CYBR
$50.70
Cyberark Soft Ord
($.86)
(1.67%)
Earnings Details
2nd Quarter June 2016
Tuesday, August 09, 2016 4:05:06 PM
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Summary

Cyberark Soft Ord Beats

Cyberark Soft Ord (CYBR) reported 2nd Quarter June 2016 earnings of $0.26 per share on revenue of $50.4 million. The consensus earnings estimate was $0.20 per share on revenue of $48.4 million. The Earnings Whisper number was $0.22 per share. Revenue grew 38.5% on a year-over-year basis.

The company said it expects third quarter non-GAAP earnings of $0.21 to $0.23 per share on revenue of $51.5 million to $52.5 million. The current consensus earnings estimate is $0.21 per share on revenue of $51.9 million for the quarter ending September 30, 2016. The company said it expects 2016 earnings of $1.03 to $1.07 per share on revenue of $210.5 million to $212.5 million. The company's previous guidance was earnings of $0.87 to $0.91 per share on revenue of $209.0 million to $211.0 million and the current consensus earnings estimate is $0.91 per share on revenue of $210.9 million for the year ending December 31, 2016.

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
$0.26
Earnings Whisper
$0.22
Consensus Estimate
$0.20
Reported Revenue
$50.4 Mil
Revenue Estimate
$48.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

CyberArk Announces Strong Second Quarter 2016 Results

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 second quarter ended June 30, 2016.

"The second quarter was another strong quarter for CyberArk," said Udi Mokady, CyberArk Chairman and CEO. "Our top line growth demonstrates the increasing demand for our privileged account security platform while our bottom line outperformance shows the power of our business model. As we move into the second half of the year, we plan to continue making thoughtful investments including enhancing our technology platform and expanding market presence."

Financial Highlights for the Second Quarter Ended June 30, 2016

Revenue:

Total revenue was $50.4 million, up 39% year-over-year compared with the second quarter of 2015.

License revenue was $30.0 million, up 35% compared with the second quarter of 2015.

Maintenance and Professional Services revenue was $20.4 million, up 45% from the second quarter of 2015.

Operating Income:

GAAP operating income was $8.5 million for the quarter, up from $6.5 million in the second quarter of 2015.

Non-GAAP operating income was $13.6 million for the quarter, up from $8.2 million in the second quarter of 2015.

Net Income:

GAAP net income was $6.4 million, or $0.18 per diluted share, compared to GAAP net income of $4.9 million, or $0.14 per diluted share, in the second quarter of 2015.

Non-GAAP net income was $10.5 million, or $0.29 per diluted share, compared to $6.5 million, or $0.19 per diluted share, in the second quarter of 2015.

The tables at the end of this press release include a reconciliation of GAAP to non-GAAP operating income and net income for the three months and six months ended June 30, 2016 and 2015. 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, 2016, CyberArk had $259.0 million in cash, cash equivalents, marketable securities and short-term deposits, compared to $238.3 million as of December 31, 2015.

During the first six months of 2016, the Company generated $21.4 million in cash flow from operations, compared to $35.1 million in the first six months of 2015.

Business Outlook

Based on information available as of August 9, 2016, CyberArk is issuing guidance for the third quarter and full year 2016 as indicated below.

Third Quarter 2016:

Total revenue is expected to be in the range of $51.5 million to $52.5 million, which represents 29% to 31% year-over-year growth.

Non-GAAP operating income is expected to be in the range of $10.1 million to $11.0 million.

Non-GAAP net income per share is expected to be in the range of $0.21 to $0.23 per diluted share. This assumes 36.0 million weighted average diluted shares.

Full Year 2016:

Total revenue is expected to be in the range of $210.5 million to $212.5 million, which represents 31% to 32% year-over-year growth.

Non-GAAP operating income is expected to be in the range of $48.4 million to $50.0 million.

Non-GAAP net income per share is expected to be in the range of $1.03 to $1.07 per diluted share. This assumes 35.9 million weighted average diluted shares.

Conference Call Information

CyberArk will host a conference call on Tuesday, August 9, 2016 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 47864998. 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. 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 47864998. 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 is the only security company focused on eliminating the most advanced cyber threats; those that use insider privileges to attack the heart of the enterprise. Dedicated to stopping attacks before they stop business, CyberArk proactively secures against cyber threats before attacks can escalate and do irreparable damage. The company is trusted by the world’s leading companies - including 45 percent of the Fortune 100 - to protect their highest value information assets, infrastructure and applications. A global company, CyberArk is headquartered in Petach Tikvah, Israel, with U.S. headquarters located in Newton, Mass. The company also has offices throughout EMEA and Asia Pacific and Japan. To learn more about CyberArk, visit www.cyberark.com, read the company blog, http://www.cyberark.com/blog/, follow on Twitter @CyberArk or Facebook at https://www.facebook.com/CyberArk.

