CyberArk Announces Strong Third Quarter 2024 Results

Rhea-AI Summary

CyberArk (CYBR) reported strong Q3 2024 financial results, exceeding all guided metrics. Subscription revenue grew 43% year-over-year to $175.6 million, while total revenue increased 26% to $240.1 million. The company's Annual Recurring Revenue (ARR) reached $926 million, up 31% year-over-year, with the subscription portion growing 46% to $735 million. GAAP net income was $11.1 million ($0.24 per diluted share). The company raised its full-year 2024 guidance across all metrics and announced the successful closure of the Venafi acquisition on October 1, 2024.

Positive

• Subscription revenue grew 43% YoY to $175.6 million
• Total revenue increased 26% YoY to $240.1 million
• ARR grew 31% YoY to $926 million
• Turned GAAP net loss to profit: $11.1 million vs $(14.6) million last year
• Operating cash flow improved significantly to $167.2 million from $9.3 million
• Non-GAAP net income more than doubled to $45.1 million from $19.6 million

Negative

• Maintenance and professional services revenue declined to $61.6 million from $64.3 million
• Perpetual license revenue decreased to $2.9 million from $4.1 million
• GAAP operating loss of $(11.1) million continues, though improved from prior year

Insights

Financial Analyst

CyberArk delivered exceptional Q3 results with robust growth across key metrics. $240.1M in total revenue represents 26% YoY growth, while subscription revenue surged 46% to $735M ARR. The company's transition to a subscription-based model is progressing well, now comprising 79% of total ARR.

Notable improvements in profitability metrics with non-GAAP operating income more than doubling to $35.4M and strong cash flow generation of $167.2M YTD. The Venafi acquisition positions CYBR for accelerated growth in machine identity security. Raised FY24 guidance reflects management's confidence, projecting total revenue of $983M-$989M and ARR growth of 49-50%.

Tech Industry Analyst

The strategic acquisition of Venafi significantly strengthens CyberArk's position in the rapidly growing machine identity security market. This move addresses a critical gap in cybersecurity as organizations grapple with exponential growth in machine identities across cloud environments. The partnership with Wiz further enhances their cloud security capabilities.

Market leadership validation through Gartner and KuppingerCole rankings demonstrates CyberArk's technological edge in PAM solutions. The transition from perpetual licenses to subscription-based offerings shows successful business model evolution, improving revenue predictability and customer lifetime value.

Results Exceeded all Guided Metrics

Subscription Portion of Annual Recurring Revenue (ARR) Grew 46% Year-Over-Year to $735 million

Total ARR Grew 31% Year-Over-Year to $926 million

Subscription Revenue Grew 43% Year-Over-Year to $175.6 million

Total Revenue Grew 26% Year-Over-Year Reaching a Record of $240.1 million

Net Cash Provided by Operating Activities for the Nine Months Ended September 30, 2024 of $167.2 million

Company Raises Full Year Guidance Across all Metrics

NEWTON, Mass. & PETACH TIKVA, Israel--(BUSINESS WIRE)-- CyberArk (NASDAQ: CYBR), the global leader in identity security, today announced strong financial results for the third quarter ended September 30, 2024.

“CyberArk reported strong results and outperformed guidance across all metrics. Our best-in-class execution and industry leadership in identity security is helping us deliver strong net new ARR, record revenue and increased profitability and cash flow,” said Matt Cohen, CyberArk’s Chief Executive Officer. “The security first approach is at the core of CyberArk’s DNA and differentiating us from competitors. We continue to deliver on our vision of securing every identity – human and machine – with the right level of privilege controls. Demand for our solutions remains strong as customers continue to embrace our industry leading solutions across workforce, IT, developer and machine identities. Given the tremendous market opportunity, the mission critical nature of securing all identities, and durable demand drivers, we are confidently raising our guidance for the full year 2024 across all metrics.

“We are thrilled to have closed the acquisition of Venafi on October 1, extending our platform leadership and setting a new standard for end-to-end machine identity security. Feedback from both customers and partners has further validated our excitement. Machine identities are the fastest growing and most complex identities today, and Venafi’s cloud native, modern machine identity management solution is the leader in a market that is ready for an inflection,” concluded Cohen.

