CyberArk Software (NASDAQ:CYBR) reported second-quarter financial results on Aug. 8.

The Israeli cybersecurity company struggled to close deals on time, prompting it to reshuffle its leadership structure in order to right the ship.

An electronic display showing the word "delayed" multiple times

Delays in closing deals dinged CyberArk's second-quarter results. Image source: Getty Images.

CyberArk Software results: The raw numbers

Metric

Q2 2017

Q2 2016

Year-Over-Year Change

Revenue

$57.5 million

$50.4 million

14%

Net income

$3.2 million

$6.4 million

(50%)

Earnings per share

$0.09

$0.18

(50%)

Data Source: CyberArk Software Q2 2017 earnings press release.

What happened with CyberArk Software this quarter?

Revenue increased 14% year over year to $57.5 million, which was significantly below the $61 million to $62 million CyberArk guided for back in May.

CyberArk preannounced the shortfall in July. Management said the lower-than-expected revenue performance was primarily due to poor results in the company's EMEA (Europe, Middle East, and Africa) region, where several deals that were expected to close by the end of the quarter were delayed.

Even as revenue growth has slowed, operating expenses rose 33%, to $46.5 million, mainly due to the investments CyberArk is making to expand its sales force. In turn, operating income fell to $1 million from $8.5 million in the year-ago quarter. And non-GAAP operating income -- which excludes share-based compensation, acquisition-related expenses, and certain other items -- declined 35% to $8.8 million.

All told, non-GAAP net income dropped 26% to $7.7 million, and non-GAAP EPS decreased 28% to $0.21.

Looking forward

CyberArk expects third-quarter revenue of $62 million to $63 million, representing year-over-year growth of 13% to 15%. Non-GAAP operating income and earnings per share are forecast to be in the ranges of $8.2 million to $9 million and $0.17 to $0.19, respectively.

CyberArk also cut its 2017 full-year outlook, including:

  • Total revenue of $253 million to $256 million, down from a previous forecast of $268.5 million to $271.5 million
  • Non-GAAP operating income of $46.4 million to $48.4 million, down from $55 million to $57 million
  • Non-GAAP EPS of $1.02 to $1.06, versus $1.18 to $1.22

To help get growth back on track, CyberArk promoted Ron Zoran to the position of chief revenue officer. Zoran previously was the company's vice president of sales for its Americas division.

"Ron's proven track record across every role he's held at CyberArk, his passion for our mission and deep security expertise gives me great confidence in Ron's ability to deliver results and enable CyberArk to fully capitalize on our tremendous opportunity," Chairman and CEO Udi Mokady said in a press release. "With Ron at the helm of our global sales organization, we will drive consistent best practices across all sales, sales engineering and channel sales to enable CyberArk to expand our market reach, drive growth and scale our operations."

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