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.
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.
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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.
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.
Highest Returns for Any Asset Class
It’s not even close. Despite ups and downs, Bitcoin has been more profitable for investors than any other decentralized, borderless form of money.
No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%. Zacks predicts another significant surge in months to come.
Hurry, Download Special Report – It’s FREE >>
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