Third quarter total revenue of $64.8 million,
18 percent year-over-year increase
CyberArk (NASDAQ: CYBR), the company that protects organizations
from cyber attacks that have made their way inside the network
perimeter, today announced financial results for the third quarter
ended September 30, 2017.
“We were pleased that CyberArk exceeded its guidance in the
third quarter,” said Udi Mokady, CyberArk Chairman and CEO. “Our
results were driven by both new and add-on business. We are making
early progress executing our strategy to globalize the sales
organization, which we believe will position us to capitalize on
the long term opportunity for Privileged Account Security.”
Financial Highlights for the Third Quarter Ended September
30, 2017
Revenue:
- Total revenue was $64.8 million, an
increase from $55.0 million in the third quarter of 2016.
- License revenue was $35.8 million,
compared to $33.3 million in the third quarter of 2016.
- Maintenance and Professional Services
revenue was $29.0 million, an increase from $21.7 million in the
third quarter of 2016.
Operating Income:
- GAAP operating income was $1.7 million
for the quarter, compared to $8.1 million in the third quarter of
2016.
- Non-GAAP operating income was $10.7
million for the quarter, compared to $14.3 million in the third
quarter of 2016.
Net Income:
- GAAP net income was $1.7 million, or
$0.05 per diluted share, compared to GAAP net income of $7.1
million, or $0.20 per diluted share, in the third quarter of
2016.
- Non-GAAP net income was $8.9 million,
or $0.25 per diluted share, compared to $11.8 million, or $0.33 per
diluted share, in the third quarter of 2016.
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 nine months ended September
30, 2017 and 2016. 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, 2017, CyberArk had
$296.8 million in cash, cash equivalents, marketable securities and
short-term deposits. This compares to $295.5 million as of December
31, 2016.
- During the first nine months of 2017,
CyberArk generated $44.6 million in cash flow from operations,
compared to $36.2 million in the first nine months of 2016.
Business Outlook
Based on information available as of November 2, 2017, CyberArk
is issuing guidance for the fourth quarter and full year 2017 as
indicated below.
Fourth Quarter 2017:
- Total revenue is expected to be in the
range of $75.0 million to $76.0 million which represents 17% to 18%
year-over-year growth.
- Non-GAAP operating income is expected
to be in the range of $16.8 million to $17.6 million.
- Non-GAAP net income per share is
expected to be in the range of $0.35 to $0.36 per diluted share.
This assumes 36.4 million weighted average diluted shares.
Full Year 2017:
- Total revenue is expected to be in the
range of $256.3 million to $257.3 million, which represents 18% to
19% year-over-year growth.
- Non-GAAP operating income is expected
to be in the range of $48.9 million to $49.7 million.
- Non-GAAP net income per share is
expected to be in the range of $1.09 to $1.10 per diluted share.
This assumes 36.3 million weighted average diluted shares.
Conference Call Information
CyberArk will host a conference call on today, Thursday,
November 2, 2017 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 +1 844-237-3590 (U.S.) or +1 484-747-6582
(international). The conference ID is 75374407. Additionally, a
live webcast of the conference call will be available via the
“Investor Relations” section of the company’s web site at
www.cyberark.com. Following the conference call, a replay will be
available for one week at +1 855-859-2056 (U.S.) or +1 404-537-3406
(international). The replay pass code is 75374407. 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 is the only security company focused on
eliminating the most advanced cyber threats; those that use insider
privileges to attack the heart of the enterprise. Dedicated to
stopping attacks before they stop business, CyberArk proactively
secures against cyber threats before attacks can escalate and do
irreparable damage. The company is trusted by the world’s leading
companies – including more than 50 percent of the Fortune 100 – to
protect their highest value information assets, infrastructure and
applications. 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 blog, or follow on Twitter via
@CyberArk, LinkedIn or Facebook.
Copyright © 2017 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 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 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 costs, amortization of intangible
assets related to acquisitions and the tax effect of the non-GAAP
adjustments.
