Form 6-K CyberArk Software Ltd. For: Feb 13

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549  

 

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FORM 6-K

 

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REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

 

For the month of February 2017

 

Commission File Number: 001-36625  

 

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CyberArk Software Ltd.

(Translation of registrant’s name into English)  

 

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CyberArk Software Ltd.

94 Em-Ha’moshavot Road

Park Ofer, P.O. Box 3143

Petach Tikva 4970602, Israel

(Address of principal executive offices)

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Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F  ☒            Form 40-F  ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

 

EXPLANATORY NOTE

 

On February 9, 2017, CyberArk Software Ltd. (the “Company”), issued a press release entitled “CyberArk Announces Record Revenue and Strong Fourth Quarter and Full Year 2016 Results.” A copy of this press release is furnished as Exhibit 99.1 herewith.

Other than as indicated below, the information in this Form 6-K (including in Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

The U.S. GAAP financial information contained in (i) the consolidated balance sheets, (ii) consolidated statements of operations and (iii) consolidated statement of cash flows included in the press release attached as Exhibit 99.1 to this Report on Form 6-K is hereby incorporated by reference into the Registrant’s Registration Statements on Form S-8 (File No. 333- 202850 and 33-200367).

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	CYBERARK SOFTWARE LTD.
Date: February 12, 2017	By:	/s/ Joshua Siegel
		Name: Joshua Siegel
		Title:   Chief Financial Officer

 

EXHIBIT INDEX

 

 

4

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CyberArk Announces Record Revenue and Strong Fourth Quarter and Full Year 2016 Results

Full year total revenue of $216.6 million increases 35% year-over-year

Newton, Mass. and Petach Tikvah, Israel – February 9, 2017 – 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 fourth quarter and year ended December 31, 2016.

“CyberArk had an incredible 2016,” said Udi Mokady, CyberArk Chairman and CEO. “We outperformed across revenue, operating income and net income per share, demonstrating the ongoing execution of our land and expand strategy and the power of our operating model.  Protecting privileged accounts, across the enterprise, on endpoints, in the cloud and in hybrid environments, is increasingly recognized as fundamental to cyber security programs. Because of our operational and financial success in 2016, we entered 2017 as an even stronger company, well positioned to continue to deliver profitable revenue growth.”

 

Financial Highlights for the Fourth Quarter Ended December 31, 2016

Revenue:

·

Total revenue was $64.4 million, up 25% compared with the fourth quarter of 2015.

·

License revenue was $40.8 million, up 23% compared with the fourth quarter of 2015.

·

Maintenance and Professional Services revenue was $23.6 million, up 28% compared with the fourth quarter of 2015.

 

Operating Income:

 

·

GAAP operating income was $13.2 million, compared to $10.9 million in the fourth quarter of 2015.  Non-GAAP operating income was $19.4 million, compared to $15.2 million in the fourth quarter of 2015.

 

Net Income:

·

GAAP net income was $10.2 million, or $0.28 per diluted share, compared to GAAP net income of $9.9 million, or $0.28 per diluted share, in the fourth quarter of 2015.   Non-GAAP net income was $14.7 million, or $0.41 per diluted share, compared to $13.8 million, or $0.39 per diluted share, in the fourth quarter of 2015.

Financial Highlights for the Full Year Ended December 31, 2016

Revenue:

·

Total revenue was $216.6 million, up 35% compared with 2015.

·

License revenue was $131.5 million, up 31% compared with 2015.

·

Maintenance and Professional Services revenue was $85.1 million, up 40% compared with 2015.

 

Operating Income:

 

·

GAAP operating income was $36.0 million, compared to $33.2 million in 2015.  Non-GAAP operating income was $58.0 million, compared to $43.6 million in 2015.

 

Net Income:

·

GAAP net income was $28.1 million, or $0.78 per diluted share, compared to GAAP net income of $25.8 million, or $0.73 per diluted share, in 2015. Non-GAAP net income was $45.2 million, or $1.26 per diluted share, compared to $35.3 million, or $1.00 per diluted share, in 2015.

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 twelve months ended December 31, 2016 and 2015. An explanation of these measures is also included below under the heading “Non-GAAP Financial measures.”

Balance Sheet and Cash Flow From Operations:

 

·

As of December 31, 2016, CyberArk had $295.5 million in cash, cash equivalents, marketable securities and short-term deposits. This compares with $274.6 million in cash, cash equivalents, marketable securities and short-term deposits as of September 30, 2016 and $238.3 million as of December 31, 2015.

 

·

During 2016, the Company generated $56.3 million in cash flow from operations, compared to $59.2 million during in 2015.

 

Business Outlook

Based on information available as of February 9, 2017, CyberArk is issuing guidance for the first quarter and full year 2017 as indicated below.

