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CyberArk Announces Record Revenue and Strong Fourth Quarter and Full Year 2016 Results
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Full year total revenue of $216.6 million increases 35% year-over-year

NEWTON, Mass. & PETACH TIKVAH, Israel--(BUSINESS WIRE)--Feb. 9, 2017-- CyberArk, (NASDAQ: 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, 2016.

“CyberArk had an incredible 2016,” said Udi Mokady, CyberArk Chairman and CEO. “We outperformed across revenue, operating income and net income per share, demonstrating the ongoing execution of our land and expand strategy and the power of our operating model. Protecting privileged accounts, across the enterprise, on endpoints, in the cloud and in hybrid environments, is increasingly recognized as fundamental to cyber security programs. Because of our operational and financial success in 2016, we entered 2017 as an even stronger company, well positioned to continue to deliver profitable revenue growth.”

Financial Highlights for the Fourth Quarter Ended December 31, 2016

Revenue:

  • Total revenue was $64.4 million, up 25% compared with the fourth quarter of 2015.
  • License revenue was $40.8 million, up 23% compared with the fourth quarter of 2015.
  • Maintenance and Professional Services revenue was $23.6 million, up 28% compared with the fourth quarter of 2015.

Operating Income:

  • GAAP operating income was $13.2 million, compared to $10.9 million in the fourth quarter of 2015. Non-GAAP operating income was $19.4 million, compared to $15.2 million in the fourth quarter of 2015.

Net Income:

  • GAAP net income was $10.2 million, or $0.28 per diluted share, compared to GAAP net income of $9.9 million, or $0.28 per diluted share, in the fourth quarter of 2015. Non-GAAP net income was $14.7 million, or $0.41 per diluted share, compared to $13.8 million, or $0.39 per diluted share, in the fourth quarter of 2015.

Financial Highlights for the Full Year Ended December 31, 2016

Revenue:

  • Total revenue was $216.6 million, up 35% compared with 2015.
  • License revenue was $131.5 million, up 31% compared with 2015.
  • Maintenance and Professional Services revenue was $85.1 million, up 40% compared with 2015.

Operating Income:

  • GAAP operating income was $36.0 million, compared to $33.2 million in 2015. Non-GAAP operating income was $58.0 million, compared to $43.6 million in 2015.

Net Income:

  • GAAP net income was $28.1 million, or $0.78 per diluted share, compared to GAAP net income of $25.8 million, or $0.73 per diluted share, in 2015. Non-GAAP net income was $45.2 million, or $1.26 per diluted share, compared to $35.3 million, or $1.00 per diluted share, in 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 and twelve months ended December 31, 2016 and 2015. 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, 2016, CyberArk had $295.5 million in cash, cash equivalents, marketable securities and short-term deposits. This compares with $274.6 million in cash, cash equivalents, marketable securities and short-term deposits as of September 30, 2016 and $238.3 million as of December 31, 2015.
  • During 2016, the Company generated $56.3 million in cash flow from operations, compared to $59.2 million during in 2015.

Business Outlook
Based on information available as of February 9, 2017, CyberArk is issuing guidance for the first quarter and full year 2017 as indicated below.

First Quarter 2017:

  • Total revenue is expected to be in the range of $57.0 million to $58.0 million, which represents 22% to 24% year-over-year growth.
  • Non-GAAP operating income is expected to be in the range of $9.9 million to $10.7 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 36.2 million weighted average diluted shares.

Full Year 2017:

  • Total revenue is expected to be in the range of $267.0 million to $270.0 million which represents 23% to 25% year-over-year growth.
  • Non-GAAP operating income is expected to be in the range of $56.0 million to $58.0 million.
  • Non-GAAP net income per share is expected to be in the range of $1.20 to $1.24 per diluted share. This assumes 36.4 million weighted average diluted shares.