Because of varying available valuation methodologies, subjective
assumptions and the variety of equity instruments that can impact a
company’s non-cash expense, the Company believes that providing
non-GAAP financial measures that exclude share-based compensation,
acquisition related expenses, facility exit costs and amortization
of intangible assets related to acquisitions 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. The Company believes that expenses
related to its acquisitions, facility exit costs and amortization
of intangible assets related to acquisitions 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 measures to evaluate its business.
Cautionary Language Concerning Forward-Looking
Statements
This release may contain 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,” “guide,” “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; 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; 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, 2016 2017
2016 2017 Revenues: License $ 33,257 $ 35,818
$ 90,736 $ 99,088 Maintenance and professional services 21,707
29,000 61,519 82,245 Total revenues
54,964 64,818 152,255 181,333 Cost of revenues: License
1,084 2,161 3,641 5,652 Maintenance and professional services 6,962
8,801 17,750 24,577 Total cost of
revenues 8,046 10,962 21,391 30,229
Gross profit 46,918 53,856 130,864 151,104
Operating expenses: Research and development 9,192 11,369
25,290 30,144 Sales and marketing 23,800 32,877 67,300 90,055
General and administrative 5,841 7,927 15,527 22,214
Total operating expenses 38,833 52,173 108,117
142,413 Operating income 8,085 1,683
22,747 8,691 Financial income, net 368 816 341 2,491
Income before taxes on income 8,453 2,499 23,088 11,182 Tax
benefit (taxes on income) (1,341) (818) (5,203) 1,281 Net
income $ 7,112 $ 1,681 $ 17,885 $ 12,463 Basic net
income per ordinary share $ 0.21 $ 0.05 $ 0.53 $ 0.36 Diluted net
income per ordinary share $ 0.20 $ 0.05 $ 0.50 $ 0.34 Shares
used in computing net income per ordinary shares, basic 33,886,461
34,979,389 33,601,280 34,703,328 Shares used in computing net
income per ordinary shares, diluted 35,983,790 36,184,151
35,798,352 36,153,515
Share-based
Compensation Expense: Three Months Ended Nine
Months Ended September 30, September 30,
2016 2017 2016 2017 Cost
of revenues $ 423 $ 701 $ 949 $ 1,658 Research and development
1,403 1,775 3,341 4,607 Sales and marketing 1,544 2,459 4,140 6,148
General and administrative 1,721 2,267 4,013 6,230 Total
share-based compensation expense $ 5,091 $ 7,202 $ 12,443 $ 18,643
CYBERARK SOFTWARE LTD.
Consolidated Balance Sheets U.S. dollars in thousands
(Unaudited) December 31, September 30,
2016 2017 ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 172,957 $ 145,365
Short-term bank deposits 86,829 100,968 Marketable securities
15,246 27,968 Trade receivables 33,330 33,906 Prepaid expenses and
other current assets 4,804 5,847 Total current
assets 313,166 314,054 LONG-TERM ASSETS:
Property and equipment, net 4,760 8,076 Intangible assets, net
14,035 17,108 Goodwill 35,145 69,355 Marketable securities 20,443
22,503 Severance pay fund 3,332 3,741 Prepaid expenses and other
long-term assets 1,761 1,621 Deferred tax asset 10,389
27,957 Total long-term assets 89,865
150,361
TOTAL ASSETS $ 403,031 $ 464,415
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT
LIABILITIES: Trade payables $ 2,699 $ 3,464 Employees and payroll
accruals 18,470 19,308 Accrued expenses and other current
liabilities 6,876 6,725 Deferred revenues 50,111
57,726 Total current liabilities 78,156 87,223
LONG-TERM LIABILITIES: Deferred revenues 23,395 27,854 Other
long-term liabilities 229 249 Accrued severance pay 5,035
5,826 Total long-term liabilities 28,659
33,929
TOTAL LIABILITIES 106,815
121,152 SHAREHOLDERS' EQUITY: Ordinary shares of NIS 0.01
par value 88 90 Additional paid-in capital 221,609 242,704
Accumulated other comprehensive income (loss) (175) 128 Retained
earnings 74,694 100,341 Total shareholders'
equity 296,216 343,263
