Record total revenue of $84.7 million increases
by 31% year-over-year
GAAP operating income of $8.8 million and
record non-GAAP operating income of $21.0 million
Net cash provided by operating activities for
the nine months of $89.2 million
Deferred revenue of $136.0 million increases by
59% year-over-year
CyberArk (NASDAQ: CYBR), the global leader in privileged
access security, today announced record total revenue and
strong financial results for the third quarter ended September 30,
2018.
“We exceeded our financial outlook across all guided metrics,
while generating record revenue and non-GAAP operating income in
the third quarter,” said Udi Mokady, CyberArk Chairman and CEO.
“Our strong results reflect our success executing our growth
strategy across sales and marketing as well as delivering
innovative solutions that help strengthen customers’ overall
security posture on premises, in the cloud and across the DevOps
pipeline. Given our strong leadership position in the privileged
access security market and our performance year to date, we are
pleased to raise our full year guidance for 2018.”
Financial Highlights for the Third Quarter Ended September
30, 2018
Revenue:
- Total revenue was $84.7 million, a 31%
increase from $64.8 million in the third quarter of 2017.
- License revenue was $46.1 million, a
29% increase compared to $35.8 million in the third quarter of
2017.
- Maintenance and Professional Services
revenue was $38.5 million, a 33% increase from $29.0 million in the
third quarter of 2017.
Operating Income:
- GAAP operating income was $8.8 million
for the quarter, compared to $1.7 million in the third quarter of
2017.
- Non-GAAP operating income was $21.0
million for the quarter, compared to $10.7 million in the third
quarter of 2017.
Net Income:
- GAAP net income was $8.1 million, or
$0.22 per diluted share, compared to GAAP net income of $1.7
million, or $0.05 per diluted share, in the third quarter of
2017.
- Non-GAAP net income was $17.8 million,
or $0.48 per diluted share, compared to $8.9 million, or $0.25 per
diluted share, in the third quarter of 2017.
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, 2018 and 2017. 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, 2018, CyberArk had
$410.0 million in cash, cash equivalents, marketable securities and
short-term deposits. This compares to $330.3 million as of December
31, 2017 and $296.8 million at September 30, 2017.
- As of September 30, 2018, total
deferred revenue was $136.0 million, a 29% increase from $105.2
million at December 31, 2017 and a 59% increase from $85.6 million
at September 30, 2017.
- During the first nine months of 2018,
CyberArk generated $89.2 million in net cash provided by operating
activities, an increase of 100% from $44.6 million in the first
nine months of 2017.
Business Outlook
Based on information available as of November 7, 2018, CyberArk
is issuing guidance for the fourth quarter and increasing its
guidance for the full year 2018 as indicated below.
Fourth Quarter 2018:
- Total revenue is expected to be in the
range of $94.75 million to $96.25 million which represents 18% to
20% year-over-year growth.
- Non-GAAP operating income is expected
to be in the range of $27.3 million to $28.5 million, or an
operating margin of 29% to 30%.
- Non-GAAP net income per share is
expected to be in the range of $0.58 to $0.60 per diluted share.
This assumes 37.9 million weighted average diluted shares.
Full Year 2018:
- Total revenue is expected to be in the
range of $328.9 million to $330.4 million, which represents 26%
year-over-year growth.
- Non-GAAP operating income is expected
to be in the range of $78.0 million to $79.2 million, or an
operating margin of 24%.
- Non-GAAP net income per share is
expected to be in the range of $1.75 to $1.77 per diluted share.
This assumes 37.2 million weighted average diluted shares.
Conference Call Information
CyberArk will host a conference call on today, Wednesday,
November 7, 2018 at 4:30 p.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 2673547. 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 2673547. An archived
webcast of the conference call will also be available in the
“Investor Relations” section of the company’s web site at
www.cyberark.com.
About CyberArk
CyberArk (NASDAQ: CYBR) is the global leader in privileged
access security, 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 100, 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 © 2018 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 and transitions 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 transitions costs, amortization
of intangible assets related to acquisitions, intra-entity IP
transfer tax effect and the tax effect of the other non-GAAP
adjustments.
