Subscription Portion of Annual Recurring
Revenue (ARR) of $403 million; Growth of 84% Year-over-Year Total
ARR of $604 million; Growth of 42% Year-over-Year Subscription
Revenue of $92.7 million for the Quarter; Growth of 78%
Year-Over-Year Total Revenue of $161.7 million for the Quarter;
Growth Accelerates to 27% Year-Over-Year Company Raises Full Year
ARR Guidance to a Range of $735 million to $745 million from $730
million to $740 million
CyberArk (NASDAQ: CYBR), the global leader in Identity Security,
today announced the Company’s financial results for the first
quarter ended March 31, 2023.
“Our results in the first quarter demonstrate the durability of
our business model and the mission criticality of our Identity
Security platform,” said Matt Cohen, CyberArk's Chief Executive
Officer. “With identity-based attacks increasing in frequency and
severity, CISOs are prioritizing our solutions even in today’s
uncertain macro-economic environment. Demand for our SaaS solutions
remains strong, resulting in our subscription bookings mix reaching
an all-time high of 95 percent, higher than our guidance framework.
While the bookings mix lowered our recognized revenue, it also
drove strong 84 percent growth in Subscription ARR to $403 million
and 42 percent growth in total ARR to $604 million. Given our
results in the first quarter and resiliency in demand for our
solutions, we are well positioned to deliver strong long-term
growth, profitability and cash flow.”
Financial Summary for the First Quarter Ended March 31,
2023
- Subscription revenue was $92.7 million in the first quarter of
2023, an increase of 78 percent from $51.9 million in the first
quarter of 2022.
- Maintenance and professional services revenue was $65.1 million
in the first quarter of 2023, compared to $65.1 million in the
first quarter of 2022.
- Perpetual license revenue was $3.9 million in the first quarter
of 2023, compared to $10.6 million in the first quarter of
2022.
- Total revenue was $161.7 million in the first quarter of 2023,
up 27 percent from $127.6 million in the first quarter of
2022.
- GAAP operating loss was $(46.1) million and non-GAAP operating
loss was $(12.6) million in the first quarter of 2023.
- GAAP net loss was $(35.0) million, or $(0.85) per basic and
diluted share, in the first quarter of 2023. Non-GAAP net loss was
$(6.9) million, or $(0.17) per basic and diluted share, in the
first quarter of 2023.
Balance Sheet and Net Cash Provided by Operating
Activities
- As of March 31, 2023, CyberArk had $1.2 billion in cash, cash
equivalents, marketable securities, and short-term deposits.
- During the three months ended March 31, 2023, the Company
generated $5.8 million in net cash provided by operating
activities.
- As of March 31, 2023, total deferred revenue was $415.8
million, a 20 percent increase from $345.2 million at March 31,
2022.
Key Business Highlights
- Annual Recurring Revenue (ARR) was $604 million, an increase of
42 percent from $427 million at March 31, 2022.
- The Subscription portion of ARR was $403 million, or 67 percent
of total ARR at March 31, 2023. This represents an increase of 84
percent from $219 million, or 51 percent of total ARR, at March 31,
2022.
- The Maintenance portion of ARR was $202 million at March 31,
2023, compared to $208 million at March 31, 2022.
- Recurring revenue in the first quarter was $145.9 million, an
increase of 37 percent from $106.9 million for the first quarter of
2022.
Recent Developments
- CyberArk Achieved SOC 2 Type 2 and SOC 3 Certifications for its
Identity Security Platform
- CyberArk was named an Overall Leader in Privileged Access
Management by KuppingerCole
- CyberArk Announced Enhanced Functionality for its Workforce
Password Management solution
Business Outlook
Based on information available as of May 11, 2023, CyberArk is
issuing guidance for the second quarter and full year 2023 as
indicated below.
Second Quarter 2023:
- Total revenue is expected to be in the range of $170.0 million
and $175.0 million, representing growth of 19 percent to 23 percent
compared to the second quarter of 2022.
- Non-GAAP operating loss is expected to be in the range of
$(10.5) million to $(6.5) million.
- Non-GAAP net loss per share is expected to be in the range of
$(0.19) to $(0.09) per basic and diluted share.
- Assumes 41.7 million weighted average basic and diluted
shares.
Full Year 2023:
- Total revenue is expected to be in the range of $724.0 million
to $736.0 million, representing growth of 22 percent to 24 percent
compared to the full year 2022.
- Non-GAAP operating income/(loss) is expected to be in the range
of $(5.0) million to $5.0 million.
- Non-GAAP net income per share is expected to be in the range of
$0.16 to $0.38 per diluted share.