Financial Summary for the Third Quarter Ended September 30, 2024

The financial results for the third quarter of 2024 did not include any financial contribution from the acquisition of Venafi, which closed on October 1, 2024.

• Subscription revenue was $175.6 million in the third quarter of 2024, an increase of 43 percent from $122.9 million in the third quarter of 2023.
• Maintenance and professional services revenue was $61.6 million in the third quarter of 2024, compared to $64.3 million in the third quarter of 2023.
• Perpetual license revenue was $2.9 million in the third quarter of 2024, compared to $4.1 million in the third quarter of 2023.
• Total revenue was $240.1 million in the third quarter of 2024, up 26 percent from $191.2 million in the third quarter of 2023.
• GAAP operating loss was $(11.1) million compared to GAAP operating loss of $(25.7) million in the same period last year. Non-GAAP operating income was $35.4 million compared to non-GAAP operating income of $16.9 million, in the same period last year.
• GAAP net income was $11.1 million, or $0.24 per diluted share, compared to GAAP net loss of $(14.6) million, or $(0.35) per basic and diluted share, in the same period last year. Non-GAAP net income was $45.1 million, or $0.94 per diluted share, compared to non-GAAP net income of $19.6 million, or $0.42 per diluted share, in the same period last year.

Balance Sheet and Net Cash Provided by Operating Activities

• As of September 30, 2024, cash, cash equivalents, short-term deposits, and marketable securities were $1.5 billion.
• During the nine months ended September 30, 2024, net cash provided by operating activities was $167.2 million, compared to $9.3 million in the nine months ended September 30, 2023.

Key Business Highlights

• Annual Recurring Revenue (ARR) was $926 million, an increase of 31 percent from $705 million at September 30, 2023.
  • The Subscription portion of ARR was $735 million, or 79 percent of total ARR at September 30, 2024. This represents an increase of 46 percent from $504 million, or 72 percent of total ARR, at September 30, 2023.
  • The Maintenance portion of ARR was $191 million at September 30, 2024, compared to $200 million at September 30, 2023.
• Recurring revenue in the third quarter was $224.2 million, an increase of 29 percent from $174.4 million for the third quarter of 2023.

CyberArk Announces Chief Financial Officer Transition

CyberArk today announced that Josh Siegel, CyberArk’s Chief Financial Officer, is stepping down from his role as Chief Financial Officer effective January 1, 2025. As part of a planned succession, Erica Smith, CyberArk's Deputy Chief Financial Officer, will become Chief Financial Officer and join the executive team at that time. The details of the announcement can be accessed here.

Recent Developments

• CyberArk Closed the Acquisition of Machine Identity Management Leader Venafi, setting a new paradigm for end-to-end machine identity security.
• CyberArk Celebrated the 10 Year Anniversary of its Initial Public Offering (IPO) by ringing the Opening Bell at the NASDAQ Stock Exchange.
• CyberArk announced a strategic partnership with leading cloud security provider Wiz, working together to enable organizations to build faster and safer in the cloud.
• CyberArk Named a Leader in the 2024 Gartner® Magic Quadrant™ for Privileged Access Management. CyberArk is positioned as a Leader for the sixth consecutive time and is positioned furthest in Completeness of Vision. ⁽¹⁾
• CyberArk Named a Overall Leader in the 2024 Leadership Compass on Privileged Access Management⁽²⁾ by KuppingerCole Analysts AG. The report examined three separate leadership categories: Product, Innovation and Market Leadership. CyberArk is placed in the top quadrant and scores highest in all of them.
• CyberArk Named Trusted Cloud Provider by Cloud Security Alliance.

⁽¹⁾Gartner® Magic Quadrant™ for Privileged Access Management, by Abhyuday Data, Michael Kelley, Nayara Sangiorgio, Felix Gaehtgens, Paul Mezzera, 9 September 2024

⁽²⁾KuppingerCole Analysts AG “Leadership Compass: Privileged Access Management,” October 7, 2024 by Paul Fisher.

Business Outlook

Based on information available as of November 13, 2024, CyberArk is issuing guidance for the fourth quarter and full year 2024 as indicated below.

