Total revenue of $106.8 million GAAP operating
income of $2.6 million and non-GAAP operating income of $21.5
million CyberArk Acquires Identity as a Service Provider,
Idaptive
CyberArk (NASDAQ:CYBR), the global leader in privileged access
management, today announced financial results for the first quarter
ended March 31, 2020.
“The health and well-being of our global community of employees,
customers and partners continues to be our first priority,” said
Udi Mokady, CyberArk Chairman and CEO. “We were pleased to deliver
results in line with or exceeding all guided metrics for the first
quarter. Privileged Access Management (PAM) is even more critical
today with attackers exploiting the sudden and dramatic change in
enterprise IT created by remote work environments. In this higher
threat environment, our level of engagement with customers has
increased as they look to better secure their extended enterprise
by expanding their PAM programs. Given our leadership position in
PAM, our team’s extensive experience during prior market downturns
as well as our ongoing commitment to innovation and customer
satisfaction, we believe that we will emerge from the COVID-19
pandemic stronger than before. We are also pleased with today’s
acquisition of Idaptive, which positions us as the only modern
identity security platform, adds another SaaS offering to our
portfolio, and expands our Total Addressable Market.”
“Given the weakened economic environment due to Covid-19, we
expect customers to make more cautious purchasing decisions which
will impact our revenue and cash flow from operations in the near
term,” stated Josh Siegel, CyberArk Chief Financial Officer. “We
believe deal close rates, particularly for new business and in
certain verticals, will be less predictable and have therefore
decided to withdraw our full year 2020 guidance. We continue to
believe in the long-term growth opportunity given that Privileged
Access Management is a priority for customers. The management team
remains focused on delivering growth and profitability in 2020. As
we monitor COVID-19 developments, our current plan is to manage
expenses for the full year to better align with our top line, but
also make disciplined investments and hire for key roles. We
believe this approach will allow CyberArk to navigate through the
current environment and prepare the Company for accelerated growth
when the business environment stabilizes.”
Financial Highlights for the First Quarter Ended March 31,
2020
Revenue:
- Total revenue was $106.8 million, up 11% compared with the
first quarter of 2019.
- License revenue was $51.7 million, up from $51.3 million in the
first quarter of 2019.
- Maintenance and professional services revenue was $55.2
million, compared to $44.7 million in the first quarter of
2019.
Operating Income:
- GAAP operating income was $2.6 million, compared to $13.6
million in the first quarter of 2019. Non-GAAP operating income was
$21.5 million, compared to $25.5 million in the first quarter of
2019.
Net Income:
- GAAP net income was $2.4 million, or $0.06 per diluted share,
compared to GAAP net income of $13.7 million, or $0.36 per diluted
share, in the first quarter of 2019. Non-GAAP net income was $19.6
million, or $0.50 per diluted share, compared to $21.5 million, or
$0.56 per diluted share, in the first quarter of 2019.
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 ended March 31, 2020 and 2019.
An explanation of these measures is also included below under the
heading “Non-GAAP Financial Measures.”
Balance Sheet and Net Cash Provided by Operating
Activities:
- As of March 31, 2020, CyberArk had $1.2 billion in cash, cash
equivalents, marketable securities and short-term deposits. This
compares with $509.7 million in cash, cash equivalents, marketable
securities and short-term deposits as of March 31, 2019.
- As of March 31, 2020, total deferred revenue was $210.7
million, a 23% increase from $171.1 million at March 31, 2019.
- During the first quarter of 2020, the Company generated $33.8
million in net cash provided by operating activities, compared to
$45.9 million in the first quarter of 2019.
CyberArk Acquires IDaptive Holdings, Inc.
- In a separate announcement, CyberArk announced the acquisition
of Idaptive, a leading Identity as a Service (IDaaS) provider.
Together, CyberArk and Idaptive will deliver the industry’s only
modern identity platform with a security-first approach.
CyberArk’s COVID-19 Response: Business Operations
As the COVID-19 situation evolved, CyberArk quickly took action
to protect its community of employees, customers and partners and
is continually evolving its COVID-19 response plan. To date,
following actions have been taken:
- Created an executive level task force to respond to the
situation and monitor guidance from the World Health Organization,
CDC as well as local authorities to shape the Company’s policies
and guidelines.
- Closed offices and enabled all employees to work securely from
home.
- Transitioned sales and marketing to focus on virtual and
digital programs.
- Restricted non-essential business travel.
CyberArk’s COVID-19 Response: Customers, Partners and
Community
- Transitioned support and service staff to be available from
remote locations 24 hours a day, 7 days a week to help our
customers and partners implement business continuity strategies in
response to the COVID-19 pandemic.
