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CyberArk (CYBR) Q2 Loss Narrower Than Expected, Revenues Beat

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CyberArk Software (CYBR - Free Report) reported a non-GAAP loss of 27 cents, which was narrower than the Zacks Consensus Estimate of 30 cents per share. The bottom line was far lower than the year-ago quarter’s non-GAAP earnings of a penny per share.

For second-quarter 2022, the leading Identity Security solution provider reported revenues of $142.3 million, beating the consensus mark of $139 million. The top line witnessed a year-over-year improvement of 21%. Markedly, 85% of quarterly revenues were recurring in nature, which surged 49% year over year to $120 million.

Annual Recurring Revenues (ARR) increased 48% to $465 million. The maintenance portion, representing 45% of total ARR, increased 1.9% year over year to $210 million. The subscription portion, which accounted for 55% of the total ARR, soared 133% year over year to $255 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 has been witnessing strong momentum, with a rapidly growing base of recurring revenues. Subscription bookings made up 88% of the license bookings in the quarter, which was significantly higher than 65% in the year-ago quarter.

CyberArk Software Ltd. Price, Consensus and EPS Surprise CyberArk Software Ltd. Price, Consensus and EPS Surprise

CyberArk Software Ltd. price-consensus-eps-surprise-chart | CyberArk Software Ltd. Quote

Quarter Details

Segment-wise, subscription revenues (46% of total revenues) were $66 million, up 144% from the year-ago quarter.

Maintenance and professional services revenues (45.9% of total revenues) climbed 3.8% to $65.3 million from the year-ago quarter.

Perpetual license revenues (7.7% of total revenues) plunged 59.7% to $11 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 second quarter, CyberArk added around 250 new customers.

Operating Details

CyberArk’s non-GAAP gross profit increased 19% year over year to $116.9 million.

Non-GAAP operating expenses escalated 33% year over year to $127.5 million. This was primarily due to 39.9%, 31.9% and 10.6% 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 57% of the total quarterly operating expenses.

The company’s non-GAAP operating loss was $11 million at the end of second-quarter 2022, against a non-GAAP operating income of $2 million a year ago.

Balance Sheet

CyberArk ended the April-June quarter with cash and cash equivalents, marketable securities, and short-term deposits of $1.2 billion.

As of Jun 30, 2022, total deferred revenues were $352 million, up 28% year over year.

During the second quarter, CyberArk used operating cash flow worth $14.3 million and free cash flow worth $16.4 million. In the first six months of 2022, the company generated $10.7 million in operating cash flow and $6.6 million in free cash flow.

Guidance

For the third quarter of 2022, CyberArk expects revenues between $147 million and $153 million. It projects to post a non-GAAP loss per share in the range of 14-27 cents.

Non-GAAP operating loss is estimated between $6 million and $11 million.

For full-year 2022, CyberArk now expects revenues to be $589-$601 million, up from a prior estimate of $583.5-$598.5 million. The company now projects non-GAAP loss to be 57-82 cents per share compared with the previously estimated range of 60-92 cents per share.

Non-GAAP operating loss for full-year 2022 is estimated in the $20.5-$30.5 million band.

Zacks Rank & Key Picks

CyberArk currently carries a Zacks Rank #3 (Hold). Shares of CYBR have increased 1.8% in the past year.

Some better-ranked stocks from the broader Computer and Technology sector are Taiwan Semiconductor (TSM - Free Report) , Clearfield (CLFD - Free Report) and Silicon Laboratories (SLAB - Free Report) , each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Taiwan Semiconductor's third-quarter 2022 earnings has been revised 10 cents northward to $1.70 per share over the past 30 days. For 2022, earnings estimates have moved 41 cents north to $6.30 per share in the past 30 days.

TSM's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 3.9%. Shares of the company have decreased 26.5% in the past year.

The Zacks Consensus Estimate for Clearfield's fourth-quarter fiscal 2022 earnings has been revised upward by 10 cents to 80 cents per share over the past 30 days. For fiscal 2022, earnings estimates have moved 36 cents north to $3.13 per share in the past 30 days.

Clearfield’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 33.9%. Shares of CLFD have soared 170.7% in the past year.

The Zacks Consensus Estimate for Silicon Laboratories’ third-quarter 2022 earnings has increased 22.9% to $1.02 per share over the past 30 days. For 2022, earnings estimates have moved 14.2% up to $4.18 per share in the past 30 days.

Silicon Laboratories’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 63.6%. Shares of SLAB have decreased 10.7% in the past year.