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press release

Feb. 12, 2020, 7:01 a.m. EST

CyberArk Announces Record Fourth Quarter and Full Year 2019 Results

Fourth quarter total revenue of $129.7 million increases 19% year-over-year Fourth quarter GAAP operating income of $22.9 million and non-GAAP operating income of $42.1 millionFull year total revenue of $433.9 million increases 26% year-over-yearFull year GAAP operating income of $62.3 million and non-GAAP operating income of $123.4 millionFull year net cash provided by operating activities of $141.7 million

CyberArk , /zigman2/quotes/206810080/composite CYBR +1.28% , the global leader in privileged access management , today announced record financial results for the fourth quarter and year ended December 31, 2019.

“Our record fourth quarter results capped off another great year of strong growth driven by disciplined investments,” said Udi Mokady, CyberArk Chairman and CEO. “We were thrilled to win a record number of logos in the fourth quarter, signing nearly 300 new customers. Throughout 2019, organizations continued to recognize that protecting privileged access is foundational to a comprehensive security program and increasingly turned to CyberArk as a trusted advisor, particularly to secure mission-critical digital transformation and cloud migration strategies. Our clear leadership position in the market and ongoing commitment to deliver innovation, positions us well to deliver profitable growth in 2020 and beyond.”

Financial Highlights for the Fourth Quarter Ended December 31, 2019

Revenue:

  • Total revenue was $129.7 million, up 19% compared with the fourth quarter of 2018.

  • License revenue was $76.5 million, up 15% compared with the fourth quarter of 2018.

  • Maintenance and Professional Services revenue was $53.1 million, up 26% compared with the fourth quarter of 2018.

Operating Income:

  • GAAP operating income was $22.9 million, compared to $27.5 million in the fourth quarter of 2018. Non-GAAP operating income was a record $42.1 million, compared to $39.8 million in the fourth quarter of 2018.

Net Income:

  • GAAP net income was $20.7 million, or $0.53 per diluted share, compared to GAAP net income of $24.2 million, or $0.64 per diluted share, in the fourth quarter of 2018. Non-GAAP net income was a record $37.8 million, or $0.97 per diluted share, compared to $33.4 million, or $0.89 per diluted share, in the fourth quarter of 2018.

Financial Highlights for the Full Year Ended December 31, 2019

Revenue:

  • Total revenue was $433.9 million, up 26% compared with 2018.

  • License revenue was $237.9 million, up 24% compared with 2018.

  • Maintenance and Professional Services revenue was $196.0 million, up 30% compared with 2018.

Operating Income:

  • GAAP operating income was $62.3 million, compared to $47.3 million in 2018. Non-GAAP operating income was $123.4 million, compared to $90.5 million in 2018.

Net Income:

  • GAAP net income was $63.1 million, or $1.62 per diluted share, compared to GAAP net income of $47.1 million, or $1.27 per diluted share, in 2018. Non-GAAP net income was $107.9 million, or $2.77 per diluted share, compared to $76.5 million, or $2.06 per diluted share, in 2018.

The tables at the end of this press release include a reconciliation of GAAP to non-GAAP gross profit, operating income and net income for the three months and year ended December 31, 2019 and 2018. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Balance Sheet and Cash Flow From Operations:

  • As of December 31, 2019, CyberArk had $1.1 billion in cash, cash equivalents, marketable securities and short-term deposits. This compares to $451.2 million in cash, cash equivalents, marketable securities and short-term deposits as of December 31, 2018.

  • As of December 31, 2019, total deferred revenue was $190.4 million, a 27% increase from $149.5 million at December 31, 2018.

  • During 2019, the Company generated $141.7 million in net cash provided by operating activities compared to $130.1 million in 2018.

Business Outlook Based on information available as of February 12, 2020, CyberArk is issuing guidance for the first quarter and full year 2020 as indicated below.

First Quarter 2020:

  • Total revenue is expected to be in the range of $106.0 million to $110.0 million.

  • Non-GAAP operating income is expected to be in the range of $16.5 million to $19.5 million.

  • Non-GAAP net income per share is expected to be in the range of $0.35 to $0.41 per share. This assumes 39.6 million weighted average diluted shares.

