CyberArk (CYBR) Soars 8% as Q4 Earnings & Sales Crush Estimates
CyberArk Software Ltd. CYBR shares gained 7.6% on Thursday after the cybersecurity company delivered better-than-expected results for the fourth quarter of 2023. The company reported non-GAAP earnings of 81 cents per share and outpaced the Zacks Consensus Estimate of 47 cents. CyberArk’s fourth-quarter non-GAAP earnings also came well ahead of its previously provided guidance range of 41-50 cents per share.
Moreover, the bottom line improved more than fivefold from the year-ago quarter’s earnings of 16 cents per share. The robust year-over-year earnings growth was primarily driven by higher revenues, better cost management and increased financial income, partially offset by a higher number of outstanding shares.
Top-Line Performance
In the fourth quarter of 2023, the Identity Security solution provider’s reported revenues increased 32% year over year to $223.1 million and surpassed the consensus mark of $209.7 million. Markedly, more than 90% of quarterly revenues were recurring in nature, which surged 41% year over year to $201.5 million.
Annual Recurring Revenues (“ARR”) increased 36% to $774 million. The subscription portion, which accounted for 75% of the total ARR, soared 60% year over year to $582 million. This upside was primarily driven by a record number of software-as-a-service solution bookings and the strong demand for on-premise subscription offerings. However, the maintenance portion, representing 25% of the total ARR, decreased to $192 million from $206 million on Dec 31, 2022.
CyberArk’s subscription transition has been witnessing strong momentum with a rapidly growing base of recurring revenues. Subscription bookings made up 95% of license bookings in the quarter.
CyberArk Software Ltd. Price, Consensus and EPS Surprise
CyberArk Software Ltd. price-consensus-eps-surprise-chart | CyberArk Software Ltd. Quote
Quarterly Details
Segment-wise, Subscription revenues (67% of the total revenues) were $150.3 million, up 70% from the year-ago quarter. Our estimate for Subscription revenues was pegged at $139.5 million.
Maintenance and professional services revenues (29% of the total revenues) were $64.8 million, slightly lower than the year-ago quarter’s $66.1 million. Our estimate for Maintenance and professional services revenues was pegged at $65.6 million.
Perpetual license revenues (4% of the total revenues) plunged to $8 million from $14.6 million in the year-ago quarter. The decline reflects the company’s continued efforts toward shifting the business model to subscription-based from a perpetual license. Our estimate for Perpetual license revenues was pegged at $4.2 million.
Operating Details
CyberArk’s non-GAAP gross profit increased 35.3% year over year to $189.7 million. Moreover, the non-GAAP gross margin expanded 210 basis points (bps) to 85%.
Non-GAAP operating expenses escalated 13.9% year over year to $155 million. Higher operating expenses reflect the company’s aggressive sales and marketing initiatives and sustained investments in research and development to boost product offerings and capabilities. However, operating expenses as a percentage of revenues declined to 69.5% from 80.5% in the year-ago quarter.
The company reported a non-GAAP operating income of $34.7 million in the fourth quarter, which reflects a strong improvement from the year-ago quarter’s non-GAAP operating income of $4.1 million. Its fourth-quarter non-GAAP operating margin was 15.6%, significantly higher than the year-ago quarter’s 2.4%.
Balance Sheet
CyberArk ended the October-December 2023 quarter with cash and cash equivalents, marketable securities and short-term deposits of $993.4 million. As of Dec 31, 2023, total deferred revenues were $480.6 million, up 18% year over year.
During the fourth quarter, the company generated operating cash flow and free cash flow of $46.9 million and $46.2 million, respectively. In 2023, CyberArk generated operating cash flow of $56.2 million and free cash flow of $51.3 million.
Guidance
CyberArk initiated guidance for the first quarter and the full year 2024. For the first quarter, the company expects revenues between $209 million and $215 million. The non-GAAP operating income is estimated between $7.5 million and $12.5 million. It projects to post non-GAAP earnings in the range of 21-31 cents per share.
For 2024, CYBR expects revenues in the range of $920-$930 million. It projects to post non-GAAP operating income between $75.5 million and $84.5 million. The company projects its non-GAAP earnings to be in the range of $1.63-$1.81 per share.
Zacks Rank & Stocks to Consider
Currently, CyberArk carries a Zacks Rank #3 (Hold). Shares of CYBR have increased 80% over the past year.
Some better-ranked stocks from the broader technology sector are CrowdStrike Holdings CRWD, Amazon.com AMZN and NVIDIA Corporation NVDA, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CrowdStrike’s fiscal 2024 earnings has been revised upward by a penny to $2.95 per share in the past 60 days, suggesting year-over-year growth of 91.6%. The long-term estimated earnings growth rate for the stock stands at 36.1%. Shares of CRWD have jumped 184.8% over the past year.
The Zacks Consensus Estimate for Amazon’s 2024 earnings has been revised upward by 36 cents to $4.03 per share in the past seven days, which calls for an increase of 39% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 28.1%. AMZN stock has returned 72.9% over the past year.
The consensus mark for NVIDIA’s fiscal 2024 earnings has been revised downward by a penny to $12.30 per share over the past 30 days, indicating a whopping 268.3% increase from fiscal 2023. It has a long-term earnings growth expectation of 13.5%. In the trailing 12 months, NVDA stock has surged 211.7%.
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