Fourth quarter total revenue of $129.7 million increases 19% year-over-year

Fourth quarter GAAP operating income of $22.9 million and non-GAAP operating income of $42.1 million

Full year total revenue of $433.9 million increases 26% year-over-year

Full year GAAP operating income of $62.3 million and non-GAAP operating income of $123.4 million

Full year net cash provided by operating activities of $141.7 million

NEWTON, Mass. & PETACH TIKVA, Israel--(BUSINESS WIRE)-- CyberArk, (NASDAQ: CYBR), the global leader in privileged access management, today announced record financial results for the fourth quarter and year ended December 31, 2019.

“Our record fourth quarter results capped off another great year of strong growth driven by disciplined investments,” said Udi Mokady, CyberArk Chairman and CEO. “We were thrilled to win a record number of logos in the fourth quarter, signing nearly 300 new customers. Throughout 2019, organizations continued to recognize that protecting privileged access is foundational to a comprehensive security program and increasingly turned to CyberArk as a trusted advisor, particularly to secure mission-critical digital transformation and cloud migration strategies. Our clear leadership position in the market and ongoing commitment to deliver innovation, positions us well to deliver profitable growth in 2020 and beyond.”

Financial Highlights for the Fourth Quarter Ended December 31, 2019

Revenue:

• Total revenue was $129.7 million, up 19% compared with the fourth quarter of 2018.
• License revenue was $76.5 million, up 15% compared with the fourth quarter of 2018.
• Maintenance and Professional Services revenue was $53.1 million, up 26% compared with the fourth quarter of 2018.

Operating Income:

• GAAP operating income was $22.9 million, compared to $27.5 million in the fourth quarter of 2018. Non-GAAP operating income was a record $42.1 million, compared to $39.8 million in the fourth quarter of 2018.

Net Income:

• GAAP net income was $20.7 million, or $0.53 per diluted share, compared to GAAP net income of $24.2 million, or $0.64 per diluted share, in the fourth quarter of 2018. Non-GAAP net income was a record $37.8 million, or $0.97 per diluted share, compared to $33.4 million, or $0.89 per diluted share, in the fourth quarter of 2018.

Financial Highlights for the Full Year Ended December 31, 2019

Revenue:

• Total revenue was $433.9 million, up 26% compared with 2018.
• License revenue was $237.9 million, up 24% compared with 2018.
• Maintenance and Professional Services revenue was $196.0 million, up 30% compared with 2018.

Operating Income:

• GAAP operating income was $62.3 million, compared to $47.3 million in 2018. Non-GAAP operating income was $123.4 million, compared to $90.5 million in 2018.

Net Income:

• GAAP net income was $63.1 million, or $1.62 per diluted share, compared to GAAP net income of $47.1 million, or $1.27 per diluted share, in 2018. Non-GAAP net income was $107.9 million, or $2.77 per diluted share, compared to $76.5 million, or $2.06 per diluted share, in 2018.

The tables at the end of this press release include a reconciliation of GAAP to non-GAAP gross profit, operating income and net income for the three months and year ended December 31, 2019 and 2018. 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, 2019, CyberArk had $1.1 billion in cash, cash equivalents, marketable securities and short-term deposits. This compares to $451.2 million in cash, cash equivalents, marketable securities and short-term deposits as of December 31, 2018.
• As of December 31, 2019, total deferred revenue was $190.4 million, a 27% increase from $149.5 million at December 31, 2018.
• During 2019, the Company generated $141.7 million in net cash provided by operating activities compared to $130.1 million in 2018.

Business Outlook
Based on information available as of February 12, 2020, CyberArk is issuing guidance for the first quarter and full year 2020 as indicated below.

First Quarter 2020:

• Total revenue is expected to be in the range of $106.0 million to $110.0 million.
• Non-GAAP operating income is expected to be in the range of $16.5 million to $19.5 million.
• Non-GAAP net income per share is expected to be in the range of $0.35 to $0.41 per share. This assumes 39.6 million weighted average diluted shares.

