Second quarter total revenue of $77.7 million
increases 35% year-over-year
GAAP operating income of $7.0 million and
non-GAAP operating income of $17.0 million
Cash flow from operations of $56.2 million
increases 90% year-over-year
Deferred revenue of $129.6 increases 56%
year-over-year
CyberArk, (NASDAQ: CYBR), the global leader in privileged
access security, today announced financial results for the
second quarter ended June 30, 2018.
“CyberArk had a great second quarter,” said Udi Mokady, CyberArk
Chairman and CEO. “We exceeded our guidance across all metrics. We
posted strong revenue growth, profitability and operating cash
flow. Our growth was driven by strong execution and robust demand
from both new and existing customers across all geographies. We
were thrilled to sign nearly 200 new logos in the second quarter
bringing our total number of customers to more than 4,000, which
demonstrates that we are still in the early innings of our market
opportunity. In addition, the significant value our solution
provides coupled with our unwavering commitment to customer
satisfaction drove our add on business during the quarter. Given
our strong execution in the first half of the year and our
tremendous market opportunity, we are positioned well for the
remainder of 2018.”
Financial Highlights for the Second Quarter Ended June 30,
2018
Revenue:
- Total revenue was $77.7 million, up 35%
compared with the second quarter of 2017.
- License revenue was $41.1 million, up
36% compared with the second quarter of 2017.
- Maintenance and professional services
revenue was $36.6 million, up 35% compared with the second quarter
of 2017.
Operating Income:
- GAAP operating income was $7.0 million,
an increase from $1.0 million in the second quarter of 2017.
Non-GAAP operating income was $17.0 million, an increase from $8.8
million in the second quarter of 2017.
Net Income:
- GAAP net income was $8.4 million, or
$0.23 per diluted share, an increase from GAAP net income of $3.2
million, or $0.09 per diluted share, in the second quarter of 2017.
Non-GAAP net income was $13.5 million, or $0.36 per diluted share,
an increase from $7.7 million, or $0.21 per diluted share, in the
second quarter of 2017.
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, 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 June 30, 2018, CyberArk had
$377.5 million in cash, cash equivalents, marketable securities and
short-term deposits. This compares to $330.3 million as of December
31, 2017 and $283.2 million at June 30, 2017.
- As of June 30, 2018, total deferred
revenue was $129.6 million, a 23% increase from $105.2 million at
December 31, 2017 and a 56% increase from $82.8 million at June 30,
2017.
- During the six months ended June 30,
2018, the Company generated $56.2 million in cash flow from
operations, a 90% increase from $29.7 million in the first six
months of 2017.
Business Outlook
Based on information available as of August 7, 2018, CyberArk is
issuing guidance for the third quarter and increasing its guidance
for the full year 2018 as indicated below.
Third Quarter 2018:
- Total revenue is expected to be in the
range of $77.75 million to $79.25 million, which represents 20% to
22% year-over-year growth.
- Non-GAAP operating income is expected
to be in the range of $11.4 million to $12.6 million.
- Non-GAAP net income per share is
expected to be in the range of $0.25 to $0.28 per diluted share.
This assumes 37.5 million weighted average diluted shares.
Full Year 2018:
- Total revenue is expected to be in the
range of $320.0 million to $324.0 million, which represents 22% to
24% year-over-year growth.
- Non-GAAP operating income is expected
to be in the range of $64.0 million to $67.0 million.
- Non-GAAP net income per share is
expected to be in the range of $1.43 to $1.50 per diluted share.
This assumes 37.0 million weighted average diluted shares.
