EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1

Exhibit 99.1
CyberArk Announces Strong Third Quarter 2019 Results
Third quarter total revenue of $108.1 million increased 28% year-over-year
Third quarter license revenue of $57.9 million increased 25% year-over-year
GAAP operating income of $12.7 million and non-GAAP operating income of $29.4 million

Newton, Mass. and Petach Tikva, Israel – November 6, 2019 – CyberArk, (NASDAQ: CYBR), the global leader in privileged access management, today announced strong financial results for the third quarter ended September 30, 2019.

“Q3 was another strong quarter for CyberArk,” said Udi Mokady, CyberArk Chairman and CEO.  “We delivered revenue growth of 28%, a non-GAAP operating margin of 27% and signed 200 new customers. Our results demonstrate our strong execution, leadership position in the market and the robust demand environment for our solutions. Organizations around the world recognize that Privileged Access Management is critical to a successful security program and are leveraging CyberArk to secure access across on-premises, cloud, and hybrid environments as well as the DevOps pipeline.”      

Financial Highlights for the Third Quarter Ended September 30, 2019

Revenue:


Total revenue was $108.1 million, up 28% compared with the third quarter of 2018.

License revenue was $57.9 million, up 25% compared with the third quarter of 2018.

Maintenance and professional services revenue was $50.2 million, up 30% compared with the third quarter of 2018.

Operating Income:
 

GAAP operating income was $12.7 million, an increase from $8.8 million in the third quarter of 2018.  Non-GAAP operating income was $29.4 million, an increase from $21.0 million in the third quarter of 2018.
 
Net Income:


GAAP net income was $15.2 million, or $0.39 per diluted share, an increase from GAAP net income of $8.1 million, or $0.22 per diluted share, in the third quarter of 2018. Non-GAAP net income was $25.6 million, or $0.65 per diluted share, an increase from $17.8 million, or $0.48 per diluted share, in the third quarter of 2018.

The tables at the end of this press release include a reconciliation of GAAP to non-GAAP gross margin, operating income and net income for the three months and nine months ended September 30, 2019 and 2018. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”
 

Balance Sheet and Cash Flow:
 

As of September 30, 2019, CyberArk had $555.1 million in cash, cash equivalents, marketable securities and short-term deposits.  This compares to $451.2 million as of December 31, 2018 and $410.0 million at September 30, 2018.
 

As of September 30, 2019, total deferred revenue was $177.3 million, a 30% increase from $136.0 million at September 30, 2018.
 

During the nine months ended September 30, 2019, the Company generated $88.6 million in cash flow from operations, compared with $89.2 million in the first nine months of 2018.
 
Business Outlook

Based on information available as of November 6, 2019, CyberArk is issuing guidance for the fourth quarter and increasing its guidance for the full year 2019 as indicated below.
 
Fourth Quarter 2019:
 

Total revenue between $125.0 million and $127.0 million, representing 15% to 16% year-over-year growth.

Non-GAAP operating income between $38.5 million and $40.0 million.

Non-GAAP net income per share between $0.78 and $0.82 per diluted share.

o
Assumes 39.2 million weighted average diluted shares.

Full Year 2019:
 

Total revenue between $429.2 million and $431.2 million, representing 25% to 26% year-over-year growth.

Non-GAAP operating income between $119.75 million and $121.25 million.

Non-GAAP net income per share between $2.58 and $2.61 per diluted share.

o
Assumes 39.1 million weighted average diluted shares.
 
Conference Call Information
 
CyberArk will host a conference call today, November 6, 2019 at 8:30 a.m. Eastern Time (ET) to discuss the company’s third quarter financial results and its business outlook. To access this call, dial +1 877-823-7693 (U.S.) or +1 647-689-4543 (international).  The conference ID is 2039434. Additionally, a live webcast of the conference call will be available via the “Investor Relations” section of the company’s website at www.cyberark.com.



Following the conference call, a replay will be available for one week at +1 800-585-8367 (U.S.) or +1 416-621-4642 (international). The replay pass code is 2039434. An archived webcast of the conference call will also be available in the “Investor Relations” section of the company’s website at www.cyberark.com.

