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CyberArk (CYBR) Beats Q4 Earnings and Revenue Estimates
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Keeping its earnings streak alive for the tenth consecutive quarter, CyberArk Software Ltd. (CYBR - Free Report) reported better-than-expected fourth-quarter 2016 results. The company reported adjusted earnings per share (excluding amortization of intangible assets and other one-time items but including stock-based compensation) on a proportionate tax basis of 30 cents per share, which came way ahead of the Zacks Consensus Estimate of 24 cents per share. Adjusted earnings however were flat year over year.
Quarter Details
CyberArk’s revenues grew 25% year over year to $64.4 million and surpassed the Zacks Consensus Estimate of $63 million. The company’s revenues increased on a year-over-year basis, primarily due to better-than-expected demand for its privileged account security platform.
Revenues were also boosted by a 23% increase in License revenues, which came in at $40.8 million and accounted for 63% of total revenue. Also, a 28% year-over-year increase in Maintenance and Professional Services revenues (37% of total revenues) positively impacted the quarterly results.
Geographically, on a year-over-year basis, revenues from the Americas increased 12% and contributed 58% of total revenue. EMEA increased 53% and accounted for 36% of total revenue. Asia-Pacific and Japan increased 30% year over year, representing 6% of total revenue.
CyberArk’s adjusted gross margin (excluding amortization of intangible assets and other one-time items but including stock-based compensation) contracted 60 basis points (bps) on a year-over-year basis to 86.9%, primarily due to higher cost of sales.
The company’s adjusted operating margin (excluding amortization of intangible assets and other one-time items but including stock-based compensation) shrunk 80 bps from the year-ago quarter to 22.3%, primarily due to lower gross margin and higher adjusted operating expenses as a percentage of revenues. Adjusted operating expenses increased 25.7% year over year to $41.6 million.
The company’s adjusted net income (excluding amortization of intangible assets and other one-time items buts including stock-based compensation) came in at $11 million, which improved from $10.8 million reported in the year-ago quarter. On a GAAP basis, net income came in at $10.2 million compared with $9.9 million reported in the year-ago period.
CyberArk exited the quarter with cash, cash equivalents, short-term deposits and marketable securities of approximately $238.3 million, flat with the previous quarter. Receivables were $20.4 million at the end of the quarter.
CyberArk’s balance sheet does not have any long-term debt. The company reported cash flow from operations of $59.2 million for 2016.
Guidance
The company provided guidance for the first quarter and full year 2017.
For the first quarter, CyberArk expects revenues in a range of $57 million to $58 million (mid-point $57.5 million), representing 22% to 24% year-over-year growth. The mid-point of the guided range is below the Zacks Consensus Estimate of $57.95 million. Non-GAAP operating income is expected to be in a range of $9.9 million to $10.7 million. The company expects non-GAAP earnings for the first quarter in a range of 21 cents to 23 cents. The Zacks Consensus Estimate is pegged at 13 cents.
For the year, the company expects revenues in a range of $267 million to $270 million (mid-point $268.5 million), representing 23% to 25% year-over-year growth. The guided range is higher than the Zacks Consensus Estimate of $262.1 million. Non-GAAP operating income is expected to be in a range of $56 million to $58 million. The company expects non-GAAP earnings for 2017 in a range of $1.20 per share to $1.24 per share. The Zacks Consensus Estimate is pegged at 88 cents.
Our Take
CyberArk is an Israeli company that specializes in protecting accounts from cyber-attacks. The company offers several products that protect passwords, close loopholes in the security system, and secure cloud-based assets.
The company ended 2016 on a strong note as evident from the better-than-expected results for the fourth quarter. While CyberArk’s revenues marked a year-over-year improvement, its adjusted earnings were flat.
CyberArk Software Ltd. Price, Consensus and EPS Surprise
Shares of the cybersecurity firm fell 4.2% in yesterday’s after-hour trade. We believe that the company’s decelerating revenue growth rate may be a concern for investors.
It should be noted that the company has reported the slowest revenue growth rate in the fourth quarter since it was enlisted in Sep 2014. Prior to this, CyberArk had witnessed over 35% revenue growth every quarter.
Moreover, its outlook for the first quarter as well as full year depicts that it will remain in mid 20%. This makes us increasingly cautious about its growth prospects. Intensifying competition from peers such as CA Inc. (CA - Free Report) and Microsoft Corp. (MSFT - Free Report) and an uncertain macroeconomic environment add to its woes.
Currently, CyberArk carries a Zacks Rank #4 (Sell).
Notably, the stock has underperformed the Zacks categorized IT Services industry in the past three months. While the industry has gained 6.1% in the said period, CyberArk has lost 0.1% of its value.
The stock has a long-term expected EPS growth rate of 15% and has witnessed sharp upward estimate revisions for 2017 and 2018 in the last 30 days.
