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CyberArk (CYBR) to Report Q2 Earnings: What's in the Offing?

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CyberArk Software Ltd. (CYBR - Free Report) is scheduled to report second-quarter 2019 results on Aug 7.

Notably, the company beat estimates in each of the trailing four quarters, the average positive surprise being 53.81%.

In the last reported quarter, non-GAAP earnings per share of 56 cents surpassed the Zacks Consensus Estimate of 41 cents. The bottom line came in way higher than the year-ago quarter figure of 32 cents.

Moreover, CyberArk’s revenues jumped 34% year over year to $95.9 million, and beat the consensus estimate of $92 million.

Strong revenue growth across the Americas, EMEA and APJ drove the top line. Increasing demand for privileged access security on the back of digital transformation and cloud migration strategies was a key growth driver.

CyberArk Software Ltd. Price and EPS Surprise

CyberArk Software Ltd. Price and EPS Surprise

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

Projections for Q2
    
For the second quarter, CyberArk estimates revenues in the range of $96-$98 million, representing 24-26% year-over-year growth. The Zacks Consensus Estimate for revenues is pegged at $97.21 million.

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 Zacks Consensus Estimate stands at 47 cents.

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. The new pricing model, which enables the core Privileged Account Security to be a major revenue and license growth driver, is expected to have boosted customer acquisition in the second quarter.

Growing traction of Endpoint Privilege Manager within customers of all sizes and across industries is likely to remain a tailwind.

Moreover, about 25% of CyberArk’s current customer base belongs to the mid-market, prompting the company to focus on expanding its presence among small and medium-sized businesses. The company took initiatives to formalize mid-market sales motion in the last reported quarter, which is likely to reflect positively in second quarter's top-line results.

The company’s expertise in securing multiple public clouds, which include Alphabet’s (GOOGL - Free Report) Google Cloud Platform and AWS is a tailwind. It recently enhanced protection capabilities in AWS, Google Cloud Platform, Microsoft (MSFT - Free Report) Azure as well as DevOps and other platforms to strengthen customer security as they continue their digital transformation journey.

Healthy demand trend across all geographic segments is a major positive for the company, and is expected to continue in the near term.

Moreover, intense competition from the likes of International Business Machines Corporation (IBM - Free Report) in the access and identity management market continues to be an overhang.

Further, investments in business, and high expenses related to marketing programs and seasonal employee expenses in the second quarter are likely to keep margins under pressure.

CyberArk currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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