George Kurtz: Well, when we think about the current environment, I think everyone is seeing there is a shift in the competitive environment and companies that are moving around in terms of M&A activity. We think the back half of the year will be a great opportunity. We continue to evaluate many, many different candidates as we normally do. And we think the environment is getting better from an M&A perspective. And we’re very diligent in how we buy things in the bar and how we look to integration because we focus on a seamless one platform approach, and we remain true to that. So back half of the year, we’ll see how it goes, but certainly excited about that, and we continue to drive innovation internally and we’ll look externally for good companies with good culture and good people.
Operator: Thank you. One moment please. And our next question comes from the line of Mike Walkley with Canaccord Genuity.
Mike Walkley: Great. Thank you. George, it’s clear platform leaders are gaining wallet share as enterprises consolidate vendors. I just want to dig in a little bit more. It seems like there’s even a big shift more favorable to CrowdStrike from your comments even a quarter ago, with SentinelOne and BlackBerry Cylance potentially up for sale, are you already generating strong share gain opportunities in the SMB market? Or can you just let us know how Falcon Go is trending versus your expectations?
George Kurtz: Yeah. We already see that in the marketplace. We’ve got customers that are very concerned about the uncertainty. They have seen the Cylance Blackberry movie before, and they’re concerned and uncertainty is never a good thing for a security buyer. So we’ve already seen deals come our way. And again, as a consolidator, and as the leader of the space, we think that just accrues more value to us. So we’ll see how everything shakes out, but for sure, what we’re hearing from partners and customers about some of the latest movements in our space is concern in terms of other competitors. And again, they’re looking for a long-term viable partner, and those are — that’s what we’re hearing from multiple sources.
Operator: Thank you. One moment please for our next question. Our next question comes from the line of Gray Powell with BTIG.
Gray Powell: Great. Thanks for taking the question. And congratulations on the good results. So maybe one on the competitive side. I guess the biggest concern we’ve heard from investors is just on pricing in the endpoint security space, particularly as EDR adoption moves past the 50% mark. So I guess the question would be, how much room is left in the Global 2000? And then how sensitive do you think the incremental buyer is today compared to what you’ve seen the last two years? Thank you.
George Kurtz: Well, from buyers, what we’ve seen is their buying platform. They’re not just buying one particular area. The way our technology works, it’s single-agent architecture, a common data store and then modules and then we’ve been able to obviously monetize that across different areas. Protection is just one area. But when you look at cloud, you look at agentless, you look at some of the other offerings, LogScale and Identity, it’s really about the platform sale, not an individual area and getting the right outcome, as I talked about in the earnings script, stopping breaches. I talked to a customer recently. They have 60 different products and controls. And we were the only one that actually detected activity in their environment and prevented a potential issue.
So that’s really been the focus for us. And I think when you look at even the legacy areas, it’s almost, what, 50% of the market is still available from a legacy perspective, near 50%. So yeah, 48%. I think when you look at that, still a big opportunity in legacy displacements as well as the platform areas that we called out are just massive TAM opportunities. And as I mentioned in the script, they could each be an IPO-able business on a stand-alone basis as big as they are.
Operator: Thank you. One moment please for our next question, please. Our next question comes from the line of Brian Essex with JPMorgan.
Brian Essex: Yeah. Good afternoon. Thank you for taking the question. Maybe just for Burt. I wanted to understand how you’re balancing spending both on a GAAP and non-GAAP perspective. It looks like operating expenses on a non-GAAP basis actually declined sequentially, but stock-based comps spiked up. Would love to know how the hiring environment is playing into that and how you think about managing that going forward? And any impact that might have toward achieving your cash flow targets? Thank you.
Burt Podbere: Sure, right. So thanks for the question. So number one, we are going to continue to invest as aggressively as we can while keeping to our commitment to our profitability metrics. And for us, I think that the key here, you had mentioned on the stock-based compensation, a lot of that is based on timing of grants and I think that for us, we’re going to continue to use grants to attract and retain. Having said that, we think that we are going to continue to show low dilution, less than 2% this year and strive to keep it under 3% for next year. For us today, we think it’s a good hiring environment. We’re taking the time in terms of how we’re going to [Technical Difficulty] hiring and where, and we’re being very prudent in terms of where we’re deploying headcount. And as we’ve mentioned in prior calls, we are managing the pace of hiring in accordance with what we think is what we need to continue to hit our targets. So that’s how we see it.
Operator: Thank you. One moment please for our next question. Our next question comes from the line of Jonathan Ho with William Blair.
Jonathan Ho: Hi, good afternoon and congrats on the strong results. Can you maybe give us some additional color in terms of what you’re seeing for these attach rates, especially with the eight or more products and how do we think about maybe net retention going forward as you start to realize that platform vision? Thank you.
Burt Podbere: Yeah, Jonathan, great to hear your voice. Yeah. We’re really pleased with what we’ve seen with respect to customers adopting across the board, five, six, seven, eight modules. So for us, when you talk about the DBNR, remember, it’s a noisy metric, and it can fluctuate quarter-to-quarter, and we’ve talked about that repeatedly. Some quarters have bigger [lands] (ph) and some have bigger expense. But I think at the end of the day, for us, what we’re seeing is that we’ve got a lot of headroom in both new local opportunities. George talked about the available market from our legacy provider 48%, but we also have an ever-growing customer base. And as we continue to delight our customers, they’re going to continue to buy more for us, and it goes along with the consolidation theme that we’ve been talking about here.
So it really plays into our favor. The great news is that in addition to strong expansions, net new ARR contribution from new logos remains high, even higher than we were expecting so far for the year.
