Second quarter total revenue of $100.2 million
increases 29% year-over-year
GAAP operating income of $13.0 million and
non-GAAP operating income of $26.5 million
Company Announces Chief Revenue Officer
Transition
CyberArk, (NASDAQ: CYBR), the global leader in privileged access
security, today announced strong financial results for the second
quarter ended June 30, 2019.
“We were pleased that our results exceeded expectations across
all guided metrics,” said Udi Mokady, CyberArk Chairman and CEO.
“Every region contributed to our strong growth and we were thrilled
to sign more than 200 new logos in the second quarter. Our
innovation not only sets the standard for Privileged Access
Security but also strengthens our leadership position in the
market. With our strong first half of 2019, we are pleased to
increase our guidance for the full year on both the top and bottom
line.”
Financial Highlights for the Second Quarter Ended June 30,
2019
Revenue:
- Total revenue was $100.2 million, up 29% compared with the
second quarter of 2018.
- License revenue was $52.2 million, up 27% compared with the
second quarter of 2018.
- Maintenance and professional services revenue was $48.0
million, up 31% compared with the second quarter of 2018.
Operating Income:
- GAAP operating income was $13.0 million, an increase from $7.0
million in the second quarter of 2018. Non-GAAP operating income
was $26.5 million, an increase from $17.0 million in the second
quarter of 2018.
Net Income:
- GAAP net income was $13.4 million, or $0.34 per diluted share,
an increase from GAAP net income of $8.4 million, or $0.23 per
diluted share, in the second quarter of 2018. Non-GAAP net income
was $23.0 million, or $0.59 per diluted share, an increase from
$13.5 million, or $0.36 per diluted share, in the second 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 six months
ended June 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 June 30, 2019, CyberArk had $537.9 million in cash, cash
equivalents, marketable securities and short-term deposits. This
compares to $451.2 million as of December 31, 2018 and $377.5
million at June 30, 2018.
- As of June 30, 2019, total deferred revenue was $174.2 million,
a 34% increase from $129.6 million at June 30, 2018.
- During the six months ended June 30, 2019, the Company
generated $67.3 million in cash flow from operations, a 20%
increase from $56.2 million in the first six months of 2018.
Business Outlook
Based on information available as of August 7, 2019, CyberArk is
issuing guidance for the third quarter and increasing its guidance
for the full year 2019 as indicated below.
Third Quarter 2019:
- Total revenue between $102.0 million and $104.0 million,
representing 20% to 23% year-over-year growth.
- Non-GAAP operating income between $21.75 million and $23.25
million.
- Non-GAAP net income per share between of $0.45 and $0.48 per
diluted share.
- Assumes 39.4 million weighted average diluted shares.
Full Year 2019:
- Total revenue between $419.0 million and $423.0 million,
representing 22% to 23% year-over-year growth.
- Non-GAAP operating income between $106.0 million and $109.0
million.
- Non-GAAP net income per share between $2.24 and $2.30 per
diluted share.
- Assumes 39.1 million weighted average diluted shares.
Chief Revenue Officer Transition Ron Zoran, CyberArk’s
Chief Revenue Officer, plans to transition from the Company to
pursue other business opportunities, including assisting early
stage technology companies as a board member. Ron will continue to
serve as Chief Revenue Officer of CyberArk through September 30,
2019 and to help ensure a smooth transition, he will also continue
to serve as an advisor into the first quarter of 2020. The Company
has initiated a search to identify a new global head of sales.
“Ron was one of the very first employees of CyberArk and has
provided invaluable technology and sales leadership over the
years,” continued Mr. Mokady. “On behalf of the Company and the
Board, I want to thank him for his significant contributions to the
company, which have been instrumental in helping establish CyberArk
as the leader in Privileged Access Security. We wish Ron all the
best in his future pursuits and believe his extensive experience
will be valuable to emerging technology companies. Ron has built an
exceptional sales organization that is well positioned to
capitalize on the opportunities ahead of us. We appreciate his
commitment to the Company, support and leadership during this
transition period.”
