CyberArk Announces Strong Second Quarter 2018 Results
NEWTON, Mass. & PETACH TIKVA, Israel--(BUSINESS WIRE)--Aug 7, 2018--CyberArk, (NASDAQ: CYBR), the global leader in privileged access security, today announced financial results for the second quarter ended June 30, 2018.
“CyberArk had a great second quarter,” said Udi Mokady, CyberArk Chairman and CEO. “We exceeded our guidance across all metrics. We posted strong revenue growth, profitability and operating cash flow. Our growth was driven by strong execution and robust demand from both new and existing customers across all geographies. We were thrilled to sign nearly 200 new logos in the second quarter bringing our total number of customers to more than 4,000, which demonstrates that we are still in the early innings of our market opportunity. In addition, the significant value our solution provides coupled with our unwavering commitment to customer satisfaction drove our add on business during the quarter. Given our strong execution in the first half of the year and our tremendous market opportunity, we are positioned well for the remainder of 2018.”
Financial Highlights for the Second Quarter Ended June 30, 2018
Revenue:Total revenue was $77.7 million, up 35% compared with the second quarter of 2017. License revenue was $41.1 million, up 36% compared with the second quarter of 2017. Maintenance and professional services revenue was $36.6 million, up 35% compared with the second quarter of 2017.
Operating Income:GAAP operating income was $7.0 million, an increase from $1.0 million in the second quarter of 2017. Non-GAAP operating income was $17.0 million, an increase from $8.8 million in the second quarter of 2017.
Net Income:GAAP net income was $8.4 million, or $0.23 per diluted share, an increase from GAAP net income of $3.2 million, or $0.09 per diluted share, in the second quarter of 2017. Non-GAAP net income was $13.5 million, or $0.36 per diluted share, an increase from $7.7 million, or $0.21 per diluted share, in the second quarter of 2017.
The tables at the end of this press release include a reconciliation of GAAP to non-GAAP gross margin, operating income and net income for the three months and six months ended June 30, 2018 and 2017. 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, 2018, CyberArk had $377.5 million in cash, cash equivalents, marketable securities and short-term deposits. This compares to $330.3 million as of December 31, 2017 and $283.2 million at June 30, 2017. As of June 30, 2018, total deferred revenue was $129.6 million, a 23% increase from $105.2 million at December 31, 2017 and a 56% increase from $82.8 million at June 30, 2017. During the six months ended June 30, 2018, the Company generated $56.2 million in cash flow from operations, a 90% increase from $29.7 million in the first six months of 2017.
Based on information available as of August 7, 2018, CyberArk is issuing guidance for the third quarter and increasing its guidance for the full year 2018 as indicated below.
Third Quarter 2018:Total revenue is expected to be in the range of $77.75 million to $79.25 million, which represents 20% to 22% year-over-year growth. Non-GAAP operating income is expected to be in the range of $11.4 million to $12.6 million. Non-GAAP net income per share is expected to be in the range of $0.25 to $0.28 per diluted share. This assumes 37.5 million weighted average diluted shares.
Full Year 2018:Total revenue is expected to be in the range of $320.0 million to $324.0 million, which represents 22% to 24% year-over-year growth. Non-GAAP operating income is expected to be in the range of $64.0 million to $67.0 million. Non-GAAP net income per share is expected to be in the range of $1.43 to $1.50 per diluted share. This assumes 37.0 million weighted average diluted shares.
Conference Call Information
CyberArk will host a conference call today, August 7, 2018 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 2687958. 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 2687958. 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 (NASDAQ: CYBR ) is the global leader in privileged access 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 © 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, 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, amortization of intangible assets related to acquisitions and the tax effect of the non-GAAP adjustments.
The Company believes that providing non-GAAP financial measures that exclude share-based compensation, acquisition related expenses, amortization of intangible assets related to acquisitions 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 the 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 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.
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