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press release

Nov. 6, 2019, 7:30 a.m. EST

CyberArk Announces Strong Third Quarter 2019 Results

Third quarter total revenue of $108.1 million increased 28% year-over-yearThird quarter license revenue of $57.9 million increased 25% year-over-yearGAAP operating income of $12.7 million and non-GAAP operating income of $29.4 million

CyberArk , /zigman2/quotes/206810080/composite CYBR +1.03% , the global leader in privileged access management , today announced strong financial results for the third quarter ended September 30, 2019.

“Q3 was another strong quarter for CyberArk,” said Udi Mokady, CyberArk Chairman and CEO. “We delivered revenue growth of 28%, a non-GAAP operating margin of 27% and signed 200 new customers. Our results demonstrate our strong execution, leadership position in the market and the robust demand environment for our solutions. Organizations around the world recognize that Privileged Access Management is critical to a successful security program and are leveraging CyberArk to secure access across on-premises, cloud, and hybrid environments as well as the DevOps pipeline.”

Financial Highlights for the Third Quarter Ended September 30, 2019

Revenue:

  • Total revenue was $108.1 million, up 28% compared with the third quarter of 2018.

  • License revenue was $57.9 million, up 25% compared with the third quarter of 2018.

  • Maintenance and professional services revenue was $50.2 million, up 30% compared with the third quarter of 2018.

Operating Income:

  • GAAP operating income was $12.7 million, an increase from $8.8 million in the third quarter of 2018. Non-GAAP operating income was $29.4 million, an increase from $21.0 million in the third quarter of 2018.

Net Income:

  • GAAP net income was $15.2 million, or $0.39 per diluted share, an increase from GAAP net income of $8.1 million, or $0.22 per diluted share, in the third quarter of 2018. Non-GAAP net income was $25.6 million, or $0.65 per diluted share, an increase from $17.8 million, or $0.48 per diluted share, in the third quarter of 2018.

The tables at the end of this press release include a reconciliation of GAAP to non-GAAP gross margin, operating income and net income for the three months and nine months ended September 30, 2019 and 2018. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Balance Sheet and Cash Flow:

  • As of September 30, 2019, CyberArk had $555.1 million in cash, cash equivalents, marketable securities and short-term deposits. This compares to $451.2 million as of December 31, 2018 and $410.0 million at September 30, 2018.

  • As of September 30, 2019, total deferred revenue was $177.3 million, a 30% increase from $136.0 million at September 30, 2018.

  • During the nine months ended September 30, 2019, the Company generated $88.6 million in cash flow from operations, compared with $89.2 million in the first nine months of 2018.

Business Outlook Based on information available as of November 6, 2019, CyberArk is issuing guidance for the fourth quarter and increasing its guidance for the full year 2019 as indicated below.

Fourth Quarter 2019:

  • Total revenue between $125.0 million and $127.0 million, representing 15% to 16% year-over-year growth.

  • Non-GAAP operating income between $38.5 million and $40.0 million.

  • Non-GAAP net income per share between $0.78 and $0.82 per diluted share.

Full Year 2019:

  • Total revenue between $429.2 million and $431.2 million, representing 25% to 26% year-over-year growth.

  • Non-GAAP operating income between $119.75 million and $121.25 million.

  • Non-GAAP net income per share between $2.58 and $2.61 per diluted share.

Conference Call Information CyberArk will host a conference call today, November 6, 2019 at 8:30 a.m. Eastern Time (ET) to discuss the company’s third quarter 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 2039434. 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 2039434. 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 the enterprise, in the cloud 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 percent 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 © 2019 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 IP transfer tax effect 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 IP transfer tax effect 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 and intra-entity IP transfer tax effect 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 IP transfer tax effect 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; potential 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, channel partners, managed security service providers, or contractors to correctly implement, manage and maintain 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 a wide variety of IT security vendors; the Company’s ability to successfully integrate recent and or future acquisitions; 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 Nine Months Ended
September 30, September 30,
2018 2019 2018 2019
 
Revenues:
License $ 46,130 $ 57,868 $ 125,745 $ 161,353
Maintenance and professional services   38,523   50,247   108,404   142,878
 
