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CyberArk Software Ltd. (CYBR - Free Report) started 2024 on a strong note by reporting better-than-expected results for the first quarter. The leading identity security solution provider’s quarterly results also exceeded management’s expectations across all guided metrics.
CyberArk reported non-GAAP earnings of 75 cents per share and outpaced the Zacks Consensus Estimate of 27 cents. CyberArk’s first-quarter non-GAAP earnings also came well ahead of its previously provided guidance range of 21-31 cents per share.
Moreover, the bottom line also marked robust improvement from the year-ago quarter’s loss of 17 cents per share. The solid year-over-year earnings performance was primarily driven by higher revenues, better cost management and increased financial income, partially offset by a higher number of outstanding shares.
CyberArk Software Ltd. Price, Consensus and EPS Surprise
In the first quarter of 2024, the Identity Security solution provider’s reported revenues increased 37% year over year to $221.6 million and surpassed the consensus mark of $213.4 million. Markedly, 93% of quarterly revenues were recurring in nature, which surged 41% year over year to $206 million.
Annual Recurring Revenues (“ARR”) increased 34% to $811 million. The subscription portion, which accounted for 77% of the total ARR, soared 54% year over year to $621 million. This upside was primarily driven by a record number of software-as-a-service solution bookings and the strong demand for on-premise subscription offerings. However, the maintenance portion, representing 23% of the total ARR, decreased to $190 million from $202 million on Mar 31, 2023.
Quarterly Details
Segment-wise, Subscription revenues (71% of the total revenues) were $156.2 million, up 69% from the year-ago quarter. Our estimate for Subscription revenues was pegged at $144.3 million.
Maintenance and professional services revenues (28% of the total revenues) were $62.4 million, lower than the year-ago quarter’s $65.1 million. Our estimate for Maintenance and professional services revenues was pegged at $64.5 million.
Perpetual license revenues (1% of the total revenues) plunged to $3 million from $3.9 million in the year-ago quarter. The decline reflects the company’s continued efforts toward shifting the business model to subscription-based from a perpetual license. Our estimate for Perpetual license revenues was pegged at $4 million.
Operating Details
CyberArk’s non-GAAP gross profit increased 41.3% year over year to $185.7 million. Moreover, the non-GAAP gross margin expanded 250 basis points (bps) to 83.8%, primarily driven by robust revenue growth.
Non-GAAP operating expenses increased 6% year over year to $152.7 million. However, operating expenses as a percentage of revenues declined to 68.9% from 89.1% in the year-ago quarter.
The company reported a non-GAAP operating income of $33 million in the first quarter, which reflects a strong improvement from the year-ago quarter’s non-GAAP operating loss of $12.6 million. Its first-quarter non-GAAP operating margin was 14.9%. The robust increase in operating income was primarily driven by revenue growth outperformance, a shift in the timing of some marketing-related expenses to the second and third quarters and slower hiring, particularly in research & development.
Balance Sheet
CyberArk ended the January-March 2024 quarter with cash and cash equivalents, marketable securities and short-term deposits of $1.08 billion. As of Mar 31, 2024, total deferred revenues were $425 million, up 3.8% year over year.
During the first quarter, the company generated operating cash flow and free cash flow of $68.6 million and $66.8 million, respectively.
CYBR Raises FY24 Guidance
Buoyed by stronger-than-expected first-quarter performance, CyberArk raises guidance for the full-year 2024. The company now expects 2024 revenues in the range of $928-$938 million, up from the previous guidance range of $920-$930 million. The Zacks Consensus Estimate for 2024 revenues is currently pegged at $926.8 million, which indicates 23.3% year-over-year growth.
It now projects to post non-GAAP operating income between $90.5 million and $99.5 million instead of the earlier assumption of $75.5-$84.5 million. The company now estimates its non-GAAP earnings in the range of $1.88-$2.07 per share, up from the previous forecast of $1.63-$1.81 per share. The consensus mark for 2024 earnings is currently pegged at $1.76 per share, which implies 57.1% year-over-year growth.
Additionally, CyberArk initiated guidance for the second quarter. The company expects revenues between $215 million and $221 million for the second quarter. The non-GAAP operating income is estimated between $12 million and $17 million. It projects to post non-GAAP earnings in the range of 34-44 cents per share. The Zacks Consensus Estimate for second-quarter revenues and earnings is currently pegged at $220.6 million and 28 cents per share, respectively.
Zacks Rank & Stocks to Consider
Currently, CyberArk carries a Zacks Rank #3 (Hold). Shares of CYBR have risen 6.2% year to date (YTD).
The Zacks Consensus Estimate for NVIDIA’s fiscal 2025 earnings has been revised 10 cents upward to $23.94 per share in the past 30 days, which suggests year-over-year growth of 84.7%. The long-term estimated earnings growth rate for the stock stands at 30.9%. The NVDA stock has soared 74.5% YTD.
The Zacks Consensus Estimate for Salesforce’s fiscal 2025 earnings has been revised upward by 3 cents to $9.71 per share in the past 60 days, which calls for an increase of 18.1% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 17.4%. CRM shares have risen 3.4% YTD.
The consensus mark for Twilio’s 2024 earnings has been revised upward by a penny to $2.71 per share over the past 30 days, which indicates a 10.6% increase from 2023. It has a long-term earnings growth expectation of 19.6%. The TWLO stock has declined 19% in the YTD period.
