Form 6-K CyberArk Software Ltd. For: May 12

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549  

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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 May 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

 

4

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CyberArk Announces Strong First Quarter 2022 Results

Total revenue of $127.6 million

Subscription Portion of Annual Recurring Revenue (ARR) of $219 million with Growth Accelerating to 149%

Total ARR of $427 million with Growth Accelerating to 48%

Subscription Bookings Mix of 86% in the first quarter; Reaches Bookings Mix Target for Subscription Transition

Full Year ARR Guidance Range Increased to $535 million to $541 million

Newton, Mass. and Petach Tikva, Israel – May 12, 2022–  CyberArk (NASDAQ: CYBR), the global leader in Identity Security, today announced strong financial results for the first quarter ended March 31, 2022.

“We had an excellent start to 2022 and our business continued to accelerate,” said Udi Mokady, CyberArk Chairman and CEO. “Great execution, robust demand and strong industry tailwinds resulted in subscription ARR reaching $219 million with growth accelerating to nearly 150 percent and total ARR reaching $427 million with growth accelerating to 48 percent year-over-year. Driven by continued strong demand for our Identity Security platform, our subscription bookings mix reached 86 percent in the first quarter, beating our guidance framework and passing our transition target for subscription bookings mix of 85 percent in just five quarters from the start of the transition. Digital transformation, the adoption of Zero Trust and attacker innovation contributed to our momentum and another great bookings quarter with our growth rate further accelerating off an incredible fourth quarter of 2021. A key contributor to our bookings growth was a particularly strong quarter for new business with nearly 250 new logos, a record for a first quarter. With our momentum from 2021 continuing in the first quarter, we are confidently raising our full year guidance for ARR. We are well positioned to deliver against a multi-year durable growth opportunity, which we believe will increase shareholder value.”

     Financial Summary for the First Quarter Ended March 31, 2022

Balance Sheet and Net Cash Provided by Operating Activities

 

Business Outlook

Based on information available as of May 12, 2022, CyberArk is issuing guidance for the second quarter and full year 2022 as indicated below.

 

Second Quarter 2022:

Full Year 2022:

Conference Call Information

 

In conjunction with this announcement, CyberArk will host a conference call on Thursday, May 12, 2022 at 8:00 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 8455417. 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 8455417. 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 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, 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.

 

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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
		March 31,
		2021				2022
Revenues:
Subscription		$	24,727			$	51,950
Perpetual license			26,694				10,557
Maintenance and professional services			61,341				65,055
Total revenues			112,762				127,562
Cost of revenues:
Subscription			5,210				9,197
Perpetual license			1,004				892
Maintenance and professional services			14,718				17,945
Total cost of revenues			20,932				28,034
Gross profit			91,830				99,528
Operating expenses:
Research and development			29,737				43,443
Sales and marketing			61,440				77,433
General and administrative			15,999				19,736
Total operating expenses			107,176				140,612
Operating loss			(15,346	)			(41,084	)
Financial income (expense), net			(2,906	)			1,056
Loss before taxes on income			(18,252	)			(40,028	)
Tax benefit			3,057				2,217
Net loss		$	(15,195	)		$	(37,811	)
Basic loss per ordinary share, net		$	(0.39	)		$	(0.94	)
Diluted loss per ordinary share, net		$	(0.39	)		$	(0.94	)
Shares used in computing net loss
per ordinary shares, basic			39,175,052				40,169,333
Shares used in computing net loss
per ordinary shares, diluted			39,175,052				40,169,333

 

CYBERARK SOFTWARE LTD.

Consolidated Balance Sheets

U.S. dollars in thousands  (Unaudited)

		December 31,				March 31,
		2021				2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	356,850			$	347,852
Short-term bank deposits			369,645				353,063
Marketable securities			199,933				259,748
Trade receivables			113,211				76,372
Prepaid expenses and other current assets			22,225				25,072
Total current assets			1,061,864				1,062,107
LONG-TERM ASSETS:
Marketable securities			300,662				262,314
Property and equipment, net			20,183				19,409
Intangible assets, net			17,866				23,153
Goodwill			123,717				135,526
Other long-term assets			121,743				149,623
Deferred tax asset			47,167				59,481
Total long-term assets			631,338				649,506
TOTAL ASSETS		$	1,693,202			$	1,711,613
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables		$	10,076			$	11,232
Employees and payroll accruals			75,442				53,028
Accrued expenses and other current liabilities			23,576				26,913
Deferred revenues			230,908				254,613
Total current liabilities			340,002				345,786
LONG-TERM LIABILITIES:
Convertible senior notes, net			520,094				567,108
Deferred revenues			86,367				90,595
Other long-term liabilities			20,227				38,442
Total long-term liabilities			626,688				696,145
TOTAL LIABILITIES			966,690				1,041,931
SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0.01 par value			104				105
Additional paid-in capital			588,937				551,299
Accumulated other comprehensive income (loss)			397				(7,588	)
Retained earnings			137,074				125,866
Total shareholders' equity			726,512				669,682
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,693,202			$	1,711,613

CYBERARK SOFTWARE LTD.