Full Year 2020:

• Total revenue is expected to be in the range of $511.0 million to $519.0 million.
• Non-GAAP operating income is expected to be in the range of $109.0 million to $115.0 million.
• Non-GAAP net income per share is expected to be in the range of $2.26 to $2.38 per share. This assumes 39.8 million weighted average diluted shares.

Conference Call Information
In conjunction with this announcement, CyberArk will host a conference call on Wednesday, February 12, 2020 at 8:30 a.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 +1 877-823-7693 (U.S.) or +1 647-689-4543 (international). The conference ID is 7689662. 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 7689662. 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 privileged access management, a critical layer of IT security to protect data, infrastructure and assets across cloud and hybrid environments, and throughout the DevOps pipeline. CyberArk delivers the industry’s most complete solution to reduce risk created by privileged credentials and secrets. The company is trusted by the world’s leading organizations, including more than 50% of the Fortune 500, to protect against external attackers and malicious insiders. A global company, CyberArk is headquartered in Petach Tikva, Israel, with U.S. headquarters located in Newton, Mass. The company also has offices throughout the Americas, EMEA, Asia Pacific and Japan. To learn more about CyberArk, visit www.cyberark.com, read the CyberArk blogs or follow on Twitter via @CyberArk, LinkedIn or Facebook.

Copyright © 2020 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 gross profit, 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 gross profit, operating income or net income or any other performance measures derived in accordance with GAAP.

• Non-GAAP gross profit is calculated as gross profit excluding share-based compensation expense and amortization of intangible assets related to acquisitions.
• Non-GAAP operating income is calculated as operating income excluding share-based compensation expense, acquisition related expenses, facility exit and transition costs and amortization of intangible assets related to acquisitions.
• Non-GAAP net income is calculated as net income excluding share-based compensation expense, acquisition related expenses, facility exit and transition costs, amortization of intangible assets related to acquisitions, intra-entity intellectual property transfer tax effect, amortization of debt discount and issuance costs and the tax effect of other non-GAAP adjustments.

The Company believes that providing non-GAAP financial measures that exclude, as applicable, share-based compensation expense, acquisition related expenses, amortization of intangible assets related to acquisitions, facility exit and transition costs, intra-entity intellectual property transfer tax effect, non-cash interest expense related to the amortization of debt discount and issuance costs and the tax effect of the non-GAAP adjustments 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 and amortization of intangible assets related to acquisitions, facility exit and transition costs, intra-entity intellectual property transfer tax effect 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.

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, facility exit and transition costs, amortization of intangible assets related to acquisitions, intra-entity intellectual property transfer tax effect, non-cash interest expense related to the amortization of debt discount and issuance costs and the tax effect of the other 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: changes in the rapidly evolving cyber threat landscape; failure to effectively manage growth; the Company’s ability to increase its sales of software as a service (“SaaS”) solutions, while supporting and maintaining multiple software pricing and delivery models; 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; the Company’s ability to comply with evolving laws and regulations, including those relating to privacy and data protection; 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.

