Total revenue of $106.5 million GAAP operating
loss of $(4.9) million and Non-GAAP operating income of $16.9
million Deferred revenue grew 30 percent year over year
CyberArk (NASDAQ: CYBR), the global leader in privileged access
management, today announced financial results for the second
quarter ended June 30, 2020.
“We were pleased to deliver results ahead of all guided metrics
for the second quarter,” said Udi Mokady, CyberArk Chairman and
CEO. “The integration of our Idaptive acquisition is progressing
well and the feedback from customers and partners has been
positive. Our SaaS solutions are gaining momentum resulting in
record SaaS bookings in the second quarter, contributing to our
strong 30 percent deferred revenue growth. While SaaS acceleration
results in a short-term revenue headwind, the recurring revenue
base creates significant longer-term value for both our customers
and CyberArk. It was a very active quarter overall with the impact
from the global pandemic confined to new business progression,
which was in line with our expectations. Cybersecurity market
fundamentals remain strong, identity security is at the top of
customers’ priority lists, and our pipeline growth is robust. We
are confident that we are positioned to accelerate growth as the
overall business environment stabilizes.”
Financial Highlights for the Second Quarter Ended June 30,
2020
Revenue:
- Total revenue was $106.5 million, compared to $100.2 million in
the second quarter of 2019.
- License revenue was $47.9 million, compared to $52.2 million in
the second quarter of 2019.
- Maintenance and professional services revenue was $58.6
million, compared to $48.0 million in the second quarter of
2019.
Operating Income (Loss):
- GAAP operating loss was $(4.9) million, compared to operating
income of $13.0 million in the second quarter of 2019. Non-GAAP
operating income was $16.9 million, compared to $26.5 million in
the second quarter of 2019.
Net Income (Loss):
- GAAP net loss was $(4.3) million, or $(0.11) per basic and
diluted share, compared to GAAP net income of $13.4 million, or
$0.34 per diluted share, in the second quarter of 2019. Non-GAAP
net income was $16.7 million, or $0.42 per diluted share, compared
to $23.0 million, or $0.59 per diluted share, in the second quarter
of 2019.
The tables at the end of this press release include a
reconciliation of GAAP to non-GAAP gross profit, operating income
(loss) and net income (loss) for the three months and six months
ended June 30, 2020 and 2019. An explanation of these measures is
also included below under the heading “Non-GAAP Financial
Measures.”
Balance Sheet and Cash Flow:
- As of June 30, 2020, CyberArk had $1.1 billion in cash, cash
equivalents, marketable securities and short-term deposits. This
compares to $537.9 million at June 30, 2019.
- As of June 30, 2020, total deferred revenue was $225.7 million,
a 30% increase from $174.2 million at June 30, 2019.
- During the six months ended June 30, 2020, the company
generated $53.3 million in net cash provided by operating
activities, compared to $67.3 million in the first six months of
2019.
Business Outlook
Based on information available as of August 4, 2020, CyberArk is
issuing guidance for the third quarter of 2020 as indicated
below.
Third Quarter 2020:
- Total revenue between $107.0 million and $115.0 million.
- Non-GAAP operating income between $8.0 million and $15.0
million.
- Non-GAAP net income per share between $0.19 and $0.33 per
diluted share.
- Assumes 39.8 million weighted average diluted shares.
Conference Call Information
In conjunction with this announcement, CyberArk will host a
conference call on Tuesday, August 4, 2020 at 8:30 a.m. Eastern
Time (ET) to discuss the company’s second quarter financial results
and its business outlook. To access this call, dial +1 (833)
968-2251 (U.S.) or +1 (778) 560-2670 (international). The
conference ID is 3597059. 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 (416) 621-4642
(international). The replay pass code is 3597059. 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 (loss)
or net income (loss) or any other performance measures derived in
accordance with GAAP.
- Non-GAAP gross profit is calculated as GAAP gross profit
excluding share-based compensation expense, acquisition related
expenses and amortization of intangible assets related to
acquisitions.
- Non-GAAP operating income is calculated as GAAP operating
income (loss) excluding share-based compensation expense,
acquisition related expenses and amortization of intangible assets
related to acquisitions.