About CyberArk                                                                                                       
CyberArk (NASDAQ: CYBR) is the global leader in privileged access management, a critical layer of IT security to protect data, infrastructure and assets across the enterprise, in the cloud and throughout the DevOps pipeline. CyberArk delivers the industry’s most complete solution to reduce risk created by privileged credentials and secrets. The company is trusted by the world’s leading organizations, including more than 50 percent of the Fortune 500, to protect against external attackers and malicious insiders. A global company, CyberArk is headquartered in Petach Tikva, Israel, with U.S. headquarters located in Newton, Mass. The company also has offices throughout the Americas, EMEA, Asia Pacific and Japan. To learn more about CyberArk, visit www.cyberark.com, read the CyberArk blogs or follow on Twitter via @CyberArk, LinkedIn or Facebook.
 
Copyright © 2019 CyberArk Software. All Rights Reserved. All other brand names, product names, or trademarks belong to their respective holders.
 
Non-GAAP Financial Measures
CyberArk believes that the use of non-GAAP gross profit, non-GAAP operating income and non-GAAP net income is helpful to our investors. These financial measures are not measures of the Company’s financial performance under U.S. GAAP and should not be considered as alternatives to gross profit, operating income or net income or any other performance measures derived in accordance with GAAP.


Non-GAAP gross profit is calculated as gross profit excluding share-based compensation expense and amortization of intangible assets related to acquisitions.
 

Non-GAAP operating income is calculated as operating income excluding share-based compensation expense, acquisition related expenses, facility exit and transition costs and amortization of intangible assets related to acquisitions.
 

Non-GAAP net income is calculated as net income excluding share-based compensation expense, acquisition related expenses, facility exit and transition costs, amortization of intangible assets related to acquisitions, intra-entity IP transfer tax effect and the tax effect of other non-GAAP adjustments.
 
The Company believes that providing non-GAAP financial measures that exclude, as applicable, share-based compensation expense, acquisition related expenses, amortization of intangible assets related to acquisitions, facility exit and transition costs, intra-entity IP transfer tax effect and the tax effect of the non-GAAP adjustments allows for more meaningful comparisons of its period to period operating results. Share-based compensation expense has been and will continue to be for the foreseeable future, a significant recurring expense in the Company’s business and an important part of the compensation provided to its employees. Share based compensation expense has varying available valuation methodologies, subjective assumptions and a variety of equity instruments that can impact a company’s non-cash expense.  The Company believes that expenses related to its acquisitions and amortization of intangible assets related to acquisitions, facility exit and transition costs and intra-entity IP transfer tax effect do not reflect the performance of its core business and impact period-to-period comparability.



Non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies in the industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. In addition, there are limitations in using non-GAAP financial measures as they exclude expenses that may have a material impact on the Company’s reported financial results. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP. CyberArk urges investors to review the reconciliation of its non-GAAP financial measures to the comparable U.S. GAAP financial measures included below, and not to rely on any single financial measure to evaluate its business.

Guidance for non-GAAP financial measures excludes, as applicable, share-based compensation expense, acquisition related expenses, facility exit and transition costs, amortization of intangible assets related to acquisitions, intra-entity IP transfer tax effect and the tax effect of the other non-GAAP adjustments. A reconciliation of the non-GAAP financial measures guidance to the corresponding GAAP measures is not available on a forward-looking basis due to the uncertainty regarding, and the potential variability and significance of, the amounts of share-based compensation expense, amortization of intangible assets related to acquisitions, and the non-recurring expenses that are excluded from the guidance. Accordingly, a reconciliation of the non-GAAP financial measures guidance to the corresponding GAAP measures for future periods is not available without unreasonable effort.
 