CYBERARK SOFTWARE LTD.
Consolidated Statements of Operations
U.S. dollars in thousands (except per share data)
(Unaudited)
					Three Months Ended								Twelve Months Ended
					December 31,								December 31,
						2018				2019				2018				2019
	Revenues:
	License				$	66,769			$	76,526			$	192,514			$	237,879
	Maintenance and professional services					42,281				53,138				150,685				196,016
	Total revenues					109,050				129,664				343,199				433,895
	Cost of revenues:
	License					3,005				2,801				10,526				10,569
	Maintenance and professional services					10,316				14,048				37,935				52,046
	Total cost of revenues					13,321				16,849				48,461				62,615
	Gross profit					95,729				112,815				294,738				371,280
	Operating expenses:
	Research and development					15,340				20,930				57,112				72,520
	Sales and marketing					40,307				52,939				148,290				184,168
	General and administrative					12,561				16,005				42,044				52,308
	Total operating expenses					68,208				89,874				247,446				308,996
	Operating income					27,521				22,941				47,292				62,284
	Financial income, net					1,078				2,394				4,551				7,800
	Income before taxes on income					28,599				25,335				51,843				70,084
	Taxes on income					(4,419	)			(4,599	)			(4,771	)			(7,020	)
	Net income				$	24,180			$	20,736			$	47,072			$	63,064
	Basic net income per ordinary share				$	0.66			$	0.55			$	1.30			$	1.68
	Diluted net income per ordinary share				$	0.64			$	0.53			$	1.27			$	1.62
	Shares used in computing net income
	per ordinary shares, basic					36,570,609				37,957,899				36,174,316				37,586,387
	Shares used in computing net income
	per ordinary shares, diluted					37,607,625				39,148,849				37,065,727				38,890,108
	Share-based Compensation Expense:
					Three Months Ended								Twelve Months Ended
					December 31,								December 31,
						2018				2019				2018				2019
	Cost of revenues				$	980			$	1,802			$	3,350			$	5,690
	Research and development					2,174				3,347				7,922				10,960
	Sales and marketing					3,647				6,464				12,708				20,976
	General and administrative					3,493				6,418				11,984				17,891
	Total share-based compensation expense				$	10,294			$	18,031			$	35,964			$	55,517

	CYBERARK SOFTWARE LTD.
	Consolidated Balance Sheets
	U.S. dollars in thousands
	(Unaudited)
					December 31,				December 31,
					2018				2019
	ASSETS
	CURRENT ASSETS:
	Cash and cash equivalents				$	260,636			$	792,363
	Short-term bank deposits					106,399				140,067
	Marketable securities					59,948				132,412
	Trade receivables					48,431				72,953
	Prepaid expenses and other current assets					6,349				8,406
	Total current assets					481,763				1,146,201
	LONG-TERM ASSETS:
	Property and equipment, net					15,120				16,472
	Intangible assets, net					14,732				9,143
	Goodwill					82,400				82,400
	Marketable securities					24,261				54,408
	Other long-term assets					31,863				72,091
	Deferred tax asset					23,481				24,451
	Total long-term assets					191,857				258,965
	TOTAL ASSETS				$	673,620			$	1,405,166
	LIABILITIES AND SHAREHOLDERS' EQUITY
	CURRENT LIABILITIES:
	Trade payables				$	4,924			$	5,675
	Employees and payroll accruals					32,853				41,345
	Accrued expenses and other current liabilities					13,271				27,132
	Deferred revenues					92,375				118,519
	Total current liabilities					143,423				192,671
	LONG-TERM LIABILITIES:
	Deferred revenues					57,159				71,836
	Other long-term liabilities					6,268				31,408
	Convertible senior notes, net					-				485,119
	Total long-term liabilities					63,427				588,363
	TOTAL LIABILITIES					206,850				781,034
	SHAREHOLDERS' EQUITY:
	Ordinary shares of NIS 0.01 par value					95				99
	Additional paid-in capital					303,900				396,437
	Accumulated other comprehensive income (loss)					(939	)			818
	Retained earnings					163,714				226,778
	Total shareholders' equity					466,770				624,132
	TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY				$	673,620			$	1,405,166

