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CyberArk (CYBR) Up 9.6% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for CyberArk (CYBR - Free Report) . Shares have added about 9.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CyberArk due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
CyberArk Reports Solid Q3 Results
CyberArk reported healthy third-quarter 2019 results wherein both the top line and bottom line beat estimates. Non-GAAP earnings per share of 65 cents surpassed the Zacks Consensus Estimate of 47 cents. The bottom line was way higher than the year-ago quarter figure of 48 cents.
CyberArk’s revenues jumped 28% year over year to $108.1 million, and beat the consensus estimate of $103 million.
Strong revenue growth across all its geographical regions augmented the top line. Increasing demand for privileged access security on the back of digital transformation and cloud migration strategies was a key growth driver. Moreover, strong demand across all verticals, particularly energy and pharmaceuticals, also boosted revenues.
Quarter Details
Segment wise, License revenues (54% of total revenues) increased 25% year over year to $57.9 million. On the product side, Application Access Manager represented nearly 11% of license revenues and Endpoint Privilege Manager accounted for 5% of the same. Continued growth in the EPM bookings derived from SaaS deals was a positive.
Application Access Manager continued to witness a strong traction and secured some of the largest deals in the quarter.
Maintenance and Professional Services (46%) revenues jumped 30% to $50.2 million. Revenues from the professional services part of this mix were $8.2 million. Within the segment, professional services revenues came at $9.6 million, representing nearly 9% of total revenues.
The company witnessed top-line growth in every region. On a year-over-year basis, revenues from the Americas of $69.8 million increased 34%, representing 65% of total revenues, backed by strong EPM SaaS bookings. Revenues from the Asia Pacific and Japan of $8.5 million were up 35%, representing 8% of the total top line. EMEA revenues of $29.8 million jumped 13% and accounted for 27% of total revenues.
The company also witnessed strong traction in the global government space as a result of continued investment in the U.S. Federal vertical. The U.S. Federal business benefited from spending on Privilege Access Security Solution under the Department of Homeland Security’s CDM program.
Moreover, because of high customer satisfaction and several product certifications, CyberArk continued to gain momentum in U.S. military and intelligence agencies during the third quarter.
CyberArk’s new SaaS solutions, CyberArk Privilege Cloud and Alero, are also witnessing significant growth.
CyberArk ended the quarter with more than 5,000 customers, adding around 200 new logos. During the third quarter, it closed several seven figure rip-and-replace as well as expansion deals.
During the quarter, the company began expanding its capabilities to improve protection of workloads in AWS environment.
The company’s advisory, value-added reseller and technology partner ecosystem contributed to more than 65% of revenues from indirect channel.
The company continued its hiring spree, and ended the quarter with 1,326 employees worldwide.
Operating Results
CyberArk’s non-GAAP gross profit was $94 million, representing year-over-year growth of 25.3%. Gross margin contracted 160 basis points (bps) to 86.9%.
The company reported non-GAAP operating income of $29.4 million compared with $21 million in the year-ago quarter. Non-GAAP operating margin expanded 200 bps to 27% on the back of higher revenues, strong business model and disciplined investments.
Balance Sheet & Cash Flow
CyberArk exited the quarter with cash, cash equivalents, short-term deposits and marketable securities of approximately $555.1 million, up from $537.9 million at the end of previous quarter. The company’s balance sheet does not have any long-term debt.
The company’s cash flow generated from operations was approximately $88.6 million as of Sep 30, 2019, up from $45.9 million sequentially.
Guidance
For full-year 2019, CyberArk raised its guidance. It now anticipates revenues in the band of $429.2-$431.2 million, up from $419-$423 million, representing 25-26% year-over-year growth.
Non-GAAP operating income is now projected to be between $119.75 million and $121.25 million compared with $106-$109 million projected earlier.
Non-GAAP earnings per share for 2019 are expected to be in the $2.58-$2.61 band, up from $2.24-$2.30.
For the fourth quarter of 2019, CyberArk estimates revenues in the range of $125-$127 million, representing 15-16% year-over-year growth.
Non-GAAP operating income is predicted to be in the band of $38.5-$40 million. The company projects non-GAAP earnings in the 78-82 cents range.
The company intends to continue investing in business in the third quarter, which will keep expenses high and margins under pressure.
Notably, the third and fourth quarters are usually the best quarters in terms of revenue generation.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 32.67% due to these changes.
