CyberArk Announces Record Fourth Quarter and Full Year 2021 Results

Record fourth quarter revenue of $151.3 million; Record full year revenue of $502.9 million

Subscription Bookings Mix of 71% in the fourth quarter; 66% for the full year 2021

Subscription Portion of Annual Recurring Revenue (ARR) of $183 million with Growth Accelerating to 146%

Total ARR of $393 million with Growth Accelerating to 44%

Subscription Transition Goals Now Expected to be Met in Second Quarter of 2022

Newton, Mass. and Petach Tikva, Israel – February 10, 2022–  CyberArk (NASDAQ: CYBR), the global leader in Identity Security, today announced record financial results for the fourth quarter and full year ended December 31, 2021.

“2021 was a historic year for CyberArk characterized by transformation, outperformance and acceleration,” said Udi Mokady, CyberArk Chairman and CEO. “As we moved through 2021, momentum continued to build culminating in a record fourth quarter. In the fourth quarter, we experienced a step function change in demand resulting in the largest sequential increase in ARR. In addition, subscription ARR growth accelerated to 146 percent, and total ARR growth accelerated to 44 percent, and we added a record number of new logos, signing more than 375 customers. We again exceeded our subscription bookings mix framework, and revenue beat our guidance range in the fourth quarter, demonstrating that our bookings were significantly above our guidance framework. Given our performance in 2021, we are confident we will hit our subscription transition target goal of reaching about 85 percent bookings mix in the second quarter of 2022. With the acceleration in our business in 2021, our excellence in execution and strong competitive stance, we are in a great position to deliver long-term profitable growth and increase shareholder value.”

     Financial Summary for the Fourth Quarter Ended December 31, 2021

Financial Summary for the Full Year Ended December 31, 2021

Balance Sheet and Net Cash Provided by Operating Activities

 

Recent Developments

Business Outlook

Based on information available as of February 10, 2022, CyberArk is issuing guidance for the first quarter and full year 2022 as indicated below.

 

First Quarter 2022:

Full Year 2022:

 

Conference Call Information

 

In conjunction with this announcement, CyberArk will host a conference call on Thursday, February 10, 2022 at 8:30 a.m. Eastern Time (ET) to discuss the Company’s fourth quarter and year-end financial results and its business outlook. To access this call, dial +1 (833) 968-2251 (U.S.) or +1 (778) 560-2670 (international). The conference ID is 9918439. Additionally, a live webcast of the conference call will be available via the “Investor Relations” section of the company’s website at www.cyberark.com.

Following the conference call, a replay will be available for one week at +1 (800) 585-8367 (U.S.) or +1 (416) 621-4642 (international). The replay pass code is 9918439. An archived webcast of the conference call will also be available in the “Investor Relations” section of the company’s website at www.cyberark.com.

About CyberArk                                                                                                       

CyberArk (NASDAQ: CYBR) is the global leader in Identity Security. Centered on privileged access management, CyberArk provides the most comprehensive security offering for any identity – human or machine – across business applications, distributed workforces, hybrid cloud workloads and throughout the DevOps lifecycle. The world’s leading organizations trust CyberArk to help secure their most critical assets. To learn more about CyberArk, visit https://www.cyberark.com, read the CyberArk blogs or follow on Twitter via @CyberArk, LinkedIn or Facebook.

Copyright ^© 2022 CyberArk Software. All Rights Reserved. All other brand names, product names, or trademarks belong to their respective holders.

Key Performance Indicators and Non-GAAP Financial Measures

Annual Recurring Revenue (ARR)

 

Subscription Portion of Annual Recurring Revenue

 

Maintenance Portion of Annual Recurring Revenue

 

Recurring Revenue

 

Financial Presentation

 

Beginning in the first quarter of 2021, CyberArk revised the presentation of its lines of revenue and cost of revenue. The Company believes that the revised categories for revenue and cost of revenue as presented on the income statement align with how management evaluates the business. In addition, this disclosure will increase transparency into the Company’s business and shift toward recurring revenues, providing investors with more visibility into the subscription transition program. Historical information by quarter for fiscal year 2020, which has been retroactively reclassified to reflect the new lines of revenue and cost of revenue, can be found in the PowerPoint presentation posted to CyberArk’s investor relations website. The new revenue lines consist of (a) Subscription revenue, which represents SaaS and self-hosted subscription revenue including the license portion of self-hosted subscription revenue and the ratable maintenance component of self-hosted subscription revenue, (b) Perpetual license revenue and (c) Maintenance and professional services revenue, which represents the maintenance component related to perpetual license sales and professional services revenue.

 

Non-GAAP Financial Measures

CyberArk believes that the use of non-GAAP gross profit, non-GAAP operating expense, non-GAAP operating income, non-GAAP net income and free cash flow is helpful to our investors. These financial measures are not measures of the Company’s financial performance under U.S. GAAP and should not be considered as alternatives to gross profit, operating loss, net loss or net cash provided by operating activities or any other performance measures derived in accordance with GAAP.

