States represented 10% or more of the Company’s total long-lived assets as of January 31, 2022 and January 31, 2021.

Related Party Transactions

Subscription and Professional Services Revenue from Related Parties

During the fiscal years ended January 31, 2022, January 31, 2021 and January 31, 2020, certain investors and companies with whom the Company’s Board of Directors are affiliated with, purchased subscriptions and professional services.

During the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021, certain investors and companies, with whom the Company’s board of directors are affiliated, purchased subscriptions and professional services.

The Company recorded revenue from subscriptions and professional services from related parties of $ 10.5 million, $ 7.7 million, and $ 4.3 million during the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021, respectively.

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Accounts Payable to Related Parties

During the fiscal years ended January 31, 2022, January 31, 2021 and January 31, 2020, the Company purchased goods and services totaling $ 26.0 million, $ 8.8 million, and $ 3.2 million, respectively, from certain investors and companies with whom its Board of Directors are affiliated with.

The accounts payable to such vendors was $ 3.7 million and immaterial as of January 31, 2022 and January 31, 2021, respectively.

During the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021, the Company purchased goods and services totaling $ 4.0 million, $ 26.0 million, and $ 8.8 million, respectively, from certain investors and companies with whom the Company’s board of directors are affiliated.

The accounts payable to such vendors was immaterial as of January 31, 2023 and was $ 3.7 million as of January 31, 2022.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

Reposify Ltd.

On October 3, 2022, the Company acquired 100 % of the equity interest of Reposify Ltd.

(“Reposify”), a privately-held company that provides an external attack surface management platform that scans the internet for exposed assets of an organization to detect and eliminate risk from vulnerable and unknown assets before attackers can exploit them.

The acquisition has been accounted for as a business combination.

The total consideration transferred consisted of $ 18.9 million, net of cash acquired of $ 0.5 million, and an immaterial amount representing the fair value of replacement equity awards attributable to pre-acquisition service.

The remaining fair value of these replacement awards is subject to the recipient’s continued service and thus was excluded from the purchase price.

The purchase price was allocated on a preliminary basis, subject to working capital adjustment and continuing management analysis, to developed technology of $ 3.8 million, net tangible assets acquired of $ 0.9 million, and goodwill of $ 14.2 million, which was allocated to the Company’s one reporting unit and represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired.

The goodwill was primarily attributable to the assembled workforce of Reposify, planned growth in new markets, and synergies expected to be achieved from the integration of Reposify.

Goodwill was not deductible for income tax purposes.

The fair value of the developed technology acquired was $ 3.8 million with a useful life of 72 months.

Secure Circle, LLC

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The total consideration transferred was $ 60.6 million, which consisted solely of cash.

The purchase price was allocated, on a preliminary basis, to identified intangible assets, which include developed technology and customer relationships of $ 18.3 million, net tangible assets acquired of $( 0.5 ) million and goodwill of $ 43.0 million allocated to the Company’s one reporting unit, representing the excess of the purchase price over the fair value of net tangible and intangible assets acquired.

The purchase price was allocated to identified intangible assets, which include developed technology and customer relationships of $ 18.3 million, net tangible assets acquired of $( 0.8 ) million and goodwill of $ 43.1 million allocated to the Company’s one reporting unit, representing the excess of the purchase price over the fair value of net tangible and intangible assets acquired.

The goodwill was primarily attributable to the assembled workforce of SecureCircle, planned growth in new markets, and synergies expected to be achieved from the integration of SecureCircle.

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Total intangible assets acquired $ 18,300

The Company incurred acquisition expense of $ 1.2 million for the fiscal year ended January 31, 2022.

The acquisition costs are recorded in general and administrative expenses on the Company’s consolidated statement of operations.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

The results of operations of SecureCircle have been included in the Company’s consolidated financial statements from the date of acquisition.

The acquisition of SecureCircle did not have a material impact on the Company’s consolidated financial statements, and therefore historical and pro forma disclosures have not been presented.

Humio Limited

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The purchase price was allocated to identified intangible assets, which include developed technology, customer relationships, and trade names, of $ 75.6 million, net tangible assets acquired of $ 3.4 million, and goodwill of $ 291.3 million allocated to the Company’s one reporting unit, representing the excess of the purchase price over the fair value of net tangible and intangible assets acquired.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

The goodwill was primarily attributable to the assembled workforce of Humio, planned growth in new markets, and synergies expected to be achieved from the integration of Humio.

Goodwill is not deductible for income tax purposes.

Goodwill was not deductible for income tax purposes.

Per the terms of the share purchase agreement with Humio, certain unvested stock options held by Humio employees were canceled and exchanged for replacement stock options under the 2019 Plan.

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The portion of the fair value of the replacement equity awards associated with pre-acquisition service of Humio’s employees represented a component of the total purchase consideration.

The remaining fair value of these issued awards is subject to the recipients’ continued service and thus were excluded from the purchase price.

The remaining fair value of these issued awards is subject to the recipients’ continued service and thus was excluded from the purchase price.

