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CyberArk (CYBR) to Report Q1 Earnings: What's in Store?

Zacks Equity Research

CyberArk Software Ltd. CYBR is scheduled to report first-quarter 2019 results on May 14.

Notably, the company beat estimates in each of the trailing four quarters, the average positive surprise being 57.75%.

In the last reported quarter, the company came up with a positive earnings surprise of 50.85%. Revenues surged 36% year over year to $109 million. Increasing demand for privileged access security on the back of digital transformation and cloud migration strategies was a key growth driver.

Projections for Q1
For the first quarter, CyberArk’s expects revenues in the range of $91-$93 million, indicating growth of 27-30% from the year-ago reported figure. The Zacks Consensus Estimate for revenues is pegged at $92.35 million.

Non-GAAP operating income is predicted to be in the band of $18.5-$20 million.

The company projects non-GAAP earnings in the 39-42 cents range. The Zacks Consensus Estimate stands at 41 cents.

Let's see how things are shaping up for the upcoming announcement.

Factors Likely to Drive Results

CyberArk is benefiting from an increase in customer accounts, which is driving its top line. The improved functionality of Version 10 of the company’s core privileged access security solutions, together with the new pricing model, is expected to have boosted customer acquisition in the first quarter.

The company’s expertise in securing multiple public clouds, which include Google Cloud Platform and AWS is a tailwind. It recently enhanced its protection capabilities in AWS, Alphabet’s GOOGL Google Cloud Platform, Microsoft MSFT Azure as well as DevOps and other platforms to strengthen customer security as they continue their digital transformation journey.

Strong momentum across all geographic segments is a major positive for the company, and is expected to continue in the near term.

During the first quarter of 2019, the company introduced the CyberArk Privileged Access Security Solution v10.8, a platform to protect privileged accounts in cloud. This offering is expected to benefit the company, given the strength in the market for privileged access security.

Moreover, CyberArk is gaining momentum among advisory firms like Deloitte, PWC, KPMG and Accenture. Management mentions that new and add-on business impacted by advisory firms grew 85% year over year at the end of 2018. These businesses are likely to boost the first-quarter top line as well.

However, management notes that the company typically experiences a sequential decline in revenues in the first quarter.

Moreover, significant competition from the likes of International Business Machines Corporation IBM in the access and identity management market continues to be an overhang.

CyberArk currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CyberArk Software Ltd. Price and EPS Surprise

CyberArk Software Ltd. Price and EPS Surprise | CyberArk Software Ltd. Quote

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