 

 

 

 

 

The Company believes that providing non-GAAP financial measures that are adjusted by, as applicable, share-based compensation expense, facility exit and transition costs, acquisition related expenses, amortization of intangible assets related to acquisitions, non-cash interest expense related to the amortization of debt discount and issuance cost, the tax effect of the non-GAAP adjustments and IP transfer, and purchase of property and equipment allows for more meaningful comparisons of its period to period operating results. Share-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in the Company’s business and an important part of the compensation provided to its employees. Share based compensation expense has varying available valuation methodologies, subjective assumptions and a variety of equity instruments that can impact a company’s non-cash expense. The Company believes that expenses related to its facility exits, acquisitions, amortization of intangible assets related to acquisitions and non-cash interest expense related to the amortization of debt discount and issuance costs do not reflect the performance of its core business and impact period-to-period comparability. The Company believes free cash flow is a liquidity measure that, after the purchase of property and equipment, provides useful information about the amount of cash generated by the business. 

 

Non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies in the industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. In addition, there are limitations in using non-GAAP financial measures as they exclude expenses that may have a material impact on the Company’s reported financial results. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP. CyberArk urges investors to review the reconciliation of its non-GAAP financial measures to the comparable U.S. GAAP financial measures included below, and not to rely on any single financial measure to evaluate its business.

Guidance for non-GAAP financial measures excludes, as applicable, share-based compensation expense, facility exit costs, acquisition related expenses, amortization of intangible assets related to acquisitions, non-cash interest expense related to the amortization of debt discount and issuance costs and the tax effect of the non-GAAP adjustments and IP transfer. A reconciliation of the non-GAAP financial measures guidance to the corresponding GAAP measures is not available on a forward-looking basis due to the uncertainty regarding, and the potential variability and significance of, the amounts of share-based compensation expense, amortization of intangible assets related to acquisitions, and the non-recurring expenses that are excluded from the guidance. Accordingly, a reconciliation of the non-GAAP financial measures guidance to the corresponding GAAP measures for future periods is not available without unreasonable effort.

 

Cautionary Language Concerning Forward-Looking Statements

 

This release contains forward-looking statements, which express the current beliefs and expectations of CyberArk’s (the “Company”) management. In some cases, forward-looking statements may be identified by terminology such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential” or the negative of these terms or other similar expressions.  Such statements involve a number of known and unknown risks and uncertainties that could cause the Company’s future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to: the duration and scope of the COVID-19 pandemic and the impact of the pandemic and actions taken in response, on global and regional economies and economic activity and the resulting impact on the demand for the Company’s solutions and on its expected revenue growth rates and costs; the Company’s ability to adjust its operations in response to impacts from the COVID-19 pandemic; difficulties predicting future financial results, including due to impacts from the COVID-19 pandemic; the Company’s continued transition of its business to a recurring revenue model in 2021; and the Company’s ability to complete the transition in the time frame expected; the Company’s ability to meet financial and operating targets during the transition period and after the transition is complete; changes to the drivers of the Company’s growth and our ability to adapt our solutions to IT security market demands; the Company’s ability to sell into existing and new industry verticals; the Company’s sales cycles and multiple licensing models may cause results to fluctuate; the Company’s ability to sell into existing customers; potential changes in the Company’s operating and net profit margins and the Company’s revenue growth rate; the Company’s ability to successfully find, complete, fully integrate and achieve the expected benefits of future acquisitions, including the Company’s ability to integrate and achieve the expected benefits of Idaptive; real or perceived shortcomings, defects or vulnerabilities in the Company’s solutions or internal network systems; the Company’s ability to hire, retain and motivate qualified personnel; the Company’s ability to expand its channel partnerships across existing and new geographies; the Company’s ability to further diversify its product deployments and licensing options; and other factors discussed under the heading “Risk Factors” in the Company’s most recent annual report on Form 20-F filed with the Securities and Exchange Commission. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

 

###

Investor Contact:

Erica Smith

CyberArk

Phone:  +1 617-558-2132

ir@cyberark.com

Liz Campbell

 

CYBERARK SOFTWARE LTD.

