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CyberArk Announces Record Fourth Quarter and Full Year 2019 Results

February 12, 2020

Fourth quarter total revenue of $129.7 million increases 19% year-over-year

Fourth quarter GAAP operating income of $22.9 million and non-GAAP operating income of $42.1 million

Full year total revenue of $433.9 million increases 26% year-over-year

Full year GAAP operating income of $62.3 million and non-GAAP operating income of $123.4 million

Full year net cash provided by operating activities of $141.7 million

NEWTON, Mass. & PETACH TIKVA, Israel--(BUSINESS WIRE)-- CyberArk, (NASDAQ: CYBR), the global leader in privileged access management, today announced record financial results for the fourth quarter and year ended December 31, 2019.

“Our record fourth quarter results capped off another great year of strong growth driven by disciplined investments,” said Udi Mokady, CyberArk Chairman and CEO. “We were thrilled to win a record number of logos in the fourth quarter, signing nearly 300 new customers. Throughout 2019, organizations continued to recognize that protecting privileged access is foundational to a comprehensive security program and increasingly turned to CyberArk as a trusted advisor, particularly to secure mission-critical digital transformation and cloud migration strategies. Our clear leadership position in the market and ongoing commitment to deliver innovation, positions us well to deliver profitable growth in 2020 and beyond.”

Financial Highlights for the Fourth Quarter Ended December 31, 2019

Revenue:

  • Total revenue was $129.7 million, up 19% compared with the fourth quarter of 2018.
  • License revenue was $76.5 million, up 15% compared with the fourth quarter of 2018.
  • Maintenance and Professional Services revenue was $53.1 million, up 26% compared with the fourth quarter of 2018.

Operating Income:

  • GAAP operating income was $22.9 million, compared to $27.5 million in the fourth quarter of 2018. Non-GAAP operating income was a record $42.1 million, compared to $39.8 million in the fourth quarter of 2018.

Net Income:

  • GAAP net income was $20.7 million, or $0.53 per diluted share, compared to GAAP net income of $24.2 million, or $0.64 per diluted share, in the fourth quarter of 2018. Non-GAAP net income was a record $37.8 million, or $0.97 per diluted share, compared to $33.4 million, or $0.89 per diluted share, in the fourth quarter of 2018.

Financial Highlights for the Full Year Ended December 31, 2019

Revenue:

  • Total revenue was $433.9 million, up 26% compared with 2018.
  • License revenue was $237.9 million, up 24% compared with 2018.
  • Maintenance and Professional Services revenue was $196.0 million, up 30% compared with 2018.

Operating Income:

  • GAAP operating income was $62.3 million, compared to $47.3 million in 2018. Non-GAAP operating income was $123.4 million, compared to $90.5 million in 2018.

Net Income:

  • GAAP net income was $63.1 million, or $1.62 per diluted share, compared to GAAP net income of $47.1 million, or $1.27 per diluted share, in 2018. Non-GAAP net income was $107.9 million, or $2.77 per diluted share, compared to $76.5 million, or $2.06 per diluted share, in 2018.

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 year ended December 31, 2019 and 2018. 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, 2019, CyberArk had $1.1 billion in cash, cash equivalents, marketable securities and short-term deposits. This compares to $451.2 million in cash, cash equivalents, marketable securities and short-term deposits as of December 31, 2018.
  • As of December 31, 2019, total deferred revenue was $190.4 million, a 27% increase from $149.5 million at December 31, 2018.
  • During 2019, the Company generated $141.7 million in net cash provided by operating activities compared to $130.1 million in 2018.

Business Outlook
Based on information available as of February 12, 2020, CyberArk is issuing guidance for the first quarter and full year 2020 as indicated below.

First Quarter 2020:

  • Total revenue is expected to be in the range of $106.0 million to $110.0 million.
  • Non-GAAP operating income is expected to be in the range of $16.5 million to $19.5 million.
  • Non-GAAP net income per share is expected to be in the range of $0.35 to $0.41 per share. This assumes 39.6 million weighted average diluted shares.

Full Year 2020:

  • Total revenue is expected to be in the range of $511.0 million to $519.0 million.
  • Non-GAAP operating income is expected to be in the range of $109.0 million to $115.0 million.
  • Non-GAAP net income per share is expected to be in the range of $2.26 to $2.38 per share. This assumes 39.8 million weighted average diluted shares.

