CyberArk Software
CYBR
reported better-than-anticipated third-quarter 2021 results. The leading Identity Security solution provider reported a non-GAAP loss of 6 cents, which was narrower than the Zacks Consensus Estimate of a loss of 8 cents per share. However, the figure compared unfavorably with the year-ago quarter’s non-GAAP earnings of 31 cents per share.
For the third quarter of 2021, the company reported revenues of $121.6 million, beating the consensus mark of $120.4 million. The top line witnessed a year-over-year surge of 14%. Markedly, 73.1% of quarterly revenues were recurring in nature, which jumped 41% year over year to $88.9 million.
Annual Recurring Revenues (ARR) increased 38% to $344 million. The maintenance portion, representing 60% of total ARR, increased 9% year over year to $206 million. Subscription portion, which accounted for 40% of the total ARR, soared 131% year over year to $139 million. This upside was primarily driven by a record number of SaaS solutions bookings and strong demand for on-premises subscription offerings.
CyberArk’s subscription transition is witnessing strong momentum, with a rapidly growing base of recurring revenues. Notably, subscription bookings made up 72% of the license bookings in the quarter, which was significantly higher than 45% in the year-ago quarter.
Additionally, in the third-quarter 2021, the company was named a Leader in “The Forrester Wave: Identity-as-a-Service (IDaaS) For Enterprise” report.
Quarterly Details
Segment-wise, subscription revenues (29% of total revenues) were $35.3 million, up by 143% from the year-ago quarter.
Maintenance and professional services revenues (52% of total revenues) climbed 7% at $63.3 million from the year-ago quarter.
Perpetual license revenues (19% of total revenues) slumped 30.4% to $23 million at the close of this quarter.
The signing of new logos across all industries highlighted a steady increase in new business. The new business pipeline is encouraging. During the third quarter, CyberArk added over 230 new customers.
Operating Details
CyberArk’s non-GAAP gross profit increased 14.6% year over year to $102.5 million. Non-GAAP gross margin expanded 40 basis points (bps) to 84.3%.
Operating expenses escalated 33% year over year to $125.9 million. This was primarily due to 54.5%, 25.6% and 25% year-over-year increase in R&D, S&M and G&A expenses, respectively, from the year-earlier reported figures. S&M expenses comprised almost 55.3% of the total quarterly operating expenses.
The company’s non-GAAP operating income was $0.1 million at the end of the third-quarter 2021, reflecting a significant decline of 99% year over year. As a result, the non-GAAP operating margin contracted 1,220 bps to 0.1%.
Balance Sheet & Other Details
CyberArk ended the Jul-Sep quarter with cash and cash equivalents, marketable securities, and short-term deposits of $1.2 billion.
As of Sep 30, 2021, total deferred revenues were $280.9 million, up 23% year over year.
During the first nine months of 2021, the company generated operating and free cash flows of $54.3 million and $47.1 million, respectively.
Guidance
For the fourth quarter of 2021, CyberArk expects revenues between $140 million and $148 million.
It projects to post non-GAAP earnings per share in the range of 6 cents to 21 cents.
Non-GAAP operating income is estimated between $5.5 million and $11.5 million.
For full-year 2021, CyberArk raised revenue outlook to $491.6-$499.6 from $484-$496 million anticipated earlier. It narrowed non-GAAP earnings projection to 11-25 cents per share from the previous guidance range of 1-26 cents.
It now estimates non-GAAP operating income for full-year 2021 in the $13.1-$19.1 million band, up from the previous forecast of $7-$17 million.
Zacks Rank & Key Picks
CyberArk currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader computer and technology sector are
Salesforce
CRM
, which sports a Zacks Rank #1 (Strong Buy), while both
Advanced Micro Devices
AMD
and
Adobe
ADBE
carry a Zacks Rank #2 (Buy) at present. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Long-term earnings growth rates for Salesforce, Advanced Micro Devices and Adobe are currently pegged at 16.8%, 46.2% and 19.1%, respectively.
Zacks’ Top Picks to Cash in on Artificial Intelligence
This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.
See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report