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Share Name | Share Symbol | Market | Type |
---|---|---|---|
CyberArk Software Ltd | NASDAQ:CYBR | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-3.00 | -1.22% | 242.845 | 242.72 | 242.96 | 249.48 | 242.68 | 248.00 | 137,306 | 17:43:17 |
Company Exceeds Expectations Across all Guided Metrics Subscription Portion of Annual Recurring Revenue (ARR) of $504 million; Growth of 68% Year-over-Year Total ARR of $705 million; Growth of 38% Year-over-Year Subscription Revenue of $122.9 million in Q3; Growth of 65% Year-Over-Year Record Total Revenue of $191.2 million in Q3 Exceeds Guidance; Growth Accelerating to 25% Year-Over-Year Company Significantly Raises Full Year ARR Guidance to a Range of $758 million to $768 million from $743 million to $753 million
CyberArk (NASDAQ: CYBR), the identity security company, today announced strong financial results for the third quarter ended September 30, 2023.
“Strong execution and robust industry tailwinds drove our outperformance in the third quarter and our results significantly exceeded expectations across all guided metrics,” said Matt Cohen, CyberArk's Chief Executive Officer. “We delivered one of the best financial performances in the company’s history in the third quarter and our business accelerated. Our identity security platform is gaining momentum in both our customer base and with new customers who recognize the critical requirement to secure all identities, human and machine, with intelligent privileged controls. The durable demand for our solutions is the result of the severe threat landscape paired with the exponential growth of identities and environments. We delivered robust net new ARR, 68 percent growth in Subscription ARR to $504 million and 38 percent growth in total ARR to $705 million. Our consistent execution, strong competitive position and confidence in the demand environment is best demonstrated by the significant increase in our full year ARR guidance. As the clear leader in identity security, we have a tremendous opportunity in front of us and are well positioned to deliver strong long-term growth, profitability and cash flow.”
Financial Summary for the Third Quarter Ended September 30, 2023
Balance Sheet and Net Cash Provided by Operating Activities
Key Business Highlights
Recent Developments
Business Outlook
Based on information available as of November 2, 2023, CyberArk is issuing guidance for the fourth quarter and full year 2023 as indicated below.
Fourth Quarter 2023:
Full Year 2023:
(1)
Gartner® Magic Quadrant™ for Privileged Access Management, by Felix Gaehtgens, James Hoover, Michael Kelley, Brian Guthrie, Abhyuday Data, 5 September 2023(2)
The Forrester Wave™: Privileged Identity Management, Q4 2023 by Geoff Cairns, October 11, 2023Conference Call Information
In conjunction with this announcement, CyberArk will host a conference call on Thursday, November 2, 2023 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 (888) 330-2455 (U.S.) or +1 (240) 789-2717 (international). The conference ID is 6515982. 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) 770-2030 (U.S.) or +1 (647) 362-9199 (international). The replay pass code is 6515982. 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 identity security. Centered on intelligent privilege controls, CyberArk provides the most comprehensive security offering for any identity – human or machine – across business applications, distributed workforces, hybrid cloud environments and throughout the DevOps lifecycle. The world’s leading organizations trust CyberArk to help secure their most critical assets. To learn more about CyberArk, visit https://www.cyberark.com, read the CyberArk blogs or follow on LinkedIn, Twitter, Facebook or YouTube.
Copyright © 2023 CyberArk Software. All Rights Reserved. All other brand names, product names, or trademarks belong to their respective holders.
Key Performance Indicators and Non-GAAP Financial Measures
Annual Recurring Revenue (ARR)
Subscription Portion of Annual Recurring Revenue
Maintenance Portion of Annual Recurring Revenue
Recurring Revenue
Non-GAAP Financial Measures
CyberArk believes that the use of non-GAAP gross profit, non-GAAP operating expense, non-GAAP operating income (loss), non-GAAP net income (loss) and free cash flow 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 loss, net loss or net cash provided by operating activities or any other performance measures derived in accordance with GAAP.
The Company believes that providing non-GAAP financial measures that are adjusted by, as applicable, share-based compensation expense, acquisition related expenses, amortization of intangible assets related to acquisitions, impairment of capitalized software development costs, non-cash interest expense related to the amortization of debt discount and issuance cost, gain from investment in privately held companies, and the tax effect of the non-GAAP adjustments and purchase of property and equipment 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 non-cash interest expense related to the amortization of debt discount and issuance costs do not reflect the performance of its core business and impact period-to-period comparability. The Company believes free cash flow is a liquidity measure that, after the purchase of property and equipment, provides useful information about the amount of cash generated by the business.
