CyberArk Software Revenue Jumps 36%

The cybersecurity leader is winning in an increasingly cloud-based world.

Joe Tenebruso
Joe Tenebruso
Feb 15, 2019 at 9:35AM
Technology and Telecom

CyberArk Software (NASDAQ:CYBR) reported fourth-quarter financial results on Feb. 14. The cybersecurity specialist is experiencing soaring demand for its privileged account-security solutions, which help businesses defend against external attacks -- as well as malicious behavior by their own employees.

CyberArk Software results: The raw numbers

Metric

Q4 2018

Q4 2017

Year-Over-Year Change

Revenue

$109.05 million

$80.37 million

36%

Adjusted net income

$33.44 million

$14.99 million

123%

Adjusted EPS

$0.89

$0.41

117%

Data Source: CyberArk Software Q4 2018 earnings press release. EPS = earnings per share.

What happened with CyberArk Software this quarter?

License revenue surged 38% year over year, to $66.8 million, while maintenance and professional services revenue leapt 33%, to $42.3 million. Together, that drove a 36% increase in total revenue, to $109.1 million.

"Through our innovation, we have cemented our leadership position as the industry's global solution provider to secure privileged access from on-premise to the cloud," said Chairman and CEO Udi Mokady during a conference call with analysts.

Artist's rendering of digital circuits connecting to a digital cloud.

Image source: Getty Images.

Mokady said that cybersecurity is becoming increasingly important as companies shift more of their operations to the cloud.

Today's business paradigm dictates that every organization -- the insurance company, the retailer, the airline, the utility -- is a software company, implementing digital transformation strategies and migrating workloads to the cloud. They are leveraging speed, automation, and agility as a competitive advantage. This is causing organizations around the world to rethink security and prioritize impactful initiatives.

In turn, more businesses are turning to CyberArk to protect the most vital areas of their IT networks, as Mokady explains.

In this new, more complex environment, privileged accounts are being created and privileged access expanded at an unprecedented rate. ... As a result, awareness and demand for privileged access security has increased across geographies, verticals, and from companies of all sizes. 

This robust demand for privileged account security is helping to drive CyberArk's profits sharply higher. Non-GAAP operating income -- which excludes share-based compensation and acquisition-related items -- more than doubled, to $39.8 million. And non-GAAP net income soared 123%, to $33.4 million, or $0.89 per share.

"We delivered record results across all operating metrics including revenue, GAAP and non-GAAP operating income and net income, as well as cash flow from operations and new customer additions," Mokady said.

Looking forward

CyberArk's guidance for 2019 calls for revenue to rise as much as 21% year over year, to $415 million. However, the company's non-GAAP operating income may rise less than 6%, to between $92.5 million and $95.5 million, as CyberArk intends to prioritize long-term value creation over short-term profits.

"Fundamentals for privileged access security continue to be robust and, as a result, our priority for 2019 is to strengthen the organization to generate sustainable growth over the long term while staying true to our operating principle of delivering profitability through disciplined investments," said CFO Josh Siegel. 

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