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CyberArk (CYBR) Q4 Earnings and Revenues Beat, Stock Up
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Shares of CyberArk Software Ltd. (CYBR - Free Report) jumped nearly 8% yesterday after the company reported splendid results for fourth-quarter 2017, wherein the company exceeded its guidance at every point and surpassed the respective Zacks Consensus Estimate as well. Encouraging revenue guidance for the current quarter and full year also contributed to the upswing.
Now let’s discuss quarterly results in detail.
Revenues
CyberArk’s revenues were up 24.9% year over year to $80.4 million and came ahead of management’s guided range of $75-$76 million (mid-point $75.5 million), as well as the Zacks Consensus Estimate of $75.6 million. The company’s top line mainly benefited from better sales execution, new customer acquisitions and add-on business from existing clients.
During the reported quarter, the company closed a number of deals, including a significant number of seven-figure new clients. Also, CyberArk witnessed a remarkable number of federal deals in the fourth quarter. The company added more than 200 customers and ended the quarter with more than 3,650 clients.
Furthermore, the company reported data for the number of deals of different sizes it won in 2017. The number of deals worth more than $100,000 increased 27% to 659 from 519 in 2016. It also won 92 contracts worth more than $500,000, which also include a record number of million dollar deals.
Segment wise, License revenues which accounted for 60% of total revenues, increased 19% year over year to $48.6 million. Maintenance and Professional Services revenues, contributing 40% to total revenues, surged 35% year over year to $31.8 million.
Geographically, the company witnessed revenue growth across every region. On a year-over-year basis, revenues from the Americas increased 18% and contributed 54% of total revenues. Revenues in the Asia Pacific and Japan were up 2% year over year, representing 5% of total revenues. EMEA recorded a 41% jump and accounted for 41% of total revenues.
Operating Results
CyberArk’s non-GAAP gross profit came in at $70.6 million, representing year-over-year growth of 25.1%. Gross margin remained flat year over year 88% in the fourth quarter.
The company reported non-GAAP operating income of $19.7 million, up marginally from $19.4 million reported in the year-ago quarter. Operating income also came way higher than the company’s guidance range of $16.8-$17.6 million.
Non-GAAP operating margin dipped to 24.5% from 30.2%, primarily due to elevated operating expenses as a percentage of revenues. Escalated operating expenses mainly stemmed from increased investment toward enhancing product offerings and expanding sales capabilities.
The company reported non-GAAP net income of approximately $15 million, slightly up from $14.7 million reported in the year-ago quarter. However, net income margin came in at 18.7% compared with 22.8% reported in fourth-quarter 2016.
On per-share basis, the company reported non-GAAP earnings of 41 cents, flat with the year-ago quarter. Benefits from higher revenues were completely offset by increased operating expenses.
However, quarterly earnings came ahead of management’s guidance range of 35-36 cents and surpassed the Zacks Consensus Estimate of 36 cents as well.
CyberArk Software Ltd. Price, Consensus and EPS Surprise
CyberArk exited the fourth quarter with cash, cash equivalents, short-term deposits and marketable securities of approximately $284 million, down from $297 million at the end of third-quarter 2017. Receivables were $33.3 million at the end of the reported quarter.
CyberArk’s balance sheet does not have any long-term debt. The company generated cash flow from operations of approximately $80.7 million in 2017.
Guidance
Buoyed by splendid fourth-quarter results, the company issued encouraging outlook for the first quarter and full-year 2018.
For the current year, CyberArk anticipates revenues in the band of $312-$316 million (mid-point $314 million), representing 19-21% year-over-year growth. The guided range is higher than the Zacks Consensus Estimate of $306.5 million.
Non-GAAP operating income is projected to lie between $54.5 million and $57.5 million. Non-GAAP earnings for 2018 are expected to be between $1.18 and $1.24 per share. The earnings projection is however lower than the Zacks Consensus Estimate of $1.31.
For the first quarter, CyberArk estimates revenues in the range of $68.25-$69.75 million (mid-point $69 million), representing 16-18% year-over-year growth. The mid-point of the guided range is almost in line with the Zacks Consensus Estimate of $69.25 million. Non-GAAP operating income is predicted to lie in the band of $9.2-$10.4 million. The company projects non-GAAP earnings for the first quarter in the 19-22 cents range. The Zacks Consensus Estimate is currently pegged at 26 cents.
Our Take
The company’s outstanding fourth-quarter results, along with an encouraging outlook, indicate that its ongoing investment in sales and marketing strategies are paying off.
Furthermore, it should be noted that, in the second quarter, the company had reported the slowest revenue growth rate of 14% since its listing in September 2014. Prior to that, it was around 25%. However, the third and fourth quarters’ actual growth rate, along with the current quarter’s projection, make us optimistic about its long-term revenue performance.
Furthermore, CyberArk’s expansion strategy through acquisitions is encouraging for the near term. Per the company, the recently-acquired Conjur business has received strong customer response. Conjur specializes in offering DevOps security software. Therefore, the acquisition is anticipated to boost CyberArk’s capabilities in empowering companies to accelerate software deployment in their organizations with more security.
Moreover, CyberArk’s strategy of enhancing relationship with channel partners is bringing in new customers. The company noted that channel partners make a key component to its go-to-market sales strategy and generated roughly 60% of the business in the fourth quarter.
Apart from this, the company’s C3 technology alliance program is also influencing deals, in turn, bolstering its revenues. CyberArk has nearly 70 partners, now, under this program, which includes companies like Proofpoint , Qualys (QLYS - Free Report) and ServiceNow (NOW - Free Report) .
We believe the company’s continued focus on the aforementioned initiatives will continue to drive its top-line performance.