Conference Call Information
CyberArk will host a conference call today, at 4:30 p.m. Eastern Time (ET) to discuss the company’s fourth quarter and year end 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 48627364. 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 48627364. 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 more than 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 © 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 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 months and year ended December 31, 2016, non-GAAP operating income is calculated as GAAP operating income excluding share-based compensation expense and amortization of intangible assets related to acquisitions. For the three months and year ended December 31, 2015, non-GAAP operating income is calculated as operating income excluding public offering, amortization of intangible assets and acquisition related expenses as well as share-based compensation expense.
  • For the three months and year ended December 31, 2016, non-GAAP net income is calculated as GAAP 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 months and year ended December 31, 2015, non-GAAP net income is calculated as GAAP net income excluding public offering, amortization of intangible assets 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 Twelve Months Ended
December 31, December 31,
2015 2016 2015 2016
 
Revenues:
License $ 33,037 $ 40,794 $ 100,113 $ 131,530
Maintenance and professional services 18,429 23,564 60,699 85,083
       
Total revenues 51,466 64,358 160,812 216,613
 
Cost of revenues:
License 1,571 1,085 5,088 4,726
Maintenance and professional services 5,227 7,675 17,572 25,425
       
Total cost of revenues 6,798 8,760 22,660 30,151
       
Gross profit 44,668 55,598 138,152 186,462
       
Operating expenses:
Research and development 7,705 9,324 21,734 34,614
Sales and marketing 20,580 26,475 66,206 93,775
General and administrative 5,483 6,590 16,990 22,117
       
Total operating expenses 33,768 42,389 104,930 150,506
       
Operating income 10,900 13,209 33,222 35,956
 
Financial income (expenses), net   (233 )   (96 )   (1,479 )   245  
 
Income before taxes on income 10,667 13,113 31,743 36,201
 
Taxes on income   (734 )   (2,874 )   (5,949 )   (8,077 )
 
Net income $ 9,933   $ 10,239   $ 25,794   $ 28,124  
 
 
Basic net income per ordinary share $ 0.30   $ 0.30   $ 0.80   $ 0.83  
Diluted net income per ordinary share $ 0.28   $ 0.28   $ 0.73   $ 0.78  
 
Shares used in computing net income
per ordinary shares, basic   33,243,103     34,158,580     32,124,772     33,741,359  
Shares used in computing net income
per ordinary shares, diluted   35,727,077     36,003,803     35,322,716     35,838,863  
 
 
 
 
Share-based Compensation Expense:
 
Three Months Ended Twelve Months Ended
December 31, December 31,
2015 2016 2015 2016
 
 
Cost of revenues $ 213 $ 437 $ 499 $ 1,386
Research and development 972 1,319 1,507 4,660
Sales and marketing 1,185 1,625 2,214 5,765
General and administrative   966     1,711     2,829     5,724  
 
Total share-based compensation expense $ 3,336   $ 5,092   $ 7,049   $ 17,535  
 
           
CYBERARK SOFTWARE LTD.
Consolidated Balance Sheets
U.S. dollars in thousands
(Unaudited)
 
December 31, December 31,
2015 2016
 
 
ASSETS
 
CURRENT ASSETS:
Cash and cash equivalents $ 234,539 $ 172,957
Short-term bank deposits 3,713 86,829
Marketable securities - 15,246
Trade receivables 20,410 33,330
Prepaid expenses and other current assets   3,293     4,804  
 
Total current assets   261,955     313,166  
 
LONG-TERM ASSETS:
Property and equipment, net 3,584 4,760
Intangible assets, net 18,558 14,035
Goodwill 35,145 35,145
Marketable securities - 20,443
Severance pay fund 3,230 3,332
Prepaid expenses and other long-term assets 1,954 1,761
Deferred tax asset   9,998     10,389  
 
Total long-term assets   72,469     89,865  
 
TOTAL ASSETS $ 334,424   $ 403,031  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Trade payables $ 2,530 $ 2,699
Employees and payroll accruals 15,860 18,470
Deferred revenues 37,104 50,111
Accrued expenses and other current liabilities   9,366     6,876  
 
Total current liabilities   64,860     78,156  
 
LONG-TERM LIABILITIES:
Deferred revenues 17,285 23,395
Other long-term liabilities 188 229
Accrued severance pay 4,667 5,035
Deferred tax liabilities   754     -  
 
