CyberArk Software Ltd Delivers 25% Sales Growth

CyberArk Software (CYBR 0.47%) reported fourth-quarter financial results on Feb. 9. The Israeli cybersecurity specialist continues to win new business for its "privileged account" security solutions, which help to protect against cyberattacks that use insider privileges to penetrate network perimeters and assault the most sensitive areas of an enterprise's IT infrastructure.

CyberArk Software results: The raw numbers

Data source: CyberArk Software Q4 2016 earnings press release.

Image source: Getty Images.

What happened with CyberArk Software this quarter?

Revenue jumped 25% year over year to $64.4 million, driven by a 23% rise in license revenue to $40.8 million and a 28% increase in maintenance and professional services revenue to $23.6 million.

"We closed over 200 new logos in the fourth quarter alone, ending the year with more than 3,075 customers, an increase from about 2,500 last year," said Chairman and CEO Udi Mokady during a conference call with analysts. "With our customer additions, more than 25% of the Global 2000 and about half of the Fortune 100 are trusting CyberArk to help protect their most valuable assets."

CyberArk also continues to display solid profitability, with non-GAAP operating income -- which excludes share-based compensation, acquisition-related expenses, and certain other items -- leaping 28% to $19.4 million. Non-GAAP net income, however, rose only 7% to $14.7 million, mostly due to larger tax payments compared to the year-ago quarter. And non-GAAP EPS, which was impacted by a higher share count, increased 5% to $0.39.

"CyberArk had an incredible 2016," said Mokady in a press release. "We outperformed across revenue, operating income and net income per share, demonstrating the ongoing execution of our land and expand strategy and the power of our operating model."

Looking forward

For the first quarter, CyberArk expects revenue of $57 million to $58 million, which represents year-over-year growth of 22% to 24%. Non-GAAP operating income and EPS are forecast to be in the ranges of $9.9 million to $10.7 million and $0.21 to $0.23, respectively.

CyberArk also issued a financial outlook for 2017, including:

• Total revenue of $267 million to $270 million, up 23% to 25% year over year
• Non-GAAP operating income of $56 million to $58 million, down 3% to flat versus 2016
• Non-GAAP earnings per share of $1.20 to $1.24, down 5% to down 2% year over year

The lower operating and EPS estimates reflect the heavy investments CyberArk plans to make to expand its business in the coming year, as explained by CFO Josh Siegel during the company's earnings call:

In 2017, we plan to continue to invest in our cloud infrastructure to support the scale of Endpoint Privilege Manager, implementation and training service to help speed the deployment of our software, sales and marketing headcount to capture market share and grow our business, and R&D to continue to deliver innovative products to market. ... Given the scale of our business, our growth rates, demand for our solution and our market opportunity, we believe it is in the best long-term interest of the company and our shareholders to continue to invest in capturing market share and extending our leadership position.

These investments also reflect management's optimism toward the opportunities that lie ahead for CyberArk.

"Protecting privileged accounts, across the enterprise, on endpoints, in the cloud and in hybrid environments, is increasingly recognized as fundamental to cyber security programs," added Mokady. "Because of our operational and financial success in 2016, we entered 2017 as an even stronger company, well positioned to continue to deliver profitable revenue growth."