CyberArk Announces Strong Third Quarter 2014 Results
Newton, Mass. and Petach Tikvah, Israel – November 12, 2014 – CyberArk, (NASDAQ: CYBR), the company that protects organizations from cyber attacks that have made their way inside the network perimeter, today announced financial results for the third quarter ended September 30, 2014.
Udi Mokady, CyberArk CEO, said, “We are very pleased with our strong performance in the third quarter, the first quarter we have completed as a public company. Our solid execution, combined with our industry-leading solutions and our profitable, scalable go-to-market model continue to drive our success across the diverse set of customers in our large and under-penetrated available market.”
Financial Highlights for the Third Quarter Ended September 30, 2014
- Total revenue was $28.0 million, up 66% year-over-year compared with the third quarter of 2013. For the first nine months of 2014, total revenue increased 45% compared with the first nine months of 2013.
- License revenue was $16.6 million, up 67% compared with the third quarter of 2013.
- Maintenance and Professional Services revenue was $11.3 million, up 64% year-over-year.
- GAAP operating income was $7.7 million for the quarter, compared to $3.0 million in the third quarter of 2013.
- Non-GAAP operating income was $8.4 million for the quarter, compared to $3.1 million in the third quarter of 2013. Non-GAAP operating income for the third quarter of 2014 excludes $0.7 million of stock-based compensation expense, compared with $0.1 million in the third quarter of 2013.
- GAAP net income was $3.3 million, compared to GAAP income of $2.5 million in the third quarter of 2013. GAAP net income for the third quarter of 2014 includes $1.9 million in warrant expense, compared with $0.7 million in the third quarter of 2013.
- GAAP net income per share was $0.11, compared to GAAP net income per share of $0.09 in the third quarter of 2013, based on 29.5 million and 27.0 million diluted shares outstanding, respectively.
- Non-GAAP net income was $5.9 million, compared to $3.3 million in the third quarter of 2013.
- Non-GAAP net income per share was $0.20, compared to income per share of $0.12 in the third quarter of 2013, based on 29.5 million and 27.0 million diluted shares outstanding, respectively.
The tables at the end of this press release include a reconciliation of GAAP to non-GAAP operating income and net income for the three and nine months ended September 30, 2014 and 2013. 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, 2014, CyberArk had $169.0 million in cash and cash equivalents and short-term deposits inclusive of $90.3 million raised in the Company’s initial public offering which closed on September 29, 2014.
- During the nine months ended September 30, 2014, the Company generated $13.5 million in cash flow from operations compared to $13.2 million during the first nine months of 2013.
Recent Business Highlights
- Completed its initial public offering of 6,164,000 ordinary shares at a price to the public of $16.00 per share, which includes 804,000 ordinary shares purchased pursuant to the full exercise of the underwriters’ option to purchase additional shares. All of the shares were offered by CyberArk.
- Announced CyberArk Privileged Threat Analytics 2.0, an expert system for privileged account security intelligence. The expanded analytics includes new self-learning, behavior-based algorithms that enable customers to detect attacks faster by pinpointing malicious privileged account activity previously hidden in the sheer volume of information collected by big data analytics solutions.
- Introduced comprehensive Secure Shell (SSH) key management with the release of version 9 of CyberArk Privileged Account Security Solution. Customers can now secure and manage SSH keys as well as other privileged credentials in a single, integrated platform to protect against advanced external attackers and malicious insiders.
Based on information available as of November 12, 2014, CyberArk is issuing guidance for the fourth quarter and full year 2014 as indicated below.
Fourth Quarter 2014:
- Total revenue is expected to be in the range of $26.0 million to $27.0 million which represents 30% to 35% year-over-year growth.
- Non-GAAP operating income is expected to in the range of $1.6 million to $2.5 million.
- Non-GAAP income per share is expected to be in the range of $0.04 to $0.06. This assumes 34.7 million diluted shares outstanding.
Full Year 2014:
- Total revenue is expected to be in the range of $92.7 million to $93.7 million which represents 40% to 42% year-over-year growth.
- Non-GAAP operating income is expected to in the range of $13.6 million to $14.5 million.
- Non-GAAP income per share is expected to be in the range of $0.33 to $0.35. This assumes 30.0 million diluted shares outstanding.
Conference Call Information
CyberArk will host a conference call on Wednesday, November 12, 2014 at 5:00 p.m. Eastern Time (ET) to discuss the company’s third quarter financial results and business outlook. To access this call, dial 888-481-2877 (domestic) or 719-325-2215 (international). The conference ID is 6537013. Additionally, a live webcast of the conference call will be available in the “Investor Relations” section of the Company’s web site at cyberarkvx.staging.wpengine.com. Following the conference call, a replay will be available for one week at 877-870-5176 (U.S.) or 858-384-5517 (international). The replay pass code is 6537013. An archived webcast of this conference call will also be available in the “Investor Relations” section of the Company’s web site at cyberarkvx.staging.wpengine.com.
Non-GAAP Financial Measures
CyberArk believes that the use of non-GAAP operating income and non-GAAP net income is helpful to our investors. These financial measures are not measures of our financial performance under U.S. GAAP and should not be considered as alternatives to operating income or net income or any other performance measures derived in accordance with GAAP.
- For the three and nine months ended September 30, 2014 and 2013, non-GAAP operating income is calculated as operating income excluding stock-based compensation expense.
- For the three and nine months ended September 30, 2014 and 2013, non-GAAP net income is calculated as net income excluding (i) stock-based compensation expense and (ii) financial expenses resulting from the revaluation of warrants to purchase preferred shares.
Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company’s non-cash expense, the Company believes that providing non-GAAP financial measures that exclude stock-based compensation expense allows for more meaningful comparisons of our period to period operating results. Stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of the compensation provided to our employees. In addition, the Company believes that excluding financial expenses with respect to revaluation of warrants to purchase preferred shares allows for more meaningful comparison between our net income from period to period, especially since upon the closing of the IPO, the warrants were exercised for ordinary shares, and as a result, are no longer evaluated at each balance sheet date. Each of these financial measures is an important tool for financial and operational decision-making and for evaluating our own operating results over different periods of time.
Non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our 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 our 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 our non-GAAP financial measures to the comparable U.S. GAAP financial measures included below, and not to rely on any single financial measures to evaluate our business.