Image Source: CyberArk Software.
CyberArk Software (NASDAQ: CYBR) enjoyed a sharp jump in third-quarter sales as the cybersecurity specialist continues to enjoy strong demand for its "privileged account" security solutions, which help to protect against the most advanced cyberthreats -- those that use insider privileges to penetrate network perimeters and attack the most vital aspects of an enterprise's IT infrastructure.
CyberArk Software results: The raw numbers
Data Source: CyberArk Software Q3 2016 earnings press release. Results were reported Nov. 3.
What happened with CyberArk Software this quarter?
Revenue surged 37% year over year to $55 million, fueled by a 34% increase in license revenue to $33.3 million and a 42% rise in maintenance and professional services revenue to $21.7 million. CyberArk continues to demonstrate strong levels of profitability, with non-GAAP operating income -- which excludes share-based compensation, acquisition-related expenses, and certain other items -- jumping 29% to $14.3 million. Non-GAAP operating margin, however, declined to 26% from 28% in Q3 2015 as CyberArk increased its investments in support of its growth initiatives.
All told, non-GAAP net income leapt 28% to $11.8 million, and non-GAAP EPS rose 27% to $0.33.
Importantly, CyberArk's cash flow generation also remained strong, with the company producing more than $36 million in operating cash flow during the first nine months of 2016. That helped CyberArk end the third quarter with nearly $275 million in cash and investments and zero long-term debt.
"Our financial performance continues to demonstrate our significant market opportunity, the importance of privileged account security, the strength of our business model and our ongoing commitment to delivering strong profitable growth," said Chairman and CEO Udi Mokady in a conference call with analysts.
CyberArk expects fourth-quarter revenue of $62 million to $63 million, which would represent year-over-year growth between 20% and 22%. The company is also projecting fourth-quarter non-GAAP operating income of $14.7 million to $15.5 million and non-GAAP EPS of$0.31to$0.33.
Additionally, management again raised its full-year 2016 forecast. Revenue is now projected to be in the range of$214.3 million to $215.3 million, up from previous estimates of $210.5 millionto$212.5 million in August and prior expectations of $209 millionto$211 million back in May. CyberArk also boosted its forecast for non-GAAP operating income to $53.3 million to $54.1 million and non-GAAP EPS to $1.16 to $1.18, compared with its prior guidance of $48.4 million to $50 million and $1.03to$1.07, respectively.
"Our results demonstrate that companies of all sizes are choosing CyberArk as a strategic partner to help protect their most valuable assets on premise and in the cloud," said Mokady in a press release. "Our investments in product innovation, expanding our sales and marketing engine and growing our partner ecosystem, are strengthening our position as the leader in privileged account security."
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