CYBR
$53.34
Cyberark Soft Ord
$.86
1.64%
Earnings Details
4th Quarter December 2017
Thursday, February 15, 2018 7:40:00 AM
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Summary

Cyberark Soft Ord Beats

Cyberark Soft Ord (CYBR) reported 4th Quarter December 2017 earnings of $0.45 per share on revenue of $80.4 million. The consensus earnings estimate was $0.36 per share on revenue of $75.6 million. The Earnings Whisper number was $0.39 per share. Revenue grew 24.9% on a year-over-year basis.

The company said it expects first quarter non-GAAP earnings of $0.19 to $0.22 per share on revenue of $68.25 million to $69.75 million and 2018 earnings of $1.18 to $1.24 per share on revenue of $312.0 million to $316.0 million. The current consensus earnings estimate is $0.26 per share on revenue of $69.3 million for the quarter ending March 31, 2018 and $1.32 per share on revenue of $306.5 million for the year ending December 31, 2018.

CyberArk Software Ltd offers IT security solutions to protect organizations from cyber attacks. Its services include Maintenance and Support and Professional Services.

Results
Reported Earnings
$0.45
Earnings Whisper
$0.39
Consensus Estimate
$0.36
Reported Revenue
$80.4 Mil
Revenue Estimate
$75.6 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

CyberArk Announces Record Revenue and Strong Fourth Quarter and Full Year 2017 Results

Full year record total revenue of $261.7 million increased 21% year-over-year

--Full year record cash flow from operations of $80.7 million increased 43% year-over-year

CyberArk, (CYBR), the company that protects organizations from cyber attacks that have made their way inside the network perimeter, today announced financial results for the fourth quarter and year ended December 31, 2017.

"The fourth quarter represented a strong finish to 2017 and we were pleased to deliver record revenue and cash flow from operations with strong operating margins," said Udi Mokady, CyberArk Chairman and CEO. "Our results demonstrate the healthy demand for our solutions across companies of all sizes and vertical markets. During the fourth quarter, we introduced enhancements to our Privileged Account Security solution that strengthened our leadership position as the most comprehensive solution across on-premises, hybrid and cloud environments as well as DevOps. As we look ahead, we remain focused on creating long term shareholder value by delivering sustainable, profitable growth."

Financial Highlights for the Fourth Quarter Ended December 31, 2017

Revenue:

Total revenue was $80.4 million, up 25% compared with the fourth quarter of 2016.

License revenue was $48.6 million, up 19% compared with the fourth quarter of 2016.

Maintenance and Professional Services revenue was $31.8 million, up 35% compared with the fourth quarter of 2016.

Operating Income:

GAAP operating income was $11.6 million, compared to $13.2 million in the fourth quarter of 2016. Non-GAAP operating income was $19.7 million, compared to $19.4 million in the fourth quarter of 2016.

Net Income:

GAAP net income was $3.6 million, or $0.10 per diluted share, compared to GAAP net income of $10.2 million, or $0.28 per diluted share, in the fourth quarter of 2016. Non-GAAP net income was $15.0 million, or $0.41 per diluted share, compared to $14.7 million, or $0.41 per diluted share, in the fourth quarter of 2016.

Financial Highlights for the Full Year Ended December 31, 2017

Revenue:

-- Total revenue was $261.7 million, up 21% compared with 2016.

-- License revenue was $147.6 million, up 12% compared with 2016.

Maintenance and Professional Services revenue was $114.1 million, up 34% compared with 2016.

Operating Income:

GAAP operating income was $20.3 million, compared to $36.0 million in 2016. Non-GAAP operating income was $51.9 million, compared to $58.0 million in 2016.

Net Income:

GAAP net income $16.0 million, or $0.44 per diluted share, compared to GAAP net income of $28.1 million, or $0.78 per diluted share, in 2016. Non-GAAP net income was $41.9 million, or $1.16 per diluted share, compared to $45.2 million, or $1.26 per diluted share, in 2016.

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 and twelve months ended December 31, 2017 and 2016. An explanation of these measures is also included below under the heading "Non-GAAP Financial measures."

Balance Sheet and Cash Flow From Operations:

As of December 31, 2017, CyberArk had $330.3 million in cash, cash equivalents, marketable securities and short-term deposits. This compares with $296.8 million in cash, cash equivalents, marketable securities and short-term deposits as of September 30, 2017 and $295.5 million as of December 31, 2016.

As of December 31, 2017, total deferred revenue was $105.2 million, a 43% increase from $73.5 million at December 31, 2016.

During 2017, the Company generated $80.7 million in cash flow from operations, a 43% increase compared to $56.3 million during in 2016.

