CyberArk Announces Strong First Quarter 2019 Results

CyberArk,
(NASDAQ: CYBR), the global leader in privileged
access security, today announced strong financial results for the
first quarter ended March 31, 2019.

“We were pleased to deliver results ahead of all guided metrics as well
as record cash flow from operations,” said Udi Mokady, CyberArk Chairman
and CEO. “Our results demonstrate that Privileged Access Security is the
foundation of comprehensive cybersecurity programs. As the leader in the
market, organizations of all sizes and industries are turning to
CyberArk as a trusted advisor to secure digital transformation and cloud
migration strategies. As we look at the remainder of 2019 and beyond, we
are committed to delivering sustainable growth, strong profitability and
continual innovation to secure privileged access across on-premises,
hybrid and cloud environments.”

Financial Highlights for the First Quarter Ended March 31, 2019

Revenue:

• Total revenue was $95.9 million, up 34% compared with the first
  quarter of 2018.
• License revenue was $51.3 million, up 33% compared with the first
  quarter of 2018.
• Maintenance and professional services revenue was $44.7 million, up
  34% compared with the first quarter of 2018.

Operating Income:

• GAAP operating income was $13.6 million, compared to $4.0 million in
  the first quarter of 2018. Non-GAAP operating income was $25.5
  million, compared to $12.6 million in the first quarter of 2018.

Net Income:

• GAAP net income was $13.7 million, or $0.36 per diluted share,
  compared to GAAP net income of $6.4 million, or $0.18 per diluted
  share, in the first quarter of 2018. Non-GAAP net income was $21.5
  million, or $0.56 per diluted share, compared to $11.8 million, or
  $0.32 per diluted share, in the first quarter of 2018.

The tables at the end of this press release include a reconciliation of
GAAP to non-GAAP gross margin, operating income and net income for the
three months ended March 31, 2019 and 2018. An explanation of these
measures is also included below under the heading “Non-GAAP Financial
Measures.”

Balance Sheet and Net Cash Provided by Operating Activities:

• As of March 31, 2019, CyberArk had $509.7 million in cash, cash
  equivalents, marketable securities and short-term deposits. This
  compares with $344.2 million in cash, cash equivalents, marketable
  securities and short-term deposits as of March 31, 2018 and $451.2
  million as of December 31, 2018.
• As of March 31, 2019, total deferred revenue was $171.1 million, a 43%
  increase from $119.5 million at March 31, 2018.
• During the first quarter of 2019, the Company generated $45.9 million
  in net cash provided by operating activities, a 39% increase compared
  to $33.1 million in the first quarter of 2018.

Business Outlook

Based on information available as of May 14, 2019, CyberArk is issuing
guidance as indicated below:

Second Quarter 2019:

• Total revenue between $96.0 million and $98.0 million, representing
  24% to 26% year-over-year growth.
• Non-GAAP operating income between $22.0 million and $23.5 million.
• Non-GAAP net income per share between of $0.45 and $0.48 per diluted
  share.
  • Assumes 39.1 million weighted average diluted shares.

Full Year 2019:

• Total revenue between $415.0 million and $419.0 million, representing
  21% to 22% year-over-year growth.
• Non-GAAP operating income between $100.5 million and $103.5 million.
• Non-GAAP net income per share between $2.10 and $2.16 per diluted
  share.
  • Assumes 38.9 million weighted average diluted shares.

Conference Call Information

CyberArk will host a conference call today, Tuesday, May 14, 2019 at
8:30 a.m. Eastern Time (ET) to discuss the company’s first quarter
financial results and its business outlook. To access this call, dial +1
877-823-7693 (U.S.) or +1 647-689-4543 (international). The conference
ID is 5885529. Additionally, a live webcast of the conference call will
be available via the “Investor Relations” section of the company’s
website at www.cyberark.com.

Following the conference call, a replay will be available for one week
at +1 800-585-8367 (U.S.) or +1 416-621-4642 (international). The replay
pass code is 5885529. An archived webcast of the conference call will
also be available in the “Investor Relations” section of the company’s
website at www.cyberark.com.

About CyberArk

CyberArk
(NASDAQ: CYBR)
is the global leader in privileged access security, a critical layer of
IT security to protect data, infrastructure and assets across the
enterprise, in the cloud and throughout the DevOps pipeline. CyberArk
delivers the industry’s most complete solution to reduce risk created by
privileged credentials and secrets. The company is trusted by the
world’s leading organizations, including more than 50 percent of the
Fortune 500, to protect against external attackers and malicious
insiders. A global company, CyberArk is headquartered in Petach Tikva,
Israel, with U.S. headquarters located in Newton, Mass. The company also
has offices throughout the Americas, EMEA, Asia Pacific and Japan. To
learn more about CyberArk, visit www.cyberark.com,
read the CyberArk
blogs or follow on Twitter via @CyberArk,
LinkedIn
or Facebook.