“CyberArk has provided me with significant opportunities
including being part of the world’s most talented and progressive
team of security professionals extending across CyberArk
executives, employees, customers and partners,” stated Ron Zoran,
CyberArk Chief Revenue Officer. “My decision to leave the Company
was difficult, but at this stage of my career I want to leverage my
experience to scale and grow early stage technology companies.
Given my long tenure at the company and strong personal
relationships with the entire team, I remain fully engaged to
ensure a smooth transition.”
Conference Call Information CyberArk will host a
conference call today, August 7, 2019 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 +1 877-823-7693
(U.S.) or +1 647-689-4543 (international). The conference ID is
6476456. 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 6476456. 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 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 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 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,
amortization of intangible assets related to acquisitions and the
tax effect of the 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
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 the tax effect of the non-GAAP adjustments 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
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:
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
Six Months Ended
June 30,
June 30,
2018
2019
2018
2019
Revenues:
License
$ 41,121
$ 52,201
$
79,615
$
103,485
Maintenance and professional services
36,592
47,980
69,881
92,631
Total revenues
77,713
100,181
149,496
196,116
Cost of revenues:
License
2,510
2,906
4,907
5,494
Maintenance and professional services
9,198
12,305
18,089
23,284
Total cost of revenues
11,708
15,211
22,996
28,778
Gross profit
66,005
84,970
126,500
167,338
Operating expenses:
Research and development
13,808
16,995
26,792
33,326
Sales and marketing
35,521
43,573
70,103
85,078
General and administrative
9,714
11,426
18,613
22,331
Total operating expenses
59,043
71,994
115,508
140,735
Operating income
6,962
12,976
10,992
26,603
Financial income, net
225
2,485
2,066
3,906
Income before taxes on income
7,187
15,461
13,058
30,509
Tax benefit (taxes on income)
1,190
(2,058)
1,740
(3,429)
Net income
$
8,377
$ 13,403
$
14,798
$
27,080
Basic net income per ordinary share
$
0.23
$
0.36
$
0.41
$
0.73
Diluted net income per ordinary share
$
0.23
$
0.34
$
0.40
$
0.70
Shares used in computing net income
per ordinary shares, basic
36,001,580
37,522,410
35,724,717
37,285,788
Shares used in computing net
income
per ordinary shares, diluted
36,923,520
38,993,170
36,680,585
38,735,078
Share-based Compensation
Expense:
Three Months Ended
Six Months Ended
June 30,
June 30,
2018
2019
2018
2019
Cost of revenues
$
758
$
1,251
$
1,413
$
2,208
Research and development
2,007
2,394
3,511
4,701
Sales and marketing
2,874
4,878
5,291
8,563
General and administrative
2,774
3,373
5,121
6,676
Total share-based compensation expense
$
8,413
$ 11,896
$
15,336
$
22,148
CYBERARK SOFTWARE LTD.
Consolidated Balance
Sheets
U.S. dollars in
thousands
(Unaudited)
December 31,
June 30,
2018
2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$ 260,636
$ 341,738
Short-term bank deposits
106,399
97,566
Marketable securities
59,948
59,279
Trade receivables
48,431
45,275
Prepaid expenses and other current
assets
6,349
10,876
Total current assets
481,763
554,734
LONG-TERM ASSETS:
Property and equipment, net
15,120
15,790
Intangible assets, net
14,732
11,556
Goodwill
82,400
82,400
Marketable securities
24,261
39,328
Other long-term assets
31,863
60,690
Deferred tax asset
23,481
25,046
Total long-term assets
191,857
234,810
TOTAL ASSETS
$ 673,620
$ 789,544
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Trade payables
$
4,924
$
4,615
Employees and payroll accruals
32,853
30,577
Accrued expenses and other current
liabilities
13,271
20,157
Deferred revenues
92,375
106,921
Total current liabilities
143,423
162,270
LONG-TERM LIABILITIES:
Deferred revenues
57,159
67,268
Other long-term liabilities
6,268
25,718
Total long-term liabilities
63,427
92,986
TOTAL LIABILITIES
206,850
255,256
SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0.01 par value
95
98
Additional paid-in capital
303,900
342,618
Accumulated other comprehensive income
(loss)
(939)
778
Retained earnings
163,714
190,794
Total shareholders' equity
466,770
534,288
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$ 673,620
$ 789,544
CYBERARK SOFTWARE LTD.
