Form 6-K CyberArk Software Ltd. For: Aug 10

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549  

 

REPORT OF FOREIGN PRIVATE ISSUER

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

Securities Exchange Act of 1934

 

For the month of August 2022

 

Commission File Number: 001-36625  

 

CyberArk Software Ltd.

(Translation of registrant’s name into English)  

 

CyberArk Software Ltd.

9 Hapsagot St.

Park Ofer 2, POB 3143

Petach-Tikva, 4951041 Israel

 (Address of principal executive offices)  

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

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.

 

 

EXHIBIT INDEX

 

CyberArk Announces Strong Second Quarter 2022 Results

Subscription Portion of Annual Recurring Revenue (ARR) of $255 million with Growth of 133%

Total ARR of $465 million with Growth of 48%

Subscription Revenue of $66.0 million with Growth Accelerating to 144%

Total Revenue of $142.3 million Exceeds Guidance Range; Growth Accelerating to 21%

Full Year ARR Guidance Range Increased to a Range of $543 million to $549 million

Newton, Mass. and Petach Tikva, Israel – August 10, 2022–  CyberArk (NASDAQ: CYBR), the global leader in Identity Security, today announced strong financial results for the second quarter ended June 30, 2022.

“We had an outstanding second quarter with momentum continuing to build for our Identity Security platform,” said Udi Mokady, CyberArk Chairman and CEO. “Robust demand, great execution and strong industry tailwinds drove the strength in our bookings. This resulted in 48 percent year-over-year growth in total ARR and in a 133 percent year-over-year growth in Subscription ARR, led by strong demand for our SaaS solutions. Our Identity Security platform centered on intelligent privilege controls is resonating with customers, who are turning to CyberArk as a trusted partner to secure all identities from workforce to privileged users to machines. The power of our land and expand strategy was demonstrated by another strong new business quarter, with nearly 250 new logos, as well as increased velocity of add on and cross sell activity in our customer base. Our Identity Security platform and subscription business model are unlocking transformational value for our customers and for CyberArk. Based on our performance in the first half of 2022, we are raising our full year guidance for total revenue and ARR and have increased confidence that we can deliver against the multi-year durable growth opportunity with strong cash flow and profitability.”

Balance Sheet and Net Cash Provided by Operating Activities

 

 

Recent Developments

Business Outlook

Based on information available as of August 10, 2022, CyberArk is issuing guidance for the third quarter and full year 2022 as indicated below.

 

Third Quarter 2022:

Full Year 2022:

 

 

Conference Call Information

 

In conjunction with this announcement, CyberArk will host a conference call on Wednesday, August 10, 2022 at 8:30 a.m. Eastern Time (ET) to discuss the Company’s second quarter financial results and its business outlook. To access this call, dial +1 (888) 330-2455 (U.S.) or +1 (240) 789-2717 (international). The conference ID is 6515982. 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) 770-2030 (U.S.) or +1 (647) 362-9199 (international). The replay pass code is 6515982. 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 Identity Security. Centered on privileged access management, CyberArk provides the most comprehensive security offering for any identity – human or machine – across business applications, distributed workforces, hybrid cloud workloads and throughout the DevOps lifecycle. The world’s leading organizations trust CyberArk to help secure their most critical assets. To learn more about CyberArk, visit https://www.cyberark.com, read the CyberArk blogs or follow on Twitter via @CyberArk, LinkedIn or Facebook.

Copyright © 2022 CyberArk Software. All Rights Reserved. All other brand names, product names, or trademarks belong to their respective holders.

Key Performance Indicators and Non-GAAP Financial Measures

Annual Recurring Revenue (ARR)

 

Subscription Portion of Annual Recurring Revenue

 

Maintenance Portion of Annual Recurring Revenue

 

Recurring Revenue

 

Non-GAAP Financial Measures

CyberArk believes that the use of non-GAAP gross profit, non-GAAP operating expense, non-GAAP operating income (loss), non-GAAP net income (loss) and free cash flow 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 loss, net loss or net cash provided by (used in) operating activities or any other performance measures derived in accordance with GAAP.

 

 

 

 

 

The Company believes that providing non-GAAP financial measures that are adjusted by, as applicable, share-based compensation expense, facility exit costs, acquisition related expenses, amortization of intangible assets related to acquisitions, non-cash interest expense related to the amortization of debt discount and issuance cost, the tax effect of the non-GAAP adjustments, and purchase of property and equipment 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 facility exit costs, acquisitions, amortization of intangible assets related to acquisitions and non-cash interest expense related to the amortization of debt discount and issuance costs do not reflect the performance of its core business and impact period-to-period comparability. The Company believes free cash flow is a liquidity measure that, after the purchase of property and equipment, provides useful information about the amount of cash generated by the business. 