CYBERARK SOFTWARE LTD.
Consolidated Statements of Cash Flows
U.S. dollars in thousands
(Unaudited)
				Twelve Months Ended
				December 31,
				2018				2019
Cash flows from operating activities:
Net income				$	47,072			$	63,064
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization					10,078				10,646
Amortization of premium and accretion of discount on marketable securities, net					293				(47	)
Share-based compensation					35,964				55,517
Deferred income taxes, net					(7,056	)			(6,974	)
Increase in trade receivables					(3,116	)			(24,522	)
Amortization of debt discount and issuance costs					-				1,966
Increase in prepaid expenses and other current and long-term assets					(11,893	)			(14,321	)
Increase in trade payables					1,955				1,571
Increase in short-term and long-term deferred revenues					47,818				40,821
Increase in employees and payroll accruals					6,896				7,337
Increase in accrued expenses and other current and long-term liabilities					2,114				6,652
Net cash provided by operating activities					130,125				141,710
Cash flows from investing activities:
Proceeds from (Investment in) short and long term deposits					1,600				(33,961	)
Investment in marketable securities					(61,118	)			(165,714	)
Proceeds from maturities of marketable securities					37,838				63,489
Purchase of property and equipment					(8,613	)			(7,036	)
Payments for business acquisitions, net of cash acquired					(18,450	)			-
Net cash used in investing activities					(48,743	)			(143,222	)
Cash flows from financing activities:
Proceeds from withholding tax related to employee stock plans					-				1,155
Proceeds from the issuance of convertible senior notes, net of issuance costs					-				560,107
Purchase of capped calls					-				(53,648	)
Proceeds from exercise of stock options					17,980				24,428
Net cash provided by financing activities					17,980				532,042
Increase in cash, cash equivalents and restricted cash					99,362				530,530
Cash, cash equivalents and restricted cash at the beginning of the period				$	162,521			$	261,883
Cash, cash equivalents and restricted cash at the end of the period				$	261,883			$	792,413

CYBERARK SOFTWARE LTD.
Reconciliation of GAAP Measures to Non-GAAP Measures
U.S. dollars in thousands (except per share data)
(Unaudited)
	Reconciliation of Gross Profit to Non-GAAP Gross Profit:
					Three Months Ended								Twelve Months Ended
					December 31,								December 31,
					2018				2019				2018				2019
	Gross profit				$	95,729			$	112,815			$	294,738			$	371,280
	Plus:
	Share-based compensation - Maintenance & professional services					980				1,802				3,350				5,690
	Amortization of intangible assets - License					1,445				968				5,563				5,029
	Non-GAAP gross profit				$	98,154			$	115,585			$	303,651			$	381,999
	Reconciliation of Operating Income to Non-GAAP Operating Income:
					Three Months Ended								Twelve Months Ended
					December 31,								December 31,
					2018				2019				2018				2019
	Operating income				$	27,521			$	22,941			$	47,292			$	62,284
	Plus:
	Share-based compensation					10,294				18,031				35,964				55,517
	Amortization of intangible assets - Cost of revenues					1,445				968				5,563				5,029
	Amortization of intangible assets - Sales and marketing					198				144				793				576
	Acquisition related expenses					-				-				268				-
	Facility exit and transitions costs					327				-				580				-
	Non-GAAP operating income				$	39,785			$	42,084			$	90,460			$	123,406
	Reconciliation of Net Income to Non-GAAP Net Income:
					Three Months Ended								Twelve Months Ended
					December 31,								December 31,
					2018				2019				2018				2019
	Net income				$	24,180			$	20,736			$	47,072			$	63,064
	Plus:
	Share-based compensation					10,294				18,031				35,964				55,517
	Amortization of intangible assets - Cost of revenues					1,445				968				5,563				5,029
	Amortization of intangible assets - Sales and marketing					198				144				793				576
	Acquisition related expenses					-				-				268				-
	Facility exit and transitions costs					327				-				580				-
	Amortization of debt discount and issuance costs					-				1,966				-				1,966
	Taxes on income related to non-GAAP adjustments					(2,528	)			(4,014	)			(15,485	)			(18,251	)
	Intra-entity IP transfer tax effect, net					(475	)			-				1,768				-
	Non-GAAP net income				$	33,441			$	37,831			$	76,523			$	107,901
	Non-GAAP net income per share
	Basic				$	0.91			$	1.00			$	2.12			$	2.87
	Diluted				$	0.89			$	0.97			$	2.06			$	2.77
	Weighted average number of shares
	Basic					36,570,609				37,957,899				36,174,316				37,586,387
	Diluted					37,607,625				39,148,849				37,065,727				38,890,108

View source version on businesswire.com: https://www.businesswire.com/news/home/20200212005390/en/

Investor Contact:

Erica Smith

CyberArk

617-558-2132

[email protected]

Media Contact:

Liz Campbell

CyberArk

617-558-2191

[email protected]

Source: CyberArk

Business Wire Press Releases

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