Copyright © 2019 CyberArk Software. All Rights Reserved. All
other brand names, product names, or trademarks belong to their
respective holders.

Non-GAAP Financial Measures

CyberArk believes that the use of non-GAAP gross profit, non-GAAP
operating income and non-GAAP net income is helpful to our investors.
These financial measures are not measures of the Company’s financial
performance under U.S. GAAP and should not be considered as alternatives
to gross profit, operating income or net income or any other performance
measures derived in accordance with GAAP.

• Non-GAAP gross profit is calculated as gross profit excluding
  share-based compensation expense and amortization of intangible assets
  related to acquisitions.
• Non-GAAP operating income is calculated as operating income excluding
  share-based compensation expense, acquisition related expenses and
  amortization of intangible assets related to acquisitions.
• Non-GAAP net income is calculated as net income excluding share-based
  compensation expense, acquisition related expenses, amortization of
  intangible assets related to acquisitions and the tax effect of the
  non-GAAP adjustments.

The Company believes that providing non-GAAP financial measures that
exclude share-based compensation, acquisition related expenses,
amortization of intangible assets related to acquisitions and the tax
effect of the non-GAAP adjustments allows for more meaningful
comparisons of its period to period operating results. Share-based
compensation expense has been and will continue to be for the
foreseeable future, a significant recurring expense in the Company’s
business and an important part of the compensation provided to its
employees. Share based compensation expense has varying available
valuation methodologies, subjective assumptions and a variety of equity
instruments that can impact a company’s non-cash expense. The Company
believes that expenses related to its acquisitions, amortization of
intangible assets related to acquisitions and the tax effect of the
non-GAAP adjustments do not reflect the performance of its core business
and impact period-to-period comparability.

Non-GAAP financial measures may not provide information that is directly
comparable to that provided by other companies in the Company’s
industry, as other companies in the industry may calculate non-GAAP
financial results differently, particularly related to non-recurring,
unusual items. In addition, there are limitations in using non-GAAP
financial measures as they exclude expenses that may have a material
impact on the Company’s reported financial results. The presentation of
non-GAAP financial information is not meant to be considered in
isolation or as a substitute for the directly comparable financial
measures prepared in accordance with U.S. GAAP. CyberArk urges investors
to review the reconciliation of its non-GAAP financial measures to the
comparable U.S. GAAP financial measures included below, and not to rely
on any single financial measure to evaluate its business.

Guidance for non-GAAP financial measures excludes, as applicable,
share-based compensation expense, acquisition related expenses,
amortization of intangible assets related to acquisitions and the tax
effect of the non-GAAP adjustments. A reconciliation of the non-GAAP
financial measures guidance to the corresponding GAAP measures is not
available on a forward-looking basis due to the uncertainty regarding,
and the potential variability and significance of, the amounts of
share-based compensation expense, amortization of intangible assets
related to acquisitions, and the non-recurring expenses that are
excluded from the guidance. Accordingly, a reconciliation of the
non-GAAP financial measures guidance to the corresponding GAAP measures
for future periods is not available without unreasonable effort.

Cautionary Language Concerning Forward-Looking Statements

This release contains forward-looking statements, which express the
current beliefs and expectations of CyberArk’s (the “Company”)
management. In some cases, forward-looking statements may be identified
by terminology such as “believe,” “may,” “estimate,” “continue,”
“anticipate,” “intend,” “should,” “plan,” “expect,” “predict,”
“potential” or the negative of these terms or other similar expressions.
Such statements involve a number of known and unknown risks and
uncertainties that could cause the Company’s future results, performance
or achievements to differ significantly from the results, performance or
achievements expressed or implied by such forward-looking statements.
Important factors that could cause or contribute to such differences
include risks relating to: changes in the rapidly evolving cyber threat
landscape; failure to effectively manage growth; potential near-term
declines in our operating and net profit margins and our revenue growth
rate; real or perceived shortcomings, defects or vulnerabilities in the
Company’s solutions or internal network system, or the failure of the
Company’s customers or channel partners to correctly implement the
Company’s solutions; fluctuations in quarterly results of operations;
the inability to acquire new customers or sell additional products and
services to existing customers; competition from a wide variety of IT
security vendors; the Company’s ability to successfully integrate recent
and or future acquisitions; and other factors discussed under the
heading “Risk Factors” in the Company’s most recent annual report on
Form 20-F filed with the Securities and Exchange Commission.
Forward-looking statements in this release are made pursuant to the safe
harbor provisions contained in the Private Securities Litigation Reform
Act of 1995. These forward-looking statements are made only as of the
date hereof, and the Company undertakes no obligation to update or
revise the forward-looking statements, whether as a result of new
information, future events or otherwise.

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