Copyright (C) 2016 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 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.

For the three and six months ended June 30, 2016, non-GAAP operating income is calculated as operating income excluding share-based compensation expense and amortization of intangible assets related to acquisitions. For the three and six months ended June 30, 2015, non-GAAP operating income is calculated as operating income excluding public offering and acquisition related expenses as well as share-based compensation expense.

For the three and six months ended June 30, 2016, non-GAAP net income is calculated as net income excluding share-based compensation expense, amortization of intangible assets related to acquisitions and the tax effects related to the non-GAAP adjustments. For the three and six months ended June 30, 2015, non-GAAP net income is calculated as net income excluding public offering and acquisition related expenses as well as share-based compensation expense and the tax effects related to the non-GAAP adjustments.

Because of 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 providing non-GAAP financial measures that exclude share-based compensation, public offering and acquisition related expenses and amortization of intangible assets related to acquisitions 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. The Company believes that expenses related to its public offerings, 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 Ended
Six Months Ended
June 30,
June 30,
2015
2016
2015
2016
Revenues:
License
$
22,278
$
29,965
$
42,256
$
57,479
Maintenance and professional services
14,097
20,415
27,034
39,812
Total revenues
36,375
50,380
69,290
97,291
Cost of revenues:
License
1,831
1,283
2,381
2,557
Maintenance and professional services
4,243
5,628
7,950
10,788
Total cost of revenues
6,074
6,911
10,331
13,345
Gross profit
30,301
43,469
58,959
83,946
Operating expenses:
Research and development
4,263
8,165
8,380
16,098
Sales and marketing
15,449
21,837
28,909
43,500
General and administrative
4,058
5,016
7,636
9,686
Total operating expenses
23,770
35,018
44,925
69,284
Operating income
6,531
8,451
14,034
14,662
Financial income (expenses), net
327
(94 )
(1,304 )
(27 )
Income before taxes on income
6,858
8,357
12,730
14,635
Taxes on income
(1,936 )
(1,908 )
(3,642 )
(3,862 )
Net income
$
4,922
$
6,449
$
9,088
$
10,773
Basic net income per ordinary share
$
0.16
$
0.19
$
0.29
$
0.32
Diluted net income per ordinary share
$
0.14
$
0.18
$
0.26
$
0.30
Shares used in computing net income
per ordinary shares, basic
31,530,242
33,547,975
31,049,379
33,457,149
Shares used in computing net income
per ordinary shares, diluted
35,001,262
35,787,574
34,896,092
35,740,107
Share-based Compensation Expense:
Three Months Ended
Six Months Ended
June 30,
June 30,
2015
2016
2015
2016
Cost of revenues
$
84
$
285
$
147
$
526
Research and development
85
998
167
1,938
Sales and marketing
177
1,371
316
2,596
General and administrative
797
1,325
978
2,292
Total share-based compensation expense
$
1,143
$
3,979
$
1,608
$
7,352
CYBERARK SOFTWARE LTD.
Consolidated Balance Sheets
U.S.
dollars in thousands
(Unaudited)
December 31,
June 30,
2015
2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$ 234,539
$
178,420
Short-term bank deposits
3,713
45,850
Marketable securities
-
12,386
Trade receivables
20,410
20,804
Prepaid expenses and other current assets
3,293
5,196
Total current assets
261,955
262,656
LONG-TERM ASSETS:
Property and equipment, net
3,584
4,366
Intangible assets, net
18,558
16,290
Goodwill
35,145
35,145
Marketable securities
-
22,390
Severance pay fund
3,230
3,187
Prepaid expenses and other long-term assets
1,954
2,005
Deferred tax asset
9,998
10,030
Total long-term assets
72,469
93,413
TOTAL ASSETS
$ 334,424
$
356,069
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables
$
2,530
$
2,215
Employees and payroll accruals
15,860
13,699
Deferred revenues
37,104
42,812
Accrued expenses and other current liabilities
9,366
5,851
Total current liabilities
64,860
64,577
LONG-TERM LIABILITIES:
Deferred revenues