Full Year 2020:

  • Total revenue is expected to be in the range of $511.0 million to $519.0 million.

  • Non-GAAP operating income is expected to be in the range of $109.0 million to $115.0 million.

  • Non-GAAP net income per share is expected to be in the range of $2.26 to $2.38 per share. This assumes 39.8 million weighted average diluted shares.

Conference Call Information In conjunction with this announcement, CyberArk will host a conference call on Wednesday, February 12, 2020 at 8:30 a.m. Eastern Time (ET) to discuss the company’s fourth quarter and year end financial results and its business outlook. To access this call, dial +1 877-823-7693 (U.S.) or +1 647-689-4543 (international). The conference ID is 7689662. Additionally, a live webcast of the conference call will be available via the “Investor Relations” section of the company’s website at www.cyberark.com .

Following the conference call, a replay will be available for one week at +1 800-585-8367 (U.S.) or +1 416-621-4642 (international). The replay pass code is 7689662. An archived webcast of the conference call will also be available in the “Investor Relations” section of the company’s website at www.cyberark.com .

About CyberArk CyberArk , (NASDAQ: CYBR ) is the global leader in privileged access management, a critical layer of IT security to protect data, infrastructure and assets across cloud and hybrid environments, and throughout the DevOps pipeline. CyberArk delivers the industry’s most complete solution to reduce risk created by privileged credentials and secrets. The company is trusted by the world’s leading organizations, including more than 50% of the Fortune 500, to protect against external attackers and malicious insiders. A global company, CyberArk is headquartered in Petach Tikva, Israel, with U.S. headquarters located in Newton, Mass. The company also has offices throughout the Americas, EMEA, Asia Pacific and Japan. To learn more about CyberArk, visit www.cyberark.com , read the CyberArk blogs or follow on Twitter via @CyberArk , LinkedIn or Facebook .

Copyright © 2020 CyberArk Software. All Rights Reserved. All other brand names, product names, or trademarks belong to their respective holders.

Non-GAAP Financial Measures CyberArk believes that the use of non-GAAP gross profit, non-GAAP operating income and non-GAAP net income is helpful to our investors. These financial measures are not measures of the Company’s financial performance under U.S. GAAP and should not be considered as alternatives to gross profit, operating income or net income or any other performance measures derived in accordance with GAAP.

  • Non-GAAP gross profit is calculated as gross profit excluding share-based compensation expense and amortization of intangible assets related to acquisitions.

  • Non-GAAP operating income is calculated as operating income excluding share-based compensation expense, acquisition related expenses, facility exit and transition costs and amortization of intangible assets related to acquisitions.

  • Non-GAAP net income is calculated as net income excluding share-based compensation expense, acquisition related expenses, facility exit and transition costs, amortization of intangible assets related to acquisitions, intra-entity intellectual property transfer tax effect, amortization of debt discount and issuance costs and the tax effect of other non-GAAP adjustments.

The Company believes that providing non-GAAP financial measures that exclude, as applicable, share-based compensation expense, acquisition related expenses, amortization of intangible assets related to acquisitions, facility exit and transition costs, intra-entity intellectual property transfer tax effect, non-cash interest expense related to the amortization of debt discount and issuance costs and the tax effect of the non-GAAP adjustments allows for more meaningful comparisons of its period to period operating results. Share-based compensation expense has been and will continue to be for the foreseeable future, a significant recurring expense in the Company’s business and an important part of the compensation provided to its employees. Share based compensation expense has varying available valuation methodologies, subjective assumptions and a variety of equity instruments that can impact a company’s non-cash expense. The Company believes that expenses related to its acquisitions and amortization of intangible assets related to acquisitions, facility exit and transition costs, intra-entity intellectual property transfer tax effect and non-cash interest expense related to the amortization of debt discount and issuance costs do not reflect the performance of its core business and impact period-to-period comparability.

Non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies in the industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. In addition, there are limitations in using non-GAAP financial measures as they exclude expenses that may have a material impact on the Company’s reported financial results. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP. CyberArk urges investors to review the reconciliation of its non-GAAP financial measures to the comparable U.S. GAAP financial measures included below, and not to rely on any single financial measure to evaluate its business.