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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CyberArk (CYBR) Q4 Earnings and Revenues Beat, Stock Up
Shares of CyberArk Software Ltd. (CYBR - Free Report) jumped nearly 8% yesterday after the company reported splendid results for fourth-quarter 2017, wherein the company exceeded its guidance at every point and surpassed the respective Zacks Consensus Estimate as well. Encouraging revenue guidance for the current quarter and full year also contributed to the upswing.
Now let’s discuss quarterly results in detail.
Revenues
CyberArk’s revenues were up 24.9% year over year to $80.4 million and came ahead of management’s guided range of $75-$76 million (mid-point $75.5 million), as well as the Zacks Consensus Estimate of $75.6 million. The company’s top line mainly benefited from better sales execution, new customer acquisitions and add-on business from existing clients.
During the reported quarter, the company closed a number of deals, including a significant number of seven-figure new clients. Also, CyberArk witnessed a remarkable number of federal deals in the fourth quarter. The company added more than 200 customers and ended the quarter with more than 3,650 clients.
Furthermore, the company reported data for the number of deals of different sizes it won in 2017. The number of deals worth more than $100,000 increased 27% to 659 from 519 in 2016. It also won 92 contracts worth more than $500,000, which also include a record number of million dollar deals.
Segment wise, License revenues which accounted for 60% of total revenues, increased 19% year over year to $48.6 million. Maintenance and Professional Services revenues, contributing 40% to total revenues, surged 35% year over year to $31.8 million.
Geographically, the company witnessed revenue growth across every region. On a year-over-year basis, revenues from the Americas increased 18% and contributed 54% of total revenues. Revenues in the Asia Pacific and Japan were up 2% year over year, representing 5% of total revenues. EMEA recorded a 41% jump and accounted for 41% of total revenues.
Operating Results
CyberArk’s non-GAAP gross profit came in at $70.6 million, representing year-over-year growth of 25.1%. Gross margin remained flat year over year 88% in the fourth quarter.
The company reported non-GAAP operating income of $19.7 million, up marginally from $19.4 million reported in the year-ago quarter. Operating income also came way higher than the company’s guidance range of $16.8-$17.6 million.
Non-GAAP operating margin dipped to 24.5% from 30.2%, primarily due to elevated operating expenses as a percentage of revenues. Escalated operating expenses mainly stemmed from increased investment toward enhancing product offerings and expanding sales capabilities.
The company reported non-GAAP net income of approximately $15 million, slightly up from $14.7 million reported in the year-ago quarter. However, net income margin came in at 18.7% compared with 22.8% reported in fourth-quarter 2016.
On per-share basis, the company reported non-GAAP earnings of 41 cents, flat with the year-ago quarter. Benefits from higher revenues were completely offset by increased operating expenses.
However, quarterly earnings came ahead of management’s guidance range of 35-36 cents and surpassed the Zacks Consensus Estimate of 36 cents as well.
CyberArk Software Ltd. Price, Consensus and EPS Surprise
CyberArk Software Ltd. Price, Consensus and EPS Surprise | CyberArk Software Ltd. Quote
Balance Sheet & Cash Flow
CyberArk exited the fourth quarter with cash, cash equivalents, short-term deposits and marketable securities of approximately $284 million, down from $297 million at the end of third-quarter 2017. Receivables were $33.3 million at the end of the reported quarter.
CyberArk’s balance sheet does not have any long-term debt. The company generated cash flow from operations of approximately $80.7 million in 2017.
Guidance
Buoyed by splendid fourth-quarter results, the company issued encouraging outlook for the first quarter and full-year 2018.
For the current year, CyberArk anticipates revenues in the band of $312-$316 million (mid-point $314 million), representing 19-21% year-over-year growth. The guided range is higher than the Zacks Consensus Estimate of $306.5 million.
Non-GAAP operating income is projected to lie between $54.5 million and $57.5 million. Non-GAAP earnings for 2018 are expected to be between $1.18 and $1.24 per share. The earnings projection is however lower than the Zacks Consensus Estimate of $1.31.
For the first quarter, CyberArk estimates revenues in the range of $68.25-$69.75 million (mid-point $69 million), representing 16-18% year-over-year growth. The mid-point of the guided range is almost in line with the Zacks Consensus Estimate of $69.25 million. Non-GAAP operating income is predicted to lie in the band of $9.2-$10.4 million. The company projects non-GAAP earnings for the first quarter in the 19-22 cents range. The Zacks Consensus Estimate is currently pegged at 26 cents.
Our Take
The company’s outstanding fourth-quarter results, along with an encouraging outlook, indicate that its ongoing investment in sales and marketing strategies are paying off.
Furthermore, it should be noted that, in the second quarter, the company had reported the slowest revenue growth rate of 14% since its listing in September 2014. Prior to that, it was around 25%. However, the third and fourth quarters’ actual growth rate, along with the current quarter’s projection, make us optimistic about its long-term revenue performance.
Furthermore, CyberArk’s expansion strategy through acquisitions is encouraging for the near term. Per the company, the recently-acquired Conjur business has received strong customer response. Conjur specializes in offering DevOps security software. Therefore, the acquisition is anticipated to boost CyberArk’s capabilities in empowering companies to accelerate software deployment in their organizations with more security.
Moreover, CyberArk’s strategy of enhancing relationship with channel partners is bringing in new customers. The company noted that channel partners make a key component to its go-to-market sales strategy and generated roughly 60% of the business in the fourth quarter.
Apart from this, the company’s C3 technology alliance program is also influencing deals, in turn, bolstering its revenues. CyberArk has nearly 70 partners, now, under this program, which includes companies like Proofpoint , Qualys (QLYS - Free Report) and ServiceNow (NOW - Free Report) .
We believe the company’s continued focus on the aforementioned initiatives will continue to drive its top-line performance.
Currently, CyberArk has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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