CyberArk slumps on disappointing Q4 guidance

Udi Mokady / Photo: CyberArk

The Israeli cybersecurity company is also changing its business model.

Israeli cybersecurity company CyberArk Software Inc.(Nasdaq:CYBR) saw its share price fall sharply on Wall Street today after reporting lower than expected revenue for the third quarter but higher than expected profit. The company also reported lukewarm fourth quarter guidance and a change in its business model.

The company's share price was down 8.42% in midday trading on Nasdaq at $96.66, giving a market cap of $3.75 billion.

Third quarter revenue was $107 million, down 1.4% from the corresponding quarter of 2019. GAAP net loss was $15.9 million ($0.41 per share and non-GAAP net profit was $12.2 million ($0.31 per share).

CyberArk sees fourth quarter revenue between $125 million and $135 million, below the analysts' forecasts of $136 million, and non-GAAP earnings per share between $0.52 and $0.67.

CyberArk chairman and CEO Udi Mokady said, "We are pleased with the momentum in the business including posting another quarter of record SaaS bookings. Enterprise demand for our SaaS solutions continued to build in the third quarter, particularly for CyberArk Privilege Cloud and Endpoint Privilege Manager. Customers are increasingly turning to CyberArk as their trusted advisor to securely implement digital transformation, cloud migration, and identity and risk reduction programs. Our ongoing cloud innovation, including CyberArk Cloud Entitlements Manager, our recently introduced AI-powered solution that strengthens cloud security, further extends our leadership position in the market. The significant increase in new SaaS and subscription bookings grew our annual recurring revenue (ARR) by 40 percent to $250 million and our deferred revenue by 28 percent to $228 million. In addition, the combination of SaaS and subscription revenue increased nearly 200 percent year over year and represents about 28 percent of total license revenue compared to 7 percent of license revenue in the third quarter of 2019. While the bookings mix shift toward high-value recurring subscriptions created a headwind to our recognized revenue and profitability in the quarter, looking through the near-term effect on the reported P&L, our business performance was strong and the level of customer and prospect engagement was at an all-time high."

He added, "As we look ahead, we will begin actively transitioning our business to a recurring revenue model in 2021, by further accelerating our SaaS business and shifting the Company sales from perpetual licenses to recurring subscriptions. As a result of our robust SaaS and subscription bookings, our strong and growing mix of recurring revenue, our expanding SaaS portfolio, and our comprehensive review of enterprise buying patterns, we are confident that our strategy will create significant long-term value for CyberArk, our customers, partners, and shareholders."

Published by Globes, Israel business news - en.globes.co.il - on November 10, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Udi Mokady / Photo: CyberArk
Udi Mokady / Photo: CyberArk
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