 

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, amortization of intangible assets related to acquisitions, non-cash interest expense related to the amortization of debt discount and issuance costs and the tax effect of the 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, levels of activity, performance or achievements to differ materially from the results, levels of activity, 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 to the drivers of the Company’s growth and its ability to adapt its solutions to IT security market demands; the transition of the Company’s business to a subscription model that began in 2021 and its ability to complete its transition goals in the time frame expected; the Company’s sales cycles and multiple pricing and delivery models; unanticipated product vulnerabilities or cybersecurity breaches of the Company’s, or the Company’s customers’ or partners’ systems; an increase in competition within the Privileged Access Management and Identity Security markets; the Company’s ability to hire, train, retain and motivate qualified personnel; the Company’s ability to sell into existing and new customers and industry verticals; risks related to compliance with privacy and data protection laws and regulations; the Company’s history of incurring net losses and our ability to achieve profitability in the future; the duration and scope of the COVID-19 pandemic and its impact on global and regional economies and the resulting effect on the demand for the Company’s solutions and on its expected revenue growth rates and costs; the Company’s ability to find, complete, fully integrate or achieve the expected benefits of additional strategic acquisitions; reliance on third-party cloud providers for the Company’s operations and SaaS solutions; the Company’s ability to expand its sales and marketing efforts and expand its  channel partnerships across existing and new geographies; risks related to sales made to government entities; regulatory and geopolitical risks associated with global sales and operations (including the current conflict between Russia and Ukraine) and changes in regulatory requirements or fluctuations in currency exchange rates; the ability of the Company’s products to help customers achieve and maintain compliance with government regulations or industry standards; risks related to intellectual property claims or the Company’s ability to protect its proprietary technology and intellectual property rights; 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 U.S. 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.

 

Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

###

Investor Contact:

Erica Smith

CyberArk

Phone:  +1 617-558-2132

Liz Campbell

CYBERARK SOFTWARE LTD.

Consolidated Statements of Operations

U.S. dollars in thousands (except per share data)

(Unaudited)

 

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2021				2022				2021				2022
Revenues:
Subcription		$	27,054			$	65,999			$	51,781			$	117,949
Perpetual license			27,329				11,038				54,023				21,595
Maintenance and professional services			62,851				65,290				124,192				130,345
Total revenues			117,234				142,327				229,996				269,889
Cost of revenues:
Subcription			6,047				11,076				11,257				20,273
Perpetual license			985				385				1,989				1,277
Maintenance and professional services			16,232				19,258				30,950				37,203
Total cost of revenues			23,264				30,719				44,196				58,753
Gross profit			93,970				111,608				185,800				211,136
Operating expenses:
Research and development			33,623				46,964				63,360				90,407
Sales and marketing			65,801				86,805				127,241				164,238
General and administrative			17,959				19,868				33,958				39,604
Total operating expenses			117,383				153,637				224,559				294,249
Operating loss			(23,413	)			(42,029	)			(38,759	)			(83,113	)
Financial income (expense), net			(3,155	)			1,572				(6,061	)			2,628
Loss before taxes on income			(26,568	)			(40,457	)			(44,820	)			(80,485	)
Tax benefit			3,810				2,829				6,867				5,046
Net loss		$	(22,758	)		$	(37,628	)		$	(37,953	)		$	(75,439	)
Basic loss per ordinary share, net		$	(0.58	)		$	(0.93	)		$	(0.96	)		$	(1.87	)
Diluted loss per ordinary share, net		$	(0.58	)		$	(0.93	)		$	(0.96	)		$	(1.87	)
Shares used in computing net loss
per ordinary shares, basic			39,565,087				40,517,587				39,371,147				40,344,422
Shares used in computing net loss
per ordinary shares, diluted			39,565,087				40,517,587				39,371,147				40,344,422

 

		December 31,				June 30,
		2021				2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	356,850			$	381,527
Short-term bank deposits			369,645				307,645
Marketable securities			199,933				251,478
Trade receivables			113,211				87,836
Prepaid expenses and other current assets			22,225				25,197
Total current assets			1,061,864				1,053,683
LONG-TERM ASSETS:
Marketable securities			300,662				269,034
Property and equipment, net			20,183				19,557
Intangible assets, net			17,866				21,578
Goodwill			123,717				135,526
Other long-term assets			121,743				160,805
Deferred tax asset			47,167				67,270
Total long-term assets			631,338				673,770
TOTAL ASSETS		$	1,693,202			$	1,727,453
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables		$	10,076			$	11,302
Employees and payroll accruals			75,442				62,776
Accrued expenses and other current liabilities			23,576				36,377
Deferred revenues			230,908				264,614
Total current liabilities			340,002				375,069
LONG-TERM LIABILITIES:
Convertible senior notes, net			520,094				567,852
Deferred revenues			86,367				87,484
Other long-term liabilities			20,227				36,868
Total long-term liabilities			626,688				692,204
TOTAL LIABILITIES			966,690				1,067,273
SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0.01 par value			104				107
Additional paid-in capital			588,937				588,669
Accumulated other comprehensive income (loss)			397				(16,834	)
Retained earnings			137,074				88,238
Total shareholders' equity			726,512				660,180
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,693,202			$	1,727,453