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, non-cash interest expense related to the amortization of debt discount and issuance costs 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, levels of activity, performance or achievements to differ materially from the results, levels of activity, 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 to the drivers of the Company’s growth and its ability to adapt its solutions to IT security market demands; fluctuation in the Company’s quarterly results of operations due to sales cycles and multiple pricing and delivery models; the Company’s ability to sell into existing and new customers and industry verticals; an increase in competition within the Privileged Access Management and Identity Security markets; unanticipated product vulnerabilities or cybersecurity breaches of the Company’s, or the Company’s customers’ or partners’ systems; complications or risks in connection with the Company’s subscription model, including uncertainty regarding renewals from its existing customer base, and retaining sufficient subscription or maintenance and support service renewal rates; risks related to compliance with privacy and data protection laws and regulations; risks regarding potential negative economic conditions in the global economy or certain regions, including conditions resulting from financial and credit market fluctuations, rising interest rates, bank failures, inflation, and the potential for regional or global recessions; the Company’s ability to hire, train, retain and motivate qualified personnel; reliance on third-party cloud providers for the Company’s operations and SaaS solutions; the Company’s history of incurring net losses and its ability to achieve profitability in the future; risks related to the Company’s ongoing transition to a new Chief Executive Officer; risks related to sales made to government entities; the Company’s ability to find, complete, fully integrate or achieve the expected benefits of strategic acquisitions; the duration and scope of the COVID-19 pandemic and its resulting effect on the demand for the Company’s solutions and on its expected revenue growth rates and costs; the Company’s ability to expand its sales and marketing efforts and expand its channel partnerships across existing and new geographies; regulatory and geopolitical risks associated with global sales and operations, as well as the location of our principal executive offices, most of our research and development activities and other significant operations in Israel; changes in regulatory requirements or fluctuations in currency exchange rates; the ability of the Company’s products to help customers achieve and maintain compliance with government regulations or industry standards; risks related to intellectual property claims or the Company’s ability to protect its proprietary technology and intellectual property rights; 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 U.S. 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.
Gartner Disclaimers
GARTNER is a registered trademark and service mark of Gartner and Magic Quadrant and Peer Insights are a registered trademark, of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved.
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
Gartner Peer Insights content consists of the opinions of individual end users based on their own experiences with the vendors listed on the platform, should not be construed as statements of fact, nor do they represent the views of Gartner or its affiliates. Gartner does not endorse any vendor, product or service depicted in this content nor makes any warranties, expressed or implied, with respect to this content, about its accuracy or completeness, including any warranties of merchantability or fitness for a particular purpose.
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,
2022
2023
2022
2023
Revenues: Subscription
$
74,249
$
122,879
$
192,198
$
321,766
Perpetual license
13,790
4,056
35,385
13,028
Maintenance and professional services
64,631
64,301
194,976
193,990
Total revenues
152,670
191,236
422,559
528,784
Cost of revenues: Subscription
12,214
21,281
32,487
54,859
Perpetual license
703
642
1,980
1,173
Maintenance and professional services
19,548
19,816
56,751
60,446
Total cost of revenues
32,465
41,739
91,218
116,478
Gross profit
120,205
149,497
331,341
412,306
Operating expenses: Research and development
48,437
51,733
138,844
157,653
Sales and marketing
90,298
98,859
254,536
299,376
General and administrative
20,738
24,642
60,342
67,038
Total operating expenses
159,473
175,234
453,722
524,067
Operating loss
(39,268
)
(25,737
)
(122,381
)
(111,761
)
Financial income, net
3,641
12,424
6,269
33,912
Loss before taxes on income
(35,627
)
(13,313
)
(116,112
)
(77,849
)
Tax benefit (taxes on income)
2,902
(1,296
)
7,948
2,434
Net loss
$
(32,725
)
$
(14,609
)
$
(108,164
)
$
(75,415
)
Basic loss per ordinary share$
(0.80
)
$
(0.35
)
$
(2.67
)
$
(1.82
)
Diluted loss per ordinary share$
(0.80
)
$
(0.35
)
$
(2.67
)
$
(1.82
)
Shares used in computing net loss per ordinary shares, basic
40,834,640
41,899,371
40,488,909
41,539,052
Shares used in computing net loss per ordinary shares, diluted
40,834,640
41,899,371
40,488,909
41,539,052
CYBERARK SOFTWARE LTD.