In addition, Humio employees were granted RSUs and PSUs under the 2019 Plan.

The awards which are subject to continued service will be recognized ratably as stock-based compensation expense over the requisite service period.

The awards which are based on specified performance targets will be recognized under the accelerated attribution method.

The following table sets forth the preliminary fair value of the identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (dollars in thousands):

Fair Value Useful Life

Developed technology $ 68,800 96

Customer relationships 5,400 96

Trade names 1,400 24

Total intangible assets acquired $ 75,600

The Company incurred acquisition expense of $ 5.0 million for the fiscal year ended January 31, 2022.

The acquisition costs are recorded in general and administrative expenses on the Company’s consolidated statement of operations.

The results of operations of Humio have been included in the Company’s consolidated financial statements from the date of acquisition.

The acquisition of Humio did not have a material impact on the Company’s consolidated financial statements, and therefore historical and pro forma disclosures have not been presented.

Preempt Security, Inc.

On September 30, 2020, the Company acquired 100 % of the equity interest of Preempt Security, Inc.

(“Preempt Security”), a privately-held Delaware corporation that developed real-time access control and threat prevention technology (the “Acquisition”).

The Acquisition has been accounted for a business combination.

The total consideration transferred was $ 91.2 million which consisted of $ 87.4 million in cash and $ 3.8 million representing the fair value of replacement equity awards attributable to pre-acquisition service.

The purchase price was allocated to identified intangible assets, which include developed technology, customer relationships and trade names, of $ 16.4 million, net tangible assets acquired of $( 0.5 ) million and goodwill of $ 75.3 million allocated to the Company’s one reporting segment, representing the excess of the purchase price over the fair value of net tangible and intangible assets acquired.

The goodwill was primarily attributable to the assembled workforce

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

of Preempt Security, planned growth in new markets and synergies expected to be achieved from the integration of Preempt Security.

Goodwill is not deductible for income tax purposes.

Per the terms of the merger agreement with Preempt Security, certain unvested stock options held by Preempt Security employees were canceled and exchanged for replacement stock options under the 2019 Plan.

Additionally, certain shares of stock issued pursuant to share-based compensation awards to key employees of Preempt Security were canceled and exchanged for replacement RSUs of the Company, which are subject to future vesting.

The portion of the fair value of the replacement equity awards associated with pre-acquisition service of Preempt Security’s employees represented a component of the total purchase consideration.

The remaining fair value of these issued awards is subject to the recipients’ continued service with the Company and the achievement of specified performance targets, and thus were excluded from the purchase price.

The awards which are subject to continued service will be recognized ratably as stock-based compensation expense over the requisite service period.

The awards which are based on specified performance targets will be recognized under the accelerated attribution method.

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (dollars in thousands):

The awards, which are subject to continued service are recognized ratably as stock-based compensation expense over the requisite service period.

The awards, which are based on specified performance targets, are recognized under the accelerated attribution method.

The following table sets forth the fair value of the identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (dollars in thousands):

Fair Value Useful Life

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Total intangible assets acquired $ 75,600

The Company incurred an immaterial amount of acquisition expense for the fiscal year ended January 31, 2022.

The acquisition costs are recorded in general and administrative expenses on the Company’s consolidated statement of operations.

The results of operations of Preempt Security have been included in the Company’s consolidated financial statements from the date of acquisition.

The acquisition of Preempt Security did not have a material impact on the Company’s consolidated financial statements, and therefore historical and pro forma disclosures have not been presented.

Acquisition costs during the fiscal year ended January 31, 2023 were not material and are recorded in general and administrative expenses on the Company’s consolidated statements of operations.

The results of operations for the above acquisitions have been included in the Company’s consolidated financial statements from the date of acquisition.

The acquisitions did not have material impact on the Company’s consolidated financial statements, and therefore historical and pro forma disclosures have not been presented.

Net Loss Per Share Attributable to Common Stockholders

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As such, the undistributed earnings are allocated equally to each share of common stock without class distinction, and the resulting basic and diluted net loss per share attributable to CrowdStrike common stockholders are the same for shares of Class A and Class B common stock.

CrowdStrike Holdings, Inc.

Notes to Consolidated Financial Statements

The following table sets forth the computation of basic and diluted net loss per share attributable to CrowdStrike common stockholders (in thousands, except per share data):

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The above table excludes founder holdbacks related to business combinations.

A variable number of shares will be issued upon vesting to settle a fixed monetary amount of $ 18.5 million, which shares are contingent upon continued employment with the Company.

The share price will be determined based on the Company’s average stock price or the volume weighted average stock price 5 days prior to each vesting date.

A variable number of shares will be issued upon vesting to settle a fixed monetary amount of $ 7.9 million, contingent upon continued employment with the Company.

The share price will be determined based on the Company’s average stock price or the volume weighted average stock price five days prior to each vesting date.

As of January 31, 2023, 86,519 shares were issued to settle founder holdbacks at a weighted average price of $ 163.82 per share.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data