The Company believes that providing non-GAAP financial measures
that exclude share-based compensation, acquisition related
expenses, amortization of intangible assets related to
acquisitions, facility exit and transitions 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 transitions cost
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 transitions 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; 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,
2017 2018 2017 2018 Revenues:
License $ 35,818 $ 46,130 $ 99,088 $ 125,745 Maintenance and
professional services 29,000 38,523 82,245 108,404
Total revenues 64,818 84,653 181,333 234,149
Cost of revenues: License 2,161 2,614 5,652 7,521 Maintenance and
professional services 8,801 9,530 24,577 27,619
Total cost of revenues 10,962 12,144 30,229 35,140
Gross profit 53,856 72,509 151,104
199,009 Operating expenses: Research
and development 11,369 14,980 30,144 41,772 Sales and marketing
32,877 37,880 90,055 107,983 General and administrative 7,927
10,870 22,214 29,483 Total operating
expenses 52,173 63,730 142,413 179,238
Operating income 1,683 8,779 8,691 19,771 Financial income,
net 816 1,407 2,491 3,473
Income before taxes on income 2,499 10,186 11,182
23,244 Tax benefit (taxes on income) (818 )
(2,092 ) 1,281 (352 ) Net income $ 1,681
$ 8,094 $ 12,463 $ 22,892 Basic
net income per ordinary share $ 0.05 $ 0.22 $ 0.36 $
0.64 Diluted net income per ordinary share $ 0.05 $
0.22 $ 0.34 $ 0.62 Shares used in computing
net income per ordinary shares, basic 34,979,389
36,485,724 34,703,328 35,981,177
Shares used in computing net income per ordinary shares, diluted
36,184,151 37,475,729 36,153,515
36,894,457
Share-based
Compensation Expense: Three Months Ended Nine
Months Ended September 30, September 30,
2017 2018 2017 2018 Cost
of revenues $ 701 $ 957 $ 1,658 $ 2,370 Research and development
1,775 2,237 4,607 5,748 Sales and marketing 2,459 3,770 6,148 9,061
General and administrative 2,267 3,371
6,230 8,492 Total share-based
compensation expense $ 7,202 $ 10,335 $ 18,643 $
25,671
CYBERARK
SOFTWARE LTD. Consolidated Balance Sheets U.S.
dollars in thousands (Unaudited) December 31,
September 30, 2017 2018
ASSETS CURRENT ASSETS: Cash and cash equivalents $
161,261 $ 205,247 Short-term bank deposits 107,647 127,695
Marketable securities 34,025 53,532 Trade receivables 45,315 29,707
Prepaid expenses and other current assets 7,407 8,413
Total current assets 355,655 424,594
LONG-TERM ASSETS: Property and equipment, net 9,230
13,596 Intangible assets, net 15,664 16,374 Goodwill 69,217 83,156
Marketable securities 27,407 23,544 Severance pay fund 3,692 3,669
Other long-term assets 2,368 21,379 Deferred tax asset
19,343 23,076 Total long-term assets
146,921 184,794
TOTAL ASSETS $ 502,576
$ 609,388
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES: Trade payables $ 1,960 $ 2,841
Employees and payroll accruals 25,253 25,861 Accrued expenses and
other current liabilities 10,209 7,623 Deferred revenues
66,986 84,176 Total current liabilities
104,408 120,501 LONG-TERM LIABILITIES:
Deferred revenues 38,249 51,838 Other long-term liabilities 242
1,218 Accrued severance pay 5,712 5,692
Total long-term liabilities 44,203 58,748
TOTAL LIABILITIES 148,611 179,249
SHAREHOLDERS' EQUITY: Ordinary shares of NIS 0.01 par
value 91 95 Additional paid-in capital 249,874 291,087 Accumulated
other comprehensive income (loss) 107 (577 ) Retained earnings
103,893 139,534 Total shareholders'
equity 353,965 430,139
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY $ 502,576 $ 609,388
CYBERARK SOFTWARE
LTD. Consolidated Statements of Cash Flows U.S.
