CyberArk (CYBR) Jumps On Splendid Q3 Earnings & Upbeat View
Zacks Investment Research | Nov 02, 2017 10:51PM ET
Shares of CyberArk Software Ltd. (NASDAQ:CYBR) jumped over 11% yesterday after the company reported splendid results for third-quarter 2017, wherein it exceeded its guidance at every point and surpassed the respective Zacks Consensus Estimate as well. An optimistic guidance for the next quarter and upbeat outlook for the full year also contributed to the surge.
Now let’s discuss quarterly results in detail.
Revenues
CyberArk’s revenues were up 17.9% year over year to $64.8 million and came ahead of management’s guided range of $62-$63 million (mid-point $62.5 million), as well as the Zacks Consensus Estimate of $63 million. The company’s top line mainly benefited from new customer acquisitions and add-on business from existing clients.
During the reported quarter, the company closed a number of deals, including the largest numbers of seven-figure new clients in its history. Also, CyberArk witnessed a record number of federal deals in the third quarter. The company added over 100 customers and ended the quarter with more than 3,450 clients.
Segment wise, License revenues which accounted for 55% of total revenues, increased 7.7% year over year to $35.8 million. Maintenance and Professional Services revenues, contributing 45% to total revenues, surged 33.6% year over year to $29 million.
Geographically, the company witnessed revenue growth across every region. On a year-over-year basis, revenues from the Americas increased 17% and contributed 65% of total revenues. Revenues in the Asia Pacific and Japan were up 13% year over year, representing 6% of total revenues. EMEA witnessed a 23% jump and accounted for 29% of total revenues.
Operating Results
CyberArk’s non-GAAP gross profit came in at $55.8 million, representing year-over-year growth of 16.9%. However, gross margin contracted 80 basis points (bps) year over year to 86% in the third quarter. The decline was primarily due to slight change in the revenue mix, and investments in cloud infrastructure and professional services.
The company reported non-GAAP operating income of $10.7 million, down from $14.3 million reported in the year-ago quarter. However, operating income was way higher than the company’s guidance range of $8.2-$9 million.
Non-GAAP operating margin dipped to 16.5% from 26%, primarily due to lower gross margin and elevated operating expenses as a percentage of revenues. Escalated operating expenses were mainly stemmed by increased investment toward enhancing product offerings and expanding sales capabilities.
The company reported non-GAAP net income of $8.9 million, down from $11.7 million reported in the year-ago quarter. Net income margin came in at 13.7% compared with 21.4% reported in third-quarter 2016.
On per-share basis, the company reported non-GAAP earnings of 25 cents, down from 33 cents reported in the year-ago quarter. Benefits from higher revenues were more than offset by increased operating expenses.
However, quarterly earnings came ahead of management’s guidance range of 17-19 cents and surpassed the Zacks Consensus Estimate of 18 cents as well.
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