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CyberArk (CYBR) Down 0.2% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for CyberArk (CYBR - Free Report) . Shares have lost about 0.2% in that time frame, outperforming 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 drivers.
CyberArk Q2 Loss Narrower Than Expected, Revenues Beat
CyberArk Software 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, CyberArk has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. 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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CyberArk (CYBR) Down 0.2% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for CyberArk (CYBR - Free Report) . Shares have lost about 0.2% in that time frame, outperforming 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 drivers.
CyberArk Q2 Loss Narrower Than Expected, Revenues Beat
CyberArk Software 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, CyberArk has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, CyberArk has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.