CyberArk Software (CYBR - Free Report) reported first-quarter 2021 non-GAAP earnings of 9 cents per share that exceeded the Zacks Consensus Estimate of 3 cents. The bottom line, however, tanked 82% year over year.
CyberArk’s revenues grew 5.6% year over year to $112.8 million and topped the consensus mark of $109.6 million as well. Markedly, 68% of quarterly revenues were recurring in nature, which jumped 41% year over year to $76 million.
Annual Recurring Revenues climbed 41% year over year to $288 million, as of Mar 31, 2021.
Notably, CyberArk’s subscription transition is in force with strong momentum, with a rapidly growing base of recurring revenues.
SaaS and subscription bookings created additional headwinds of about $11 million for the first quarter. However, strong demand for the company’s solutions more than offset this and drove top-line growth.
Quarter Details
Segment wise, Subscription revenues surged 180% to $25 million and represented 22% of the total revenues. Sales from Perpetual License (24% of total revenues) plunged 39% to $27 million mainly due to the company’s strategic move of shifting sales motion toward a recurring subscription business model. The company’s Maintenance and Professional Services (54% of total revenues) revenues increased 13% to $61 million.
Solid demand across PAM including on-premise and cloud, Endpoint Privilege Manager and Application Access Manager was a major growth driver.
Growth in existing customers to an all-time high was also a tailwind. Moreover, a steady increase in new business was reflected in the signing of new logos across all industries. The new business pipeline is also encouraging.
CyberArk’s non-GAAP gross profit came in at $95.6 million, marking a year-over-year increase of 3.3%. Yet, gross margin contracted 200 basis points (bps) to 85% on unfavorable subscription bookings mix and increased cloud infrastructure costs related to the SaaS business.
Operating expenses flared up 27% year over year to $90.1 million. This inflation resulted from the 39% year-on-year rise in R&D expenses, 20% in S&M, 37% in G&A expenses, along with $2.1 million additional expenses related to the integration of Idaptive operations.
The company reported non-GAAP operating income of $5.5 million, significantly down 74.7% year over year. As a result, non-GAAP operating margin shrunk to 4.8% from the year-ago quarter’s 20.2%.
Balance Sheet
As of Mar 31, 2021, CyberArk had $978 million in cash, cash equivalents, marketable securities and short-term deposits compared with the $953 million reported in the previous quarter.
Total deferred revenues were $176 million, up 23% year over year.
Guidance
For the second quarter of 2021, CyberArk estimates revenues of $111-$119 million.
Non-GAAP operating income is predicted between a loss of $3.5 million and an income of $2.5 million. The company projects the bottom line between a non-GAAP loss of 11 cents and a non-GAAP earnings of 6 cents per share.
Approximately 55% of new license bookings are expected to come from subscription, resulting in a revenue headwind of about $9 million for the second quarter.
For 2021, CyberArk projects revenues between $484 million and $496 million. Revenues from SaaS and subscription are expected to constitute 57% of license bookings, leading to a revenue headwind of $45 million.
The company lowered its non-GAAP earnings per share guided range to 39-64 cents from the earlier projection of 45-64 cents.
Zacks Rank and Stocks to Consider
CyberArk currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include Lam Research Corporation (LRCX - Free Report) , ASML Holding N.V. (ASML - Free Report) and NVIDIA (NVDA - Free Report) . While Lam Research and ASML Holding sport a Zacks Rank #1, NVIDIA carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Lam Research, ASML Holding, and NVIDIA is currently pegged at 32.8%, 29.8% and 15.1%, respectively.
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CyberArk Software (CYBR - Free Report) reported first-quarter 2021 non-GAAP earnings of 9 cents per share that exceeded the Zacks Consensus Estimate of 3 cents. The bottom line, however, tanked 82% year over year.
CyberArk’s revenues grew 5.6% year over year to $112.8 million and topped the consensus mark of $109.6 million as well. Markedly, 68% of quarterly revenues were recurring in nature, which jumped 41% year over year to $76 million.
Annual Recurring Revenues climbed 41% year over year to $288 million, as of Mar 31, 2021.
Notably, CyberArk’s subscription transition is in force with strong momentum, with a rapidly growing base of recurring revenues.
SaaS and subscription bookings created additional headwinds of about $11 million for the first quarter. However, strong demand for the company’s solutions more than offset this and drove top-line growth.
Quarter Details
Segment wise, Subscription revenues surged 180% to $25 million and represented 22% of the total revenues. Sales from Perpetual License (24% of total revenues) plunged 39% to $27 million mainly due to the company’s strategic move of shifting sales motion toward a recurring subscription business model. The company’s Maintenance and Professional Services (54% of total revenues) revenues increased 13% to $61 million.
Solid demand across PAM including on-premise and cloud, Endpoint Privilege Manager and Application Access Manager was a major growth driver.
Growth in existing customers to an all-time high was also a tailwind. Moreover, a steady increase in new business was reflected in the signing of new logos across all industries. The new business pipeline is also encouraging.
CyberArk’s non-GAAP gross profit came in at $95.6 million, marking a year-over-year increase of 3.3%. Yet, gross margin contracted 200 basis points (bps) to 85% on unfavorable subscription bookings mix and increased cloud infrastructure costs related to the SaaS business.
Operating expenses flared up 27% year over year to $90.1 million. This inflation resulted from the 39% year-on-year rise in R&D expenses, 20% in S&M, 37% in G&A expenses, along with $2.1 million additional expenses related to the integration of Idaptive operations.
The company reported non-GAAP operating income of $5.5 million, significantly down 74.7% year over year. As a result, non-GAAP operating margin shrunk to 4.8% from the year-ago quarter’s 20.2%.
Balance Sheet
As of Mar 31, 2021, CyberArk had $978 million in cash, cash equivalents, marketable securities and short-term deposits compared with the $953 million reported in the previous quarter.
Total deferred revenues were $176 million, up 23% year over year.
Guidance
For the second quarter of 2021, CyberArk estimates revenues of $111-$119 million.
Non-GAAP operating income is predicted between a loss of $3.5 million and an income of $2.5 million. The company projects the bottom line between a non-GAAP loss of 11 cents and a non-GAAP earnings of 6 cents per share.
Approximately 55% of new license bookings are expected to come from subscription, resulting in a revenue headwind of about $9 million for the second quarter.
For 2021, CyberArk projects revenues between $484 million and $496 million. Revenues from SaaS and subscription are expected to constitute 57% of license bookings, leading to a revenue headwind of $45 million.
The company lowered its non-GAAP earnings per share guided range to 39-64 cents from the earlier projection of 45-64 cents.
Zacks Rank and Stocks to Consider
CyberArk currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include Lam Research Corporation (LRCX - Free Report) , ASML Holding N.V. (ASML - Free Report) and NVIDIA (NVDA - Free Report) . While Lam Research and ASML Holding sport a Zacks Rank #1, NVIDIA carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Lam Research, ASML Holding, and NVIDIA is currently pegged at 32.8%, 29.8% and 15.1%, respectively.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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