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CyberArk (CYBR) to Report Q3 Earnings: What's Shaping Up?

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CyberArk Software Ltd. (CYBR - Free Report) is scheduled to report third-quarter 2018 results on Nov 7.

Notably, the company beat estimates in each of the trailing four quarters, delivering an average positive surprise of 38.79%.

In the last reported quarter, the company came up with a positive earnings surprise of 50%.

For the third quarter, CyberArk estimates revenues in the range of $77.75-$79.25 million, representing 20-22% year-over-year growth. Non-GAAP operating income is predicted to lie in the band of $11.4-$12.6 million. The company projects non-GAAP earnings for the third quarter in the 25-28 cents range.

Let's see how things are shaping up for the upcoming announcement.

Factors Likely to Drive Results

CyberArk is benefiting from an increase in customer accounts, which is driving its top line. Significant number of federal deal wins in this regard is noteworthy.

We note that rising demand for cyber security and the growing popularity of cloud computing are key growth drivers. CyberArk’s solid product portfolio has placed it well to capitalize on this opportunity.

Notably, CyberArk is growing rapidly in this space on the back of its privileged access management solutions. The company has made few announcements recently, including the availability of security-as-a-service offering named CyberArk Privilege Cloud, CyberArk Privileged Access Security Solution on AWS Marketplace and CyberArk Conjur on Google Cloud Platform.

Moreover, the company is gaining momentum among advisory firms like Deloitte, PWC, KPMG and Accenture. Management mentions that new and add-on business impacted by advisory firms grew more than 50% year over year in the last reported quarter. These businesses are likely to have boosted the company’s top line in the third quarter.

Apart from this, the company’s C3 technology alliance program is also influencing deals, which in turn, is boosting revenues. CyberArk has key partners under this program, including companies like Proofpoint , Qualys (QLYS - Free Report) and ServiceNow (NOW - Free Report) . We believe the positive trend of this program will continue driving its top-line performance.

However, the company expects operating expenses to increase in the to-be-reported quarter due to seasonal employee expenses, marketing programs and its new defense customer series, and hence keep margins under pressure.

CyberArk currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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