The guidance for the fourth quarter and full year 2024 includes the expected contribution from the acquisition of Venafi, which closed on October 1, 2024.

Fourth Quarter 2024:

• Total revenue is expected to be in the range of $297.0 million and $303.0 million, representing growth of 33 percent to 36 percent compared to the fourth quarter of 2023.
• Non-GAAP operating income is expected to be in the range of $43.5 million to $48.5 million.
• Non-GAAP net income per share is expected to be in the range of $0.65 to $0.75 per diluted share.
  • Assumes 51.2 million weighted average diluted shares.

Full Year 2024:

• Total revenue is expected to be in the range of $983.0 million to $989.0 million, representing growth of 31 percent to 32 percent compared to the full year 2023.
• Non-GAAP operating income is expected to be in the range of $135.0 million to $140.0 million.
• Non-GAAP net income per share is expected to be in the range of $2.85 to $2.96 per diluted share.
  • Assumes 49.0 million weighted average diluted shares.
• ARR as of December 31, 2024 is expected to be in the range of $1.153 billion to $1.163 billion, representing growth of 49 percent to 50 percent from December 31, 2023.
• Non-GAAP free cash flow is expected to be in the range of $203.0 million to $213.0 million for the full year 2024.

Conference Call Information

In conjunction with this announcement, CyberArk will host a conference call on Wednesday, November 13, 2024 at 8:30 a.m. Eastern Time (ET) to discuss the Company’s third quarter financial results and its business outlook. To access this call, dial +1 (888) 330-2455 (U.S.) or +1 (240) 789-2717 (international). The conference ID is 6515982. 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) 770-2030 (U.S.) or +1 (609) 800-9909 (international). The replay pass code is 6515982. 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.

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The Gartner content described herein (the “Gartner Content”) represents research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. and is not a representation of fact. Gartner Content speaks as of its original publication date (and not as of the date of this press release), and the opinions expressed in the Gartner Content are subject to change without notice.

About CyberArk

CyberArk (NASDAQ: CYBR) is the global leader in identity security. Centered on Intelligent Privilege Controls™, CyberArk provides the most comprehensive security offering for any identity – human or machine – across business applications, distributed workforces, hybrid cloud environments and throughout the DevOps lifecycle. The world’s leading organizations trust CyberArk to help secure their most critical assets. To learn more about CyberArk, visit cyberark.com, read the CyberArk blogs or follow on LinkedIn, X, Facebook or YouTube.

Copyright © 2024 CyberArk Software. All Rights Reserved. All other brand names, product names, or trademarks belong to their respective holders.

Key Performance Indicators and Non-GAAP Financial Measures

Recurring Revenue

• Recurring Revenue is defined as revenue derived from SaaS and self-hosted subscription contracts, and maintenance contracts related to perpetual licenses during the reported period.

Annual Recurring Revenue (ARR)

• ARR is defined as the annualized value of active SaaS, self-hosted subscriptions and their associated maintenance and support services, and maintenance contracts related to the perpetual licenses in effect at the end of the reported period.

Subscription Portion of Annual Recurring Revenue

• Subscription portion of ARR is defined as the annualized value of active SaaS and self-hosted subscription contracts in effect at the end of the reported period. The subscription portion of ARR excludes maintenance contracts related to perpetual licenses.

Maintenance Portion of Annual Recurring Revenue

• Maintenance portion of ARR is defined as the annualized value of active maintenance contracts related to perpetual licenses. The Maintenance portion of ARR excludes SaaS and self-hosted subscription contracts in effect at the end of the reported period.

Net New ARR

• Net new ARR refers to the difference between ARR as of September 30, 2024 and ARR as of June 30, 2024.

Annual Recurring Revenue (ARR), Subscription portion of ARR and Maintenance portion of ARR are performance indicators that provide more visibility into the growth of our recurring business in the upcoming year. This visibility allows us to make informed decisions about our capital allocation and level of investment. Each of these measures should be viewed independently of revenues and total deferred revenue as each is an operating measure and is not intended to be combined with or to replace either of those measures. ARR, Subscription portion of ARR and Maintenance portion of ARR are not forecasts of future revenues and can be impacted by contract start and end dates and renewal rates.

