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CyberArk (CYBR) Up 6.8% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for CyberArk (CYBR - Free Report) . Shares have added about 6.8% 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 its most recent earnings report in order to get a better handle on the important catalysts.
CyberArk Reports Solid Q4 Results
CyberArk reported fourth-quarter 2018 non-GAAP earnings per share (EPS) of 89 cents, which surpassed the Zacks Consensus Estimate of 59 cents. The bottom linecame inway higher than the year-ago quarter figure of 41 cents.
CyberArk’s revenues were up 36% year over year to $109.1 million, and beat the consensus estimate of $96 million. Strong revenue growth across the Americas, EMEA and APJdrove the top line.
Increasing demand for privileged access security on the back of digital transformation and cloud migration strategies wasa key growth driver.
Quarter Details
Segment wise, License revenues (61% of total revenues) increased 37.5% year over year to $66.77 million.
Maintenance and Professional Services (39% of total revenues) revenues jumped 33% year over year to $42.3 million. Revenues from the professional services part of this mix were $7.7 million.
Geographically, the company witnessed revenue growth across every region. On a year-over-year basis, revenues from the Americas of $60.9 million increased 40%. Revenues in the Asia Pacific and Japan of $6.5 million were up 56%, representing 7% of total revenues. EMEA revenues of $41.6 million recorded a 28% jump and accounted for 31% of total revenues.
Strong demand across manufacturing, telecom, IT services and software, retail and pharmaceuticals, all of which grew more than 50%, drove the strong geographic growth in revenues.
CyberArk ended the quarter with 4,450 customers, adding around 250 new logos this quarter.
During the fourth quarter, CyberArk closed several seven figure add-on deals. The company was the only privileged access security program vendor for a leading bank in EMEA to complement its cloud-first strategy in Microsoft Azure.
The company’s expertise in securing multiple public clouds, which include Google Cloud Platform and AWS is a tailwind. It strengthened protection across these platforms along with DevOps and containerized platforms to enhance customers’ digital transformation journey.
A key customer significantly expanded its CyberArk program in the fourth quarter by adding Endpoint Privilege Manager for credential theft blocking, and Conjur to secure application development in Pivotal Cloud Foundry and AWS.Notably, a leading SaaS company also deployed CyberArk in AWS during the quarter.
Operating Results
CyberArk’s non-GAAP gross profit came in at $98.2 million, representing year-over-year growth of 39.1%. Gross margin expanded 200 basis points year over year to 90%, driven by higher utilization of professional services team.
The company reported non-GAAP operating income of $39.8 million compared with $19.7 million reported in the year-ago quarter. Non-GAAP operating margin expanded to 36% from 24% on the back of higher revenues, strong business model and disciplined investments.
Balance Sheet & Cash Flow
CyberArk exited the quarter with cash, cash equivalents, short-term deposits and marketable securities of approximately $451.2 million, up from $410 million at the end of previous quarter.
The company’sbalance sheet does not have any long-term debt. The company generated cash flow from operations of approximately $130.1 million compared with $80.7 million in the previous year.
Full-Year Highlights
For the full year, revenues came in at $343.2 million, up 31% year over year. Non-GAAP EPS was $2.06 compared with$1.16 in 2017.
At the end of 2018, existing customers buying additional licenses contributed to 60% of License revenues. Moreover, approximately 40% of revenues came from new customers. AIM and Conjur together contributed about 10% of License revenues for the year and Endpoint Privilege Manager represented about 8% of License revenues for 2018.AIM and Conjur were included in six of the top 10 deals this year.
Moreover, the company is gaining momentum among advisory firms like Deloitte, PWC, KPMG, among others. Notably, more than 85% of the company’s business in 2018 was driven by these firms.
Guidance
For full-year 2019, CyberArk anticipates revenues in the band of $411–$415 million, representing 20-21% year-over-year growth.
Non-GAAP operating income is now projected to be between $92.5 million and $95.5 million. Non-GAAP earnings per share for 2018 are now expected to be in the $1.94-$2 band.
For the first quarter of 2019, CyberArk estimates revenues in the range of $91-$93 million, representing 27-30% year-over-year growth. Non-GAAP operating income is predicted to be in the band of $18.5-$20 million. The company projects non-GAAP earnings in the 39-42 cents range.
The company typically experiences a sequential decline in revenuesin the first quarter, and moderate sequential growth in the second quarter.The third and fourth quarters are usually the best quarters in terms of revenue generation.
However, an increase in expenses due to seasonal employee expenses and the marquee Americas customer event is expected to be an overhang in the third quarter of 2019.
How Have Estimates Been Moving Since Then?
Fresh estimates followed an upward path over the past two months. The consensus estimate has shifted 65.18% due to these changes.
