CYBR
$40.08
Cyberark Soft Ord
$.01
.02%
Earnings Details
2nd Quarter June 2017
Tuesday, August 08, 2017 4:04:01 PM
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Summary

Cyberark Soft Ord Beats but Guides Lower

Cyberark Soft Ord (CYBR) reported 2nd Quarter June 2017 earnings of $0.22 per share on revenue of $57.5 million. The consensus earnings estimate was $0.19 per share on revenue of $57.2 million. The Earnings Whisper number was $0.20 per share. Revenue grew 14.1% on a year-over-year basis.

The company said it expects third quarter non-GAAP earnings of $0.17 to $0.19 per share on revenue of $62.0 million to $63.0 million. The current consensus earnings estimate is $0.25 per share on revenue of $64.1 million for the quarter ending September 30, 2017. The company said it expects 2017 earnings of $1.02 to $1.06 per share on revenue of $253.0 million to $256.0 million. The current consensus earnings estimate is $1.08 per share on revenue of $254.7 million for the year ending December 31, 2017.

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
$0.22
Earnings Whisper
$0.20
Consensus Estimate
$0.19
Reported Revenue
$57.5 Mil
Revenue Estimate
$57.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

CyberArk Announces Second Quarter 2017 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, 2017.

"While our results in the second quarter were primarily impacted by certain deals in EMEA that did not close by June 30, we continued to see strong demand for our solutions across on premises, cloud and hybrid environments," said Udi Mokady, CyberArk Chairman and CEO. "Our global leadership position in the market, strong demand for our solutions and recent organizational changes position us well to deliver long term growth and capitalize on the tremendous opportunity for privileged account security."

Financial Highlights for the Second Quarter Ended June 30, 2017

Revenue:

Total revenue was $57.5 million, an increase from $50.4 million compared to the second quarter of 2016.

License revenue was $30.3 million, compared to $30.0 million in the second quarter of 2016.

Maintenance and Professional Services revenue was $27.2 million, compared to $20.4 million in the second quarter of 2016.

Operating Income:

GAAP operating income was $1.0 million for the quarter, compared to $8.5 million in the second quarter of 2016.

Non-GAAP operating income was $8.8 million for the quarter, compared to $13.6 million in the second quarter of 2016.

Net Income:

GAAP net income was $3.2 million, or $0.09 per diluted share, compared to GAAP net income of $6.4 million, or $0.18 per diluted share, in the second quarter of 2016.

Non-GAAP net income was $7.7 million, or $0.21 per diluted share, compared to $10.5 million, or $0.29 per diluted share, in the second quarter of 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 months and six months ended June 30, 2017 and 2016. 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, 2017, CyberArk had $283.2 million in cash, cash equivalents, marketable securities and short-term deposits, which reflects the approximately $42 million in cash consideration for the acquisition of Conjur, Inc. in May 2017. This compares to $295.5 million as of December 31, 2016.

During the first six months of 2017, the Company generated $29.7 million in cash flow from operations, compared to $21.4 million in the first six months of 2016.

Globalization of Sales Team

Announced today that Ron Zoran, the Company’s Vice President of Sales, Americas, has been named Chief Revenue Officer and will be responsible for executing the company’s worldwide sales strategy across sales, sales engineering, and channels to drive revenue growth in all geographies.

Business Outlook

Based on information available as of August 8, 2017, CyberArk is issuing guidance for the third quarter and full year 2017 as indicated below.

Third Quarter 2017:

Total revenue is expected to be in the range of $62.0 million to $63.0 million, which represents 13% to 15% year-over-year growth.

Non-GAAP operating income is expected to be in the range of $8.2 million to $9.0 million.

Non-GAAP net income per share is expected to be in the range of $0.17 to $0.19 per diluted share. This assumes 36.4 million weighted average diluted shares.

Full Year 2017:

Total revenue is expected to be in the range of $253.0 million to $256.0 million, which represents 17% to 18% year-over-year growth.

Non-GAAP operating income is expected to be in the range of $46.4 million to $48.4 million.

Non-GAAP net income per share is expected to be in the range of $1.02 to $1.06 per diluted share. This assumes 36.3 million weighted average diluted shares.