- Assumes 46.3 million weighted average diluted shares
- ARR as of December 31, 2023 is expected to be in the range of
$735 million to $745 million, representing growth of 29 percent to
31 percent from December 31, 2022.
Conference Call Information
In conjunction with this announcement, CyberArk will host a
conference call on Thursday, May 11, 2023 at 8:00 a.m. Eastern Time
(ET) to discuss the Company’s first quarter financial results and
its business outlook. To access this call, dial +1 (888) 330-2455
(U.S.) or +1 (240) 789-2717 (international). The conference ID is
6515982. 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) 770-2030 (U.S.) or +1 (647) 362-9199
(international). The replay pass code is 6515982. 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 Identity
Security. Centered on privileged access management, CyberArk
provides the most comprehensive security offering for any identity
– human or machine – across business applications, distributed
workforces, hybrid cloud workloads and throughout the DevOps
lifecycle. The world’s leading organizations trust CyberArk to help
secure their most critical assets. To learn more about CyberArk,
visit https://www.cyberark.com, read the CyberArk blogs or follow
on Twitter via @CyberArk, LinkedIn or Facebook.
Copyright © 2023 CyberArk Software. All Rights Reserved. All
other brand names, product names, or trademarks belong to their
respective holders.
Key Performance Indicators and Non-GAAP Financial
Measures
Annual Recurring Revenue (ARR)
- Annual Recurring Revenue (ARR) is defined as the annualized
value of active SaaS, subscription or term-based license and
maintenance contracts related to perpetual licenses in effect at
the end of the reported period.
Subscription Portion of Annual Recurring Revenue
- Subscription portion of ARR is defined as the annualized value
of active SaaS and subscription or term-based license contracts in
effect at the end of the reported period. The subscription portion
of ARR excludes maintenance contracts related to perpetual
licenses.
Maintenance Portion of Annual Recurring Revenue
- Maintenance portion of ARR is defined as the annualized value
of active maintenance contracts related to perpetual licenses. The
Maintenance portion of ARR excludes SaaS and subscription or
term-based license contracts in effect at the end of the reported
period.
Recurring Revenue
- Recurring Revenue is defined as revenue derived from SaaS and
subscription or term-based license contracts, and maintenance
contracts related to perpetual licenses during the reported
period.
Non-GAAP Financial Measures
CyberArk believes that the use of non-GAAP gross profit,
non-GAAP operating expense, non-GAAP operating loss, non-GAAP net
loss and free cash flow 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 loss, net loss or net cash
provided by operating activities 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, and amortization of
intangible assets related to acquisitions.
- Non-GAAP operating expense is calculated as GAAP operating
expenses excluding share-based compensation expense, acquisition
related expenses and amortization of intangible assets related to
acquisitions.
- Non-GAAP operating loss is calculated as GAAP operating loss
excluding share-based compensation expense, acquisition related
expenses and amortization of intangible assets related to
acquisitions.
- Non-GAAP net loss is calculated as GAAP net 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.
- Free cash flow is calculated as net cash provided by operating
activities less purchase of property and equipment.
The Company believes that providing non-GAAP financial measures
that are adjusted by, 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 cost, the tax
effect of the non-GAAP adjustments and purchase of property and
equipment 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. The
Company believes free cash flow is a liquidity measure that, after
the purchase of property and equipment, provides useful information
about the amount of cash generated by the business.
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, levels of activity, performance or achievements to
differ materially from the results, levels of activity, 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 to the drivers
of the Company’s growth and its ability to adapt its solutions to
IT security market demands; fluctuation in the Company’s results
due to sales cycles and multiple pricing and delivery models; the
Company’s ability to sell into existing and new customers and
industry verticals; an increase in competition within the
Privileged Access Management and Identity Security markets;
unanticipated product vulnerabilities or cybersecurity breaches of
the Company’s, or the Company’s customers’ or partners’ systems;
complications or risks in connection with the Company’s
subscription model, including uncertainty regarding renewals from
its existing customer base, and retaining sufficient subscription
or maintenance and support service renewal rates; risks related to
compliance with privacy and data protection laws and regulations;
risks regarding potential negative economic conditions in the
global economy or certain regions, including conditions resulting
from financial and credit market fluctuations, rising interest
rates, bank failures, inflation, and the potential for regional or
global recessions; the Company’s ability to hire, train, retain and
motivate qualified personnel; reliance on third-party cloud
providers for the Company’s operations and SaaS solutions; the
Company’s history of incurring net losses and its ability to
achieve profitability in the future; risks related to the Company’s
ongoing transition to a new Chief Executive Officer; the Company’s
ability to find, complete, fully integrate or achieve the expected
benefits of strategic acquisitions; the duration and scope of the
COVID-19 pandemic and its resulting effect on the demand for the
Company’s solutions and on its expected revenue growth rates and
costs; the Company’s ability to expand its sales and marketing
efforts and expand its channel partnerships across existing and new
geographies; risks related to sales made to government entities;
regulatory and geopolitical risks associated with global sales and
operations (including the current conflict between Russia and
Ukraine) and changes in regulatory requirements or fluctuations in
currency exchange rates; the ability of the Company’s products to
help customers achieve and maintain compliance with government
regulations or industry standards; risks related to intellectual
property claims or the Company’s ability to protect its proprietary
technology and intellectual property rights; 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 U.S.