Guidance for non-GAAP financial measures excludes, as applicable, share-based compensation expense, acquisition related expenses, facility exit and transition costs, amortization of intangible assets related to acquisitions, intra-entity intellectual property transfer tax effect, non-cash interest expense related to the amortization of debt discount and issuance costs and the tax effect of the other non-GAAP adjustments. A reconciliation of the non-GAAP financial measures guidance to the corresponding GAAP measures is not available on a forward-looking basis due to the uncertainty regarding, and the potential variability and significance of, the amounts of share-based compensation expense, amortization of intangible assets related to acquisitions, and the non-recurring expenses that are excluded from the guidance. Accordingly, a reconciliation of the non-GAAP financial measures guidance to the corresponding GAAP measures for future periods is not available without unreasonable effort.

Cautionary Language Concerning Forward-Looking Statements This release contains forward-looking statements, which express the current beliefs and expectations of CyberArk’s (the “Company”) management. In some cases, forward-looking statements may be identified by terminology such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential” or the negative of these terms or other similar expressions. Such statements involve a number of known and unknown risks and uncertainties that could cause the Company’s future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to: changes in the rapidly evolving cyber threat landscape; failure to effectively manage growth; the Company’s ability to increase its sales of software as a service (“SaaS”) solutions, while supporting and maintaining multiple software pricing and delivery models; near-term declines in our operating and net profit margins and our revenue growth rate; real or perceived shortcomings, defects or vulnerabilities in the Company’s solutions or internal network system, or the failure of the Company’s customers or channel partners to correctly implement the Company’s solutions; fluctuations in quarterly results of operations; the inability to acquire new customers or sell additional products and services to existing customers; competition from IT security vendors; the Company’s ability to successfully integrate recent and or future acquisitions; the Company’s ability to comply with evolving laws and regulations, including those relating to privacy and data protection; and other factors discussed under the heading “Risk Factors” in the Company’s most recent annual report on Form 20-F filed with the Securities and Exchange Commission. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

 
CYBERARK SOFTWARE LTD.
Consolidated Statements of Operations
U.S. dollars in thousands (except per share data)
(Unaudited)
     
    Three Months Ended Twelve Months Ended
    December 31, December 31,
      2018     2019     2018     2019  
     
Revenues:    
License     $ 66,769   $ 76,526   $ 192,514   $ 237,879  
Maintenance and professional services       42,281     53,138     150,685     196,016  
     
Total revenues       109,050     129,664     343,199     433,895  
     
Cost of revenues:    
License       3,005     2,801     10,526     10,569  
Maintenance and professional services       10,316     14,048     37,935     52,046  
     
Total cost of revenues       13,321     16,849     48,461     62,615  
     
Gross profit       95,729     112,815     294,738     371,280  
     
Operating expenses:    
Research and development       15,340     20,930     57,112     72,520  
Sales and marketing       40,307     52,939     148,290     184,168  
General and administrative       12,561     16,005     42,044     52,308  
     
Total operating expenses       68,208     89,874     247,446     308,996  
     
Operating income       27,521     22,941     47,292     62,284  
     
Financial income, net       1,078     2,394     4,551     7,800  
     
Income before taxes on income       28,599     25,335     51,843     70,084  
     
Taxes on income       (4,419 )   (4,599 )   (4,771 )   (7,020 )
     
Net income     $ 24,180   $ 20,736   $ 47,072   $ 63,064  
     
     
Basic net income per ordinary share     $ 0.66   $ 0.55   $ 1.30   $ 1.68  
Diluted net income per ordinary share     $ 0.64   $ 0.53   $ 1.27   $ 1.62  
     
Shares used in computing net income    
per ordinary shares, basic       36,570,609     37,957,899     36,174,316     37,586,387  
Shares used in computing net income    
per ordinary shares, diluted       37,607,625     39,148,849     37,065,727     38,890,108  
     
     
Share-based Compensation Expense:    
     