Conference Call Information

CyberArk will discuss the company’s second quarter financial results and its business outlook today, August 8, 2017 at 4:30 p.m. Eastern Time (ET). To access this call, dial +1 844-237-3590 (U.S.) or +1 484-747-6582 (international). The conference ID is 44458128. 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 44458128. 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 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 more than 50 percent of the Fortune 100 - to protect their highest value information assets, infrastructure and applications. 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 blog, or follow on Twitter via @CyberArk, LinkedIn or Facebook.

Copyright (C) 2017 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.

For the three and six months ended June 30, 2017 and June 30, 2016, non-GAAP gross profit is calculated as gross profit excluding share-based compensation expense and amortization of intangible assets related to acquisitions.

For the three and six months ended June 30, 2017, 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. 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, 2017 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 effects related to the non-GAAP adjustment. 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.

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, 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 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,
2016
2017
2016
2017
Revenues:
License
$
29,965
$
30,318
$
57,479
$
63,270
Maintenance and professional services
20,415
27,162
39,812
53,245
Total revenues
50,380
57,480
97,291
116,515
Cost of revenues:
License
1,283
1,907
2,557
3,491
Maintenance and professional services
5,628
8,093
10,788
15,776
Total cost of revenues
6,911
10,000
13,345
19,267
Gross profit
43,469
47,480
83,946
97,248
Operating expenses:
Research and development
8,165
9,561
16,098
18,775
Sales and marketing
21,837
29,500
43,500
57,178
General and administrative
5,016
7,409
9,686
14,287
Total operating expenses
35,018
46,470
69,284
90,240
Operating income
8,451
1,010
14,662
7,008
Financial income (expenses), net
(94 )
1,127
(27 )
1,675
Income before taxes on income
8,357
2,137
14,635
8,683
Tax benefit (taxes on income)
(1,908 )
1,109
(3,862 )
2,099
Net income
$
6,449
$
3,246
$
10,773
$
10,782
Basic net income per ordinary share
$
0.19
$
0.09
$
0.32
$
0.31
Diluted net income per ordinary share
$
0.18
$
0.09
$
0.30
$
0.30
Shares used in computing net income per ordinary shares, basic
33,547,975
34,729,119
33,457,149
34,563,040
Shares used in computing net income per ordinary shares, diluted
35,787,574
36,194,471
35,740,107
36,147,712
Share-based Compensation Expense:
Three Months Ended
Six Months Ended
June 30,
June 30,
2016
2017
2016
2017
Cost of revenues
$
285
$
504
$
526
$
957
Research and development
998
1,523
1,938
2,832
Sales and marketing
1,371
2,018
2,596
3,689
General and administrative
1,325
2,197
2,292
3,963
Total share-based compensation expense
$
3,979
$
6,242
$
7,352
$
11,441
CYBERARK SOFTWARE LTD.
Consolidated Balance Sheets
U.S. dollars in thousands
(Unaudited)
December 31,
June 30,
2016
2017
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$ 172,957
$
142,457
Short-term bank deposits
86,829
96,567
Marketable securities
15,246
21,804
Trade receivables
33,330
30,272
Prepaid expenses and other current assets
4,804
7,206
Total current assets
313,166
298,306
LONG-TERM ASSETS:
Property and equipment, net
4,760
5,266
Intangible assets, net
14,035
18,552
Goodwill
35,145
69,355
Marketable securities
20,443
22,376
Severance pay fund
3,332
3,703
Prepaid expenses and other long-term assets
1,761
1,866
Deferred tax asset
10,389
28,154
Total long-term assets
89,865
149,272
TOTAL ASSETS
$ 403,031
$
447,578
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables
$
2,699
$
1,762
Employees and payroll accruals
18,470
16,929
Accrued expenses and other current liabilities
6,876
5,627
Deferred revenues
50,111
57,258
Total current liabilities
78,156
81,576
LONG-TERM LIABILITIES:
Deferred revenues
23,395
25,587
Other long-term liabilities