Conference Call Information
In conjunction with this announcement, CyberArk will host a conference call on Wednesday, February 12, 2020 at 8:30 a.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 +1 877-823-7693 (U.S.) or +1 647-689-4543 (international). The conference ID is 7689662. 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 +1 800-585-8367 (U.S.) or +1 416-621-4642 (international). The replay pass code is 7689662. 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 privileged access management, a critical layer of IT security to protect data, infrastructure and assets across cloud and hybrid environments, 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% of the Fortune 500, 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 © 2020 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 gross profit, 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 and transition 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 and transition costs, amortization of intangible assets related to acquisitions, intra-entity intellectual property transfer tax effect, amortization of debt discount and issuance costs and the tax effect of other non-GAAP adjustments.

The Company believes that providing non-GAAP financial measures that exclude, as applicable, share-based compensation expense, acquisition related expenses, amortization of intangible assets related to acquisitions, facility exit and transition costs, intra-entity intellectual property transfer tax effect, non-cash interest expense related to the amortization of debt discount and issuance costs and the tax effect of the non-GAAP adjustments 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 and amortization of intangible assets related to acquisitions, facility exit and transition costs, intra-entity intellectual property transfer tax effect 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.

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, facility exit and transition costs, amortization of intangible assets related to acquisitions, intra-entity intellectual property transfer tax effect, non-cash interest expense related to the amortization of debt discount and issuance costs and the tax effect of the other 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, 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; the Company’s ability to increase its sales of software as a service (“SaaS”) solutions, while supporting and maintaining multiple software pricing and delivery models; 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; the Company’s ability to comply with evolving laws and regulations, including those relating to privacy and data protection; 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,
   

 

2018

 

 

2019

 

 

2018

 

 

2019

 

     
Revenues:    
License    

$

66,769

 

$

76,526

 

$

192,514

 

$

237,879

 

Maintenance and professional services    

 

42,281

 

 

53,138

 

 

150,685

 

 

196,016

 

     
Total revenues    

 

109,050

 

 

129,664

 

 

343,199

 

 

433,895

 

     
Cost of revenues:    
License    

 

3,005

 

 

2,801

 

 

10,526

 

 

10,569

 

Maintenance and professional services    

 

10,316

 

 

14,048

 

 

37,935

 

 

52,046

 

     
Total cost of revenues    

 

13,321

 

 

16,849

 

 

48,461

 

 

62,615

 

     
Gross profit    

 

95,729

 

 

112,815

 

 

294,738

 

 

371,280

 

     
Operating expenses:    
Research and development    

 

15,340

 

 

20,930

 

 

57,112

 

 

72,520

 

Sales and marketing    

 

40,307

 

 

52,939

 

 

148,290

 

 

184,168

 

General and administrative    

 

12,561

 

 

16,005

 

 

42,044

 

 

52,308

 

     
Total operating expenses    

 

68,208

 

 

89,874

 

 

247,446

 

 

308,996

 

     
Operating income    

 

27,521

 

 

22,941

 

 

47,292

 

 

62,284

 

     
Financial income, net    

 

1,078

 

 

2,394

 

 

4,551

 

 

7,800

 

     
Income before taxes on income    

 

28,599

 

 

25,335

 

 

51,843

 

 

70,084

 

     
Taxes on income    

 

(4,419

)

 

(4,599

)

 

(4,771

)

 

(7,020

)

     
Net income    

$

24,180

 

$

20,736

 

$

47,072

 

$

63,064

 

     
     
Basic net income per ordinary share    

$

0.66

 

$

0.55

 

$

1.30

 

$

1.68

 

Diluted net income per ordinary share    

$

0.64

 

$

0.53

 

$

1.27

 

$

1.62

 

     
Shares used in computing net income    
per ordinary shares, basic    

 

36,570,609

 

 

37,957,899

 

 

36,174,316

 

 

37,586,387

 

Shares used in computing net income    
per ordinary shares, diluted    

 

37,607,625

 

 

39,148,849

 

 

37,065,727

 

 

38,890,108

 

     
     
Share-based Compensation Expense:    
     
    Three Months Ended Twelve Months Ended
    December 31, December 31,
   

 

2018

 

 

2019

 

 

2018

 

 

2019

 

     
     
Cost of revenues    

$

980

 

$

1,802

 

$

3,350

 

$

5,690

 

Research and development    

 

2,174

 

 

3,347

 

 

7,922

 

 

10,960

 

Sales and marketing    

 

3,647

 

 

6,464

 

 

12,708

 

 

20,976

 

General and administrative    

 

3,493

 

 

6,418

 

 

11,984

 

 

17,891

 

     
Total share-based compensation expense    

$

10,294

 

$

18,031

 

$

35,964

 

$

55,517

 

     
     

CYBERARK SOFTWARE LTD.