VGM Scores
Currently, CyberArk has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
CyberArk has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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CyberArk (CYBR) Up 6.8% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for CyberArk (CYBR - Free Report) . Shares have added about 6.8% 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 its most recent earnings report in order to get a better handle on the important catalysts.
CyberArk Reports Solid Q4 Results
CyberArk reported fourth-quarter 2018 non-GAAP earnings per share (EPS) of 89 cents, which surpassed the Zacks Consensus Estimate of 59 cents. The bottom linecame inway higher than the year-ago quarter figure of 41 cents.
CyberArk’s revenues were up 36% year over year to $109.1 million, and beat the consensus estimate of $96 million. Strong revenue growth across the Americas, EMEA and APJdrove the top line.
Increasing demand for privileged access security on the back of digital transformation and cloud migration strategies wasa key growth driver.
Quarter Details
Segment wise, License revenues (61% of total revenues) increased 37.5% year over year to $66.77 million.
Maintenance and Professional Services (39% of total revenues) revenues jumped 33% year over year to $42.3 million. Revenues from the professional services part of this mix were $7.7 million.
Geographically, the company witnessed revenue growth across every region. On a year-over-year basis, revenues from the Americas of $60.9 million increased 40%. Revenues in the Asia Pacific and Japan of $6.5 million were up 56%, representing 7% of total revenues. EMEA revenues of $41.6 million recorded a 28% jump and accounted for 31% of total revenues.
Strong demand across manufacturing, telecom, IT services and software, retail and pharmaceuticals, all of which grew more than 50%, drove the strong geographic growth in revenues.
CyberArk ended the quarter with 4,450 customers, adding around 250 new logos this quarter.
During the fourth quarter, CyberArk closed several seven figure add-on deals. The company was the only privileged access security program vendor for a leading bank in EMEA to complement its cloud-first strategy in Microsoft Azure.
The company’s expertise in securing multiple public clouds, which include Google Cloud Platform and AWS is a tailwind. It strengthened protection across these platforms along with DevOps and containerized platforms to enhance customers’ digital transformation journey.
A key customer significantly expanded its CyberArk program in the fourth quarter by adding Endpoint Privilege Manager for credential theft blocking, and Conjur to secure application development in Pivotal Cloud Foundry and AWS.Notably, a leading SaaS company also deployed CyberArk in AWS during the quarter.
Operating Results
CyberArk’s non-GAAP gross profit came in at $98.2 million, representing year-over-year growth of 39.1%. Gross margin expanded 200 basis points year over year to 90%, driven by higher utilization of professional services team.
The company reported non-GAAP operating income of $39.8 million compared with $19.7 million reported in the year-ago quarter. Non-GAAP operating margin expanded to 36% from 24% on the back of higher revenues, strong business model and disciplined investments.
Balance Sheet & Cash Flow
CyberArk exited the quarter with cash, cash equivalents, short-term deposits and marketable securities of approximately $451.2 million, up from $410 million at the end of previous quarter.
The company’sbalance sheet does not have any long-term debt. The company generated cash flow from operations of approximately $130.1 million compared with $80.7 million in the previous year.
Full-Year Highlights
For the full year, revenues came in at $343.2 million, up 31% year over year. Non-GAAP EPS was $2.06 compared with$1.16 in 2017.
At the end of 2018, existing customers buying additional licenses contributed to 60% of License revenues. Moreover, approximately 40% of revenues came from new customers. AIM and Conjur together contributed about 10% of License revenues for the year and Endpoint Privilege Manager represented about 8% of License revenues for 2018.AIM and Conjur were included in six of the top 10 deals this year.
Moreover, the company is gaining momentum among advisory firms like Deloitte, PWC, KPMG, among others. Notably, more than 85% of the company’s business in 2018 was driven by these firms.
Guidance
For full-year 2019, CyberArk anticipates revenues in the band of $411–$415 million, representing 20-21% year-over-year growth.
Non-GAAP operating income is now projected to be between $92.5 million and $95.5 million. Non-GAAP earnings per share for 2018 are now expected to be in the $1.94-$2 band.
For the first quarter of 2019, CyberArk estimates revenues in the range of $91-$93 million, representing 27-30% year-over-year growth. Non-GAAP operating income is predicted to be in the band of $18.5-$20 million. The company projects non-GAAP earnings in the 39-42 cents range.
The company typically experiences a sequential decline in revenuesin the first quarter, and moderate sequential growth in the second quarter.The third and fourth quarters are usually the best quarters in terms of revenue generation.
However, an increase in expenses due to seasonal employee expenses and the marquee Americas customer event is expected to be an overhang in the third quarter of 2019.
How Have Estimates Been Moving Since Then?
Fresh estimates followed an upward path over the past two months. The consensus estimate has shifted 65.18% due to these changes.
VGM Scores
Currently, CyberArk has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
CyberArk has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.