Cautionary Language Concerning Forward-Looking Statements
 
This release contains forward-looking statements, which express the current beliefs and expectations of CyberArk’s (the “Company”) management. In some cases, forward-looking statements may be identified by terminology such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential” or the negative of these terms or other similar expressions.  Such statements involve a number of known and unknown risks and uncertainties that could cause the Company’s future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to: changes in the rapidly evolving cyber threat landscape; failure to effectively manage growth; potential near-term declines in our operating and net profit margins and our revenue growth rate; real or perceived shortcomings, defects or vulnerabilities in the Company’s solutions or internal network system, or the failure of  the Company’s customers, channel partners, managed security service providers, or contractors to correctly implement, manage and maintain to correctly implement the Company’s solutions; fluctuations in quarterly results of operations; the inability to acquire new customers or sell additional products and services to existing customers; competition from a wide variety of IT security vendors; the Company’s ability to successfully integrate recent and or future acquisitions; and other factors discussed under the heading “Risk Factors” in the Company’s most recent annual report on Form 20-F filed with the Securities and Exchange Commission. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
 
###
Investor Contact:
Erica Smith
CyberArk
Phone:  +1- 617-558-2132
ir@cyberark.com

Media Contact:
Liz Campbell
CyberArk
Phone: +1-617-558-2191
press@cyberark.com




 
 CYBERARK SOFTWARE LTD.
 Consolidated Statements of Operations
 U.S. dollars in thousands (except per share data)
(Unaudited)

   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2018
   
2019
   
2018
   
2019
 
                         
Revenues:
                       
 License
 
$
46,130
   
$
57,868
   
$
125,745
   
$
161,353
 
 Maintenance and professional services
   
38,523
     
50,247
     
108,404
     
142,878
 
                                 
       Total revenues
   
84,653
     
108,115
     
234,149
     
304,231
 
                                 
 Cost of revenues:
                               
 License
   
2,614
     
2,274
     
7,521
     
7,768
 
 Maintenance and professional services
   
9,530
     
14,714
     
27,619
     
37,998
 
                                 
        Total cost of revenues
   
12,144
     
16,988
     
35,140
     
45,766
 
                                 
 Gross profit
   
72,509
     
91,127
     
199,009
     
258,465
 
                                 
 Operating expenses:
                               
 Research and development
   
14,980
     
18,264
     
41,772
     
51,590
 
 Sales and marketing
   
37,880
     
46,151
     
107,983
     
131,229
 
 General and administrative
   
10,870
     
13,972
     
29,483
     
36,303
 
                                 
        Total operating expenses
   
63,730
     
78,387
     
179,238
     
219,122
 
                                 
 Operating income
   
8,779
     
12,740
     
19,771
     
39,343
 
                                 
 Financial income, net
   
1,407
     
1,500
     
3,473
     
5,406
 
                                 
 Income before taxes on income
   
10,186
     
14,240
     
23,244
     
44,749
 
                                 
 Tax benefit (taxes on income)
   
(2,092
)
   
1,008
     
(352
)
   
(2,421
)
                                 
 Net income
 
$
8,094
   
$
15,248
   
$
22,892
   
$
42,328
 
                                 
 Basic net income per ordinary share
 
$
0.22
   
$
0.40
   
$
0.64
   
$
1.13
 
 Diluted net income per ordinary share
 
$
0.22
   
$
0.39
   
$
0.62
   
$
1.09
 
                                 
 Shares used in computing net income
                               
 per ordinary shares, basic
   
36,485,724
     
37,805,442
     
35,981,177
     
37,460,829
 
 Shares used in computing  net income
                               
 per ordinary shares, diluted
   
37,475,729
     
39,057,545
     
36,894,457
     
38,831,275
 




 Share-based Compensation Expense:
                       
                         
   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2018
   
2019
   
2018
   
2019
 
                         
 Cost of revenues
 
$
957
   
$
1,680
   
$
2,370
   
$
3,888
 
 Research and development
   
2,237
     
2,912
     
5,748
     
7,613
 
 Sales and marketing
   
3,770
     
5,949
     
9,061
     
14,512
 
 General and administrative
   
3,371
     
4,797
     
8,492
     
11,473
 
                                 
 Total share-based compensation expense
 
$
10,335
   
$
15,338
   
$
25,671
   
$
37,486
 



 
 CYBERARK SOFTWARE LTD.
 Consolidated Balance Sheets
 U.S. dollars in thousands
 (Unaudited)