Non-GAAP Financial Measures

CyberArk believes that the use of non-GAAP gross profit, non-GAAP operating expense, non-GAAP operating income (loss), non-GAAP net income and free cash flow 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 loss, net income (loss) or net cash provided by operating activities or any other performance measures derived in accordance with GAAP.

• Non-GAAP gross profit is calculated as GAAP gross profit excluding share-based compensation expense, amortization of intangible assets related to acquisitions, and impairment of capitalized software development costs.
• Non-GAAP operating expense is calculated as GAAP operating expenses excluding share-based compensation expense, acquisition related expenses, and amortization of intangible assets related to acquisitions.
• Non-GAAP operating income (loss) is calculated as GAAP operating loss excluding share-based compensation expense, acquisition related expenses, amortization of intangible assets related to acquisitions, and impairment of capitalized software development costs.
• Non-GAAP net income is calculated as GAAP net (loss) excluding share-based compensation expense, acquisition related expenses, amortization of intangible assets related to acquisitions, amortization of debt discount and issuance costs, change in fair value of derivative assets, gain from investment in privately held companies, impairment of capitalized software development costs, and the tax effect of non-GAAP adjustments.
• Free cash flow is calculated as net cash provided by operating activities less purchase of property and equipment.

The Company believes that providing non-GAAP financial measures that are adjusted by, as applicable, share-based compensation expense, acquisition related expenses, amortization of intangible assets related to acquisitions, non-cash interest expense related to the amortization of debt discount and issuance cost, change in fair value of derivative assets, and the tax effect of the non-GAAP adjustments and purchase of property and equipment 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, change in fair value of derivative assets, and non-cash interest expense related to the amortization of debt discount and issuance costs do not reflect the performance of its core business and impact period-to-period comparability. The Company believes free cash flow is a liquidity measure that, after the purchase of property and equipment, provides useful information about the amount of cash generated by the business.

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, non-cash interest expense related to the amortization of debt discount and issuance costs, non-cash change in fair value of derivative assets, the tax effect of the non-GAAP adjustments, and purchase of property and equipment. 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, as well as changes in interest rates and foreign exchange rates, which impact other GAAP performance metrics. 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, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating, but not limited to: risks related to the Company’s acquisition of Venafi Holdings, Inc. (“Venafi”), including impacts of the acquisition on the Company’s or Venafi’s operating results and business generally; the ability of the Company or Venafi to retain and hire key personnel and maintain relationships with customers, suppliers and others with whom the Company or Venafi do business; risks that Venafi’s business will not be integrated successfully into the Company’s operations; risks relating to the Company’s ability to realize anticipated benefits of the combined operations after the Venafi acquisition; changes to the drivers of the Company’s growth and the Company’s ability to adapt its solutions to the information security market changes and demands, including artificial intelligence (“AI”); the Company’s ability to acquire new customers and maintain and expand the Company’s revenues from existing customers; intense competition within the information security market; real or perceived security vulnerabilities, gaps, or cybersecurity breaches of the Company, or the Company’s customers’ or partners’ systems, solutions or services; risks related to the Company’s compliance with privacy, data protection and AI laws and regulations; the Company’s ability to successfully operate its business as a subscription company and fluctuation in the quarterly results of operations; the Company’s reliance on third-party cloud providers for its operations and software-as-a-service (“SaaS”) solutions; the Company’s ability to hire, train, retain and motivate qualified personnel; the Company’s ability to effectively execute its sales and marketing strategies; the Company’s ability to find, complete, fully integrate or achieve the expected benefits of additional strategic acquisitions; the Company’s ability to maintain successful relationships with channel partners, or if the Company’s channel partners fail to perform; risks related to sales made to government entities; prolonged economic uncertainties or downturns; the Company’s history of incurring net losses, the Company’s ability to generate sufficient revenue to achieve and sustain profitability and the Company’s ability to generate cash flow from operating activities; regulatory and geopolitical risks associated with the Company’s global sales and operations; risks related to intellectual property claims; fluctuations in currency exchange rates; the ability of the Company’s products to help customers achieve and maintain compliance with government regulations or industry standards; the Company’s ability to protect its proprietary technology and intellectual property rights; risks related to using third-party software, such as open-source software; risks related to stock price volatility or activist shareholders; any failure to retain the Company’s “foreign private issuer” status or the risk that the Company may be classified, for U.S. federal income tax purposes, as a “passive foreign investment company”; risks related to the Company’s Convertible Senior Notes due 2024 (the “Convertible Notes”), including the potential dilution to existing shareholders and the Company’s ability to raise the funds necessary to repurchase the Convertible Notes; changes in tax laws; the Company’s expectation to not pay dividends on the Company’s ordinary shares for the foreseeable future; risks related to the Company’s incorporation and location in Israel, including the ongoing war between Israel and Hamas and conflict in the region; 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 U.S. 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, except as required by applicable law.

