CyberArk Software (CYBR Quick QuoteCYBR - Free Report) reported better-than-anticipated fourth-quarter 2021 results. The leading Identity Security solution provider reported non-GAAP earnings of 28 cents surpassing the Zacks Consensus Estimate of earnings of 17 cents per share. However, the bottom line fell 65.9% compared with the year-ago quarter’s non-GAAP earnings of 82 cents per share.

For the fourth quarter of 2021, the company reported revenues of $151.3 million, beating the consensus mark of $144.5 million. The top line witnessed a year-over-year improvement of 5%. Markedly, 68% of quarterly revenues were recurring in nature, which jumped 48% year over year to $102.9 million.

Annual Recurring Revenues (ARR) increased 44% to $393 million. The maintenance portion, representing 54% of total ARR, increased 5.5% year over year to $210 million. Subscription portion, which accounted for 46% of the total ARR, soared 146% year over year to $183 million. This upside was primarily driven by a record number of software-as-a-service (“SaaS”) solutions bookings and strong demand for on-premises subscription offerings.

CyberArk’s subscription transition is witnessing strong momentum, with a rapidly growing base of recurring revenues. Subscription bookings made up 71% of the license bookings in the quarter, which was significantly higher than 35% in the year-ago quarter. The management expects to achieve an 85% subscription bookings mix by the second quarter of 2022.

Quarterly Details

Segment-wise, subscription revenues (31.5% of total revenues) were $47.6 million, up by 142% from the year-ago quarter.

Maintenance and professional services revenues (43% of total revenues) climbed 6% at $65.1 million from the year-ago quarter.

Perpetual license revenues (25.6% of total revenues) slumped 38.1% to $38.7 million at the close of this quarter.

The signing of new logos across all industries highlighted a steady increase in new business. The new business pipeline is encouraging.

During the fourth quarter, CyberArk added over 375 new customers.

Operating Details

CyberArk’s non-GAAP gross profit increased 2.8% year over year to $130.1 million.

Non-GAAP operating expenses escalated 31.2% year over year to $113.8 million. This was primarily due to 52.8%, 27.2% and 25% year-over-year increases in R&D, S&M and G&A expenses, respectively, from the year-earlier reported figures. S&M expenses comprised almost 56.4% of the total quarterly operating expenses.

The company’s non-GAAP operating income was $16.3 million at the end of fourth-quarter 2021, reflecting a significant decline of 60% year over year. As a result, non-GAAP operating margin contracted 570 bps to 10.8%.

Balance Sheet & Other Details

CyberArk ended the October-December quarter with cash and cash equivalents, marketable securities, and short-term deposits of $1.2 billion.
As of Dec 31, 2021, total deferred revenues were $317.3 million, up 31% year over year.

During the fourth quarter, CyberArk generated operating cash flow worth $20.4 million and free cash flow worth $18.7 million.

During full-year 2021, the company generated operating and free cash flows of $74.7 million and $65.8 million, respectively.

Full-Year Highlights   

For full-year 2021, CyberArk reported revenues of $502.9 million, up 8% year over year. Recurring revenues hiked 41% year over year to $348.7 million.

The company reported non-GAAP earnings of 33 cents per share compared with 2020’s earnings of $2.05 per share.

Non-GAAP gross profit was $426.1 million. Non-GAAP operating income was $23.9 million.

Guidance 2022

For the first quarter of 2021, CyberArk expects revenues between $125 million and $133 million. It projects to post non-GAAP loss per share in the range of 25 cents to 42 cents.

Non-GAAP operating loss is estimated between $9 million and $16 million.
For full-year 2022, CyberArk expects revenues to be $582-$598 million. It projects non-GAAP loss to be 64-98 cents per share.

Non-GAAP operating loss for full-year 2022is estimated in the $20-$34 million band.

Zacks Rank & Key Picks

CyberArk currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the broader computer and technology sector include the iPhone maker Apple (AAPL Quick QuoteAAPL - Free Report) , sporting a Zacks Rank #1 (Strong Buy), Analog Devices (ADI Quick QuoteADI - Free Report) and Axcelis Technologies (ACLS Quick QuoteACLS - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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