CYBR CyberArk Software Ltd

SECURITIES AND EXCHANGE COMMISSION

 

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REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

 

For the month of August 2024

 

CyberArk Software Ltd.

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CyberArk Software Ltd.

9 Hapsagot St.

Park Ofer 2, POB 3143

Petach-Tikva, 4951041 Israel

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F  ☒            Form 40-F  ☐

 

EXPLANATORY NOTE

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	CYBERARK SOFTWARE LTD.
Date: August 8, 2024	By:	/s/ Joshua Siegel
		Name: Joshua Siegel
		Title:   Chief Financial Officer

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EXHIBIT INDEX

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CyberArk Announces Strong Second Quarter 2024 Results

Results Exceeded all Guided Metrics

Subscription Portion of Annual Recurring Revenue (ARR) Grew 50% Year-Over-Year to $677 million

Total ARR Grew 33% Year-Over-Year to $868 million

Subscription Revenue Grew 49% Year-Over-Year to $158.4 million

Total Revenue Grew 28% Year-Over-Year Reaching a Record of $224.7 million

Net Cash Provided by Operating Activities for the Six Months Ended June 30, 2024 of $113.0 million

Company Raises Full Year Guidance Across all Metrics

Newton, Mass. and Petach Tikva, Israel – August 8, 2024 – CyberArk (NASDAQ: CYBR), the identity security company, today announced strong financial results for the second quarter ended June 30, 2024.

“We had a strong quarter, posting record revenue and increasing our profitability, resulting in CyberArk again outperforming our guidance across all metrics,” said Matt Cohen, CyberArk’s Chief Executive Officer. “With the explosion of new identities, new environments, and new attack methods, a new paradigm is needed to protect every identity – human or machine – with the right level of privilege controls. Customers are consolidating on our platform, driving land and expand, as evidenced by the 245 new logos we signed and our net new Subscription ARR of $56 million. Our consistent performance puts us in an elite class of companies that deliver 25 plus percent topline growth, strong profitability and cash flow margins. Given the mission-critical nature of identity security and durable demand for our platform, we are confidently raising our guidance for the full year 2024. We have a tremendous opportunity ahead of us and are well positioned to deliver strong long-term profitable growth.”

Financial Summary for the Second Quarter Ended June 30, 2024

     

Balance Sheet and Net Cash Provided by Operating Activities

Recent Developments

Venafi Acquisition

The transaction is still expected to close in the second half of 2024, subject to required regulatory approvals, clearances, and other customary closing conditions.

Business Outlook

Based on information available as of August 8, 2024, CyberArk is issuing guidance for the third quarter and full year 2024 as indicated below.

CyberArk’s guidance for the third quarter and full year 2024 does not include contributions from the proposed acquisition of Venafi, Inc., which is expected to close in the second half of 2024, or the issuance of approximately 2.3 million CyberArk shares in connection with the closing of the proposed acquisition of Venafi, Inc.

Third Quarter 2024:

Full Year 2024:

 

Conference Call Information

 

In conjunction with this announcement, CyberArk will host a conference call on Thursday, August 8, 2024 at 8:30 a.m. Eastern Time (ET) to discuss the Company’s second quarter financial results and its business outlook. To access this call, dial +1 (888) 330-2455 (U.S.) or +1 (240) 789-2717 (international). The conference ID is 6515982. 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) 770-2030 (U.S.) or +1 (609) 800-9909 (international). The replay pass code is 6515982. 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 intelligent privilege controls, CyberArk provides the most comprehensive security offering for any identity – human or machine – across business applications, distributed workforces, hybrid cloud environments 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 LinkedIn, X, Facebook or YouTube.

Copyright ^© 2024 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

Recurring Revenue

 

Annual Recurring Revenue (ARR)

 

Subscription Portion of Annual Recurring Revenue

 

Maintenance Portion of Annual Recurring Revenue

 

Net New Subscription ARR

 

Annual Recurring Revenue (ARR), Subscription portion of ARR and Maintenance portion of ARR are performance indicators that provide more visibility into the growth of our recurring business in the upcoming year. This visibility allows us to make informed decisions about our capital allocation and level of investment. Each of these measures should be viewed independently of revenues and total deferred revenue as each is an operating measure and is not intended to be combined with or to replace either of those measures. ARR, Subscription portion of ARR and Maintenance portion of ARR are not forecasts of future revenues and can be impacted by contract start and end dates and renewal rates.

