Third quarter total revenue of $108.1 million
increased 28% year-over-year
Third quarter license revenue of $57.9 million
increased 25% year-over-year
GAAP operating income of $12.7 million and
non-GAAP operating income of $29.4 million
CyberArk, (NASDAQ: CYBR), 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.
- Assumes 39.2 million weighted average diluted shares.
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.
- Assumes 39.1 million weighted average diluted shares.
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/
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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