Form 6-K CyberArk Software Ltd. For: May 06

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 May 2021

 

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

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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

 

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CyberArk Announces Strong First Quarter 2021 Results

Total Revenue of $113 Million

Subscription Revenue of $25 Million Increased 180% Year-over-Year

Strong Annual Recurring Revenue (ARR) of $288 Million Grew 41% Year-over-Year

Cash Flow Provided by Operating Activities of $34 Million

Newton, Mass. and Petach Tikva, Israel – May 5 2021–  CyberArk (NASDAQ: CYBR), the global leader in Identity Security, today announced strong financial results for the first quarter ended March 31, 2021.

“With our strong first quarter performance and accelerating business momentum, 2021 is off to a great start,” said Udi Mokady, CyberArk Chairman and CEO.  “In early January, we formally kicked off our active transition to a recurring revenue model, and the execution of our strategy exceeded our expectations.  We were thrilled with the faster than 40 percent growth in our Annual Recurring Revenue (ARR), greater than 250 percent growth in ARR related to SaaS and on-premises subscription contracts, the 180 percent increase in subscription revenue, and that subscription revenue represented 22 percent of total revenue for the quarter.  The robust demand environment, particularly for our SaaS solutions, and execution of our strategy is further demonstrated by the fact that we exceeded the high end of our revenue guidance while also having a greater than expected mix of subscription bookings of 51 percent in the first quarter.  The strong start to the year positions us well to execute on our subscription transition timeline, accelerate growth across our identity security portfolio, deliver profitability and increase shareholder returns.”      

Financial Highlights for the First Quarter Ended March 31, 2021

Operating Income (Loss):

 

Net Income (Loss):

The tables at the end of this press release include a reconciliation of the following non-GAAP financial measures to their most directly comparable GAAP financial measures: non-GAAP gross profit, non-GAAP operating income, non-GAAP net income and free cash flow. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

 

Balance Sheet and Net Cash Provided by Operating Activities:

Annual Recurring Revenue (ARR):

Business Outlook

Based on information available as of May 5, 2021, CyberArk is issuing guidance for the second quarter and updating its guidance for full year 2021 as indicated below.

 

Second Quarter 2021:

Full Year 2021:

 

Conference Call Information

 

In conjunction with this announcement, CyberArk will host a conference call on Wednesday, May 5, 2021 at 8:30 a.m. Eastern Time (ET) to discuss the Company’s first quarter financial results and its business outlook. To access this call, dial +1 (833) 968-2251 (U.S.) or +1 (778) 560-2670 (international). The conference ID is 7887845. 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 (416) 621-4642 (international). The replay pass code is 7887845. 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 © 2021 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)

 

Non-GAAP Financial Measures

CyberArk believes that the use of non-GAAP gross profit, non-GAAP operating income, non-GAAP net income 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 income (loss), net income (loss) or net cash provided by 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, 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 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, 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: the duration and scope of the COVID-19 pandemic and the impact of the pandemic and actions taken in response, on global and regional economies and economic activity and the resulting impact on the demand for the Company’s solutions and on its expected revenue growth rates and costs; the Company’s ability to adjust its operations in response to impacts from the COVID-19 pandemic; difficulties predicting future financial results, including due to impacts from the COVID-19 pandemic; the Company’s plan to begin actively transitioning its business to a recurring revenue model in 2021; and the Company’s ability to complete the transition in the time frame expected; the Company’s ability to meet financial and operating targets during the transition period and after the transition is complete; changes to the drivers of the Company’s growth and our ability to adapt our solutions to IT security market demands; the Company’s ability to sell into existing and new industry verticals; the Company’s sales cycles and multiple licensing models may cause results to fluctuate; the Company’s ability to sell into existing customers; potential changes in the Company’s operating and net profit margins and the Company’s revenue growth rate; the Company’s ability to successfully find, complete, fully integrate and achieve the expected benefits of future acquisitions, including the Company’s ability to integrate and achieve the expected benefits of Idaptive; real or perceived shortcomings, defects or vulnerabilities in the Company’s solutions or internal network systems; the Company’s ability to hire, retain and motivate qualified personnel; the Company’s ability to expand its channel partnerships across existing and new geographies; the Company’s ability to further diversify its product deployments and licensing options; 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

Phone:  +1 617-558-2132

Liz Campbell

CYBERARK SOFTWARE LTD.