Conference Call Information
CyberArk will host a conference call today, August 7, 2018 at
5:00 p.m. Eastern Time (ET) to discuss the company’s second 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 2687958. 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 2687958. 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 CyberArkCyberArk (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 MeasuresCyberArk 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, 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 the 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 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,” “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 OperationsU.S. dollars
in thousands (except per share data)(Unaudited)
Three Months Ended Six Months Ended June
30, June 30, 2017 2018 2017
2018 Revenues: License $ 30,318 $ 41,121 $ 63,270 $
79,615 Maintenance and professional services 27,162 36,592 53,245
69,881 Total revenues 57,480 77,713
116,515 149,496 Cost of revenues: License 1,907 2,510 3,491
4,907 Maintenance and professional services 8,093 9,198 15,776
18,089 Total cost of revenues 10,000
11,708 19,267 22,996 Gross profit
47,480 66,005 97,248 126,500 Operating
expenses: Research and development 9,561 13,808 18,775 26,792 Sales
and marketing 29,500 35,521 57,178 70,103 General and
administrative 7,409 9,714 14,287 18,613
Total operating expenses 46,470 59,043 90,240 115,508
Operating income 1,010 6,962 7,008 10,992
Financial income, net 1,127 225 1,675
2,066 Income before taxes on income 2,137 7,187 8,683
13,058 Tax benefit 1,109 1,190 2,099
1,740 Net income $ 3,246 $ 8,377 $ 10,782 $ 14,798
Basic net income per ordinary share $ 0.09 $ 0.23 $
0.31 $ 0.41 Diluted net income per ordinary share $ 0.09 $ 0.23 $
0.30 $ 0.40 Shares used in computing net income per ordinary
shares, basic 34,729,119 36,001,580 34,563,040
35,724,717 Shares used in computing net income per ordinary
shares, diluted 36,194,471 36,923,520
36,147,712 36,680,585
Share-based Compensation Expense: Three Months
Ended Six Months Ended June 30, June 30,
2017 2018 2017 2018 Cost
of revenues $ 504 $ 758 $ 957 $ 1,413 Research and development
1,523 2,007 2,832 3,511 Sales and marketing 2,018 2,874 3,689 5,291
General and administrative 2,197 2,774 3,963
5,121 Total share-based compensation expense $ 6,242
$ 8,413 $ 11,441 $ 15,336
CYBERARK SOFTWARE
LTD.Consolidated Balance SheetsU.S. dollars in
thousands(Unaudited)
December 31, June 30,
2017 2018 ASSETS CURRENT
ASSETS: Cash and cash equivalents $ 161,261 $ 205,193 Short-term
bank deposits 107,647 100,818 Marketable securities 34,025 51,025
Trade receivables 45,315 32,959 Prepaid expenses and other current
assets 7,407 10,344 Total current
assets 355,655 400,339 LONG-TERM
ASSETS: Property and equipment, net 9,230 11,858 Intangible assets,
net 15,664 18,017 Goodwill 69,217 83,157 Marketable securities
27,407 20,477 Severance pay fund 3,692 3,558 Other long-term assets
2,368 18,451 Deferred tax asset 19,343 21,383
Total long-term assets 146,921 176,901
TOTAL ASSETS $ 502,576 $ 577,240
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT
LIABILITIES: Trade payables $ 1,960 $ 4,359 Employees and payroll
accruals 25,253 26,298 Accrued expenses and other current
liabilities 10,209 6,474 Deferred revenues 66,986
81,660 Total current liabilities 104,408
118,791 LONG-TERM LIABILITIES: Deferred
revenues 38,249 47,901 Other long-term liabilities 242 1,400
Accrued severance pay 5,712 5,445 Total
long-term liabilities 44,203 54,746
TOTAL LIABILITIES 148,611 173,537
SHAREHOLDERS' EQUITY: Ordinary shares of NIS 0.01 par value
91 94 Additional paid-in capital 249,874 273,323 Accumulated other
comprehensive income (loss) 107 (1,154 ) Retained earnings
103,893 131,440 Total shareholders' equity
353,965 403,703
TOTAL LIABILITIES
AND SHAREHOLDERS’ EQUITY $ 502,576 $ 577,240