Consolidated Balance Sheets

U.S. dollars in thousands

(Unaudited)

    December 31, December 31,
   

2018

2019

     
ASSETS    
     
CURRENT ASSETS:    
Cash and cash equivalents    

$

260,636

 

$

792,363

Short-term bank deposits    

 

106,399

 

 

140,067

Marketable securities    

 

59,948

 

 

132,412

Trade receivables    

 

48,431

 

 

72,953

Prepaid expenses and other current assets    

 

6,349

 

 

8,406

     
Total current assets    

 

481,763

 

 

1,146,201

     
LONG-TERM ASSETS:    
Property and equipment, net    

 

15,120

 

 

16,472

Intangible assets, net    

 

14,732

 

 

9,143

Goodwill    

 

82,400

 

 

82,400

Marketable securities    

 

24,261

 

 

54,408

Other long-term assets    

 

31,863

 

 

72,091

Deferred tax asset    

 

23,481

 

 

24,451

     
Total long-term assets    

 

191,857

 

 

258,965

     
TOTAL ASSETS    

$

673,620

 

$

1,405,166

     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
CURRENT LIABILITIES:    
Trade payables    

$

4,924

 

$

5,675

Employees and payroll accruals    

 

32,853

 

 

41,345

Accrued expenses and other current liabilities    

 

13,271

 

 

27,132

Deferred revenues    

 

92,375

 

 

118,519

     
Total current liabilities    

 

143,423

 

 

192,671

     
LONG-TERM LIABILITIES:    
Deferred revenues    

 

57,159

 

 

71,836

Other long-term liabilities    

 

6,268

 

 

31,408

Convertible senior notes, net    

 

-

 

 

485,119

     
Total long-term liabilities    

 

63,427

 

 

588,363

     
TOTAL LIABILITIES    

 

206,850

 

 

781,034

     
SHAREHOLDERS' EQUITY:    
Ordinary shares of NIS 0.01 par value    

 

95

 

 

99

Additional paid-in capital    

 

303,900

 

 

396,437

Accumulated other comprehensive income (loss)    

 

(939

)

 

818

Retained earnings    

 

163,714

 

 

226,778

     
Total shareholders' equity    

 

466,770

 

 

624,132

     
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY    

$

673,620

 

$

1,405,166

     

CYBERARK SOFTWARE LTD.

Consolidated Statements of Cash Flows

U.S. dollars in thousands

(Unaudited)

     
    Twelve Months Ended
    December 31,
   

2018

2019

     
Cash flows from operating activities:    
Net income    

$

47,072

 

$

63,064

 

Adjustments to reconcile net income to net cash    
provided by operating activities:    
Depreciation and amortization    

 

10,078

 

 

10,646

 

Amortization of premium and accretion of discount on marketable securities, net      

 

293

 

 

(47

)

Share-based compensation    

 

35,964

 

 

55,517

 

Deferred income taxes, net    

 

(7,056

)

 

(6,974

)

Increase in trade receivables    

 

(3,116

)

 

(24,522

)

Amortization of debt discount and issuance costs    

 

-

 

 

1,966

 

Increase in prepaid expenses and other current and long-term assets    

 

(11,893

)

 

(14,321

)

Increase in trade payables    

 

1,955

 

 

1,571

 

Increase in short-term and long-term deferred revenues    

 

47,818

 

 

40,821

 

Increase in employees and payroll accruals    

 

6,896

 

 

7,337

 

Increase in accrued expenses and other current and long-term liabilities    

 

2,114

 

 

6,652

 

     
Net cash provided by operating activities    

 

130,125

 

 

141,710

 

     
Cash flows from investing activities:    
Proceeds from (Investment in) short and long term deposits    

 

1,600

 

 

(33,961

)

Investment in marketable securities    

 

(61,118

)

 

(165,714

)

Proceeds from maturities of marketable securities    

 

37,838

 

 

63,489

 

Purchase of property and equipment    

 

(8,613

)

 

(7,036

)

Payments for business acquisitions, net of cash acquired    

 

(18,450

)

 

-

 

     
Net cash used in investing activities    

 

(48,743

)

 

(143,222

)

     
Cash flows from financing activities:    
Proceeds from withholding tax related to employee stock plans    

 

-

 

 

1,155

 

Proceeds from the issuance of convertible senior notes, net of issuance costs    

 

-

 

 

560,107

 

Purchase of capped calls    

 

-

 

 

(53,648

)

Proceeds from exercise of stock options    

 

17,980

 

 

24,428

 

     
Net cash provided by financing activities    

 

17,980

 

 

532,042

 

     
Increase in cash, cash equivalents and restricted cash    

 

99,362

 

 

530,530

 

     
Cash, cash equivalents and restricted cash at the beginning of the period    

$

162,521

 

