CyberArk Software Ltd. Boosts Full-Year Revenue and Profit Outlook

Image source: CyberArk Software.

CyberArk Software (CYBR 0.47%) reported first-quarter results on May 5. The company is enjoying 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

YOY = year over year. Data source: CyberArk Software Q1 2016 earnings press release.

What happened with CyberArk Software this quarter?

• Revenue surged 43% year over year to $46.9 million, driven by a 38% increase in license revenue to $27.5 million and a 50% jump in maintenance and professional services revenue to $19.4 million.

• Non-GAAP operating income -- which excludes share-based compensation, acquisition-related expenses, and certain other items -- increased 19% to $10.7 million. Non-GAAP operating margin, however, declined to 23% from 27% in the year-ago quarter, as CyberArk continues to invest heavily to strengthen its research and development program and expand its marketing initiatives.

• Non-GAAP net income jumped 46% to $8.3 million, and non-GAAP EPS -- which was affected by a higher share count compared to Q1 2015 -- rose 44% to $0.23.

• CyberArk also produced $16.5 million in operating cash flow, up from $14.3 million in the prior-year period. That helped the company end the quarter with $254.3 million in cash and investments and zero long-term debt.

What management had to say

"Our top and bottom line outperformance in the first quarter was driven by solid execution and strong demand for privileged account security," said CEO Udi Mokady in a press release. "The breadth of customers and partners turning to CyberArk to protect privileged accounts and credentials demonstrates that every organization regardless of size or vertical needs this critical new layer of security. We believe our disciplined investments will enable us to continue to extend our leadership position, capture share in this greenfield market and deliver profitable growth."

Looking forward

CyberArk expects second-quarter revenue to be in the range of $47.5 million to $48.5 million, which would represent year-over-year growth of 31% to 33%. The company is also forecasting non-GAAP operating income of $8.6 million to $9.5 million and non-GAAP EPS of $0.18 to $0.20.

Additionally, management boosted its full-year 2016 forecast. Revenue is now projected to be in the range of $209 million to $211 million, compared to prior guidance of $205 million to $207 million. Estimates for non-GAAP operating income and non-GAAP EPS of $41.7 million to $43.3 million and $0.87 to $0.91, respectively, are likewise up from CyberArk's previous expectations of $39.7 million to $41.3 million and $0.83 to $0.86.

"Our results give us confidence that we are just scratching the surface of this tremendous opportunity," said Mokady during CyberArk's earnings conference call. "As we look into the remainder of the year, we plan to make disciplined investments to capture market share and extend our leadership around the globe."