Consolidated Statements of
Cash Flows
U.S. dollars in
thousands
(Unaudited)
Six Months Ended
June 30,
2018
2019
Cash flows from operating
activities:
Net income
$ 14,798
$ 27,080
Adjustments to reconcile net income
to net cash
provided by operating
activities:
Depreciation and amortization
4,676
5,551
Amortization of premium and
accretion of discount on marketable securities, net
208
(42)
Share-based compensation
15,336
22,148
Deferred income taxes, net
(4,710)
(1,857)
Decrease in trade receivables
12,357
3,156
Increase in prepaid expenses and
other current and long-term assets
(6,138)
(9,656)
Increase (decrease) in trade
payables
2,003
(123)
Increase in short-term and long-term
deferred revenues
27,845
24,655
Decrease in employees and payroll
accruals
(5,168)
(7,595)
Increase (decrease) in accrued
expenses and other
current and long-term
liabilities
(4,983)
4,029
Net cash provided by operating
activities
56,224
67,346
Cash flows from investing
activities:
Proceeds from short and long term
deposits
7,775
8,948
Investment in marketable
securities
(30,563)
(50,464)
Proceeds from maturities of
marketable securities
20,114
36,653
Purchase of property and
equipment
(4,098)
(3,231)
Payments for business acquisitions,
net of cash acquired
(18,450)
-
Net cash used in investing
activities
(25,222)
(8,094)
Cash flows from financing
activities:
Proceeds from withholding tax
related to employee stock plans
5,509
5,319
Proceeds from exercise of stock
options
8,090
16,572
Net cash provided by financing
activities
13,599
21,891
Increase in cash, cash equivalents
and restricted cash
44,601
81,143
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
$ 207,122
$
343,026
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,
2018
2019
2018
2019
Gross profit
$
66,005
$ 84,970
$ 126,500
$ 167,338
Plus:
Share-based compensation -
Maintenance & professional services
758
1,251
1,413
2,208
Amortization of intangible assets -
License
1,444
1,444
2,674
2,888
Non-GAAP gross profit
$
68,207
$ 87,665
$ 130,587
$ 172,434
Reconciliation of Operating
Income to Non-GAAP Operating Income:
Three Months Ended
Six Months Ended
June 30,
June 30,
2018
2019
2018
2019
Operating income
$
6,962
$ 12,976
$
10,992
$
26,603
Plus:
Share-based compensation
8,413
11,896
15,336
22,148
Amortization of intangible assets -
Cost of revenues
1,444
1,444
2,674
2,888
Amortization of intangible assets
- Sales and marketing
199
144
397
288
Acquisition related expenses
-
-
268
-
Non-GAAP operating income
$
17,018
$ 26,460
$
29,667
$
51,927
Reconciliation of Net Income to
Non-GAAP Net Income:
Three Months Ended
Six Months Ended
June 30,
June 30,
2018
2019
2018
2019
Net income
$
8,377
$ 13,403
$
14,798
$
27,080
Plus:
Share-based compensation
8,413
11,896
15,336
22,148
Amortization of intangible assets -
Cost of revenues
1,444
1,444
2,674
2,888
Amortization of intangible assets
- Sales and marketing
199
144
397
288
Acquisition related expenses
-
-
268
-
Taxes on income related to non-GAAP
adjustments
(4,964)
(3,846)
(8,193)
(7,892)
Non-GAAP net income
$
13,469
$ 23,041
$
25,280
$
44,512
Non-GAAP net income per share
Basic
$
0.37
$
0.61
$ 0.71
$ 1.19
Diluted
$
0.36
$
0.59
$ 0.69
$ 1.15
Weighted average number of
shares
Basic
36,001,580
37,522,410
35,724,717
37,285,788
Diluted
36,923,520
38,993,170
36,680,585
38,735,078
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190807005339/en/
Investors: Erica Smith CyberArk Phone: +1- 617-558-2132
ir@cyberark.com
Media: Liz Campbell CyberArk Phone: +1-617-558-2191
press@cyberark.com
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