Consolidated Statements of Cash Flows

U.S. dollars in thousands

(Unaudited)

		Three Months Ended
		March 31,
		2021				2022
Cash flows from operating activities:
Net loss		$	(15,195	)		$	(37,811	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization			3,370				3,884
Amortization of premium and accretion of discount on marketable securities, net			1,789				1,877
Share-based compensation			19,297				27,278
Deferred income taxes, net			(5,121	)			(4,238	)
Decrease in trade receivables			26,412				36,839
Amortization of debt discount and issuance costs			4,390				744
Decrease (increase) in prepaid expenses, other current and long-term assets and others			444				(8,675	)
Increase (decrease) in trade payables			(1,783	)			1,298
Increase in short-term and long-term deferred revenues			17,174				27,933
Decrease in employees and payroll accruals			(12,312	)			(21,588	)
Decrease in accrued expenses and other current and long-term liabilities			(4,490	)			(2,557	)
Net cash provided by operating activities			33,975				24,984
Cash flows from investing activities:
Proceeds from (investment in) short and long term deposits, net			(1,313	)			16,026
Investment in marketable securities and other			(77,158	)			(104,477	)
Proceeds from sales and maturities of marketable securities			55,978				69,905
Purchase of property and equipment			(2,665	)			(2,013	)
Payments for business acquisitions, net of cash acquired			-				(12,987	)
Net cash used in investing activities			(25,158	)			(33,546	)
Cash flows from financing activities:
Proceeds from (payment of) withholding tax related to employee stock plans			1,411				(620	)
Proceeds from exercise of stock options			4,961				1,100
Net cash provided by financing activities			6,372				480
Increase (decrease) in cash, cash equivalents and restricted cash			15,189				(8,082	)
Effect of exchange rate differences on cash and cash equivalents			-				(916	)
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		$	515,233			$	347,852

CYBERARK SOFTWARE LTD.

Reconciliation of GAAP Measures to Non-GAAP Measures

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

(Unaudited)

Reconciliation of Net cash provided by operating activities to Free cash flow:

		Three Months Ended
		March 31,
		2021				2022
Net cash provided by operating activities		$	33,975			$	24,984
Less:
Purchase of property and equipment			(2,665	)			(2,013	)
Free cash flow		$	31,310			$	22,971
GAAP net cash used in investing activities			(25,158	)			(33,546	)
GAAP net cash provided by financing activities			6,372				480

Reconciliation of Gross Profit to Non-GAAP Gross Profit:

		Three Months Ended
		March 31,
		2021				2022
Gross profit		$	91,830			$	99,528
Plus:
Share-based compensation (1)			2,395				3,190
Amortization of share-based compensation capitalized in software development costs (3)			47				88
Amortization of intangible assets (2)			1,278				1,278
Non-GAAP gross profit		$	95,550			$	104,084

Reconciliation of Operating Expenses to Non-GAAP Operating Expenses:

		Three Months Ended
		March 31,
		2021				2022
Operating expenses		$	107,176			$	140,612
Less:
Share-based compensation (1)			16,902				24,088
Amortization of intangible assets (2)			174				152
Acquisition related expenses			-				478
Non-GAAP operating expenses		$	90,100			$	115,894

Reconciliation of Operating Loss to Non-GAAP Operating Income (Loss):

		Three Months Ended
		March 31,
		2021				2022
Operating loss		$	(15,346	)		$	(41,084	)
Plus:
Share-based compensation (1)			19,297				27,278
Amortization of share-based compensation capitalized in software development costs (3)			47				88
Amortization of intangible assets (2)			1,452				1,430
Acquisition related expenses			-				478
Non-GAAP operating income (loss)		$	5,450			$	(11,810	)

Reconciliation of Net Loss to Non-GAAP Net Income (Loss):

		Three Months Ended
		March 31,
		2021				2022
Net loss		$	(15,195	)		$	(37,811	)
Plus:
Share-based compensation (1)			19,297				27,278
Amortization of share-based compensation capitalized in software development costs (3)			47				88
Amortization of intangible assets (2)			1,452				1,430
Acquisition related expenses			-				478
Amortization of debt discount and issuance costs			4,390				744
Taxes on income related to non-GAAP adjustments			(6,159	)			(4,111	)
Non-GAAP net income (loss)		$	3,832			$	(11,904	)
Non-GAAP net income (loss) per share
Basic		$	0.10			$	(0.30	)
Diluted		$	0.09			$	(0.30	)
Weighted average number of shares
Basic			39,175,052				40,169,333
Diluted			40,491,989				40,169,333

(1) Share-based Compensation:

		Three Months Ended
		March 31,
		2021				2022
Cost of revenues - Subscription		$	254			$	376
Cost of revenues - Perpetual license			54				30
Cost of revenues - Maintenance and Professional services			2,087				2,784
Research and development			4,350				6,050
Sales and marketing			7,498				11,400
General and administrative			5,054				6,638
Total share-based compensation		$	19,297			$	27,278

(2) Amortization of intangible assets:

		Three Months Ended
		March 31,
		2021				2022
Cost of revenues - Subscription		$	1,089			$	1,208
Cost of revenues - Perpetual license			189				70
Sales and marketing			174				152
Total amortization of intangible assets		$	1,452			$	1,430

(3) Classified as Cost of revenues - Subscription.