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CyberArk (CYBR) Beats Q4 Earnings and Revenue Estimates
Keeping its earnings streak alive for the tenth consecutive quarter, CyberArk Software Ltd. (CYBR - Free Report) reported better-than-expected fourth-quarter 2016 results. The company reported adjusted earnings per share (excluding amortization of intangible assets and other one-time items but including stock-based compensation) on a proportionate tax basis of 30 cents per share, which came way ahead of the Zacks Consensus Estimate of 24 cents per share. Adjusted earnings however were flat year over year.
Quarter Details
CyberArk’s revenues grew 25% year over year to $64.4 million and surpassed the Zacks Consensus Estimate of $63 million. The company’s revenues increased on a year-over-year basis, primarily due to better-than-expected demand for its privileged account security platform.
Revenues were also boosted by a 23% increase in License revenues, which came in at $40.8 million and accounted for 63% of total revenue. Also, a 28% year-over-year increase in Maintenance and Professional Services revenues (37% of total revenues) positively impacted the quarterly results.
Geographically, on a year-over-year basis, revenues from the Americas increased 12% and contributed 58% of total revenue. EMEA increased 53% and accounted for 36% of total revenue. Asia-Pacific and Japan increased 30% year over year, representing 6% of total revenue.
CyberArk’s adjusted gross margin (excluding amortization of intangible assets and other one-time items but including stock-based compensation) contracted 60 basis points (bps) on a year-over-year basis to 86.9%, primarily due to higher cost of sales.
The company’s adjusted operating margin (excluding amortization of intangible assets and other one-time items but including stock-based compensation) shrunk 80 bps from the year-ago quarter to 22.3%, primarily due to lower gross margin and higher adjusted operating expenses as a percentage of revenues. Adjusted operating expenses increased 25.7% year over year to $41.6 million.
The company’s adjusted net income (excluding amortization of intangible assets and other one-time items buts including stock-based compensation) came in at $11 million, which improved from $10.8 million reported in the year-ago quarter. On a GAAP basis, net income came in at $10.2 million compared with $9.9 million reported in the year-ago period.
CyberArk exited the quarter with cash, cash equivalents, short-term deposits and marketable securities of approximately $238.3 million, flat with the previous quarter. Receivables were $20.4 million at the end of the quarter.
CyberArk’s balance sheet does not have any long-term debt. The company reported cash flow from operations of $59.2 million for 2016.
Guidance
The company provided guidance for the first quarter and full year 2017.
For the first quarter, CyberArk expects revenues in a range of $57 million to $58 million (mid-point $57.5 million), representing 22% to 24% year-over-year growth. The mid-point of the guided range is below the Zacks Consensus Estimate of $57.95 million. Non-GAAP operating income is expected to be in a range of $9.9 million to $10.7 million. The company expects non-GAAP earnings for the first quarter in a range of 21 cents to 23 cents. The Zacks Consensus Estimate is pegged at 13 cents.
For the year, the company expects revenues in a range of $267 million to $270 million (mid-point $268.5 million), representing 23% to 25% year-over-year growth. The guided range is higher than the Zacks Consensus Estimate of $262.1 million. Non-GAAP operating income is expected to be in a range of $56 million to $58 million. The company expects non-GAAP earnings for 2017 in a range of $1.20 per share to $1.24 per share. The Zacks Consensus Estimate is pegged at 88 cents.
Our Take
CyberArk is an Israeli company that specializes in protecting accounts from cyber-attacks. The company offers several products that protect passwords, close loopholes in the security system, and secure cloud-based assets.
The company ended 2016 on a strong note as evident from the better-than-expected results for the fourth quarter. While CyberArk’s revenues marked a year-over-year improvement, its adjusted earnings were flat.
CyberArk Software Ltd. Price, Consensus and EPS Surprise
CyberArk Software Ltd. Price, Consensus and EPS Surprise | CyberArk Software Ltd. Quote
Shares of the cybersecurity firm fell 4.2% in yesterday’s after-hour trade. We believe that the company’s decelerating revenue growth rate may be a concern for investors.
It should be noted that the company has reported the slowest revenue growth rate in the fourth quarter since it was enlisted in Sep 2014. Prior to this, CyberArk had witnessed over 35% revenue growth every quarter.
Moreover, its outlook for the first quarter as well as full year depicts that it will remain in mid 20%. This makes us increasingly cautious about its growth prospects. Intensifying competition from peers such as CA Inc. (CA - Free Report) and Microsoft Corp. (MSFT - Free Report) and an uncertain macroeconomic environment add to its woes.
Currently, CyberArk carries a Zacks Rank #4 (Sell).
Notably, the stock has underperformed the Zacks categorized IT Services industry in the past three months. While the industry has gained 6.1% in the said period, CyberArk has lost 0.1% of its value.
A better-ranked stock in the IT Services industry is Acxiom Corporation which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The stock has a long-term expected EPS growth rate of 15% and has witnessed sharp upward estimate revisions for 2017 and 2018 in the last 30 days.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>