Total revenues   84,653   108,115   234,149   304,231
 
Cost of revenues:
License   2,614   2,274   7,521   7,768
Maintenance and professional services   9,530   14,714   27,619   37,998
 
Total cost of revenues   12,144   16,988   35,140   45,766
 
Gross profit   72,509   91,127   199,009   258,465
 
Operating expenses:
Research and development   14,980   18,264   41,772   51,590
Sales and marketing   37,880   46,151   107,983   131,229
General and administrative   10,870   13,972   29,483   36,303
 
Total operating expenses   63,730   78,387   179,238   219,122
 
Operating income   8,779   12,740   19,771   39,343
 
Financial income, net   1,407   1,500   3,473   5,406
 
Income before taxes on income   10,186   14,240   23,244   44,749
 
Tax benefit (taxes on income)   (2,092)   1,008   (352)   (2,421)
 
Net income $ 8,094 $ 15,248 $ 22,892 $ 42,328
 
 
Basic net income per ordinary share $ 0.22 $ 0.40 $ 0.64 $ 1.13
Diluted net income per ordinary share $ 0.22 $ 0.39 $ 0.62 $ 1.09
 
Shares used in computing net income
per ordinary shares, basic   36,485,724   37,805,442   35,981,177   37,460,829
Shares used in computing net income
per ordinary shares, diluted   37,475,729   39,057,545   36,894,457   38,831,275
 
 
 
 
Share-based Compensation Expense:
 
Three Months Ended Nine Months Ended
September 30, September 30,
2018 2019 2018 2019
 
 
Cost of revenues $ 957 $ 1,680 $ 2,370 $ 3,888
Research and development   2,237   2,912   5,748   7,613
Sales and marketing   3,770   5,949   9,061   14,512
General and administrative   3,371   4,797   8,492   11,473
 
Total share-based compensation expense $ 10,335 $ 15,338 $ 25,671 $ 37,486
CYBERARK SOFTWARE LTD.
Consolidated Balance Sheets
U.S. dollars in thousands
(Unaudited)
December 31, September 30,
2018 2019
 
 
ASSETS
 
CURRENT ASSETS:
Cash and cash equivalents $ 260,636 $ 346,092
Short-term bank deposits   106,399   107,926
Marketable securities   59,948   52,573
Trade receivables   48,431   55,506
Prepaid expenses and other current assets   6,349   9,777
 
Total current assets   481,763   571,874
 
LONG-TERM ASSETS:
Property and equipment, net   15,120   16,874
Intangible assets, net   14,732   10,239
Goodwill   82,400   82,400
Marketable securities   24,261   48,536
Other long-term assets   31,863   69,865
Deferred tax asset   23,481   28,128
 
Total long-term assets   191,857   256,042
 
TOTAL ASSETS $ 673,620 $ 827,916
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Trade payables $ 4,924 $ 3,967
Employees and payroll accruals   32,853   29,339
Accrued expenses and other current liabilities   13,271   22,325
Deferred revenues   92,375   109,677
 
Total current liabilities   143,423   165,308
 
LONG-TERM LIABILITIES:
Deferred revenues   57,159   67,598
Other long-term liabilities   6,268   26,696
 
Total long-term liabilities   63,427   94,294
 
TOTAL LIABILITIES   206,850   259,602
 
SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0.01 par value   95   98
Additional paid-in capital   303,900   361,180
Accumulated other comprehensive income (loss)   (939)   994
Retained earnings   163,714   206,042
 
Total shareholders' equity   466,770   568,314
 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 673,620 $ 827,916
CYBERARK SOFTWARE LTD.
Consolidated Statements of Cash Flows
U.S. dollars in thousands
(Unaudited)
 
Nine Months Ended
September 30,
2018 2019
 
Cash flows from operating activities:
Net income $ 22,892   $ 42,328  
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization   7,327     8,122  
Amortization of premium and accretion of discount on marketable securities, net   270     (39 )
Share-based compensation   25,671     37,486  
Deferred income taxes, net   (6,669 )   (4,989 )
Decrease (increase) in trade receivables   15,608     (7,075 )
Increase in prepaid expenses and other current and long-term assets   (5,646 )   (12,629 )
Increase (decrease) in trade payables   771     (501 )
Increase in short-term and long-term deferred revenues   34,298     27,741  
Decrease in employees and payroll accruals   (2,315 )   (4,318 )
Increase (decrease) in accrued expenses and other
current and long-term liabilities   (3,051 )   2,471  
 