    Three Months Ended Twelve Months Ended
    December 31, December 31,
      2018     2019     2018     2019  
     
     
Cost of revenues     $ 980   $ 1,802   $ 3,350   $ 5,690  
Research and development       2,174     3,347     7,922     10,960  
Sales and marketing       3,647     6,464     12,708     20,976  
General and administrative       3,493     6,418     11,984     17,891  
     
Total share-based compensation expense     $ 10,294   $ 18,031   $ 35,964   $ 55,517  
     
     
CYBERARK SOFTWARE LTD.
Consolidated Balance Sheets
U.S. dollars in thousands
(Unaudited)
    December 31, December 31,
    2018 2019
     
ASSETS    
     
CURRENT ASSETS:    
Cash and cash equivalents     $ 260,636   $ 792,363
Short-term bank deposits       106,399     140,067
Marketable securities       59,948     132,412
Trade receivables       48,431     72,953
Prepaid expenses and other current assets       6,349     8,406
     
Total current assets       481,763     1,146,201
     
LONG-TERM ASSETS:    
Property and equipment, net       15,120     16,472
Intangible assets, net       14,732     9,143
Goodwill       82,400     82,400
Marketable securities       24,261     54,408
Other long-term assets       31,863     72,091
Deferred tax asset       23,481     24,451
     
Total long-term assets       191,857     258,965
     
TOTAL ASSETS     $ 673,620   $ 1,405,166
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
CURRENT LIABILITIES:    
Trade payables     $ 4,924   $ 5,675
Employees and payroll accruals       32,853     41,345
Accrued expenses and other current liabilities       13,271     27,132
Deferred revenues       92,375     118,519
     
Total current liabilities       143,423     192,671
     
LONG-TERM LIABILITIES:    
Deferred revenues       57,159     71,836
Other long-term liabilities       6,268     31,408
Convertible senior notes, net       -     485,119
     
Total long-term liabilities       63,427     588,363
     
TOTAL LIABILITIES       206,850     781,034
     
SHAREHOLDERS' EQUITY:    
Ordinary shares of NIS 0.01 par value       95     99
Additional paid-in capital       303,900     396,437
Accumulated other comprehensive income (loss)       (939 )   818
Retained earnings       163,714     226,778
     
Total shareholders' equity       466,770     624,132
     
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY     $ 673,620   $ 1,405,166
     
CYBERARK SOFTWARE LTD.
Consolidated Statements of Cash Flows
U.S. dollars in thousands
(Unaudited)
     
    Twelve Months Ended
    December 31,
    2018 2019
     
Cash flows from operating activities:    
Net income     $ 47,072   $ 63,064  
Adjustments to reconcile net income to net cash    
provided by operating activities:    
Depreciation and amortization       10,078     10,646  
Amortization of premium and accretion of discount on marketable securities, net         293     (47 )
Share-based compensation       35,964     55,517  
Deferred income taxes, net       (7,056 )   (6,974 )
Increase in trade receivables       (3,116 )   (24,522 )
Amortization of debt discount and issuance costs       -     1,966  
Increase in prepaid expenses and other current and long-term assets       (11,893 )   (14,321 )
Increase in trade payables       1,955     1,571  
Increase in short-term and long-term deferred revenues       47,818     40,821  
Increase in employees and payroll accruals       6,896     7,337  
Increase in accrued expenses and other current and long-term liabilities       2,114     6,652  
     
Net cash provided by operating activities       130,125     141,710  
     
Cash flows from investing activities:    
Proceeds from (Investment in) short and long term deposits       1,600     (33,961 )
Investment in marketable securities       (61,118 )   (165,714 )
Proceeds from maturities of marketable securities       37,838     63,489  
Purchase of property and equipment       (8,613 )   (7,036 )
Payments for business acquisitions, net of cash acquired       (18,450 )   -  
     
Net cash used in investing activities       (48,743 )   (143,222 )
     
Cash flows from financing activities:    
Proceeds from withholding tax related to employee stock plans       -     1,155  
Proceeds from the issuance of convertible senior notes, net of issuance costs       -     560,107  
Purchase of capped calls       -     (53,648 )
Proceeds from exercise of stock options       17,980     24,428  
     
