CyberArk Software Ltd Revenue Rises 18%

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CyberArk Software (NASDAQ: CYBR) reported third-quarter financial results on Nov. 2. The Israeli cybersecurity company saw its revenue growth accelerate, prompting management to lift its sales forecast for the year ahead.

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CyberArk Software results: The raw numbers

Metric

Q3 2017

Q3 2016

Year-Over-Year Change

Revenue

$64.818 million

$54.964 million

18%

Net income

$1.681 million

$7.112 million

(76%)

Earnings per share (EPS)

$0.05

$0.20

(75%)

What happened with CyberArk Software this quarter?

Total revenue jumped 18% year over year, to $64.8 million, coming in nicely above CyberArk's guidance of $62 million to $63 million. License revenue rose 7%, to $35.8 million, while maintenance and professional-services sales surged 34%, to $29 million.

"Our results were driven by both new and add-on business," Chairman and CEO Udi Mokady said in a press release. "We are making early progress executing our strategy to globalize the sales organization, which we believe will position us to capitalize on the long-term opportunity for Privileged Account Security."

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Still, operating expenses increased 35%, to $45.1 million, mostly due to the investments CyberArk is making in research and development, as well as growing its global sales and marketing teams. In turn, operating income declined to $1.7 million, down from $8.1 million in the third quarter of 2016. And non-GAAP operating income -- which excludes share-based compensation, acquisition-related expenses, and certain other items -- decreased 25%, to $10.7 million.

All told, non-GAAP net income fell 25%, to $8.9 million, or $0.25 per share -- though that was well above CyberArk's guidance for $0.17 to $0.19 in non-GAAP EPS.

Looking forward

For the fourth quarter, CyberArk expects revenue of $75 million to $76 million, representing year-over-year growth of 17% to 18%. The company also anticipates non-GAAP operating income of $16.8 million to $17.6 million and earnings per share of $0.35 to $0.36.

Thus, CyberArk's full-year outlook now includes:

  • Total revenue of $256.3 million to $257.3 million, up from a prior estimate of $253 million to $256 million.
  • Non-GAAP operating income of $48.9 million to $49.7 million, up from $46.4 million to $48.4 million.
  • Non-GAAP EPS of $1.09 to $1.10 compared to $1.02 to $1.06.

Mokady highlighted the opportunity that lies ahead for CyberArk during a conference call with analysts.

Security remains a top priority, as the threat landscape rapidly evolves and becomes increasingly complex. How organizations secure the enterprise is also changing to keep pace with malicious actors, nation states, and rogue insiders, who are more persistent and sophisticated. Today organizations increasingly understand that privileged accounts act as a highway to their most valuable assets that are exploited in successful cyber attacks.

As the leader in "privileged account" security -- which guards against cyber attacks that use insider privileges to infiltrate the most vital areas of an enterprise's IT infrastructure -- CyberArk is well positioned to meet the growing need for advanced cybersecurity services.

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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends CyberArk Software. The Motley Fool has a disclosure policy.