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CyberArk (CYBR) Q3 Earnings Beat Estimates, Revenues Fall Y/Y
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CyberArk Software (CYBR - Free Report) reported third-quarter 2020 non-GAAP earnings of 31 cents per share that exceeded the Zacks Consensus Estimate by 6.9%. The bottom line, however, declined 52.3% year over year.
CyberArk’s revenues fell 1.4% year over year to $106.6 million and missed the consensus mark by 5.7%. Markedly, 59% of quarterly revenues were recurring in nature, which grew 40% year over year to $63 million.
Annual Recurring Revenues increased 40% year over year to $250 million.
Quarter Details
Segment-wise, License revenues (42.9% of total revenues) decreased 20.9% year over year to $45.8 million. On a combined basis, SaaS and subscription revenues increased roughly 200% year over year and accounted for 28% of total license revenues.
CyberArk Software Ltd. Price, Consensus and EPS Surprise
Maintenance and Professional Services (57.1%) revenues increased 21% year over year to $60.8 million. Within the segment, professional services revenues came in at $9.9 million, representing 9% of total revenues.
The company witnessed strong year-over-year growth in financials, healthcare, telecom, pharma and the IT services software vertical.
CyberArk’s non-GAAP gross profit was $89.5 million, marking year-over-year decline of 4.8%. Moreover, gross margin contracted 300 basis points (bps) to 83.9% on unfavorable revenue mix (higher SaaS revenues) and increased cloud infrastructure cost related to SaaS business.
Operating expenses increased 20.8% year over year to $94.7 million. As a percentage of revenues, operating expenses were 88.8% compared with 72.5% reported in the year-ago quarter.
The company reported non-GAAP operating income of $13.1 million, down 55.4% year over year. Non-GAAP operating margin declined from 27.2% reported in the year-ago quarter to 12.3% in the reported quarter.
Balance Sheet
As of Sep 30, 2020, CyberArk had $1.1 billion in cash, cash equivalents, marketable securities and short-term deposits.
Total deferred revenues were $227.6 million, up 28% year over year.
Key Developments
During the reported quarter, the company introduced CyberArk Cloud Entitlements Manager, an AI-powered service, to remove excessive cloud permissions.
Moreover, the company’s solutions are now available on Microsoft’s (MSFT - Free Report) cloud platform Azure. Further, CyberArk achieved AWS Digital Workplace Competency Status and AWS Outposts Ready designation.
Guidance
For the fourth quarter of 2020, CyberArk estimates revenues of $125-$135 million.
Non-GAAP operating income is expected in the band of $25-$33 million. The company projects non-GAAP earnings in the 52-67 cents per share range.
Zacks Rank and Key Picks
Currently, CyberArk carries a Zacks Rank #3 (Hold).
Himax and NVIDIA are set to report quarterly earnings on Nov 12 and 18, respectively.
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CyberArk (CYBR) Q3 Earnings Beat Estimates, Revenues Fall Y/Y
CyberArk Software (CYBR - Free Report) reported third-quarter 2020 non-GAAP earnings of 31 cents per share that exceeded the Zacks Consensus Estimate by 6.9%. The bottom line, however, declined 52.3% year over year.
CyberArk’s revenues fell 1.4% year over year to $106.6 million and missed the consensus mark by 5.7%. Markedly, 59% of quarterly revenues were recurring in nature, which grew 40% year over year to $63 million.
Annual Recurring Revenues increased 40% year over year to $250 million.
Quarter Details
Segment-wise, License revenues (42.9% of total revenues) decreased 20.9% year over year to $45.8 million. On a combined basis, SaaS and subscription revenues increased roughly 200% year over year and accounted for 28% of total license revenues.
CyberArk Software Ltd. Price, Consensus and EPS Surprise
CyberArk Software Ltd. price-consensus-eps-surprise-chart | CyberArk Software Ltd. Quote
Maintenance and Professional Services (57.1%) revenues increased 21% year over year to $60.8 million. Within the segment, professional services revenues came in at $9.9 million, representing 9% of total revenues.
The company witnessed strong year-over-year growth in financials, healthcare, telecom, pharma and the IT services software vertical.
CyberArk’s non-GAAP gross profit was $89.5 million, marking year-over-year decline of 4.8%. Moreover, gross margin contracted 300 basis points (bps) to 83.9% on unfavorable revenue mix (higher SaaS revenues) and increased cloud infrastructure cost related to SaaS business.
Operating expenses increased 20.8% year over year to $94.7 million. As a percentage of revenues, operating expenses were 88.8% compared with 72.5% reported in the year-ago quarter.
The company reported non-GAAP operating income of $13.1 million, down 55.4% year over year. Non-GAAP operating margin declined from 27.2% reported in the year-ago quarter to 12.3% in the reported quarter.
Balance Sheet
As of Sep 30, 2020, CyberArk had $1.1 billion in cash, cash equivalents, marketable securities and short-term deposits.
Total deferred revenues were $227.6 million, up 28% year over year.
Key Developments
During the reported quarter, the company introduced CyberArk Cloud Entitlements Manager, an AI-powered service, to remove excessive cloud permissions.
Moreover, the company’s solutions are now available on Microsoft’s (MSFT - Free Report) cloud platform Azure. Further, CyberArk achieved AWS Digital Workplace Competency Status and AWS Outposts Ready designation.
Guidance
For the fourth quarter of 2020, CyberArk estimates revenues of $125-$135 million.
Non-GAAP operating income is expected in the band of $25-$33 million. The company projects non-GAAP earnings in the 52-67 cents per share range.
Zacks Rank and Key Picks
Currently, CyberArk carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the broader technology sector are NVIDIA (NVDA - Free Report) and Himax Technologies (HIMX - Free Report) . Both carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Himax and NVIDIA are set to report quarterly earnings on Nov 12 and 18, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>