   
December 31,
   
September 30,
 
   
2018
   
2019
 
 ASSETS
           
             
 CURRENT ASSETS:
           
 Cash and cash equivalents
 
$
260,636
   
$
346,092
 
 Short-term bank deposits
   
106,399
     
107,926
 
 Marketable securities
   
59,948
     
52,573
 
 Trade receivables
   
48,431
     
55,506
 
 Prepaid expenses and other current assets
   
6,349
     
9,777
 
                 
 Total current assets
   
481,763
     
571,874
 
                 
 LONG-TERM ASSETS:
               
 Property and equipment, net
   
15,120
     
16,874
 
 Intangible assets, net
   
14,732
     
10,239
 
 Goodwill
   
82,400
     
82,400
 
 Marketable securities
   
24,261
     
48,536
 
 Other long-term assets
   
31,863
     
69,865
 
 Deferred tax asset
   
23,481
     
28,128
 
                 
 Total long-term assets
   
191,857
     
256,042
 
                 
 TOTAL ASSETS
 
$
673,620
   
$
827,916
 
                 
 LIABILITIES AND SHAREHOLDERS' EQUITY
               
                 
 CURRENT LIABILITIES:
               
 Trade payables
 
$
4,924
   
$
3,967
 
 Employees and payroll accruals
   
32,853
     
29,339
 
 Accrued expenses and other current liabilities
   
13,271
     
22,325
 
 Deferred revenues
   
92,375
     
109,677
 
                 
 Total current liabilities
   
143,423
     
165,308
 
                 
 LONG-TERM LIABILITIES:
               
 Deferred revenues
   
57,159
     
67,598
 
 Other long-term liabilities
   
6,268
     
26,696
 
                 
 Total long-term liabilities
   
63,427
     
94,294
 
                 
 TOTAL LIABILITIES
   
206,850
     
259,602
 
                 
 SHAREHOLDERS' EQUITY:
               
 Ordinary shares of NIS 0.01 par value
   
95
     
98
 
 Additional paid-in capital
   
303,900
     
361,180
 
 Accumulated other comprehensive income (loss)
   
(939
)
   
994
 
 Retained earnings
   
163,714
     
206,042
 
                 
 Total shareholders' equity
   
466,770
     
568,314
 
                 
 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
 
$
673,620
   
$
827,916
 


 
 
 CYBERARK SOFTWARE LTD.
 Consolidated Statements of Cash Flows
 U.S. dollars in thousands
 (Unaudited)

   
Nine Months Ended
 
   
September 30,
 
   
2018
   
2019
 
             
 Cash flows from operating activities:
           
 Net income
 
$
22,892
   
$
42,328
 
 Adjustments to reconcile net income to net cash
               
 provided by operating activities:
               
 Depreciation and amortization
   
7,327
     
8,122
 
 Amortization of premium and accretion of discount on marketable securities, net
   
270
     
(39
)
 Share-based compensation
   
25,671
     
37,486
 
 Deferred income taxes, net
   
(6,669
)
   
(4,989
)
 Decrease (increase) in trade receivables
   
15,608
     
(7,075
)
 Increase in prepaid expenses and other current and long-term assets
   
(5,646
)
   
(12,629
)
 Increase (decrease) in trade payables
   
771
     
(501
)
 Increase in short-term and long-term deferred revenues
   
34,298
     
27,741
 
 Decrease in employees and payroll accruals
   
(2,315
)
   
(4,318
)
 Increase (decrease) in accrued expenses and other
               
 current and long-term liabilities
   
(3,051
)
   
2,471
 
                 
 Net cash provided by operating activities
   
89,156
     
88,597
 
                 
 Cash flows from investing activities:
               
 Investment in short and long term deposits
   
(19,768
)
   
(1,821
)
 Investment in marketable securities
   
(47,316
)
   
(66,883
)
 Proceeds from maturities of marketable securities
   
31,198
     
50,639
 
 Purchase of property and equipment
   
(7,130
)
   