dollars in thousands (Unaudited) Nine Months
Ended September 30, 2017 2018
Cash flows from operating activities: Net income $ 12,463 $
22,892 Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization 5,731 7,327
Amortization of premium on marketable securities 286 270
Share-based compensation expenses 18,643 25,671 Deferred income
taxes, net (3,387 ) (6,669 ) Decrease (increase) in trade
receivables (222 ) 15,608 Increase in prepaid expenses and other
current and long-term assets (578 ) (5,669 ) Increase (decrease) in
trade payables (913 ) 771 Increase in short term and long term
deferred revenues 12,074 34,298 Increase (decrease) in employees
and payroll accruals 384 (2,315 ) Decrease in accrued expenses and
other current and long-term liabilities (279 ) (3,031 ) Increase in
accrued severance pay, net 382 3
Net cash provided by operating activities 44,584
89,156
Cash flows from investing
activities: Investment in short and long term deposits (14,132
) (19,768 ) Investment in marketable securities (28,303 ) (47,316 )
Proceeds from maturities of marketable securities 13,217 31,198
Purchase of property and equipment (3,840 ) (7,130 ) Payments for
business acquisitions, net of cash acquired (41,329 )
(18,450 ) Net cash used in investing activities
(74,387 ) (61,466 )
Cash flows from financing
activities: Proceeds from withholding tax related to employee
stock plans - 2,220 Proceeds from exercise of stock options
2,080 14,038 Net cash provided by
financing activities 2,080 16,258
Increase (decrease) in cash, cash equivalents and restricted
cash (27,723 ) 43,948 Cash, cash equivalents and restricted
cash at the beginning of the period 174,156
162,518 Cash, cash equivalents and restricted cash at
the end of the period $ 146,433 $ 206,466
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, 2017 2018 2017
2018 Gross profit $ 53,856 $ 72,509 $ 151,104 $
199,009 Plus: Share-based compensation - Maintenance &
professional services 701 957 1,658 2,370 Amortization of
intangible assets - License 1,195 1,444
3,030 4,118 Non-GAAP gross
profit $ 55,752 $ 74,910 $ 155,792 $ 205,497
Reconciliation of
Operating Income to Non-GAAP Operating Income: Three
Months Ended Nine Months Ended September 30,
September 30, 2017 2018 2017
2018 Operating income $ 1,683 $ 8,779 $ 8,691
$ 19,771 Plus: Share-based compensation 7,202 10,335 18,643 25,671
Amortization of intangible assets - Cost of revenues 1,195 1,444
3,030 4,118 Amortization of intangible assets - Sales and marketing
249 198 784 595 Acquisition related expenses - - 686 268 Facility
exit and transitions costs 342 253
342 253 Non-GAAP operating
income $ 10,671 $ 21,009 $ 32,176 $ 50,676
Reconciliation of Net Income to Non-GAAP
Net Income: Three Months Ended Nine Months
Ended September 30, September 30, 2017
2018 2017 2018 Net income $
1,681 $ 8,094 $ 12,463 $ 22,892 Plus: Share-based compensation
7,202 10,335 18,643 25,671 Amortization of intangible assets - Cost
of revenues 1,195 1,444 3,030 4,118 Amortization of intangible
assets - Sales and marketing 249 198 784 595 Acquisition related
expenses - - 686 268 Facility exit and transitions costs 342 253
342 253 Taxes on income related to non-GAAP adjustments (1,757 )
(4,764 ) (9,046 ) (12,957 ) Intra-entity IP transfer tax effect,
net - 2,243 -
2,243 Non-GAAP net income $ 8,912 $ 17,803
$ 26,902 $ 43,083 Non-GAAP net income
per share Basic $ 0.25 $ 0.49 $ 0.78 $ 1.20
Diluted $ 0.25 $ 0.48 $ 0.74 $ 1.17
Weighted average number of shares Basic
34,979,389 36,485,724 34,703,328
35,981,177 Diluted 36,184,151
37,475,729 36,153,515 36,894,457
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181107005818/en/
CyberArkInvestor Contact:Erica Smith,
+1-617-558-2132ir@cyberark.comorMedia Contact:Liz Campbell,
+1-617-558-2191press@cyberark.com
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