17,285
20,004
Other long-term liabilities
188
236
Accrued severance pay
4,667
4,601
Deferred tax liabilities
754
595
Total long-term liabilities
22,894
25,436
TOTAL LIABILITIES
87,754
90,013
SHAREHOLDERS’ EQUITY:
Ordinary shares of NIS 0.01 par value
86
86
Additional paid-in capital
200,107
208,507
Accumulated other comprehensive income (loss)
(93 )
120
Retained earnings
46,570
57,343
Total shareholders’ equity
246,670
266,056
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$ 334,424
$
356,069
CYBERARK SOFTWARE LTD.
Consolidated Statements of
Cash Flows
U.S. dollars in thousands
(Unaudited)
Six Months Ended
June 30,
2015
2016
Cash flows from operating activities:
Net income
$
9,088
$
10,773
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and Amortization
459
3,126
Share-based compensation expenses
1,608
7,352
Tax benefit related to share-based compensation
(1,176 )
(411 )
Deferred income taxes, net
(731 )
(189 )
Decrease (increase) in trade receivables
4,965
(394 )
Increase in prepaid expenses and other
current and long-term assets
(1,175 )
(1,672 )
Increase (decrease) in trade payables
263
(179 )
Increase in short term and long term deferred revenues
21,106
8,427
Decrease in employees and payroll accruals
(1,153 )
(2,161 )
Increase (decrease) in accrued expenses and other
current and long-term liabilities
1,586
(3,240 )
Increase (decrease) in accrued severance pay, net
280
(23 )
Net cash provided by operating activities
35,120
21,409
Cash flows from investing activities:
Proceeds from short and long term deposits
39,289
-
Investment in short and long term deposits
-
(42,149 )
Investment in marketable securities
-
(34,650 )
Purchase of property and equipment
(1,060 )
(1,777 )
Net cash provided by (used in) investing activities
38,229
(78,576 )
Cash flows from financing activities:
Issuance of shares, net
52,685
-
Withholding proceeds related to exercise of options
17,201
-
Tax benefit related to share-based compensation
1,176
411
Proceeds from exercise of options
1,524
637
Net cash provided by financing activities
72,586
1,048
Increase (decrease) in cash and cash equivalents
145,935
(56,119 )
Cash and cash equivalents at the beginning of the period
124,184
234,539
Cash and cash equivalents at the end of the period
$ 270,119
$ 178,420
CYBERARK SOFTWARE LTD.
Reconciliation of GAAP Measures to
Non-GAAP Measures
U.S. dollars in thousands (except per share
data)
(Unaudited)
Reconciliation of Operating Income to Non-GAAP Operating Income:
Three Months Ended
Six Months Ended
June 30,
June 30,
2015
2016
2015
2016
Operating income
$
6,531
$
8,451
$
14,034
$
14,662
Public offering related expenses
487
-
1,568
-
Share-based compensation
1,143
3,979
1,608
7,352
Amortization of intangible assets - Cost of revenues
-
355
-
710
Amortization of intangible assets - Research and development
-
478
-
956
Amortization of intangible assets - Sales and marketing
-
301
-
602
Acquisition related expenses
88
-
88
-
Non-GAAP operating income
$
8,249
$
13,564
$
17,298
$
24,282
Reconciliation of Net Income to Non-GAAP Net Income:
Three Months Ended
Six Months Ended
June 30,
June 30,
2015
2016
2015
2016
Net income
$
4,922
$
6,449
$
9,088
$
10,773
Public offering related expenses
487
-
1,568
-
Share-based compensation
1,143
3,979
1,608
7,352
Amortization of intangible assets - Cost of revenues
-
355
-
710
Amortization of intangible assets - Research and development
-
478
-
956
Amortization of intangible assets - Sales and marketing
-
301
-
602
Acquisition related expenses
88
-
88
-
Taxes on income related to non-GAAP adjustments
(114 )
(1,066 )
(114 )
(1,579 )
Non-GAAP net income
$
6,526
$
10,496
$
12,238
$
18,814
Non-GAAP net income per share
Basic
$
0.21
$
0.31
$
0.39
$
0.56
Diluted
$
0.19
$
0.29
$
0.35
$
0.53
Weighted average number of shares
Basic
31,530,242
33,547,975
31,049,379
33,457,149
Diluted
35,001,262
35,787,574
34,896,092
35,740,107

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SOURCE: CyberArk

CyberArk
Investor Contact:
Erica Smith, 617-558-2132
ir@cyberark.com
or
Media Contact:
Christy Lynch, 617-796-3210
press@cyberark.com