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,
2022
2023
Revenues: Subscription
$
51,950
$
92,720
Perpetual license
10,557
3,882
Maintenance and professional services
65,055
65,103
Total revenues
127,562
161,705
Cost of revenues:
Subscription
9,197
15,945
Perpetual license
892
212
Maintenance and professional services
17,945
19,815
Total cost of revenues
28,034
35,972
Gross profit
99,528
125,733
Operating expenses:
Research and development
43,443
52,256
Sales and marketing
77,433
99,428
General and administrative
19,736
20,175
Total operating expenses
140,612
171,859
Operating loss
(41,084
)
(46,126
)
Financial income, net
1,056
9,606
Loss before taxes on income
(40,028
)
(36,520
)
Tax benefit
2,217
1,492
Net loss
$
(37,811
)
$
(35,028
)
Basic loss per ordinary
share
$
(0.94
)
$
(0.85
)
Diluted loss per ordinary share
$
(0.94
)
$
(0.85
)
Shares used in computing net loss per ordinary
shares, basic
40,169,333
41,168,043
Shares used in computing net loss per ordinary shares, diluted
40,169,333
41,168,043
CYBERARK SOFTWARE LTD.
Consolidated Balance
Sheets
U.S. dollars in
thousands
(Unaudited)
December 31, March 31,
2022
2023
ASSETS
CURRENT ASSETS: Cash and
cash equivalents
$
347,338
$
363,663
Short-term bank deposits
305,843
281,602
Marketable securities
301,101
268,487
Trade receivable
120,817
87,529
Prepaid expenses and other current assets
22,482
23,668
Total current assets
1,097,581
1,024,949
LONG-TERM ASSETS:
Marketable securities
227,748
309,687
Property and equipment, net
23,474
22,656
Intangible assets, net
27,508
25,667
Goodwill
153,241
153,241
Other long-term assets
217,040
191,093
Deferred tax asset
72,809
78,722
Total long-term assets
721,820
781,066
TOTAL ASSETS
$
1,819,401
$
1,806,015
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Trade payables
$
13,642
$
13,472
Employees and payroll accruals
77,328
53,730
Accrued expenses and other current liabilities
33,584
37,163
Deferred revenues
327,918
339,223
Total current liabilities
452,472
443,588
LONG-TERM LIABILITIES:
Convertible senior notes, net
569,344
570,092
Deferred revenues
80,524
76,602
Other long-term liabilities
38,917
37,213
Total long-term liabilities
688,785
683,907
TOTAL LIABILITIES
1,141,257
1,127,495
SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0.01 par value
107
108
Additional paid-in capital
660,289
692,597
Accumulated other comprehensive loss
(15,560
)
(12,465
)
Retained earnings (accumulated deficit)
33,308
(1,720
)
Total shareholders' equity
678,144
678,520
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
1,819,401
$
1,806,015
CYBERARK SOFTWARE LTD.