VGM Scores
Currently, CyberArk has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise CyberArk has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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CyberArk (CYBR) Up 9.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for CyberArk (CYBR - Free Report) . Shares have added about 9.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CyberArk due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
CyberArk Reports Solid Q3 Results
CyberArk reported healthy third-quarter 2019 results wherein both the top line and bottom line beat estimates. Non-GAAP earnings per share of 65 cents surpassed the Zacks Consensus Estimate of 47 cents. The bottom line was way higher than the year-ago quarter figure of 48 cents.
CyberArk’s revenues jumped 28% year over year to $108.1 million, and beat the consensus estimate of $103 million.
Strong revenue growth across all its geographical regions augmented the top line. Increasing demand for privileged access security on the back of digital transformation and cloud migration strategies was a key growth driver. Moreover, strong demand across all verticals, particularly energy and pharmaceuticals, also boosted revenues.
Quarter Details
Segment wise, License revenues (54% of total revenues) increased 25% year over year to $57.9 million. On the product side, Application Access Manager represented nearly 11% of license revenues and Endpoint Privilege Manager accounted for 5% of the same. Continued growth in the EPM bookings derived from SaaS deals was a positive.
Application Access Manager continued to witness a strong traction and secured some of the largest deals in the quarter.
Maintenance and Professional Services (46%) revenues jumped 30% to $50.2 million. Revenues from the professional services part of this mix were $8.2 million. Within the segment, professional services revenues came at $9.6 million, representing nearly 9% of total revenues.
The company witnessed top-line growth in every region. On a year-over-year basis, revenues from the Americas of $69.8 million increased 34%, representing 65% of total revenues, backed by strong EPM SaaS bookings. Revenues from the Asia Pacific and Japan of $8.5 million were up 35%, representing 8% of the total top line. EMEA revenues of $29.8 million jumped 13% and accounted for 27% of total revenues.
The company also witnessed strong traction in the global government space as a result of continued investment in the U.S. Federal vertical. The U.S. Federal business benefited from spending on Privilege Access Security Solution under the Department of Homeland Security’s CDM program.
Moreover, because of high customer satisfaction and several product certifications, CyberArk continued to gain momentum in U.S. military and intelligence agencies during the third quarter.
CyberArk’s new SaaS solutions, CyberArk Privilege Cloud and Alero, are also witnessing significant growth.
CyberArk ended the quarter with more than 5,000 customers, adding around 200 new logos. During the third quarter, it closed several seven figure rip-and-replace as well as expansion deals.
During the quarter, the company began expanding its capabilities to improve protection of workloads in AWS environment.
The company’s advisory, value-added reseller and technology partner ecosystem contributed to more than 65% of revenues from indirect channel.
The company continued its hiring spree, and ended the quarter with 1,326 employees worldwide.
Operating Results
CyberArk’s non-GAAP gross profit was $94 million, representing year-over-year growth of 25.3%. Gross margin contracted 160 basis points (bps) to 86.9%.
The company reported non-GAAP operating income of $29.4 million compared with $21 million in the year-ago quarter. Non-GAAP operating margin expanded 200 bps to 27% on the back of higher revenues, strong business model and disciplined investments.
Balance Sheet & Cash Flow
CyberArk exited the quarter with cash, cash equivalents, short-term deposits and marketable securities of approximately $555.1 million, up from $537.9 million at the end of previous quarter. The company’s balance sheet does not have any long-term debt.
The company’s cash flow generated from operations was approximately $88.6 million as of Sep 30, 2019, up from $45.9 million sequentially.
Guidance
For full-year 2019, CyberArk raised its guidance. It now anticipates revenues in the band of $429.2-$431.2 million, up from $419-$423 million, representing 25-26% year-over-year growth.
Non-GAAP operating income is now projected to be between $119.75 million and $121.25 million compared with $106-$109 million projected earlier.
Non-GAAP earnings per share for 2019 are expected to be in the $2.58-$2.61 band, up from $2.24-$2.30.
For the fourth quarter of 2019, CyberArk estimates revenues in the range of $125-$127 million, representing 15-16% year-over-year growth.
Non-GAAP operating income is predicted to be in the band of $38.5-$40 million. The company projects non-GAAP earnings in the 78-82 cents range.
The company intends to continue investing in business in the third quarter, which will keep expenses high and margins under pressure.
Notably, the third and fourth quarters are usually the best quarters in terms of revenue generation.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 32.67% due to these changes.
VGM Scores
Currently, CyberArk has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise CyberArk has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.