money Russia-Ukraine war: Financial sector 'on high alert' for cyberattacks, Crowdstrike CEO says
Crowdstrike CEO George Kurtz joins Yahoo Finance Live to discuss the state of cyber warfare amid the Russia-Ukraine war as well as the cybersecurity company's most recent quarterly earnings.
Video Transcript
- Welcome back. The cyber war in Ukraine has largely been a non-event, with conventional land forces doing the dirty work. Hacking is on the uptick, but not where you might think. It's good old fashioned e-crime. We've got con artists and thieves targeting mom and pops here and abroad. And to help break it all down for us, we have the Crowdstrike co-founder and CEO George Kurtz. George, thanks for coming back here. And this is kind of a non-story. I thought heading into this that there would have been a lot of activity. There were concerns about the power grid in the Ukraine being attacked. And so far, there have been some attacks, but not really anything major that I've seen.
GEORGE KURTZ: Yeah, obviously, it's a really sad situation in Ukraine. And when we think about digital attacks, while they can be very effective, they're far less effective than the kinetic attacks. So at the moment, it's more impactful to be able to take out infrastructure with kinetic weapons than cyber. And that's why we really haven't seen too much in the country. I mean, they're just trying to survive. Obviously, what a lot of folks in the US and Europe are concerned about is retaliatory attacks at some point, given the breadth and level of sanctions that have been put in place against Russia.
- And George, just real quickly while we have you here, we are getting some comments from Ukraine's President Zelenskyy, who is talking to members of Congress, saying American ports should be closed to Russia, and new sanctions against Russia should be made. But George, you're staying on this, of course. You work with 14 of the top 20 largest banks around the world. What is their level of concern when you talk to them right now? And what are they doing to just bolster their defenses?
GEORGE KURTZ: Well, now after the last quarter, it's 15. We can talk about that in a bit. But it is a challenge for any of the financial services organizations that are out there. I spent a lot of time with their boards, CEOs, CIOs, chief security officers because it is one of the areas that they're bracing for attacks. We've seen in the past, as an example, I believe it was 2018, I had some devastating denial of service attacks.
People are looking for potential denial of service or other retaliatory intrusions that could disrupt the financial sector, markets, et cetera. So everyone is on high alert. The government came out with sort of a shields up message. Make sure that you have your ducks in a row. And we've been really diligent with our customers, making sure we've been in contact with them and keeping an eye on what's happening.
- And George, let's focus on some of those results that you posted, I believe, it was about a week ago. I have a quote from Barclays, who raised their price target to 255 from 250, saying Crowd's fourth quarter net new average recurring revenue beat and full year 2023 revenue guide, they speak for themselves. So analysts liking the results here. What are you doing to make it work?
GEORGE KURTZ: Well, I think it starts with the best technology platform on the planet. And when you look at the level of penetration we have in the Fortune 100, 77 of the top Fortune 100, we've got a platform that works. I always talk about the Salesforce of security. It's really important. Just look at the annual recurring revenue. $1.7 billion as we ended the year. We had $217 million of net new ARR, which was accelerating into the quarter. That was 65% growth.
If you look at the cash flow generation, it was tremendous. It was $129 million. Would have been well over $190 million if we didn't have a one-time tax payment for Humio acquisition we did. So when you look at a company like Crowdstrike that has this level of growth at scale, this is not a small number that we're talking about, and you're still seeing accelerated growth, hyper growth, and generating cash, that's a very different narrative than some of the high-growth companies you talk about that are losing money.
- George, it sounds like you just gained a new banking customer. Anything you could share there? And secondarily, since the war began between Russia and Ukraine, what have you seen with your pipeline of new business?
GEORGE KURTZ: Sure. Well, we'll talk about the customer that I featured in the earnings report. They were a Crowdstrike customer on their desktops and endpoints. They were using a different product on their servers. They tried to roll it out. Didn't work. And literally within a couple of weeks, they chose Crowdstrike and rolled it out on their servers and they were up and running and actually terminated the three-year contract they had with someone else. So I think it's important to realize that technology does matter and platform needs to scale. And that's really what we've been focused on.