Consolidated Statements of Operations

		Three Months Ended
		March 31,
		2020				2021
Revenues:
Subcription		$	8,824			$	24,727
Perpetual license			43,774				26,694
Maintenance and professional services			54,228				61,341
Total revenues			106,826				112,762
Cost of revenues:
Subcription			1,940				5,210
Perpetual license			1,345				1,004
Maintenance and professional services			13,800				14,718
Total cost of revenues			17,085				20,932
Gross profit			89,741				91,830
Operating expenses:
Research and development			21,285				29,737
Sales and marketing			51,196				61,440
General and administrative			14,689				15,999
Total operating expenses			87,170				107,176
Operating income (loss)			2,571				(15,346	)
Financial expense, net			(736	)			(2,906	)
Income (loss) before taxes on income			1,835				(18,252	)
Tax benefit			551				3,057
Net income (loss)		$	2,386			$	(15,195	)
Basic net income (loss) per ordinary share		$	0.06			$	(0.39	)
Diluted net income (loss) per ordinary share		$	0.06			$	(0.39	)
Shares used in computing net income (loss) per ordinary shares, basic			38,222,867				39,175,052
Shares used in computing net income (loss) per ordinary shares, diluted			39,309,750				39,175,052

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		Three Months Ended
		March 31,
		2020				2021
Net cash provided by operating activities		$	33,826			$	33,975
Less:
Purchase of property and equipment			(1,327	)			(2,665	)
Free cash flow		$	32,499			$	31,310
GAAP net cash used in investing activities			(17,529	)			(25,158	)
GAAP net cash provided by financing activities			4,007				6,372

		Three Months Ended
		March 31,
		2020				2021
Gross profit		$	89,741			$	91,830
Plus:
Share-based compensation (1)			1,803				2,395
Amortization of share-based compensation capitalized in software development costs (3)			-				47
Amortization of intangible assets (2)			936				1,278
Non-GAAP gross profit		$	92,480			$	95,550

		Three Months Ended
		March 31,
		2020				2021
Operating income (loss)		$	2,571			$	(15,346	)
Plus:
Share-based compensation (1)			16,308				19,297
Amortization of share-based compensation capitalized in software development costs (3)			-				47
Amortization of intangible assets (2)			1,049				1,452
Acquisition related expenses			1,610				-
Non-GAAP operating income		$	21,538			$	5,450

		Three Months Ended
		March 31,
		2020				2021
Net income (loss)		$	2,386			$	(15,195	)
Plus:
Share-based compensation (1)			16,308				19,297
Amortization of share-based compensation capitalized in software development costs (3)			-				47
Amortization of intangible assets (2)			1,049				1,452
Acquisition related expenses			1,610				-
Amortization of debt discount and issuance costs			4,240				4,390
Taxes on income related to non-GAAP adjustments			(6,012	)			(6,159	)
Non-GAAP net income		$	19,581			$	3,832
Non-GAAP net income per share
Basic		$	0.51			$	0.10
Diluted		$	0.50			$	0.09
Weighted average number of shares
Basic			38,222,867				39,175,052
Diluted			39,309,750				40,491,989

		Three Months Ended
		March 31,
		2020				2021
Cost of revenues - Subscription		$	100			$	254
Cost of revenues - Perpetual license			36				54
Cost of revenues - Maintenance and Professional services			1,667				2,087
Research and development			3,021				4,350
Sales and marketing			6,400				7,498
General and administrative			5,084				5,054
Total share-based compensation		$	16,308			$	19,297

		Three Months Ended
		March 31,
		2020				2021
Cost of revenues - Subscription		$	541			$	1,089
Cost of revenues - Perpetual license			395				189
Sales and marketing			113				174
Total amortization of intangible assets		$	1,049			$	1,452

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