Consolidated Statements of
Cash Flows
U.S. dollars in
thousands
(Unaudited)
Three Months Ended
March 31,
2022
2023
Cash flows from operating
activities: Net loss
$
(37,811
)
$
(35,028
)
Adjustments to reconcile net loss to net cash
provided by operating activities: Depreciation
and amortization
3,884
4,446
Amortization of premium and accretion of discount on marketable
securities, net
1,877
(508
)
Share-based compensation
27,278
31,596
Deferred income taxes, net
(4,238
)
(5,467
)
Decrease in trade receivables
36,839
33,288
Amortization of debt discount and issuance costs
744
748
Increase in prepaid expenses, other current and long-term assets
and others
(8,708
)
(5,105
)
Changes in operating lease right-of-use assets
33
1,543
Increase (decrease) in trade payables
1,298
(363
)
Increase in short-term and long-term deferred revenues
27,933
7,383
Decrease in employees and payroll accruals
(21,588
)
(27,920
)
Increase (decrease) in accrued expenses and other current and
long-term liabilities
(851
)
3,207
Changes in operating lease liabilities
(1,706
)
(1,999
)
Net cash provided by operating
activities
24,984
5,821
Cash flows from investing
activities: Investment in short and long
term deposits
(55,906
)
(51,768
)
Proceeds from short and long term deposits
71,932
103,738
Investment in marketable securities and other
(104,477
)
(156,522
)
Proceeds from sales and maturities of marketable securities
69,905
111,611
Purchase of property and equipment
(2,013
)
(1,775
)
Payments for business acquisitions, net of cash acquired
(12,987
)
-
Net cash provided by (used in)
investing activities
(33,546
)
5,284
Cash flows from financing
activities: Proceeds from (payment of)
withholding tax related to employee stock plans
(620
)
712
Proceeds from exercise of stock options
1,100
599
Proceeds in connection with employees stock purchase plan
-
3,906
Net cash provided by financing
activities
480
5,217
Increase (decrease) in cash and cash
equivalents
(8,082
)
16,322
Effect of exchange rate differences on
cash and cash equivalents
(916
)
3
Cash and cash equivalents at the
beginning of the period
356,850
347,338
Cash and cash equivalents at the end of
the period
$
347,852
$
363,663
CYBERARK SOFTWARE LTD. Reconciliation of GAAP
Measures to Non-GAAP Measures U.S. dollars in thousands
(except per share data) (Unaudited)
Reconciliation of Net cash provided by
operating activities to Free cash flow:
Three Months Ended March
31,
2022
2023
Net cash provided by operating activities
$
24,984
$
5,821
Less: Purchase of property and equipment
(2,013
)
(1,775
)
Free cash flow
$
22,971
$
4,046
GAAP net cash provided by (used in) investing
activities
(33,546
)
5,284
GAAP net cash provided by financing activities
480
5,217
Reconciliation of Gross Profit to Non-GAAP
Gross Profit:
Three Months Ended March 31,
2022
2023
Gross profit
$
99,528
$
125,733
Plus: Share-based compensation (1)
3,190
3,953
Amortization of share-based compensation capitalized in software
development costs (3)
88
103
Amortization of intangible assets (2)
1,278
1,704
Non-GAAP gross profit
$
104,084
$
131,493
Reconciliation
of Operating Expenses to Non-GAAP Operating Expenses:
Three Months Ended
March 31,
2022
2023
Operating expenses
$
140,612
$
171,859
Less: Share-based compensation (1)
24,088
27,643
Amortization of intangible assets (2)
152
137
Acquisition related expenses
478
-
Non-GAAP operating expenses
$
115,894
$
144,079
Reconciliation of Operating Loss to
Non-GAAP Operating Loss:
Three Months Ended March
31,
2022
2023
Operating loss
$
(41,084
)
$
(46,126
)
Plus: Share-based compensation (1)
27,278
31,596
Amortization of share-based compensation capitalized in software
development costs (3)
88
103
Amortization of intangible assets (2)
1,430
1,841
Acquisition related expenses
478
-
Non-GAAP operating loss
$
(11,810
)
$
(12,586
)
Reconciliation of Net Loss to Non-GAAP Net
Loss: Three
Months Ended March 31,
2022
2023
Net loss
$
(37,811
)
$
(35,028
)
Plus: Share-based compensation (1)
27,278
31,596
Amortization of share-based compensation capitalized in software
development costs (3)
88
103
Amortization of intangible assets (2)
1,430
1,841
Acquisition related expenses
478
-
Amortization of debt discount and issuance costs
744
748
Taxes on income related to non-GAAP adjustments
(4,111
)
(6,206
)
Non-GAAP net loss
$
(11,904
)
$
(6,946
)
Non-GAAP net loss per share
Basic
$
(0.30
)
$
(0.17
)
Diluted
$
(0.30
)
$
(0.17
)
Weighted average number of shares
Basic
40,169,333
41,168,043
Diluted
40,169,333
41,168,043
(1) Share-based Compensation :
Three Months Ended March 31,
2022
2023
Cost of revenues -
Subscription
$
376
$
832
Cost of revenues - Perpetual license
30
7
Cost of revenues - Maintenance and Professional services
2,784
3,114
Research and development
6,050
6,738
Sales and marketing
11,400
14,595
General and administrative
6,638
6,310
Total share-based compensation
$
27,278
$
31,596
(2) Amortization of intangible assets :
Three Months Ended March 31,
2022
2023
Cost of revenues -
Subscription
$
1,208
$
1,704
Cost of revenues - Perpetual license
70
-
Sales and marketing
152
137
Total amortization of intangible assets
$
1,430
$
1,841
(3)
Classified as Cost of revenues - Subscription.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230510006028/en/
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
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