Business Outlook

Based on information available as of February 15, 2018, CyberArk is issuing guidance for the first quarter and full year 2018 as indicated below.

First Quarter 2018:

Total revenue is expected to be in the range of $68.25 million to $69.75 million, which represents 16% to 18% year-over-year growth.

Non-GAAP operating income is expected to be in the range of $9.2 million to $10.4 million.

Non-GAAP net income per share is expected to be in the range of $0.19 to $0.22 per share. This assumes 36.5 million weighted average diluted shares.

Full Year 2018:

Total revenue is expected to be in the range of $312.0 million to $316.0 million which represents 19% to 21% year-over-year growth.

Non-GAAP operating income is expected to be in the range of $54.5 million to $57.5 million.

Non-GAAP net income per share is expected to be in the range of $1.18 to $1.24 per share. This assumes 36.7 million weighted average diluted shares.

Conference Call Information

In conjunction with this announcement, CyberArk will host a conference call on Thursday, February 15, 2018 at 8:30 a.m. Eastern Time (ET) to discuss the company’s fourth quarter and year end 2017 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 8986489. 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 8986489. 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 (CYBR) is the global leader in privileged account 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 (C) 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 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 costs, amortization of intangible assets related to acquisitions and the tax effect of the non-GAAP adjustments as well as the impact of a one-time adjustment to our deferred tax asset as a result of the US Tax Cuts and Jobs Act 2017.