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CyberArk (CYBR) Crushes Q1 Earnings & Revenue Estimates
CyberArk Software Ltd. (CYBR - Free Report) started 2024 on a strong note by reporting better-than-expected results for the first quarter. The leading identity security solution provider’s quarterly results also exceeded management’s expectations across all guided metrics.
CyberArk reported non-GAAP earnings of 75 cents per share and outpaced the Zacks Consensus Estimate of 27 cents. CyberArk’s first-quarter non-GAAP earnings also came well ahead of its previously provided guidance range of 21-31 cents per share.
Moreover, the bottom line also marked robust improvement from the year-ago quarter’s loss of 17 cents per share. The solid year-over-year earnings performance was primarily driven by higher revenues, better cost management and increased financial income, partially offset by a higher number of outstanding shares.
CyberArk Software Ltd. Price, Consensus and EPS Surprise
CyberArk Software Ltd. price-consensus-eps-surprise-chart | CyberArk Software Ltd. Quote
Top-Line Performance
In the first quarter of 2024, the Identity Security solution provider’s reported revenues increased 37% year over year to $221.6 million and surpassed the consensus mark of $213.4 million. Markedly, 93% of quarterly revenues were recurring in nature, which surged 41% year over year to $206 million.
Annual Recurring Revenues (“ARR”) increased 34% to $811 million. The subscription portion, which accounted for 77% of the total ARR, soared 54% year over year to $621 million. This upside was primarily driven by a record number of software-as-a-service solution bookings and the strong demand for on-premise subscription offerings. However, the maintenance portion, representing 23% of the total ARR, decreased to $190 million from $202 million on Mar 31, 2023.
Quarterly Details
Segment-wise, Subscription revenues (71% of the total revenues) were $156.2 million, up 69% from the year-ago quarter. Our estimate for Subscription revenues was pegged at $144.3 million.
Maintenance and professional services revenues (28% of the total revenues) were $62.4 million, lower than the year-ago quarter’s $65.1 million. Our estimate for Maintenance and professional services revenues was pegged at $64.5 million.
Perpetual license revenues (1% of the total revenues) plunged to $3 million from $3.9 million in the year-ago quarter. The decline reflects the company’s continued efforts toward shifting the business model to subscription-based from a perpetual license. Our estimate for Perpetual license revenues was pegged at $4 million.
Operating Details
CyberArk’s non-GAAP gross profit increased 41.3% year over year to $185.7 million. Moreover, the non-GAAP gross margin expanded 250 basis points (bps) to 83.8%, primarily driven by robust revenue growth.
Non-GAAP operating expenses increased 6% year over year to $152.7 million. However, operating expenses as a percentage of revenues declined to 68.9% from 89.1% in the year-ago quarter.
The company reported a non-GAAP operating income of $33 million in the first quarter, which reflects a strong improvement from the year-ago quarter’s non-GAAP operating loss of $12.6 million. Its first-quarter non-GAAP operating margin was 14.9%. The robust increase in operating income was primarily driven by revenue growth outperformance, a shift in the timing of some marketing-related expenses to the second and third quarters and slower hiring, particularly in research & development.
Balance Sheet
CyberArk ended the January-March 2024 quarter with cash and cash equivalents, marketable securities and short-term deposits of $1.08 billion. As of Mar 31, 2024, total deferred revenues were $425 million, up 3.8% year over year.
During the first quarter, the company generated operating cash flow and free cash flow of $68.6 million and $66.8 million, respectively.
CYBR Raises FY24 Guidance
Buoyed by stronger-than-expected first-quarter performance, CyberArk raises guidance for the full-year 2024. The company now expects 2024 revenues in the range of $928-$938 million, up from the previous guidance range of $920-$930 million. The Zacks Consensus Estimate for 2024 revenues is currently pegged at $926.8 million, which indicates 23.3% year-over-year growth.
It now projects to post non-GAAP operating income between $90.5 million and $99.5 million instead of the earlier assumption of $75.5-$84.5 million. The company now estimates its non-GAAP earnings in the range of $1.88-$2.07 per share, up from the previous forecast of $1.63-$1.81 per share. The consensus mark for 2024 earnings is currently pegged at $1.76 per share, which implies 57.1% year-over-year growth.
Additionally, CyberArk initiated guidance for the second quarter. The company expects revenues between $215 million and $221 million for the second quarter. The non-GAAP operating income is estimated between $12 million and $17 million. It projects to post non-GAAP earnings in the range of 34-44 cents per share. The Zacks Consensus Estimate for second-quarter revenues and earnings is currently pegged at $220.6 million and 28 cents per share, respectively.
Zacks Rank & Stocks to Consider
Currently, CyberArk carries a Zacks Rank #3 (Hold). Shares of CYBR have risen 6.2% year to date (YTD).
Some better-ranked stocks in the broader technology sector are NVIDIA (NVDA - Free Report) , Salesforce (CRM - Free Report) and Twilio (TWLO - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2025 earnings has been revised 10 cents upward to $23.94 per share in the past 30 days, which suggests year-over-year growth of 84.7%. The long-term estimated earnings growth rate for the stock stands at 30.9%. The NVDA stock has soared 74.5% YTD.
The Zacks Consensus Estimate for Salesforce’s fiscal 2025 earnings has been revised upward by 3 cents to $9.71 per share in the past 60 days, which calls for an increase of 18.1% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 17.4%. CRM shares have risen 3.4% YTD.
The consensus mark for Twilio’s 2024 earnings has been revised upward by a penny to $2.71 per share over the past 30 days, which indicates a 10.6% increase from 2023. It has a long-term earnings growth expectation of 19.6%. The TWLO stock has declined 19% in the YTD period.