 

First Quarter 2017:

 

·

Total revenue is expected to be in the range of $57.0 million to $58.0 million, which represents 22% to 24% year-over-year growth.

·

Non-GAAP operating income is expected to be in the range of $9.9 million to $10.7 million.

·

Non-GAAP net income per share is expected to be in the range of $0.21 to $0.23 per share. This assumes 36.2 million weighted average diluted shares.

 

 

Full Year 2017:

 

·

Total revenue is expected to be in the range of $267.0 million to $270.0 million which represents 23% to 25% year-over-year growth.

·

Non-GAAP operating income is expected to be in the range of $56.0 million to $58.0 million.

·

Non-GAAP net income per share is expected to be in the range of $1.20 to $1.24 per share. This assumes 36.4 million weighted average diluted shares.

 

Conference Call Information

 

CyberArk will host a conference call today, at 4:30 p.m. Eastern Time (ET) to discuss the company’s fourth quarter and year end financial results and its business outlook.  To access this call, dial +1 844-237-3590 (U.S.) or +1 484-747-6582 (international).  The conference ID is 48627364. Additionally, a live webcast of the conference call will be available via the “Investor Relations” section of the company’s web site at www.cyberark.com.  Following the conference call, a replay will be available for one week at +1 855-859-2056 (U.S.) or +1 404-537-3406 (international). The replay pass code is 48627364. An archived webcast of the conference call will also be available in the “Investor Relations” section of the company’s web site at www.cyberark.com.

About CyberArk

 

Copyright © 2017 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 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 operating income or net income or any other performance measures derived in accordance with GAAP.

·

For the three months and year ended December 31, 2016, non-GAAP operating income is calculated as GAAP operating income excluding share-based compensation expense and amortization of intangible assets related to acquisitions. For the three months and year ended December 31, 2015, non-GAAP operating income is calculated as operating income excluding public offering, amortization of intangible assets and acquisition related expenses as well as share-based compensation expense.

·

For the three months and year ended December 31, 2016, non-GAAP net income is calculated as GAAP net income excluding share-based compensation expense, amortization of intangible assets related to acquisitions and the tax effects related to the non-GAAP adjustments. For the three months and year ended December 31, 2015, non-GAAP net income is calculated as GAAP net income excluding public offering, amortization of intangible assets and acquisition related expenses as well as share-based compensation expense and the tax effects related to the non-GAAP adjustments.

 

 

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 share-based compensation, public offering and acquisition related expenses and amortization of intangible assets related to acquisitions 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. The Company believes that expenses related to its public offerings, acquisitions and amortization of intangible assets related to acquisitions 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 measures to evaluate its business.

Cautionary Language Concerning Forward-Looking Statements

 

This release may contain 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; 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 or channel partners 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 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.

 

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Investor Contact:

Erica Smith

CyberArk

617-558-2132

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Consolidated Balance Sheets

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		Twelve Months Ended
		December 31,
		2015				2016
Cash flows from operating activities:
Net income		$	25,794			$	28,124
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and Amortization			2,254				6,488
Amortization of premium and accretion of discount
on marketable securities			-				275
Share-based compensation expenses			7,049				17,535
Tax benefit related to share-based compensation			(3,808	)			(1,466	)
Deferred income taxes, net			(4,093	)			(1,130	)
Increase in trade receivables			(187	)			(12,920	)
Increase in prepaid expenses and other
current and long-term assets			(1,183	)			(1,485	)
Increase (decrease) in trade payables			322				(177	)
Increase in short term and long term deferred revenues			21,254				19,117
Increase in employees and payroll accruals			5,011				2,610
Increase (decrease) in accrued expenses and other
current and long-term liabilities			6,353				(927	)
Increase in accrued severance pay, net			394				266
Net cash provided by operating activities			59,160				56,310
Cash flows from investing activities:
Proceeds from short and long term deposits			49,329				-
Investment in short and long term deposits			(619	)			(82,940	)
Investment in marketable securities			-				(40,433	)
Proceeds from maturity of marketable securities			-				4,307
Purchase of property and equipment			(2,066	)			(2,795	)
Payments for business acquisitions, net of cash acquired			(53,656	)			-
Net cash used in investing activities			(7,012	)			(121,861	)
Cash flows from financing activities:
Issuance of shares, net			52,575				-
Tax benefit related to share-based compensation			3,808				1,466
Proceeds from exercise of options			1,824				2,503
Net cash provided by financing activities			58,207				3,969
Increase (decrease) in cash and cash equivalents			110,355				(61,582	)
Cash and cash equivalents at the beginning of the period			124,184				234,539
Cash and cash equivalents at the end of the period		$	234,539			$	172,957

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