TOTAL LIABILITIES
AND SHAREHOLDERS’ EQUITY $ 403,031 $ 464,415
CYBERARK SOFTWARE LTD. Consolidated
Statements of Cash Flows U.S. dollars in thousands
(Unaudited) Nine Months Ended September
30, 2016 2017 Cash flows from operating
activities: Net income $ 17,885 $ 12,463 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation and Amortization 4,744 5,731 Amortization of premium
on marketable securities 165 286 Share-based compensation expenses
12,443 18,643 Tax benefit related to share-based compensation (889)
- Deferred income taxes, net (1,616) (3,387) Increase in trade
receivables (6,321) (222) Increase in prepaid expenses and other
current and long-term assets (606) (578) Decrease in trade payables
(174) (913) Increase in short term and long term deferred revenues
12,406 12,074 Increase in employees and payroll accruals 76 384
Decrease in accrued expenses and other current and long-term
liabilities (2,109) (279) Increase in accrued severance pay, net
240 382 Net cash provided by operating activities 36,244
44,584
Cash flows from investing activities: Proceeds
from short and long term deposits - 131 Investment in short and
long term deposits (88,361) (14,132) Investment in marketable
securities (37,351) (28,303) Proceeds from maturities of marketable
securities - 13,217 Purchase of property and equipment (2,446)
(3,840) Payments for business acquisitions, net of cash acquired -
(41,329) Net cash used in investing activities (128,158)
(74,256)
Cash flows from financing activities: Tax
benefit related to share-based compensation 889 - Proceeds from
exercise of stock options 1,678 2,080 Net cash provided by
financing activities 2,567 2,080 Decrease in cash and cash
equivalents (89,347) (27,592) Cash and cash equivalents at
the beginning of the period 234,539 172,957 Cash and cash
equivalents at the end of the period $ 145,192 $ 145,365
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, 2016
2017 2016 2017 Gross profit $ 46,918 $
53,856 $ 130,864 $ 151,104 Plus: Share-based compensation -
Maintenance & professional services 423 701 949 1,658
Amortization of intangible assets - License 355 1,195 1,065 3,030
Non-GAAP gross profit $ 47,696 $ 55,752 $ 132,878 $ 155,792
Reconciliation of Operating
Income to Non-GAAP Operating Income: Three Months
Ended Nine Months Ended September 30,
September 30, 2016 2017 2016
2017 Operating income $ 8,085 $ 1,683 $ 22,747
$ 8,691 Plus: Share-based compensation 5,091 7,202 12,443 18,643
Amortization of intangible assets - Cost of revenues 355 1,195
1,065 3,030 Amortization of intangible assets - Research and
development 478 - 1,434 - Amortization of intangible assets - Sales
and marketing 301 249 903 784 Acquisition related expenses - - -
686 Facility exit costs - 342 - 342 Non-GAAP operating
income $ 14,310 $ 10,671 $ 38,592 $ 32,176
Reconciliation of Net Income to Non-GAAP Net Income:
Three Months Ended Nine Months Ended September
30, September 30, 2016 2017 2016
2017 Net income $ 7,112 $ 1,681 $ 17,885 $
12,463 Plus: Share-based compensation 5,091 7,202 12,443 18,643
Amortization of intangible assets - Cost of revenues 355 1,195
1,065 3,030 Amortization of intangible assets - Research and
development 478 - 1,434 - Amortization of intangible assets - Sales
and marketing 301 249 903 784 Acquisition related expenses - - -
686 Facility exit costs - 342 - 342 Taxes on income related to
non-GAAP adjustments (1,576) (1,757) (3,155) (9,046)
Non-GAAP net income $ 11,761 $ 8,912 $ 30,575 $ 26,902
Non-GAAP net income per share Basic $ 0.35 $ 0.25 $ 0.91 $ 0.78
Diluted $ 0.33 $ 0.25 $ 0.85 $ 0.74 Weighted average number
of shares Basic 33,886,461 34,979,389 33,601,280 34,703,328 Diluted
35,983,790 36,184,151 35,798,352 36,153,515
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version on businesswire.com: http://www.businesswire.com/news/home/20171102005746/en/
CyberArkInvestor Contact:Erica Smith,
617-558-2132ir@cyberark.comorMedia Contact:Liz Campbell,
617-558-2191press@cyberark.com
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