- Non-GAAP net income is calculated as GAAP net income (loss)
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 and the resulting 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 impacts from the COVID-19 pandemic;
difficulties predicting future financial results, including due to
impacts from the COVID-19 pandemic; changes to the drivers of the
Company’s growth; 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
Six Months Ended
June 30,
June 30,
2019
2020
2019
2020
Revenues: License
$
52,201
$
47,864
$
103,485
$
99,520
Maintenance and professional services
47,980
58,633
92,631
113,803
Total revenues
100,181
106,497
196,116
213,323
Cost of revenues: License
2,906
5,223
5,494
7,458
Maintenance and professional services
12,305
15,167
23,284
30,017
Total cost of revenues
15,211
20,390
28,778
37,475
Gross profit
84,970
86,107
167,338
175,848
Operating expenses: Research and development
16,995
22,873
33,326
44,158
Sales and marketing
43,573
52,347
85,078
103,543
General and administrative
11,426
15,766
22,331
30,455
Total operating expenses
71,994
90,986
140,735
178,156
Operating income (loss)
12,976
(4,879
)
26,603
(2,308
)
Financial income (expenses), net
2,485
(1,473
)
3,906
(2,209
)
Income (loss) before taxes on income
15,461
(6,352
)
30,509
(4,517
)
Tax benefit (taxes on income)
(2,058
)
2,036
(3,429
)
2,587
Net income (loss)
$
13,403
$
(4,316
)
$
27,080
$
(1,930
)
Basic net income (loss) per ordinary share
$
0.36
$
(0.11
)
$
0.73
$
(0.05
)
Diluted net income (loss) per ordinary share
$
0.34
$
(0.11
)
$
0.70
$
(0.05
)
Shares used in computing net income (loss) per ordinary
shares, basic
37,522,410
38,565,175
37,285,788
38,393,938
Shares used in computing net income (loss) per ordinary shares,
diluted
38,993,170
38,565,175
38,735,078
38,393,938
Share-based Compensation
Expense:
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2020
2019
2020
Cost of revenues
$
1,251
$
1,949
$
2,208
$
3,752
Research and development
2,394
3,362
4,701
6,383
Sales and marketing
4,878
6,753
8,563
13,153
General and administrative
3,373
4,687
6,676
9,771
Total share-based compensation expense
$
11,896
$
16,751
$
22,148
$
33,059
CYBERARK SOFTWARE LTD.
Consolidated Balance
Sheets
U.S. dollars in
thousands
(Unaudited)
December 31,
June 30,
2019
2020
ASSETS CURRENT ASSETS: Cash and cash
equivalents
$
792,363
$
551,706
Short-term bank deposits
140,067
247,965
Marketable securities
132,412
120,050
Trade receivables
72,953
60,136
Prepaid expenses and other current assets
8,406
13,762
Total current assets
1,146,201
993,619
LONG-TERM ASSETS: Marketable securities
54,408
190,134
Property and equipment, net
16,472
16,865
Intangible assets, net
9,143
29,102
Goodwill
82,400
133,280
Other long-term assets
72,091
87,098
Deferred tax asset
24,451
27,555
Total long-term assets
258,965
484,034
TOTAL ASSETS
$
1,405,166
$
1,477,653
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT
LIABILITIES: Trade payables
$
5,675
$
8,946
Employees and payroll accruals
41,345
34,933
Accrued expenses and other current liabilities
27,132
20,272
Deferred revenues
118,519
145,526
Total current liabilities
192,671
209,677
LONG-TERM LIABILITIES: Convertible senior notes, net
485,119
493,636
Deferred revenues
71,836
80,212
Other long-term liabilities
31,408
30,007
Total long-term liabilities
588,363
603,855
TOTAL LIABILITIES
781,034
813,532
SHAREHOLDERS' EQUITY: Ordinary shares of NIS 0.01 par value
99
101
Additional paid-in capital
396,437
435,769
Accumulated other comprehensive income
818
3,403
Retained earnings
226,778
224,848
Total shareholders' equity
624,132
664,121
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
1,405,166
$
1,477,653
CYBERARK SOFTWARE LTD.