Consolidated Balance Sheets
U.S. dollars in thousands
(Unaudited)
December 31, September 30,
2022
2023
ASSETS CURRENT ASSETS: Cash and cash equivalents
$
347,338
$
372,196
Short-term bank deposits
305,843
284,461
Marketable securities
301,101
249,539
Trade receivables
120,817
118,983
Prepaid expenses and other current assets
22,482
26,308
Total current assets
1,097,581
1,051,487
LONG-TERM ASSETS: Marketable securities
227,748
322,026
Property and equipment, net
23,474
17,814
Intangible assets, net
27,508
22,050
Goodwill
153,241
153,241
Other long-term assets
217,040
213,243
Deferred tax asset
72,809
85,005
Total long-term assets
721,820
813,379
TOTAL ASSETS
$
1,819,401
$
1,864,866
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables
$
13,642
$
12,624
Employees and payroll accruals
77,328
70,750
Accrued expenses and other current liabilities
33,584
33,022
Deferred revenues
327,918
357,282
Total current liabilities
452,472
473,678
LONG-TERM LIABILITIES: Convertible senior notes, net
569,344
571,590
Deferred revenues
80,524
65,773
Other long-term liabilities
38,917
33,376
Total long-term liabilities
688,785
670,739
TOTAL LIABILITIES
1,141,257
1,144,417
SHAREHOLDERS' EQUITY: Ordinary shares of NIS 0.01 par value
107
110
Additional paid-in capital
660,289
774,882
Accumulated other comprehensive income (loss)
(15,560
)
(12,436
)
Retained earnings (accumulated deficit)
33,308
(42,107
)
Total shareholders' equity
678,144
720,449
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
1,819,401
$
1,864,866
CYBERARK SOFTWARE LTD.
Consolidated Statements of Cash Flows
U.S. dollars in thousands
(Unaudited)
Nine Months Ended September 30,
2022
2023
Cash flows from operating activities: Net loss
$
(108,164
)
$
(75,415
)
Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization
11,883
15,097
Amortization of premium and accretion of discount on marketable securities, net
3,976
(2,724
)
Share-based compensation
88,593
102,565
Deferred income taxes, net
(14,267
)
(10,763
)
Decrease in trade receivables
23,865
1,834
Amortization of debt discount and issuance costs
2,234
2,245
Increase in prepaid expenses, other current and long-term assets and others
(19,769
)
(22,564
)
Changes in operating lease right-of-use assets
2,781
5,495
Increase (decrease) in trade payables
509
(980
)
Increase in short-term and long-term deferred revenues
58,814
14,613
Decrease in employees and payroll accruals
(16,285
)
(13,579
)
Increase in accrued expenses and other current and long-term liabilities
2,259
669
Changes in operating lease liabilities
(7,218
)
(7,187
)
Net cash provided by operating activities
29,211
9,306
Cash flows from investing activities: Investment in short and long term deposits
(320,320
)
(204,461
)
Proceeds from short and long term deposits
363,905
243,630
Investment in marketable securities and other
(318,566
)
(322,049
)
Proceeds from sales and maturities of marketable securities and other
256,899
285,445
Purchase of property and equipment
(8,778
)
(4,253
)
Payments for business acquisitions, net of cash acquired
(41,285
)
-
Net cash used in investing activities
(68,145
)
(1,688
)
Cash flows from financing activities: Proceeds from (payment of) withholding tax related to employee stock plans
(811
)
3,210
Proceeds from exercise of stock options
1,729
4,209
Proceeds in connection with employees stock purchase plan
12,322
11,776
Payments of contingent consideration related to acquisitions
(1,578
)
-
Net cash provided by financing activities
11,662
19,195
Increase (decrease) in cash, cash equivalents
(27,272
)
26,813
Effect of exchange rate differences on cash, cash equivalents
(5,045
)
(1,955
)
Cash and cash equivalents at the beginning of the period
356,850
347,338
Cash and cash equivalents at the end of the period
$
324,533
$
372,196
CYBERARK SOFTWARE LTD. Reconciliation of GAAP Measures to Non-GAAP Measures U.S. dollars in thousands (except per share data) (Unaudited) Reconciliation of Net cash provided by operating activities to Free cash flow: Three Months Ended Nine Months Ended September 30, September 30,
2022
2023
2022
2023
Net cash provided by operating activities
$
18,481
$
14,353
$