The Company believes that providing non-GAAP financial measures that exclude share-based compensation acquisition related expenses, facility exit costs, amortization of intangible assets related to acquisitions and the one-time impact of the US Tax Cuts and Jobs Act of 2017 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, facility exit costs, amortization of intangible assets related to acquisitions and the one-time impact of the US Tax Cuts and Jobs Act of 2017, 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 Ended
Twelve Months Ended
December 31,
December 31,
2016
2017
2016
2017
Revenues:
License
$
40,794
$
48,552
$
131,530
$
147,640
Maintenance and professional services
23,564
31,816
85,083
114,061
Total revenues
64,358
80,368
216,613
261,701
Cost of revenues:
License
1,085
2,259
4,726
7,911
Maintenance and professional services
7,675
9,360
25,425
33,937
Total cost of revenues
8,760
11,619
30,151
41,848
Gross profit
55,598
68,749
186,462
219,853
Operating expenses:
Research and development
9,324
12,245
34,614
42,389
Sales and marketing
26,475
36,684
93,775
126,739
General and administrative
6,590
8,185
22,117
30,399
Total operating expenses
42,389
57,114
150,506
199,527
Operating income
13,209
11,635
35,956
20,326
Financial income (expenses), net
(96 )
1,612
245
4,103
Income before taxes on income
13,113
13,247
36,201
24,429
Taxes on income
(2,874 )
(9,695 )
(8,077 )
(8,414 )
Net income
$
10,239
$
3,552
$
28,124
$
16,015
Basic net income per ordinary share
$
0.30
$
0.10
$
0.83
$
0.46
Diluted net income per ordinary share
$
0.28
$
0.10
$
0.78
$
0.44
Shares used in computing net income
per ordinary shares, basic
34,158,580
35,182,870
33,741,359
34,824,312
Shares used in computing net income
per ordinary shares, diluted
36,003,803
36,296,609
35,838,863
36,175,824
Share-based Compensation Expense:
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2016
2017
2016
2017
Cost of revenues
$
437
$
631
$
1,386
$
2,289
Research and development
1,319
1,503
4,660
6,110
Sales and marketing
1,625
2,494
5,765
8,642
General and administrative
1,711
1,966
5,724
8,196
Total share-based compensation expense
$
5,092
$
6,594
$
17,535
$
25,237
CYBERARK SOFTWARE LTD.
Consolidated Balance Sheets
U.S. dollars in thousands
(Unaudited)
December 31,
December 31,
2016
2017
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$ 172,957
$
161,261
Short-term bank deposits
86,829
107,647
Marketable securities
15,246
34,025
Trade receivables
33,330
45,315
Prepaid expenses and other current assets
4,804
7,407
Total current assets
313,166
355,655
LONG-TERM ASSETS:
Property and equipment, net
4,760
9,230
Intangible assets, net
14,035
15,664
Goodwill
35,145
69,217
Marketable securities
20,443
27,407
Severance pay fund
3,332
3,692
Prepaid expenses and other long-term assets
1,761
2,368
Deferred tax asset
10,389
19,343
Total long-term assets
89,865
146,921
TOTAL ASSETS
$ 403,031
$
502,576
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables
$
2,699
$
1,960
Employees and payroll accruals
18,470
25,253
Accrued expenses and other current liabilities
6,876
10,209
Deferred revenues
50,111
66,986
Total current liabilities
78,156
104,408
LONG-TERM LIABILITIES:
Deferred revenues
23,395
38,249
Other long-term liabilities
229
242
Accrued severance pay
5,035
5,712
Total long-term liabilities
28,659
44,203
TOTAL LIABILITIES
106,815
148,611
SHAREHOLDERS’ EQUITY:
Ordinary shares of NIS 0.01 par value
88
91
Additional paid-in capital
221,609
249,874
Accumulated other comprehensive income (loss)
(175 )
107
Retained earnings
74,694
103,893
Total shareholders’ equity
296,216
353,965
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$ 403,031
$
502,576
CYBERARK SOFTWARE LTD.
Consolidated Statements of Cash Flows
U.S. dollars in thousands
(Unaudited)
Twelve Months Ended
December 31,
2016
2017
Cash flows from operating activities:
Net income
$
28,124
$
16,015
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and Amortization
6,488
7,856
Amortization of premium on marketable securities
275
382
Share-based compensation expenses
17,535
25,237
Tax benefit related to share-based compensation
(1,466 )
-
Deferred income taxes, net
(1,130 )
5,856
Increase in trade receivables
(12,920 )
(11,631 )
Increase in prepaid expenses and other
current and long-term assets
(1,485 )
(3,278 )
Decrease in trade payables
(177 )
(1,288 )
Increase in short term and long term deferred revenues
19,117
31,729
Increase in employees and payroll accruals
2,610
6,316
Increase (decrease) in accrued expenses and other
current and long-term liabilities
(927 )
3,226
Increase in accrued severance pay, net
266
317
Net cash provided by operating activities
56,310
80,737
Cash flows from investing activities:
Investment in short and long term deposits
(82,940 )
(20,722 )
Investment in marketable securities
(40,433 )
(43,604 )
Proceeds from maturities of marketable securities
4,307
17,355
Purchase of property and equipment
(2,795 )
(6,757 )
Payments for business acquisitions, net of cash acquired
-
(41,329 )
Net cash used in investing activities
(121,861 )
(95,057 )
Cash flows from financing activities:
Tax benefit related to share-based compensation
1,466
-
Proceeds from exercise of stock options
2,503
2,624
Net cash provided by financing activities
3,969
2,624
Decrease in cash and cash equivalents
(61,582 )
(11,696 )
Cash and cash equivalents at the beginning of the period
234,539
172,957
Cash and cash equivalents at the end of the period
$
172,957
$ 161,261
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
Twelve Months Ended
December 31,
December 31,
2016
2017
2016
2017
Gross profit
$
55,598
$
68,749
$
186,462
$
219,853
Plus:
Share-based compensation - Maintenance & professional services
437
631
1,386
2,289
Amortization of intangible assets - License
355
1,183
1,420
4,213
Non-GAAP gross profit
$
56,390
$
70,563
$
189,268
$
226,355
Reconciliation of Operating Income to Non-GAAP Operating Income:
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2016
2017
2016
2017
Operating income
$
13,209
$
11,635
$
35,956
$
20,326
Plus:
Share-based compensation
5,092
6,594
17,535
25,237
Amortization of intangible assets - Cost of revenues
355
1,183
1,420
4,213
Amortization of intangible assets - Research and development
479
-
1,913
-
Amortization of intangible assets - Sales and marketing
287
262
1,190
1,046
Acquisition related expenses
-
-
-
686
Facility exit costs
-
-
-
342
Non-GAAP operating income
$
19,422
$
19,674
$
58,014
$
51,850
Reconciliation of Net Income to Non-GAAP Net Income:
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2016
2017
2016
2017
Net income
$
10,239
$
3,552
$
28,124
$
16,015
Plus:
Share-based compensation
5,092
6,594
17,535
25,237
Amortization of intangible assets - Cost of revenues
355
1,183
1,420
4,213
Amortization of intangible assets - Research and development
479
-
1,913
-
Amortization of intangible assets - Sales and marketing
287
262
1,190
1,046
Acquisition related expenses
-
-
-
686
Facility exit costs
-
-
-
342
Taxes on income related to non-GAAP adjustments
(1,782 )
(3,180 )
(4,937 )
(12,226 )
-
6,582
-
6,582
Change in the US federal tax rate
Non-GAAP net income
$
14,670
$
14,993
$
45,245
$
41,895
Non-GAAP net income per share
Basic
$
0.43
$
0.43
$
1.34
$
1.20
Diluted
$
0.41
$
0.41
$
1.26
$
1.16
Weighted average number of shares
Basic
34,158,580
35,182,870
33,741,359
34,824,312
Diluted
36,003,803
36,296,609
35,838,863
36,175,824

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SOURCE: CyberArk

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