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Why Is CyberArk (CYBR) Up 6.3% Since Last Earnings Report?
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A month has gone by since the last earnings report for CyberArk (CYBR - Free Report) . Shares have added about 6.3% 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 the most recent earnings report in order to get a better handle on the important catalysts.
CyberArk Q1 Earnings & Revenues Beat Estimates, Up Y/Y
CyberArk Software 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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted 6.05% due to these changes.
VGM Scores
At this time, CyberArk has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, 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
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, 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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Why Is CyberArk (CYBR) Up 6.3% Since Last Earnings Report?
A month has gone by since the last earnings report for CyberArk (CYBR - Free Report) . Shares have added about 6.3% 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 the most recent earnings report in order to get a better handle on the important catalysts.
CyberArk Q1 Earnings & Revenues Beat Estimates, Up Y/Y
CyberArk Software 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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted 6.05% due to these changes.
VGM Scores
At this time, CyberArk has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, 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
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, CyberArk has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.