29,211
$
9,306
Less: Purchase of property and equipment
(4,618
)
(731
)
(8,778
)
(4,253
)
Free cash flow$
13,863
$
13,622
$
20,433
$
5,053
GAAP net cash used in investing activities
(72,380
)
(42,788
)
(68,145
)
(1,688
)
GAAP net cash provided by (used in) financing activities
(1,602
)
5,510
11,662
19,195
Reconciliation of Gross Profit to Non-GAAP Gross Profit: Three Months Ended Nine Months Ended September 30, September 30,
2022
2023
2022
2023
Gross profit
$
120,205
$
149,497
$
331,341
$
412,306
Plus: Share-based compensation (1)
4,030
4,780
10,962
13,112
Amortization of share-based compensation capitalized in software development costs (3)
88
103
264
309
Amortization of intangible assets (2)
1,639
1,704
4,339
5,113
Impairment of capitalized software development costs
-
2,067
-
2,067
Non-GAAP gross profit
$
125,962
$
158,151
$
346,906
$
432,907
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses: Three Months Ended Nine Months Ended September 30, September 30,
2022
2023
2022
2023
Operating expenses
$
159,473
$
175,234
$
453,722
$
524,067
Less: Share-based compensation (1)
27,712
33,821
77,631
89,454
Amortization of intangible assets (2)
154
139
458
410
Acquisition related expenses
1,653
-
2,244
-
Non-GAAP operating expenses
$
129,954
$
141,274
$
373,389
$
434,203
Reconciliation of Operating Loss to Non-GAAP Operating Income (Loss): Three Months Ended Nine Months Ended September 30, September 30,
2022
2023
2022
2023
Operating loss
$
(39,268
)
$
(25,737
)
$
(122,381
)
$
(111,761
)
Plus: Share-based compensation (1)
31,742
38,601
88,593
102,566
Amortization of share-based compensation capitalized in software development costs (3)
88
103
264
309
Amortization of intangible assets (2)
1,793
1,843
4,797
5,523
Acquisition related expenses
1,653
-
2,244
-
Impairment of capitalized software development costs
2,067
-
2,067
Non-GAAP operating income (loss)
$
(3,992
)
$
16,877
$
(26,483
)
$
(1,296
)
Reconciliation of Net Loss to Non-GAAP Net Income (loss): Three Months Ended Nine Months Ended September 30, September 30,
2022
2023
2022
2023
Net loss
$
(32,725
)
$
(14,609
)
$
(108,164
)
$
(75,415
)
Plus: Share-based compensation (1)
31,742
38,601
88,593
102,566
Amortization of share-based compensation capitalized in software development costs (3)
88
103
264
309
Amortization of intangible assets (2)
1,793
1,843
4,797
5,523
Acquisition related expenses
1,653
-
2,244
-
Amortization of debt discount and issuance costs
746
748
2,234
2,244
Unrealized Gain from investment in privately held companies
(324
)
(250
)
(324
)
(544
)
Impairment of capitalized software development costs
-
2,067
-
2,067
Taxes on income related to non-GAAP adjustments
(5,307
)
(8,894
)
(14,629
)
(22,808
)
Non-GAAP net income (loss)$
(2,334
)
$
19,609
$
(24,985
)
$
13,942
Non-GAAP net income (loss) per share Basic
$
(0.06
)
$
0.47
$
(0.62
)
$
0.34
Diluted
$
(0.06
)
$
0.42
$
(0.62
)
$
0.30
Weighted average number of shares Basic
40,834,640
41,899,371
40,488,909
41,539,052
Diluted
40,834,640
46,641,527
40,488,909
46,134,041
(1) Share-based Compensation : Three Months Ended Nine Months Ended September 30, September 30,
2022
2023
2022
2023
Cost of revenues - Subscription
$
634
$
1,149
$
1,527
$
2,959
Cost of revenues - Perpetual license
42
11
103
30
Cost of revenues - Maintenance and Professional services
3,354
3,620
9,332
10,123
Research and development
6,983
7,867
19,787
21,797
Sales and marketing
13,654
15,800
37,415
43,990
General and administrative
7,075
10,154
20,429
23,667
Total share-based compensation
$
31,742
$
38,601
$
88,593
$
102,566
(2) Amortization of intangible assets : Three Months Ended Nine Months Ended September 30, September 30,
2022
2023
2022
2023
Cost of revenues - Subscription
$
1,598
$
1,704
$
4,231
$
5,113
Cost of revenues - Perpetual license
41
-
108
-
Sales and marketing
154
139
458
410
Total amortization of intangible assets
$
1,793
$
1,843
$
4,797
$
5,523
(3) Classified as Cost of revenues - Subscription.
View source version on businesswire.com: https://www.businesswire.com/news/home/20231102454423/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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