CYBERARK SOFTWARE LTD.
Consolidated Statements of Operations
U.S. dollars in thousands (except per share data)
(Unaudited)
			Three Months Ended								Nine Months Ended
			September 30,								September 30,
			2023				2024				2023				2024
	Revenues:
	Subscription		$	122,879			$	175,577			$	321,766			$	490,230
	Perpetual license			4,056				2,896				13,028				9,484
	Maintenance and professional services			64,301				61,629				193,990				186,644
	Total revenues			191,236				240,102				528,784				686,358
	Cost of revenues:
	Subscription			21,281				24,569				54,859				68,132
	Perpetual license			642				466				1,173				1,248
	Maintenance and professional services			19,816				22,150				60,446				65,231
	Total cost of revenues			41,739				47,185				116,478				134,611
	Gross profit			149,497				192,917				412,306				551,747
	Operating expenses:
	Research and development			51,733				59,306				157,653				169,776
	Sales and marketing			98,859				113,690				299,376				333,993
	General and administrative			24,642				31,011				67,038				89,422
	Total operating expenses			175,234				204,007				524,067				593,191
	Operating loss			(25,737	)			(11,090	)			(111,761	)			(41,444	)
	Financial income, net			12,424				23,442				33,912				50,841
	Income (loss) before taxes on income			(13,313	)			12,352				(77,849	)			9,397
	Tax benefit (taxes on income)			(1,296	)			(1,242	)			2,434				(5,740	)
	Net income (loss)		$	(14,609	)		$	11,110			$	(75,415	)		$	3,657
	Basic income (loss) per ordinary share		$	(0.35	)		$	0.26			$	(1.82	)		$	0.09
	Diluted income (loss) per ordinary share		$	(0.35	)		$	0.24			$	(1.82	)		$	0.12
	Shares used in computing net income (loss)
	per ordinary shares, basic			41,899,371				43,310,397				41,539,052				42,879,017
	Shares used in computing net income (loss)
	per ordinary shares, diluted			41,899,371				48,260,869				41,539,052				47,926,888

CYBERARK SOFTWARE LTD.
Consolidated Balance Sheets
U.S. dollars in thousands
(Unaudited)
			December 31,				September 30,
			2023				2024
ASSETS
CURRENT ASSETS:
Cash and cash equivalents			$	355,933			$	1,238,472
Short-term bank deposits				354,472				199,128
Marketable securities				283,016				37,707
Trade receivables				186,472				166,157
Prepaid expenses and other current assets				31,550				300,766
Total current assets				1,211,443				1,942,230
LONG-TERM ASSETS:
Marketable securities				324,548				19,311
Property and equipment, net				16,494				17,470
Intangible assets, net				20,202				14,974
Goodwill				153,241				153,241
Other long-term assets				214,816				232,207
Deferred tax asset				81,464				82,382
Total long-term assets				810,765				519,585
TOTAL ASSETS			$	2,022,208			$	2,461,815
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables			$	10,971			$	5,346
Employees and payroll accruals				95,538				86,779
Accrued expenses and other current liabilities				36,562				47,524
Convertible senior notes, net				572,340				535,378
Deferred revenues				409,219				447,757
Total current liabilities				1,124,630				1,122,784
LONG-TERM LIABILITIES:
Deferred revenues				71,413				78,052
Other long-term liabilities				33,839				30,452
Total long-term liabilities				105,252				108,504
TOTAL LIABILITIES				1,229,882				1,231,288
SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0.01 par value				111				114
Additional paid-in capital				827,260				1,259,840
Accumulated other comprehensive income (loss)				(1,849	)			112
Accumulated deficit				(33,196	)			(29,539	)
Total shareholders' equity				792,326				1,230,527
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			$	2,022,208			$	2,461,815