229
222
Accrued severance pay
5,035
5,497
Total long-term liabilities
28,659
31,306
TOTAL LIABILITIES
106,815
112,882
SHAREHOLDERS’ EQUITY:
Ordinary shares of NIS 0.01 par value
88
90
Additional paid-in capital
221,609
235,351
Accumulated other comprehensive income (loss)
(175 )
595
Retained earnings
74,694
98,660
Total shareholders’ equity
296,216
334,696
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$ 403,031
$
447,578
CYBERARK SOFTWARE LTD.
Consolidated Statements of Cash Flows
U.S. dollars in thousands
(Unaudited)
Six Months Ended
June 30,
2016
2017
Cash flows from operating activities:
Net income
$
10,773
$
10,782
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and Amortization
3,126
3,509
Amortization of premium on marketable securities
56
190
Share-based compensation expenses
7,352
11,441
Tax benefit related to share-based compensation
(411 )
-
Deferred income taxes, net
(189 )
(3,642 )
Decrease (increase) in trade receivables
(394 )
3,412
Increase in prepaid expenses and other current and long-term assets
(1,728 )
(1,257 )
Decrease in trade payables
(179 )
(869 )
Increase in short term and long term deferred revenues
8,427
9,339
Decrease in employees and payroll accruals
(2,161 )
(1,953 )
Decrease in accrued expenses and other current and long-term
(3,240 )
(1,391 )
liabilities
Increase (decrease) in accrued severance pay, net
(23 )
91
Net cash provided by operating activities
21,409
29,652
Cash flows from investing activities:
Investment in short and long term deposits
(42,149 )
(9,938 )
Investment in marketable securities
(34,650 )
(17,760 )
Proceeds from maturities of marketable securities
-
9,106
Purchase of property and equipment
(1,777 )
(2,038 )
Payments for business acquisitions, net of cash acquired
-
(41,448 )
Net cash used in investing activities
(78,576 )
(62,078 )
Cash flows from financing activities:
Tax benefit related to share-based compensation
411
-
Proceeds from exercise of stock options
637
1,926
Net cash provided by financing activities
1,048
1,926
Decrease in cash and cash equivalents
(56,119 )
(30,500 )
Cash and cash equivalents at the beginning of the period
234,539
172,957
Cash and cash equivalents at the end of the period
$ 178,420
$ 142,457
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
Six Months Ended
June 30,
June 30,
2016
2017
2016
2017
Gross profit
$
43,469
$
47,480
$
83,946
$
97,248
Plus:
Share-based compensation - Maintenance & professional services
285
504
526
957
Amortization of intangible assets - License
355
992
710
1,835
Non-GAAP gross profit
$
44,109
$
48,976
$
85,182
$
100,040
Reconciliation of Operating Income to Non-GAAP Operating Income:
Three Months Ended
Six Months Ended
June 30,
June 30,
2016
2017
2016
2017
Operating income
$
8,451
$
1,010
$
14,662
$
7,008
Plus:
Share-based compensation
3,979
6,242
7,352
11,441
Amortization of intangible assets - Cost of revenues
355
992
710
1,835
Amortization of intangible assets - Research and development
478
-
956
-
Amortization of intangible assets - Sales and marketing
301
289
602
535
Acquisition related expenses
-
248
-
686
Non-GAAP operating income
$
13,564
$
8,781
$
24,282
$
21,505
Reconciliation of Net Income to Non-GAAP Net Income:
Three Months Ended
Six Months Ended
June 30,
June 30,
2016
2017
2016
2017
Net income
$
6,449
$
3,246
$
10,773
$
10,782
Plus:
Share-based compensation
3,979
6,242
7,352
11,441
Amortization of intangible assets - Cost of revenues
355
992
710
1,835
Amortization of intangible assets - Research and development
478
-
956
-
Amortization of intangible assets - Sales and marketing
301
289
602
535
Acquisition related expenses
-
248
-
686
Taxes on income related to non-GAAP adjustments
(1,066 )
(3,274 )
(1,579 )
(7,289 )
Non-GAAP net income
$
10,496
$
7,743
$
18,814
$
17,990
Non-GAAP net income per share
Basic
$
0.31
$
0.22
$
0.56
$
0.52
Diluted
$
0.29
$
0.21
$
0.53
$
0.50
Weighted average number of shares
Basic
33,547,975
34,729,119
33,457,149
34,563,040
Diluted
35,787,574
36,194,471
35,740,107
36,147,712

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SOURCE: CyberArk

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