CyberArk (CYBR) to Report Q4 Earnings: What's in the Offing?
CyberArk Software Ltd. CYBR is scheduled to report fourth-quarter 2023 results on Feb 8 before market open.
The cybersecurity firm projects revenues between $206.5 million and $211.5 million. The Zacks Consensus Estimate is pegged at $209.7 million, suggesting year-over-year growth of 23.9%.
The company forecasts fourth-quarter non-GAAP earnings in the range of 41-50 cents per share. The consensus mark is pegged at 47 cents per share, implying a surge of 193.8% from the year-ago figure of 16 cents.
CyberArk’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 64%.
Let’s see how things are shaping up for this announcement.
CyberArk Software Ltd. Price and EPS Surprise
CyberArk Software Ltd. price-eps-surprise | CyberArk Software Ltd. Quote
Factors to Consider
CyberArk’s fourth-quarter top-line performance is expected to have benefited from the rising demand for cyber security and privileged access security solutions due to the long list of data breaches and increasing digital transformation strategies.
The advent of cloud computing and the idea of sharing resources to lower costs has further increased the demand for adequate security policies, protocols and products. Hence, companies are allotting increasing portions of their IT budgets for security solutions. CyberArk is growing rapidly in this space with its privileged access management solutions, which offer customers a set of products that help them secure, manage and monitor privileged account access and activities.
The company’s strategic mix shift toward software-as-a-service and subscription-based solutions is likely to have driven top-line growth in the to-be-reported quarter. Our model estimates Subscription revenues in the fourth quarter to be $139.5 million, suggesting a year-over-year increase of 57.7%. The segment’s contribution to the company’s total revenues is anticipated to have reached 66.7%, significantly up from the year-ago quarter’s 52.3%.
Our estimate for Perpetual License revenues is pegged at $4.2 million, indicating a year-over-year decline of approximately 71%. The expected decline reflects CyberArk’s continued efforts toward shifting the business model to subscription-based from a perpetual license.
Strong renewal rates and the uplift in prices are likely to have brought some stabilization in Maintenance and Professional Services revenues. Our model estimates Maintenance and Professional Services revenues in the fourth quarter to be $65.6 million, slightly down from the year-ago quarter’s $66.1 million.
Strong demand for CyberArk’s software-as-a-service solution and on-premise subscription offerings is likely to have driven the company’s Annual Recurring Revenues (“ARR”) during the to-be-reported quarter. Our estimate for ARR is pegged at $761 million, of which Subscription is likely to have contributed $556.2 million, while Maintenance and Professional Services are likely to have contributed $204.8 million.
A better mix of high-margin Subscription revenues, along with efficient cost management, is likely to have driven the bottom-line performance in the fourth quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for CyberArk this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Though CyberArk carries a Zacks Rank #3 at present, it has an Earnings ESP of -2.29%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Twilio TWLO, NVIDIA NVDA and Vertiv VRT have the right combination of elements to post an earnings beat in their upcoming releases.
Twilio carries a Zacks Rank #2 and has an Earnings ESP of +31.37%. The company is scheduled to report fourth-quarter 2023 results on Feb 14. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 157.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Twilio’s fourth-quarter earnings stands at 57 cents per share, indicating a year-over-year improvement of 159.1%. It is estimated to report revenues of $1.04 billion, which suggests an increase of approximately 1.5% from the year-ago quarter.
NVIDIA is slated to report fourth-quarter fiscal 2024 results on Feb 21. The company has a Zacks Rank #2 and an Earnings ESP of +3.68% at present. NVIDIA’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 19%.
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $4.49 per share, suggesting an increase of 410.2% from the year-ago quarter’s earnings of 88 cents. NVIDIA’s quarterly revenues are estimated to improve marginally to $20.1 billion from $6.05 billion in the year-ago quarter.
Vertiv carries a Zacks Rank #2 and has an Earnings ESP of +2.44%. The company is scheduled to report fourth-quarter 2023 results on Feb 21. Its earnings surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 27.8%.
The Zacks Consensus Estimate for Vertiv’s fourth-quarter earnings is pegged at 53 cents per share, indicating a year-over-year increase of 89.3%. The consensus mark for revenues stands at $1.89 billion, calling for a year-over-year rise of 14.1%.
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