Consolidated Statements of
Cash Flows
U.S. dollars in
thousands
(Unaudited)
Six Months Ended
June 30,
2019
2020
Cash flows from operating activities: Net income
(loss)
$
27,080
$
(1,930
)
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
5,551
6,911
Amortization of premium and accretion of discount on marketable
securities, net
(42
)
222
Share-based compensation
22,148
33,059
Deferred income taxes, net
(1,857
)
(3,766
)
Decrease in trade receivables
3,156
15,677
Amortization of debt discount and issuance costs
-
8,517
Increase in prepaid expenses and other current and long-term assets
(9,656
)
(13,850
)
Increase (decrease) in trade payables
(123
)
477
Increase in short-term and long-term deferred revenues
24,655
28,627
Decrease in employees and payroll accruals
(7,595
)
(8,116
)
Increase (decrease) in accrued expenses and other current and
long-term liabilities
4,029
(12,540
)
Net cash provided by operating activities
67,346
53,288
Cash flows from investing activities: Proceeds from
(investment in) short and long term deposits
8,948
(108,138
)
Investment in marketable securities
(50,464
)
(223,733
)
Proceeds from maturities of marketable securities
36,653
102,239
Purchase of property and equipment
(3,231
)
(2,874
)
Payments for business acquisitions, net of cash acquired
-
(66,964
)
Net cash used in investing activities
(8,094
)
(299,470
)
Cash flows from financing activities: Proceeds from
(payment of) withholding tax related to employee stock plans
5,319
(603
)
Proceeds from exercise of stock options
16,572
6,125
Net cash provided by financing activities
21,891
5,522
Increase (decrease) in cash, cash equivalents and restricted
cash
81,143
(240,660
)
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
$
343,026
$
551,753
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
Six Months Ended
June 30,
June 30,
2019
2020
2019
2020
Gross profit
$
84,970
$
86,107
$
167,338
$
175,848
Plus: Share-based compensation - License, Maintenance &
professional services
1,251
1,949
2,208
3,752
Amortization of intangible assets - License
1,444
2,239
2,888
3,175
Acquisition related expenses
-
400
-
400
Non-GAAP gross profit
$
87,665
$
90,695
$
172,434
$
183,175
Reconciliation of Operating Income (Loss) to
Non-GAAP Operating Income:
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2020
2019
2020
Operating income (loss)
$
12,976
$
(4,879
)
$
26,603
$
(2,308
)
Plus: Share-based compensation
11,896
16,751
22,148
33,059
Amortization of intangible assets - Cost of revenues
1,444
2,239
2,888
3,175
Amortization of intangible assets - Sales and marketing
144
160
288
273
Acquisition related expenses
-
2,646
-
4,256
Non-GAAP operating income
$
26,460
$
16,917
$
51,927
$
38,455
Reconciliation of Net Income (Loss) to Non-GAAP
Net Income:
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2020
2019
2020
Net income (loss)
$
13,403
$
(4,316
)
$
27,080
$
(1,930
)
Plus: Share-based compensation
11,896
16,751
22,148
33,059
Amortization of intangible assets - Cost of revenues
1,444
2,239
2,888
3,175
Amortization of intangible assets - Sales and marketing
144
160
288
273
Acquisition related expenses
-
2,646
-
4,256
Amortization of debt discount and issuance costs
-
4,277
-
8,517
Taxes on income related to non-GAAP adjustments
(3,846
)
(5,066
)
(7,892
)
(11,078
)
Non-GAAP net income
$
23,041
$
16,691
$
44,512
$
36,272
Non-GAAP net income per share Basic
$
0.61
$
0.43
$
1.19
$
0.94
Diluted
$
0.59
$
0.42
$
1.15
$
0.92
Weighted average number of shares Basic
37,522,410
38,565,175
37,285,788
38,393,938
Diluted
38,993,170
39,320,124
38,735,078
39,301,975
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200804005519/en/
Investor Relations Contact: Erica Smith CyberArk
617-558-2132 ir@cyberark.com
Media Contact: Liz Campbell CyberArk 617-558-2191
press@cyberark.com
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