Consolidated Statements of Operations

U.S. dollars in thousands (except per share data)  (Unaudited)

		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2020				2021				2020				2021
Revenues:
Subscription		$	19,630			$	47,557			$	56,425			$	134,628
Perpetual license			63,441				38,674				176,061				115,738
Maintenance and professional services			61,448				65,089				231,945				252,551
Total revenues			144,519				151,320				464,431				502,917
Cost of revenues:
Subscription			5,289				8,123				17,513				25,837
Perpetual license			1,365				979				4,925				3,904
Maintenance and professional services			16,054				16,594				60,133				63,566
Total cost of revenues			22,708				25,696				82,571				93,307
Gross profit			121,811				125,624				381,860				409,610
Operating expenses:
Research and development			26,659				40,747				95,426				142,121
Sales and marketing			61,038				77,564				219,999				274,401
General and administrative			15,325				19,162				60,429				71,425
Total operating expenses			103,022				137,473				375,854				487,947
Operating income (loss)			18,789				(11,849	)			6,006				(78,337	)
Financial expense, net			(2,733	)			(3,245	)			(6,395	)			(12,992	)
Income (loss) before taxes on income			16,056				(15,094	)			(389	)			(91,329	)
Tax benefit (taxes on income)			(4,002	)			(1,793	)			(5,369	)			7,383
Net income (loss)		$	12,054			$	(16,887	)		$	(5,758	)		$	(83,946	)
Basic net income (loss) per ordinary share, net		$	0.31			$	(0.42	)		$	(0.15	)		$	(2.12	)
Diluted net income (loss) per ordinary share, net		$	0.30			$	(0.42	)		$	(0.15	)		$	(2.12	)
Shares used in computing net income (loss)
per ordinary shares, basic			38,913,923				39,982,230				38,628,770				39,645,453
Shares used in computing net income (loss)
per ordinary shares, diluted			39,938,780				39,982,230				38,628,770				39,645,453

CYBERARK SOFTWARE LTD.

Consolidated Balance Sheets

U.S. dollars in thousands

(Unaudited)

		December 31,				December 31,
		2020				2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	499,992			$	356,850
Short-term bank deposits			256,143				369,645
Marketable securities			196,856				199,933
Trade receivables			93,128				113,211
Prepaid expenses and other current assets			15,312				22,225
Total current assets			1,061,431				1,061,864
LONG-TERM ASSETS:
Marketable securities			202,190				300,662
Property and equipment, net			18,537				20,183
Intangible assets, net			23,676				17,866
Goodwill			123,717				123,717
Other long-term assets			99,992				121,743
Deferred tax asset			32,809				47,167
Total long-term assets			500,921				631,338
TOTAL ASSETS		$	1,562,352			$	1,693,202
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables		$	8,250			$	10,076
Employees and payroll accruals			52,169				75,442
Accrued expenses and other current liabilities			24,915				23,576
Deferred revenues			161,679				230,908
Total current liabilities			247,013				340,002
LONG-TERM LIABILITIES:
Convertible senior notes, net			502,302				520,094
Deferred revenues			80,829				86,367
Other long-term liabilities			24,920				20,227
Total long-term liabilities			608,051				626,688
TOTAL LIABILITIES			855,064				966,690
SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0.01 par value			101				104
Additional paid-in capital			481,992				588,937
Accumulated other comprehensive income			4,175				397
Retained earnings			221,020				137,074
Total shareholders' equity			707,288				726,512
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,562,352			$	1,693,202

 

CYBERARK SOFTWARE LTD.

Consolidated Statements of Cash Flows

U.S. dollars in thousands

(Unaudited)

		Twelve Months Ended
		December 31,
		2020				2021
Cash flows from operating activities:
Net loss		$	(5,758	)		$	(83,946	)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization			15,475				14,228
Amortization of premium and accretion of discount on marketable securities, net			3,068				7,532
Share-based compensation			71,849				95,436
Deferred income taxes, net			(1,988	)			(11,972	)
Increase in trade receivables			(17,315	)			(20,083	)
Amortization of debt discount and issuance costs			17,183				17,792
Increase in prepaid expenses, other current and long-term assets and others			(20,487	)			(38,219	)
Increase in trade payables			558				1,499
Increase in short-term and long-term deferred revenues			45,397				74,767
Increase in employees and payroll accruals			7,846				23,821
Decrease in accrued expenses and other current and long-term liabilities			(9,059	)			(6,115	)
Net cash provided by operating activities			106,769				74,740
Cash flows from investing activities:
Investment in short and long term deposits, net			(123,054	)			(105,069	)
Investment in marketable securities			(405,193	)			(357,210	)
Proceeds from sales and maturities of marketable securities			191,637				243,013
Purchase of property and equipment			(7,174	)			(8,928	)
Payments for business acquisitions, net of cash acquired			(68,603	)			-
Net cash used in investing activities			(412,387	)			(228,194	)
Cash flows from financing activities:
Proceeds from (payment of) withholding tax related to employee stock plans			1,069				(789	)
Proceeds from exercise of stock options			12,180				11,738
Net cash provided by financing activities			13,249				10,949
Decrease in cash, cash equivalents and restricted cash			(292,369	)			(142,505	)
Effect of exchange rate differences on cash and cash equivalents			-				(689	)
Cash, cash equivalents and restricted cash at the beginning of the period			792,413				500,044
Cash, cash equivalents and restricted cash at the end of the period		$	500,044			$	356,850