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CyberArk (CYBR) Down 11.3% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for CyberArk (CYBR - Free Report) . Shares have lost about 11.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CyberArk due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CyberArk Q4 Earnings Beat Estimates
CyberArk Software reported fourth-quarter 2020 non-GAAP earnings of 82 cents per share that exceeded the Zacks Consensus Estimate by 41.38%. The bottom line, however, declined 15.5% year over year.
CyberArk’s revenues grew 11.5% year over year to $144.52 million but missed the consensus mark by 12.78%. Markedly, 48% of quarterly revenues were recurring in nature, which grew 41% year over year to $70 million.
Annual Recurring Revenues increased 43% year over year to $274 million, as of Dec 31, 2020.
Notably, CyberArk’s subscription transition is in force with strong momentum, with a rapidly growing base of recurring revenues.
SaaS and subscription bookings created increasing headwinds of about $18 million for the fourth quarter. However, strong demand for the company’s solutions more than offset this headwind and drove top-line growth.
Quarter Details
Segment-wise, License revenues (55.9% of total revenues) increased 5.6% year over year to $80.8 million. Recurring license revenues were $17.4 million (22% of license revenues). On a combined basis, SaaS revenues increased roughly 300% year over year to $9 million and subscription-based license revenues reached $8 million.
Maintenance and Professional Services (44.1%) revenues increased 20% year over year to $63.7 million. Within the segment, professional services revenues came in at $11.5 million and revenues from recurring maintenance contracts came in at $52 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 about 280 marquee logos across various industries. The new business pipeline is also encouraging.
CyberArk’s non-GAAP gross profit was $126.6 million, marking a year-over-year increase of 9.5%. However, gross margin contracted 100 basis points (bps) to 88% on unfavorable revenue mix (higher SaaS revenues) and increased cloud infrastructure costs related to the SaaS business.
Operating expenses increased 18% year over year to $87 million. This inflation was driven by 28% year-on-year growth in R&D expenses, 16% increase in S&M, single-digit growth in G&A expenses, and $6 million additional expenses related to the integration of Idaptive operations. However, reduced travel spending was a breather during the quarter.
The company reported non-GAAP operating income of $39.9 million, down 5.2% year over year. Non-GAAP operating margin contracted 450 bps from the year-ago quarter to 28% in the reported quarter.
Balance Sheet
As of Dec 31, 2020, CyberArk had $953 million in cash, cash equivalents, marketable securities and short-term deposits compared with $1.1 billion reported in the previous quarter.
Total deferred revenues were $243 million, up 27% year over year, at the end of the year.
Guidance
For the first quarter of 2021, CyberArk estimates revenues of $106-$112 million.
Non-GAAP operating income is expected between a loss of $2.5 million and an income of $2.5 million. The company projects the bottom line between a non-GAAP loss of 3 cents and a non-GAAP earnings of 7 cents per share.
Approximately 47% of new license bookings are expected to come from SaaS and subscription, resulting in a revenue headwind of about $10 million for the first quarter of 2021.
For 2021, CyberArk expects revenues between $484 million and $496 million. Revenues from SaaS and subscription are expected to constitute 55% of license bookings, leading to a revenue headwind of $39 million.
Non-GAAP earnings per share are expected in the range of 45-64 cents.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, CyberArk has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
CyberArk has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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CyberArk (CYBR) Down 11.3% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for CyberArk (CYBR - Free Report) . Shares have lost about 11.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CyberArk due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CyberArk Q4 Earnings Beat Estimates
CyberArk Software reported fourth-quarter 2020 non-GAAP earnings of 82 cents per share that exceeded the Zacks Consensus Estimate by 41.38%. The bottom line, however, declined 15.5% year over year.
CyberArk’s revenues grew 11.5% year over year to $144.52 million but missed the consensus mark by 12.78%. Markedly, 48% of quarterly revenues were recurring in nature, which grew 41% year over year to $70 million.
Annual Recurring Revenues increased 43% year over year to $274 million, as of Dec 31, 2020.
Notably, CyberArk’s subscription transition is in force with strong momentum, with a rapidly growing base of recurring revenues.
SaaS and subscription bookings created increasing headwinds of about $18 million for the fourth quarter. However, strong demand for the company’s solutions more than offset this headwind and drove top-line growth.
Quarter Details
Segment-wise, License revenues (55.9% of total revenues) increased 5.6% year over year to $80.8 million. Recurring license revenues were $17.4 million (22% of license revenues). On a combined basis, SaaS revenues increased roughly 300% year over year to $9 million and subscription-based license revenues reached $8 million.
Maintenance and Professional Services (44.1%) revenues increased 20% year over year to $63.7 million. Within the segment, professional services revenues came in at $11.5 million and revenues from recurring maintenance contracts came in at $52 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 about 280 marquee logos across various industries. The new business pipeline is also encouraging.
CyberArk’s non-GAAP gross profit was $126.6 million, marking a year-over-year increase of 9.5%. However, gross margin contracted 100 basis points (bps) to 88% on unfavorable revenue mix (higher SaaS revenues) and increased cloud infrastructure costs related to the SaaS business.
Operating expenses increased 18% year over year to $87 million. This inflation was driven by 28% year-on-year growth in R&D expenses, 16% increase in S&M, single-digit growth in G&A expenses, and $6 million additional expenses related to the integration of Idaptive operations. However, reduced travel spending was a breather during the quarter.
The company reported non-GAAP operating income of $39.9 million, down 5.2% year over year. Non-GAAP operating margin contracted 450 bps from the year-ago quarter to 28% in the reported quarter.
Balance Sheet
As of Dec 31, 2020, CyberArk had $953 million in cash, cash equivalents, marketable securities and short-term deposits compared with $1.1 billion reported in the previous quarter.
Total deferred revenues were $243 million, up 27% year over year, at the end of the year.
Guidance
For the first quarter of 2021, CyberArk estimates revenues of $106-$112 million.
Non-GAAP operating income is expected between a loss of $2.5 million and an income of $2.5 million. The company projects the bottom line between a non-GAAP loss of 3 cents and a non-GAAP earnings of 7 cents per share.
Approximately 47% of new license bookings are expected to come from SaaS and subscription, resulting in a revenue headwind of about $10 million for the first quarter of 2021.
For 2021, CyberArk expects revenues between $484 million and $496 million. Revenues from SaaS and subscription are expected to constitute 55% of license bookings, leading to a revenue headwind of $39 million.
Non-GAAP earnings per share are expected in the range of 45-64 cents.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, CyberArk has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
CyberArk has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.