Net cash provided by operating activities   89,156     88,597  
 
Cash flows from investing activities:
Investment in short and long term deposits   (19,768 )   (1,821 )
Investment in marketable securities   (47,316 )   (66,883 )
Proceeds from maturities of marketable securities   31,198     50,639  
Purchase of property and equipment   (7,130 )   (5,389 )
Payments for business acquisitions, net of cash acquired   (18,450 )   -  
 
Net cash used in investing activities   (61,466 )   (23,454 )
 
Cash flows from financing activities:
Proceeds from withholding tax related to employee stock plans   2,220     547  
Proceeds from exercise of stock options   14,038     19,510  
 
Net cash provided by financing activities   16,258     20,057  
 
Increase in cash, cash equivalents and restricted cash   43,948     85,200  
 
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 $ 206,469   $ 347,083  
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 Nine Months Ended
September 30, September 30,
2018 2019 2018 2019
 
Gross profit $ 72,509   $ 91,127   $ 199,009   $ 258,465  
Plus:
Share-based compensation - Maintenance & professional services   957     1,680     2,370     3,888  
Amortization of intangible assets - License   1,444     1,173     4,118     4,061  
 
Non-GAAP gross profit $ 74,910   $ 93,980   $ 205,497   $ 266,414  
 
 
 
 
 
Reconciliation of Operating Income to Non-GAAP Operating Income:
 
Three Months Ended Nine Months Ended
September 30, September 30,
2018 2019 2018 2019
 
 
Operating income $ 8,779   $ 12,740   $ 19,771   $ 39,343  
Plus:
Share-based compensation   10,335     15,338     25,671     37,486  
Amortization of intangible assets - Cost of revenues   1,444     1,173     4,118     4,061  
Amortization of intangible assets - Sales and marketing   198     144     595     432  
Acquisition related expenses   -     -     268     -  
Facility exit and transitions costs   253     -     253     -  
 
Non-GAAP operating income $ 21,009   $ 29,395   $ 50,676   $ 81,322  
 
 
Reconciliation of Net Income to Non-GAAP Net Income:
 
Three Months Ended Nine Months Ended
September 30, September 30,
2018 2019 2018 2019
 
 
Net income $ 8,094   $ 15,248   $ 22,892   $ 42,328  
Plus:
Share-based compensation   10,335     15,338     25,671     37,486  
Amortization of intangible assets - Cost of revenues   1,444     1,173     4,118     4,061  
Amortization of intangible assets - Sales and marketing   198     144     595     432  
Acquisition related expenses   -     -     268     -  
Facility exit and transitions costs   253     -     253     -  
Taxes on income related to non-GAAP adjustments   (4,764 )   (6,345 )   (12,957 )   (14,237 )
Intra-entity IP transfer tax effect, net   2,243     -     2,243     -  
 
Non-GAAP net income $ 17,803   $ 25,558   $ 43,083   $ 70,070  
 
Non-GAAP net income per share
Basic $ 0.49   $ 0.68   $ 1.20   $ 1.87  
Diluted $ 0.48   $ 0.65   $ 1.17   $ 1.80  
 
Weighted average number of shares
Basic   36,485,724     37,805,442     35,981,177     37,460,829  
Diluted   37,475,729     39,057,545     36,894,457     38,831,275

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20191106005277/en/

SOURCE: CyberArk

Investor Contact:
Erica Smith
CyberArk
Phone: +1- 617-558-2132
ir@cyberark.com

Media Contact :
Liz Campbell
CyberArk
Phone: +1-617-558-2191
press@cyberark.com

Copyright Business Wire 2019

/zigman2/quotes/206810080/composite
US : U.S.: Nasdaq
$ 119.51
+1.22 +1.03%
Volume: 363,233
Dec. 9, 2019 4:00p
P/E Ratio
68.98
Dividend Yield
N/A
Market Cap
$4.53 billion
Rev. per Employee
$299,476
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