CYBERARK SOFTWARE
LTD.Consolidated Statements of Cash FlowsU.S. dollars
in thousands(Unaudited)
Six Months Ended June 30, 2017
2018 Cash flows from operating activities: Net
income $ 10,782 $ 14,798 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation and
amortization 3,509 4,676 Amortization of premium on marketable
securities 190 208 Share-based compensation expenses 11,441 15,336
Deferred income taxes, net (3,642 ) (4,710 ) Decrease in trade
receivables 3,412 12,357 Increase in prepaid expenses and other
current and long-term assets (1,257 ) (6,272 ) Increase (decrease)
in trade payables (869 ) 2,003 Increase in short term and long term
deferred revenues 9,339 27,845 Decrease in employees and payroll
accruals (1,953 ) (5,168 ) Decrease in accrued expenses and other
current and long-term liabilities (1,391 ) (4,716 ) Increase
(decrease) in accrued severance pay, net 91
(133 ) Net cash provided by operating activities
29,652 56,224
Cash flows from
investing activities: Proceeds from short and long term deposit
- 7,775 Investment in short and long term deposits (9,646 ) -
Investment in marketable securities (17,760 ) (30,563 ) Proceeds
from maturities of marketable securities 9,106 20,114 Purchase of
property and equipment (2,038 ) (4,098 ) Payments for business
acquisitions, net of cash acquired (41,448 ) (18,450
) Net cash used in investing activities (61,786 )
(25,222 )
Cash flows from financing
activities: Proceeds from withholding tax related to employee
stock plans - 5,509 Proceeds from exercise of stock options
1,926 8,090 Net cash provided by
financing activities 1,926 13,599
Increase (decrease) in cash, cash equivalents and restricted
cash (30,208 ) 44,601 Cash, cash equivalents and restricted
cash at the beginning of the period 174,156
162,520 Cash, cash equivalents and restricted cash at
the end of the period $ 143,948 $ 207,121
CYBERARK SOFTWARE
LTD.Reconciliation of GAAP Measures to Non-GAAP
MeasuresU.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, 2017 2018
2017 2018 Gross profit $ 47,480 $ 66,005 $
97,248 $ 126,500 Plus: Share-based compensation - Maintenance &
professional services 504 758 957 1,413 Amortization of intangible
assets - License 992 1,444 1,835
2,674 Non-GAAP gross profit $ 48,976
$ 68,207 $ 100,040 $ 130,587
Reconciliation of Operating Income
to Non-GAAP Operating Income: Three Months Ended
Six Months Ended June 30, June 30, 2017
2018 2017 2018 Operating income
$ 1,010 $ 6,962 $ 7,008 $ 10,992 Plus: Share-based compensation
6,242 8,413 11,441 15,336 Amortization of intangible assets - Cost
of revenues 992 1,444 1,835 2,674 Amortization of intangible assets
- Sales and marketing 289 199 535 397 Acquisition related expenses
248 - 686 268
Non-GAAP operating income $ 8,781 $ 17,018
$ 21,505 $ 29,667
Reconciliation of Net Income to Non-GAAP Net Income:
Three Months Ended Six Months Ended June 30,
June 30, 2017 2018 2017 2018
Net income $ 3,246 $ 8,377 $ 10,782 $ 14,798 Plus:
Share-based compensation 6,242 8,413 11,441 15,336 Amortization of
intangible assets - Cost of revenues 992 1,444 1,835 2,674
Amortization of intangible assets - Sales and marketing 289 199 535
397 Acquisition related expenses 248 - 686 268 Taxes on income
related to non-GAAP adjustments (3,274 ) (4,964 )
(7,289 ) (8,193 ) Non-GAAP net income $ 7,743
$ 13,469 $ 17,990 $ 25,280
Non-GAAP net income per share Basic $ 0.22 $ 0.37 $
0.52 $ 0.71 Diluted $ 0.21 $ 0.36 $
0.50 $ 0.69 Weighted average number of shares
Basic 34,729,119 36,001,580
34,563,040 35,724,717 Diluted
36,194,471 36,923,520 36,147,712
36,680,585
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180807005886/en/
CyberArkInvestor Contact:Erica Smith, +1
617-558-2132ir@cyberark.comorMedia Contact:Liz Campbell,
+1-617-558-2191press@cyberark.com
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