- Converted the Company’s major customer events in the U.S. and
Europe to a global virtual program.
- Adjusted our Security Services organization to deliver all
services remotely.
- Offered CyberArk Alero to customers at no cost into June. Alero
enables remote employees and contractors to securely access
CyberArk.
- Published research from CyberArk Labs communicating information
about how attackers are capitalizing on the disruptions caused by
COVID-19.
- Donated to local charities to help support COVID-19 response
efforts.
Business Outlook
Based on information available as of May 13, 2020, CyberArk is
issuing guidance as indicated below:
Second Quarter 2020:
- Total revenue between $95.0 million and $105.0 million.
- Non-GAAP operating income between $7.0 million and $16.0
million, which includes expenses from the acquisition of
Idaptive.
- Non-GAAP net income per share between $0.17 and $0.35 per
diluted share, which includes expenses from the acquisition of
Idaptive.
- Assumes 39.4 million weighted average diluted shares.
Full Year 2020:
Given the uncertainty created by the COVID-19 pandemic as well
as its impact on the overall economy, our business, our customers
and our partners, we are withdrawing our full year 2020 guidance
for total revenue, non-GAAP operating income, and non-GAAP earnings
per share that we provided on February 12, 2020.
Conference Call Information
CyberArk will host a conference call today, Wednesday, May 13,
2020 at 8:30 a.m. Eastern Time (ET) to discuss the Company’s first
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 1148659. 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 1148659. 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 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 © 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 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,
amortization of intangible assets related to acquisitions,
amortization of debt discount and issuance costs and the tax effect
of 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, 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,
amortization of intangible assets related to acquisitions 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, amortization of intangible assets related to
acquisitions, non-cash interest expense related to the amortization
of debt discount and issuance costs and the tax effect of the
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:
the duration and scope of the COVID-19 pandemic and the impact of
the pandemic and actions taken in response, on global and regional
economies and economic activity, which may have a material impact
on the demand for the Company’s solutions and on its expected
revenue growth rates and costs; the Company’s ability to adjust its
operations in response to any impacts from the COVID-19 pandemic;
difficulties predicting future financial results, including due to
impacts from the COVID-19 pandemic; the drivers of the Company’s
growth may change; the Company’s ability to sell into existing and
new industry verticals; the Company’s sales cycles and multiple
licensing models may cause results to fluctuate; the Company’s
ability to sell into existing customers; potential changes in the
Company’s operating and net profit margins and the Company’s
revenue growth rate; the Company’s ability to successfully find,
complete, fully integrate and achieve the expected benefits of
future acquisitions, including the Company’s ability to integrate
and achieve the expected benefits of Idaptive; real or perceived
shortcomings, defects or vulnerabilities in the Company’s solutions
or internal network system; the Company’s ability to hire qualified
personnel; the Company’s ability to expand its channel partnerships
across existing and new geographies; the Company’s ability to
further diversify its product deployments and licensing options;
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 March 31,
2019
2020
Revenues: License
$
51,284
$
51,656
Maintenance and professional services
44,651
55,170
Total revenues
95,935
106,826
Cost of revenues: License
2,588
2,235
Maintenance and professional services
10,979
14,850
Total cost of revenues
13,567
17,085
Gross profit
82,368
89,741
Operating expenses: Research and
development
16,331
21,285
Sales and marketing
41,505
51,196
General and administrative
10,905
14,689
Total operating expenses
68,741
87,170
Operating income
13,627
2,571
Financial income (expenses), net
1,421
(736
)
Income before taxes on income
15,048
1,835
Tax benefit (taxes on income)
(1,371
)
551
Net income
$
13,677
$
2,386
Basic net income per ordinary share
$
0.37
$
0.06
Diluted net income per ordinary share
$
0.36
$
0.06
Shares used in computing net income per
ordinary shares, basic
37,046,472
38,222,867
Shares used in computing net income per ordinary
shares, diluted
38,440,461
39,309,750
Share-based Compensation
Expense: Three Months
Ended March 31,
2019
2020
Cost of revenues
$
957
$
1,803
Research and development
2,307
3,021
Sales and marketing
3,685
6,400
General and administrative
3,303
5,084
Total share-based compensation expense
$
10,252
$
16,308
CYBERARK SOFTWARE LTD.