Total long-term liabilities   22,894     28,659  
 
TOTAL LIABILITIES   87,754     106,815  
 
SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0.01 par value 86 88
Additional paid-in capital 200,107 221,609
Accumulated other comprehensive loss (93 ) (175 )
Retained earnings   46,570     74,694  
 
Total shareholders' equity   246,670     296,216  
 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 334,424   $ 403,031  
 
           
 
CYBERARK SOFTWARE LTD.
Consolidated Statements of Cash Flows
U.S. dollars in thousands
(Unaudited)
 
Twelve Months Ended
December 31,
2015 2016
 
Cash flows from operating activities:
Net income $ 25,794 $ 28,124
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and Amortization 2,254 6,488
Amortization of premium and accretion of discount
on marketable securities - 275
Share-based compensation expenses 7,049 17,535
Tax benefit related to share-based compensation (3,808 ) (1,466 )
Deferred income taxes, net (4,093 ) (1,130 )
Increase in trade receivables (187 ) (12,920 )
Increase in prepaid expenses and other
current and long-term assets (1,183 ) (1,485 )
Increase (decrease) in trade payables 322 (177 )
Increase in short term and long term deferred revenues 21,254 19,117
Increase in employees and payroll accruals 5,011 2,610
Increase (decrease) in accrued expenses and other
current and long-term liabilities 6,353 (927 )
Increase in accrued severance pay, net   394     266  
 
Net cash provided by operating activities   59,160     56,310  
 
Cash flows from investing activities:
Proceeds from short and long term deposits 49,329 -
Investment in short and long term deposits (619 ) (82,940 )
Investment in marketable securities - (40,433 )
Proceeds from maturity of marketable securities - 4,307
Purchase of property and equipment (2,066 ) (2,795 )
Payments for business acquisitions, net of cash acquired   (53,656 )   -  
 
Net cash used in investing activities   (7,012 )   (121,861 )
 
Cash flows from financing activities:
Issuance of shares, net 52,575 -
Tax benefit related to share-based compensation 3,808 1,466
Proceeds from exercise of options   1,824     2,503  
 
Net cash provided by financing activities   58,207     3,969  
 
Increase (decrease) in cash and cash equivalents 110,355 (61,582 )
 
Cash and cash equivalents at the beginning of the period   124,184     234,539  
 
Cash and cash equivalents at the end of the period $ 234,539   $ 172,957  
 
                       
 
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 Twelve Months Ended
December 31, December 31,
2015 2016 2015 2016
 
 
Operating income $ 10,900 $ 13,209 $ 33,222 $ 35,956
Public offering related expenses - - 1,568 -
Share-based compensation 3,336 5,092 7,049 17,535
Amortization of intangible assets - Cost of revenues 340 355 359 1,420
Amortization of intangible assets - Research and development 478 479 749 1,913
Amortization of intangible assets - Sales and marketing 17 287 17 1,190
Acquisition related expenses   160     -     677     -  
 
Non-GAAP operating income $ 15,231   $ 19,422   $ 43,641   $ 58,014  
 
 
Reconciliation of Net Income to Non-GAAP Net Income:
 
Three Months Ended Twelve Months Ended
December 31, December 31,
2015 2016 2015 2016
 
 
Net income $ 9,933 $ 10,239 $ 25,794 $ 28,124
Public offering related expenses - - 1,568 -
Share-based compensation 3,336 5,092 7,049 17,535
Amortization of intangible assets - Cost of revenues 340 355 359 1,420
Amortization of intangible assets - Research and development 478 479 749 1,913
Amortization of intangible assets - Sales and marketing 17 287 17 1,190
Acquisition related expenses 160 - 677 -
Taxes on income related to non-GAAP adjustments   (455 )   (1,782 )   (951 )   (4,937 )
 
Non-GAAP net income $ 13,809   $ 14,670   $ 35,262   $ 45,245  
 
Non-GAAP net income per share
Basic $ 0.42   $ 0.43   $ 1.10   $ 1.34  
Diluted $ 0.39   $ 0.41   $ 1.00   $ 1.26  
 
Weighted average number of shares
Basic   33,243,103     34,158,580     32,124,772     33,741,359  
Diluted   35,727,077     36,003,803     35,322,716     35,838,863  
 

Source: CyberArk Software Ltd.

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

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