(5,389
)
 Payments for business acquisitions, net of cash acquired
   
(18,450
)
   
-
 
                 
 Net cash used in investing activities
   
(61,466
)
   
(23,454
)
                 
 Cash flows from financing activities:
               
 Proceeds from withholding tax related to employee stock plans
   
2,220
     
547
 
 Proceeds from exercise of stock options
   
14,038
     
19,510
 
                 
 Net cash provided by financing activities
   
16,258
     
20,057
 
                 
 Increase in cash, cash equivalents and restricted cash
   
43,948
     
85,200
 
                 
 Cash, cash equivalents and restricted cash at the beginning of the period
   
162,521
     
261,883
 
                 
 Cash, cash equivalents and restricted cash at the end of the period
 
$
206,469
   
$
347,083
 


 CYBERARK SOFTWARE LTD.
 
 Reconciliation of GAAP Measures to Non-GAAP Measures
 
 U.S. dollars in thousands (except per share data)
 
(Unaudited)
 
                         
 Reconciliation of Gross Profit to Non-GAAP Gross Profit:
                       
                         
   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2018
   
2019
   
2018
   
2019
 
                         
 Gross profit
 
$
72,509
   
$
91,127
   
$
199,009
   
$
258,465
 
 Plus:
                               
 Share-based compensation - Maintenance & professional services
   
957
     
1,680
     
2,370
     
3,888
 
 Amortization of intangible assets - License
   
1,444
     
1,173
     
4,118
     
4,061
 
                                 
 Non-GAAP gross profit
 
$
74,910
   
$
93,980
   
$
205,497
   
$
266,414
 

 Reconciliation of Operating Income to Non-GAAP Operating Income:
                       
                         
   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2018
   
2019
   
2018
   
2019
 
                         
 Operating income
 
$
8,779
   
$
12,740
   
$
19,771
   
$
39,343
 
 Plus:
                               
 Share-based compensation
   
10,335
     
15,338
     
25,671
     
37,486
 
 Amortization of intangible assets - Cost of revenues
   
1,444
     
1,173
     
4,118
     
4,061
 
 Amortization of intangible assets -  Sales and marketing
   
198
     
144
     
595
     
432
 
 Acquisition related expenses
   
-
     
-
     
268
     
-
 
 Facility exit and transitions costs
   
253
     
-
     
253
     
-
 
                                 
 Non-GAAP operating income
 
$
21,009
   
$
29,395
   
$
50,676
   
$
81,322
 

 Reconciliation of Net Income to Non-GAAP Net Income:
                       
                         
   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2018
   
2019
   
2018
   
2019
 
                         
 Net income
 
$
8,094
   
$
15,248
   
$
22,892
   
$
42,328
 
 Plus:
                               
 Share-based compensation
   
10,335
     
15,338
     
25,671
     
37,486
 
 Amortization of intangible assets - Cost of revenues
   
1,444
     
1,173
     
4,118
     
4,061
 
 Amortization of intangible assets -  Sales and marketing
   
198
     
144
     
595
     
432
 
 Acquisition related expenses
   
-
     
-
     
268
     
-
 
 Facility exit and transitions costs
   
253
     
-
     
253
     
-
 
 Taxes on income related to non-GAAP adjustments
   
(4,764
)
   
(6,345
)
   
(12,957
)
   
(14,237
)
 Intra-entity IP transfer tax effect, net
   
2,243
     
-
     
2,243
     
-
 
                                 
 Non-GAAP net income
 
$
17,803
   
$
25,558
   
$
43,083
   
$
70,070
 
                                 
 Non-GAAP net income per share
                               
 Basic
 
$
0.49
   
$
0.68
   
$
1.20
   
$
1.87
 
 Diluted
 
$
0.48
   
$
0.65
   
$
1.17
   
$
1.80
 
                                 
 Weighted average number of shares
                               
 Basic
   
36,485,724
     
37,805,442
     
35,981,177
     
37,460,829
 
 Diluted
   
37,475,729
     
39,057,545
     
36,894,457
     
38,831,275