$

261,883

 

     
Cash, cash equivalents and restricted cash at the end of the period    

$

261,883

 

$

792,413

 

 

                       
 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,
         

2018

 

2019

 

2018

 

2019

                       
   Gross profit       

 $

           95,729

 

 

 $

       112,815

 

 

 $

   294,738

 

 

 $

     371,280

 

   Plus:                     
  Share-based compensation - Maintenance & professional services     

 

                  980

 

 

 

             1,802

 

 

 

         3,350

 

 

 

           5,690

 

   Amortization of intangible assets - License       

 

               1,445

 

 

 

                968

 

 

 

         5,563

 

 

 

           5,029

 

                       
   Non-GAAP gross profit       

 $

           98,154

 

 

 $

       115,585

 

 

 $

   303,651

 

 

 $

     381,999

 

                       
                       
                       
                       
                       
   Reconciliation of Operating Income to Non-GAAP Operating Income:             
                       
          Three Months Ended   Twelve Months Ended
          December 31,   December 31,
         

2018

 

2019

 

2018

 

2019

                       
                       
   Operating income       

 $

           27,521

 

 

 $

        22,941

 

 

 $

     47,292

 

 

 $

      62,284

 

   Plus:                     
   Share-based compensation       

 

             10,294

 

 

 

           18,031

 

 

 

       35,964

 

 

 

         55,517

 

   Amortization of intangible assets - Cost of revenues     

 

               1,445

 

 

 

                968

 

 

 

         5,563

 

 

 

           5,029

 

   Amortization of intangible assets -  Sales and marketing     

 

                  198

 

 

 

                144

 

 

 

            793

 

 

 

              576

 

   Acquisition related expenses       

 

                    -  

 

 

 

                  -  

 

 

 

            268

 

 

 

                -  

 

   Facility exit and transitions costs       

 

                  327

 

 

 

                  -  

 

 

 

            580

 

 

 

                -  

 

                       
   Non-GAAP operating income       

 $

           39,785

 

 

 $

        42,084

 

 

 $

     90,460

 

 

 $

     123,406

 

                       
                       
   Reconciliation of Net Income to Non-GAAP Net Income:                   
                       
          Three Months Ended   Twelve Months Ended
          December 31,   December 31,
         

2018

 

2019

 

2018

 

2019

                       
                       
   Net income       

 $

           24,180

 

 

 $

        20,736

 

 

 $

     47,072

 

 

 $

      63,064

 

   Plus:                     
   Share-based compensation       

 

             10,294

 

 

 

           18,031

 

 

 

       35,964

 

 

 

         55,517

 

   Amortization of intangible assets - Cost of revenues     

 

               1,445

 

 

 

                968

 

 

 

         5,563

 

 

 

           5,029

 

   Amortization of intangible assets -  Sales and marketing     

 

                  198

 

 

 

                144

 

 

 

            793

 

 

 

              576

 

   Acquisition related expenses       

 

                    -  

 

 

 

                  -  

 

 

 

            268

 

 

 

                -  

 

   Facility exit and transitions costs       

 

                  327

 

 

 

                  -  

 

 

 

            580

 

 

 

                -  

 

   Amortization of debt discount and issuance costs     

 

                    -  

 

 

 

             1,966

 

 

 

              -  

 

 

 

           1,966

 

   Taxes on income related to non-GAAP adjustments     

 

              (2,528

)

 

 

            (4,014

)

 

 

      (15,485

)

 

 

        (18,251

)

   Intra-entity IP transfer tax effect, net       

 

                 (475

)

 

 

                  -  

 

 

 

         1,768

 

 

 

                -  

 

                       
   Non-GAAP net income       

 $

           33,441

 

 

 $

        37,831

 

 

 $

     76,523

 

 

 $

     107,901

 

                       
   Non-GAAP net income per share                     
   Basic       

 $

              0.91

 

 

 $

            1.00

 

 

 $

        2.12

 

 

 $

          2.87

 

   Diluted       

 $

              0.89

 

 

 $

            0.97

 

 

 $

        2.06

 

 

 $

          2.77

 

                       
   Weighted average number of shares                     
   Basic       

 

       36,570,609

 

 

 

     37,957,899

 

 

 

 36,174,316

 

 

 

   37,586,387

 

   Diluted       

 

       37,607,625

 

 

 

     39,148,849

 

 

 

 37,065,727

 

 

 

   38,890,108

 

                       

 

Investor Contact:
Erica Smith
CyberArk
617-558-2132
ir@cyberark.com

Media Contact:
Liz Campbell
CyberArk
617-558-2191
press@cyberark.com

Source: CyberArk

Categories: Press Releases
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