 

Non-GAAP Financial Measures

CyberArk believes that the use of non-GAAP gross profit, non-GAAP operating expense, non-GAAP operating income (loss), non-GAAP net income (loss) 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 (used in) 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, acquisition related expenses, amortization of intangible assets related to acquisitions, non-cash interest expense related to the amortization of debt discount and issuance cost, and the tax effect of the non-GAAP adjustments 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 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, acquisition related expenses, amortization of intangible assets related to acquisitions, non-cash interest expense related to the amortization of debt discount and issuance costs, the tax effect of the non-GAAP adjustments, and purchase of property and equipment. 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, as well as changes in interest rates and foreign exchange rates, which impact other GAAP performance metrics. 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, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating, but not limited to: the ability of the parties to consummate the proposed transaction regarding the Company’s acquisition of Venafi Holdings, Inc. (“Venafi”) in a timely manner or at all; the satisfaction of the conditions precedent to consummation of the proposed transaction, including the ability to secure regulatory approvals on the terms expected, in a timely manner or at all; the potential impact of the announcement of the proposed transaction on the ability of the Company or Venafi to retain and hire key personnel and maintain relationships with customers, suppliers and others with whom the Company or Venafi do business, or on the Company’s or Venafi’s operating results and business generally; disruption of the current plans and operations of the Company and Venafi as a result of the proposed transaction or its announcement, including increased risks of cyberattacks; risks that Venafi’s business will not be integrated successfully into the Company’s operations; risks relating to the Company’s ability to realize anticipated benefits of the combined operations; changes to the drivers of the Company’s growth and the Company’s ability to adapt its solutions to the information security market changes and demands, including artificial intelligence (“AI”); the Company’s ability to acquire new customers and maintain and expand the Company’s revenues from existing customers; intense competition within the information security market; real or perceived security vulnerabilities, gaps, or cybersecurity breaches of the Company, or the Company’s customers’ or partners’ systems, solutions or services; risks related to the Company’s compliance with privacy, data protection and AI laws and regulations; the Company’s ability to successfully operate its business as a subscription company and fluctuation in the quarterly results of operations; the Company’s reliance on third-party cloud providers for its operations and software-as-a-service (“SaaS”) solutions; the Company’s ability to hire, train, retain and motivate qualified personnel; the Company’s ability to effectively execute its sales and marketing strategies; the Company’s ability to find, complete, fully integrate or achieve the expected benefits of additional strategic acquisitions; the Company’s ability to maintain successful relationships with channel partners, or if the Company’s channel partners fail to perform; risks related to sales made to government entities; prolonged economic uncertainties or downturns; the Company’s history of incurring net losses, the Company’s ability to generate sufficient revenue to achieve and sustain profitability and the Company’s ability to generate cash flow from operating activities; regulatory and geopolitical risks associated with the Company’s global sales and operations; risks related to intellectual property claims; fluctuations in currency exchange rates; the ability of the Company’s products to help customers achieve and maintain compliance with government regulations or industry standards; the Company’s ability to protect its proprietary technology and intellectual property rights; risks related to using third-party software, such as open-source software; risks related to stock price volatility or activist shareholders; any failure to retain the Company’s “foreign private issuer” status or the risk that the Company may be classified, for U.S. federal income tax purposes, as a “passive foreign investment company”; risks related to the Company’s Convertible Senior Notes due 2024 (the “Convertible Notes”), including the potential dilution to existing shareholders and the Company’s ability to raise the funds necessary to repurchase the Convertible Notes; changes in tax laws; the Company’s expectation to not pay dividends on the Company’s ordinary shares for the foreseeable future; risks related to the Company’s incorporation and location in Israel, including the ongoing war between Israel and Hamas and conflict in the region; 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 U.S. 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, except as required by applicable law.

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Investor Relations Contact:
Srinivas Anantha, CFA

CyberArk

617-558-2132

ir@cyberark.com

Media Contact:

Nick Bowman

CyberArk

+44 (0) 7841 673378

press@cyberark.com

CYBERARK SOFTWARE LTD.

Consolidated Statements of Operations

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

(Unaudited)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2023				2024				2023				2024
Revenues:
Subscription		$	106,167			$	158,414			$	198,887			$	314,653
Perpetual license			5,090				3,637				8,972				6,588
Maintenance and professional services			64,586				62,655				129,689				125,015
Total revenues			175,843				224,706				337,548				446,256
Cost of revenues:
Subscription			17,633				22,601				33,578				43,563
Perpetual license			319				303				531				782
Maintenance and professional services			20,815				22,114				40,630				43,081
Total cost of revenues			38,767				45,018				74,739				87,426
Gross profit			137,076				179,688				262,809				358,830
Operating expenses:
Research and development			53,664				56,556				105,920				110,470
Sales and marketing			101,089				115,339				200,517				220,303
General and administrative			22,221				31,769				42,396				58,411
Total operating expenses			176,974				203,664				348,833				389,184
Operating loss			(39,898	)			(23,976	)			(86,024	)			(30,354	)
Financial income, net			11,882				13,347				21,488				27,399
Loss before taxes on income			(28,016	)			(10,629	)			(64,536	)			(2,955	)
Tax benefit (taxes on income)			2,238				(2,294	)			3,730				(4,498	)
Net loss		$	(25,778	)		$	(12,923	)		$	(60,806	)		$	(7,453	)
Basic loss per ordinary share		$	(0.62	)		$	(0.30	)		$	(1.47	)		$	(0.17	)
Diluted loss per ordinary share		$	(0.62	)		$	(0.30	)		$	(1.47	)		$	(0.17	)
Shares used in computing net loss
per ordinary shares, basic			41,599,364				42,948,191				41,384,895				42,689,375
Shares used in computing net loss
per ordinary shares, diluted			41,599,364				42,948,191				41,384,895				42,689,375

CyberArk Software (NASDAQ:CYBR)
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