CYBERARK SOFTWARE LTD.
Consolidated Statements of Cash Flows
U.S. dollars in thousands
(Unaudited)
	Nine Months Ended
	September 30,
	2023				2024
Cash flows from operating activities:
Net income (loss)	$	(75,415	)		$	3,657
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		15,097				11,983
Amortization of premium and accretion of discount on marketable securities, net and other		(2,724	)			(3,591	)
Share-based compensation		102,566				121,421
Deferred income taxes, net		(10,763	)			2,764
Decrease in trade receivables		1,834				20,315
Amortization of debt discount and issuance costs		2,245				2,257
Change in fair value of derivative assets		-				(2,591	)
Increase in prepaid expenses, other current and long-term assets and others		(22,565	)			(31,778	)
Changes in operating lease right-of-use assets		5,495				5,947
Decrease in trade payables		(980	)			(6,078	)
Increase in short-term and long-term deferred revenues		14,613				45,177
Decrease in employees and payroll accruals		(13,579	)			(6,195	)
Increase in accrued expenses and other current and long-term liabilities		669				10,216
Changes in operating lease liabilities		(7,187	)			(6,353	)
Net cash provided by operating activities		9,306				167,151
Cash flows from investing activities:
Investment in short and long term deposits		(204,461	)			(221,898	)
Proceeds from short and long term deposits		243,630				374,707
Investment in marketable securities and other		(322,049	)			(129,481	)
Proceeds from sales and maturities of marketable securities and other		285,445				688,060
Purchase of property and equipment		(4,253	)			(7,090	)
Net cash provided by (used in) investing activities		(1,688	)			704,298
Cash flows from financing activities:
Proceeds from (payment of) withholding tax related to employee stock plans		3,210				(7,661	)
Proceeds from exercise of stock options		4,209				5,245
Proceeds in connection with employees stock purchase plan		11,776				14,867
Net cash provided by financing activities		19,195				12,451
Increase in cash and cash equivalents		26,813				883,900
Effect of exchange rate differences on cash and cash equivalents		(1,955	)			(1,361	)
Cash and cash equivalents at the beginning of the period		347,338				355,933
Cash and cash equivalents at the end of the period	$	372,196			$	1,238,472