		Six Months Ended
		June 30,
		2021				2022
Cash flows from operating activities:
Net loss		$	(37,953	)		$	(75,439	)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization			6,889				7,729
Amortization of premium and accretion of discount on marketable securities, net			3,624				3,319
Share-based compensation			42,432				56,851
Deferred income taxes, net			(9,177	)			(10,358	)
Decrease in trade receivables			17,171				25,375
Amortization of debt discount and issuance costs			8,818				1,488
Increase in prepaid expenses, other current and long-term assets and others			(4,346	)			(13,244	)
Increase (decrease) in trade payables			(616	)			1,382
Increase in short-term and long-term deferred revenues			32,512				34,823
Decrease in employees and payroll accruals			(1,368	)			(17,110	)
Decrease in accrued expenses and other current and long-term liabilities			(8,484	)			(4,086	)
Net cash provided by operating activities			49,502				10,730
Cash flows from investing activities:
Proceeds from (investment in) short and long term deposits, net			(75,115	)			59,307
Investment in marketable securities and other			(155,981	)			(194,309	)
Proceeds from sales and maturities of marketable securities			105,634				156,384
Purchase of property and equipment			(4,325	)			(4,160	)
Payments for business acquisitions, net of cash acquired			-				(12,987	)
Net cash provided by (used in) investing activities			(129,787	)			4,235
Cash flows from financing activities:
Proceeds from withholding tax related to employee stock plans			1,116				3,316
Proceeds from exercise of stock options			6,342				1,210
Proceeds in connection with employees stock purchase plan			-				8,738
Net cash provided by financing activities			7,458				13,264
Increase (decrease) in cash, cash equivalents and restricted cash			(72,827	)			28,229
Effect of exchange rate differences on cash, cash equivalents and restricted cash			(326	)			(3,552	)
Cash, cash equivalents and restricted cash at the beginning of the period			500,044				356,850
Cash, cash equivalents and restricted cash at the end of the period		$	426,891			$	381,527

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2021				2022				2021				2022
Net cash provided by (used in) operating activities		$	15,527			$	(14,254	)		$	49,502			$	10,730
Less:
Purchase of property and equipment			(1,660	)			(2,147	)			(4,325	)			(4,160	)
Free cash flow		$	13,867			$	(16,401	)		$	45,177			$	6,570
GAAP net cash provided by (used in) investing activities			(104,629	)			37,781				(129,787	)			4,235
GAAP net cash provided by financing activities			1,086				12,784				7,458				13,264

Reconciliation of Gross Profit to Non-GAAP Gross Profit:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
			2021				2022				2021				2022
Gross profit		$	93,970			$	111,608			$	185,800			$	211,136
Plus:
Share-based compensation (1)			2,612				3,742				5,007				6,932
Amortization of share-based compensation capitalized in software development costs (3)			60				88				107				176
Amortization of intangible assets (2)			1,278				1,422				2,556				2,700
Non-GAAP gross profit		$	97,920			$	116,860			$	193,470			$	220,944

		Three Months Ended								Six Months Ended
		June 30,								June 30,
			2021				2022				2021				2022
Operating expenses		$	117,383			$	153,637			$	224,559			$	294,249
Less:
Share-based compensation (1)			20,523				25,831				37,425				49,919
Amortization of intangible assets (2)			174				152				348				304
Acquisition related expenses			-				113				-				591
Facility exit and transition costs			760				-				760				-
Non-GAAP operating expenses		$	95,926			$	127,541			$	186,026			$	243,435

		Three Months Ended								Six Months Ended
		June 30,								June 30,
			2021				2022				2021				2022
Operating loss		$	(23,413	)		$	(42,029	)		$	(38,759	)		$	(83,113	)
Plus:
Share-based compensation (1)			23,135				29,573				42,432				56,851
Amortization of share-based compensation capitalized in software development costs (3)			60				88				107				176
Amortization of intangible assets (2)			1,452				1,574				2,904				3,004
Acquisition related expenses			-				113				-				591
Facility exit and transition costs			760				-				760				-
Non-GAAP operating income (loss)		$	1,994			$	(10,681	)		$	7,444			$	(22,491	)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
			2021				2022				2021				2022
Cost of revenues - Subscription		$	74			$	517			$	328			$	893
Cost of revenues - Perpetual license			60				31				114				61
Cost of revenues - Maintenance and Professional services			2,478				3,194				4,565				5,978
Research and development			4,937				6,754				9,287				12,804
Sales and marketing			9,266				12,361				16,764				23,761
General and administrative			6,320				6,716				11,374				13,354
Total share-based compensation		$	23,135			$	29,573			$	42,432			$	56,851

		Three Months Ended								Six Months Ended
		June 30,								June 30,
			2021				2022				2021				2022
Cost of revenues - Subscription		$	1,111			$	1,425			$	2,200			$	2,633
Cost of revenues - Perpetual license			167				(3	)			356				67
Sales and marketing			174				152				348				304
Total amortization of intangible assets		$	1,452			$	1,574			$	2,904			$	3,004