Net cash provided by financing activities       17,980     532,042  
     
Increase in cash, cash equivalents and restricted cash       99,362     530,530  
     
Cash, cash equivalents and restricted cash at the beginning of the period     $ 162,521   $ 261,883  
     
Cash, cash equivalents and restricted cash at the end of the period     $ 261,883   $ 792,413  

 

                       
 CYBERARK SOFTWARE LTD. 
 Reconciliation of GAAP Measures to Non-GAAP Measures 
 U.S. dollars in thousands (except per share data) 
(Unaudited)
                       
                       
                       
   Reconciliation of Gross Profit to Non-GAAP Gross Profit:                   
                       
          Three Months Ended   Twelve Months Ended
          December 31,   December 31,
          2018   2019   2018   2019
                       
   Gross profit         $            95,729      $        112,815      $    294,738      $      371,280  
   Plus:                     
  Share-based compensation - Maintenance & professional services                          980                    1,802                3,350                  5,690  
   Amortization of intangible assets - License                         1,445                       968                5,563                  5,029  
                       
   Non-GAAP gross profit         $            98,154      $        115,585      $    303,651      $      381,999  
                       
                       
                       
                       
                       
   Reconciliation of Operating Income to Non-GAAP Operating Income:             
                       
          Three Months Ended   Twelve Months Ended
          December 31,   December 31,
          2018   2019   2018   2019
                       
                       
   Operating income         $            27,521      $         22,941      $      47,292      $       62,284  
   Plus:                     
   Share-based compensation                       10,294                  18,031              35,964                55,517  
   Amortization of intangible assets - Cost of revenues                       1,445                       968                5,563                  5,029  
   Amortization of intangible assets -  Sales and marketing                          198                       144                   793                     576  
   Acquisition related expenses                              -                           -                     268                       -    
   Facility exit and transitions costs                            327                         -                     580                       -    
                       
   Non-GAAP operating income         $            39,785      $         42,084      $      90,460      $      123,406  
                       
                       
   Reconciliation of Net Income to Non-GAAP Net Income:                   
                       
          Three Months Ended   Twelve Months Ended
          December 31,   December 31,
          2018   2019   2018   2019
                       
                       
   Net income         $            24,180      $         20,736      $      47,072      $       63,064  
   Plus:                     
   Share-based compensation                       10,294                  18,031              35,964                55,517  
   Amortization of intangible assets - Cost of revenues                       1,445                       968                5,563                  5,029  
   Amortization of intangible assets -  Sales and marketing                          198                       144                   793                     576  
   Acquisition related expenses                              -                           -                     268                       -    
   Facility exit and transitions costs                            327                         -                     580                       -    
   Amortization of debt discount and issuance costs                            -                      1,966                     -                    1,966  
   Taxes on income related to non-GAAP adjustments                      (2,528 )                 (4,014 )           (15,485 )             (18,251 )
   Intra-entity IP transfer tax effect, net                           (475 )                       -                  1,768                       -    
                       
   Non-GAAP net income         $            33,441      $         37,831      $      76,523      $      107,901  
                       
   Non-GAAP net income per share                     
   Basic         $               0.91      $             1.00      $         2.12      $           2.87  
   Diluted         $               0.89      $             0.97      $         2.06      $           2.77  
                       
   Weighted average number of shares                     
   Basic                 36,570,609            37,957,899        36,174,316          37,586,387  
   Diluted                 37,607,625            39,148,849        37,065,727          38,890,108  
                       

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20200212005390/en/

SOURCE: CyberArk

Investor Contact:
Erica Smith
CyberArk
617-558-2132
ir@cyberark.com Media Contact:
Liz Campbell
CyberArk
617-558-2191
press@cyberark.com

Copyright Business Wire 2020

/zigman2/quotes/206810080/composite
US : U.S.: Nasdaq
$ 106.20
+1.34 +1.28%
Volume: 380,660
June 3, 2020 4:00p
P/E Ratio
80.22
Dividend Yield
N/A
Market Cap
$4.06 billion
Rev. per Employee
$299,476
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