Consolidated Balance
Sheets
U.S. dollars in
thousands
(Unaudited)
December 31, March 31,
2019
2020
ASSETS
CURRENT ASSETS: Cash and
cash equivalents
$
792,363
$
812,667
Short-term bank deposits
140,067
152,631
Marketable securities
132,412
124,517
Trade receivables
72,953
51,970
Prepaid expenses and other current assets
8,406
11,943
Total current assets
1,146,201
1,153,728
LONG-TERM ASSETS: Marketable
securities
54,408
65,706
Property and equipment, net
16,472
16,427
Intangible assets, net
9,143
8,110
Goodwill
82,400
82,400
Other long-term assets
72,091
78,970
Deferred tax asset
24,451
24,863
Total long-term assets
258,965
276,476
TOTAL ASSETS
$
1,405,166
$
1,430,204
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables
$
5,675
$
6,172
Employees and payroll accruals
41,345
26,384
Accrued expenses and other current liabilities
27,132
21,672
Deferred revenues
118,519
130,400
Total current liabilities
192,671
184,628
LONG-TERM LIABILITIES:
Convertible senior notes, net
485,119
489,359
Deferred revenues
71,836
80,253
Other long-term liabilities
31,408
28,646
Total long-term liabilities
588,363
598,258
TOTAL LIABILITIES
781,034
782,886
SHAREHOLDERS' EQUITY: Ordinary
shares of NIS 0.01 par value
99
99
Additional paid-in capital
396,437
418,036
Accumulated other comprehensive income
818
19
Retained earnings
226,778
229,164
Total shareholders' equity
624,132
647,318
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
1,405,166
$
1,430,204
CYBERARK SOFTWARE LTD.
Consolidated Statements of
Cash Flows
U.S. dollars in
thousands
(Unaudited)
Three Months Ended
March 31,
2019
2020
Cash flows from operating activities:
Net income
$
13,677
$
2,386
Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and
amortization
2,778
2,479
Amortization of premium and accretion of discount on marketable
securities, net
(10
)
(80
)
Share-based compensation
10,252
16,308
Deferred income taxes, net
(1,311
)
(2,516
)
Decrease in trade receivables
13,914
20,983
Amortization of debt discount and issuance costs
-
4,240
Increase in prepaid expenses and other current and long-term assets
(5,347
)
(8,160
)
Increase in trade payables
871
421
Increase in short-term and long-term deferred revenues
21,537
20,298
Decrease in employees and payroll accruals
(11,797
)
(14,162
)
Increase (decrease) in accrued expenses and other current and
long-term liabilities
1,294
(8,371
)
Net cash provided by operating activities
45,858
33,826
Cash flows from investing activities:
Investment in short and long term deposits
(2,913
)
(12,527
)
Investment in marketable securities
(35,768
)
(44,921
)
Proceeds from maturities of marketable securities
21,651
41,246
Purchase of property and equipment
(2,297
)
(1,327
)
Net cash used in investing activities
(19,327
)
(17,529
)
Cash flows from financing activities:
Proceeds from (payment of) withholding tax related to
employee stock plans
4,842
(799
)
Proceeds from exercise of stock options
9,918
4,806
Net cash provided by financing activities
14,760
4,007
Increase in cash, cash equivalents and
restricted cash
41,291
20,304
Cash, cash equivalents and restricted cash at
the beginning of the period
$
261,883
$
792,413
Cash, cash equivalents and restricted cash at
the end of the period
$
303,174
$
812,717
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 March 31,
2019
2020
Gross profit
$
82,368
$
89,741
Plus: Share-based compensation - Maintenance &
professional services
957
1,803
Amortization of intangible assets - License
1,444
936
Non-GAAP gross profit
$
84,769
$
92,480
Reconciliation of Operating Income
to Non-GAAP Operating Income:
Three Months Ended March 31,
2019
2020
Operating income
$
13,627
$
2,571
Plus: Share-based compensation
10,252
16,308
Amortization of intangible assets - Cost of revenues
1,444
936
Amortization of intangible assets - Sales and marketing
144
113
Acquisition related expenses
-
1,610
Non-GAAP operating income
$
25,467
$
21,538
Reconciliation of Net Income to
Non-GAAP Net Income:
Three Months Ended March 31,
2019
2020
Net income
$
13,677
$
2,386
Plus: Share-based compensation
10,252
16,308
Amortization of intangible assets - Cost of revenues
1,444
936
Amortization of intangible assets - Sales and marketing
144
113
Acquisition related expenses
-
1,610
Amortization of debt discount and issuance costs
-
4,240
Taxes on income related to non-GAAP adjustments
(4,046
)
(6,012
)
Non-GAAP net income
$
21,471
$
19,581
Non-GAAP net income per share Basic
$
0.58
$
0.51
Diluted
$
0.56
$
0.50
Weighted average number of shares Basic
37,046,472
38,222,867
Diluted
38,440,461
39,309,750
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200513005314/en/
Investors: Erica Smith CyberArk +1 617-558-2132
ir@cyberark.com
Media: Liz Campbell CyberArk +1 617-558-2191
press@cyberark.com
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