CYBERARK SOFTWARE LTD.
Reconciliation of GAAP Measures to Non-GAAP Measures
U.S. dollars in thousands (except per share data)
(Unaudited)
	Reconciliation of Net cash provided by operating activities to Free cash flow:
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2023				2024				2023				2024
	Net cash provided by operating activities	$	14,353			$	54,173			$	9,306			$	167,151
	Less:
	Purchase of property and equipment		(731	)			(2,605	)			(4,253	)			(7,090	)
	Free cash flow	$	13,622			$	51,568			$	5,053			$	160,061
	GAAP net cash provided by (used in) investing activities		(42,788	)			534,926				(1,688	)			704,298
	GAAP net cash provided by financing activities		5,510				6,196				19,195				12,451
	Reconciliation of Gross Profit to Non-GAAP Gross Profit:
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2023				2024				2023				2024
	Gross profit	$	149,497			$	192,917			$	412,306			$	551,747
	Plus:
	Share-based compensation (1)		4,780				5,624				13,112				15,857
	Amortization of share-based compensation capitalized in software development costs (3)		103				81				309				234
	Amortization of intangible assets (2)		1,704				1,704				5,113				5,113
	Impairment of capitalized software development costs		2,067				-				2,067				-
	Non-GAAP gross profit	$	158,151			$	200,326			$	432,907			$	572,951
	Reconciliation of Operating Expenses to Non-GAAP Operating Expenses:
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2023				2024				2023				2024
	Operating expenses	$	175,234			$	204,007			$	524,067			$	593,191
	Less:
	Share-based compensation (1)		33,821				37,767				89,454				105,564
	Amortization of intangible assets (2)		139				126				410				376
	Acquisition related expenses		-				1,144				-				6,425
	Non-GAAP operating expenses	$	141,274			$	164,970			$	434,203			$	480,826
	Reconciliation of Operating Loss to Non-GAAP Operating Income (Loss):
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2023				2024				2023				2024
	Operating loss	$	(25,737	)		$	(11,090	)		$	(111,761	)			(41,444	)
	Plus:
	Share-based compensation (1)		38,601				43,391				102,566				121,421
	Amortization of share-based compensation capitalized in software development costs (3)		103				81				309				234
	Amortization of intangible assets (2)		1,843				1,830				5,523				5,489
	Acquisition related expenses		-				1,144				-				6,425
	Impairment of capitalized software development costs		2,067				-				2,067				-
	Non-GAAP operating income (loss)	$	16,877			$	35,356			$	(1,296	)		$	92,125
	Reconciliation of Net Income (Loss) to Non-GAAP Net Income:
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2023				2024				2023				2024
	Net income (loss)	$	(14,609	)		$	11,110			$	(75,415	)		$	3,657
	Plus:
	Share-based compensation (1)		38,601				43,391				102,566				121,421
	Amortization of share-based compensation capitalized in software development costs (3)		103				81				309				234
	Amortization of intangible assets (2)		1,843				1,830				5,523				5,489
	Acquisition related expenses		-				1,144				-				6,425
	Amortization of debt discount and issuance costs		748				753				2,244				2,257
	Change in fair value of derivative assets		-				(2,591	)			-				(2,591	)
	Gain from investment in privately held companies		(250	)			-				(544	)			-
	Impairment of capitalized software development costs		2,067				-				2,067				-
	Taxes on income related to non-GAAP adjustments		(8,894	)			(10,578	)			(22,808	)			(29,787	)
	Non-GAAP net income	$	19,609			$	45,140			$	13,942			$	107,105
	Non-GAAP net income per share
	Basic	$	0.47			$	1.04			$	0.34			$	2.50
	Diluted	$	0.42			$	0.94			$	0.30			$	2.23
	Weighted average number of shares
	Basic		41,899,371				43,310,397				41,539,052				42,879,017
	Diluted		46,641,527				48,260,869				46,134,041				47,926,888
	(1) Share-based Compensation :
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2023				2024				2023				2024
	Cost of revenues - Subscription	$	1,149			$	1,702			$	2,959			$	4,731
	Cost of revenues - Perpetual license		11				5				30				17
	Cost of revenues - Maintenance and Professional services		3,620				3,917				10,123				11,109
	Research and development		7,867				8,541				21,797				24,258
	Sales and marketing		15,800				17,486				43,990				49,277
	General and administrative		10,154				11,740				23,667				32,029
	Total share-based compensation	$	38,601			$	43,391			$	102,566			$	121,421
	(2) Amortization of intangible assets :
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2023				2024				2023				2024
	Cost of revenues - Subscription	$	1,704			$	1,704			$	5,113			$	5,113
	Sales and marketing		139				126				410				376
	Total amortization of intangible assets	$	1,843			$	1,830			$	5,523			$	5,489
	(3) Classified as Cost of revenues - Subscription.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241113416461/en/

Investor Relations:

Srinivas Anantha, CFA

CyberArk

617-558-2132

ir@cyberark.com

Media:

Nick Bowman

CyberArk

+44 (0) 7841 673378

press@cyberark.com

Source: CyberArk

FAQ

What was CyberArk's (CYBR) revenue growth in Q3 2024?

CyberArk's total revenue grew 26% year-over-year to $240.1 million in Q3 2024.

How much did CyberArk's (CYBR) subscription revenue grow in Q3 2024?

CyberArk's subscription revenue grew 43% year-over-year to $175.6 million in Q3 2024.

What is CyberArk's (CYBR) Annual Recurring Revenue (ARR) as of Q3 2024?

CyberArk's ARR reached $926 million, representing a 31% increase year-over-year.

When did CyberArk (CYBR) complete the Venafi acquisition?

CyberArk completed the acquisition of Venafi on October 1, 2024.