CyberArk Announces Strong Second Quarter 2018 Results

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 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, 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 Operations
U.S. dollars in thousands (except per share data)
(Unaudited)

Three Months EndedSix Months Ended
June 30,June 30,
2017201820172018
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 EndedSix Months Ended
June 30,June 30,
2017201820172018
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 Sheets
U.S. dollars in thousands
(Unaudited)

December 31,June 30,
20172018
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 Flows
U.S. dollars in thousands
(Unaudited)

Six Months Ended
June 30,
20172018
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 Measures
U.S. dollars in thousands (except per share data)
(Unaudited)

Reconciliation of Gross Profit to Non-GAAP Gross Profit:
Three Months EndedSix Months Ended
June 30,June 30,
2017201820172018
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 EndedSix Months Ended
June 30,June 30,
2017201820172018
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 EndedSix Months Ended
June 30,June 30,
2017201820172018
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

Contacts:

CyberArk
Investor Contact:
Erica Smith, +1 617-558-2132
ir@cyberark.com
or
Media Contact:
Liz Campbell, +1-617-558-2191
press@cyberark.com

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.