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01/11 03:35
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call shows strong financial performance with record ARR growth and high margins. Despite integration risks with Venafi, the acquisition is expected to enhance growth. Positive guidance for revenue and free cash flow, alongside strong Q&A responses, indicates optimism. However, potential customer retention risks and convertible notes settlement could moderate gains. Overall, the combination of strong growth metrics and optimistic future guidance suggests a positive stock price movement in the short term.
Subscription ARR $735 million, growing 46% year-over-year.
Net new subscription ARR $59 million, a record outside of the seasonally strong fourth quarter.
Total ARR $926 million, growing 31% year-over-year.
Total revenue $240.1 million, growing 26% year-over-year.
Non-GAAP operating income $35.4 million, or 15% margin, up from 9% margin in the year-ago period.
Free cash flow $51.6 million, or 21% free cash flow margin, compared to $13.6 million or 7% margin in the year-ago period.
Recurring revenue $224.2 million, growing 29% year-over-year.
Subscription revenue $175.6 million, growing 43% year-over-year.
Maintenance and services revenue $61.6 million, with recurring maintenance revenue at $48.6 million, down from $51.5 million in the year-ago period.
Gross profit $200.3 million, or 83.4% gross margin, compared to 82.7% in the third quarter last year.
Net income $45.1 million, or $0.94 per diluted share, more than doubling from $0.42 in the year-ago period.
Employee count 3,300 employees worldwide, including 1,400 in sales and marketing.
Cash and marketable securities Approximately $1.5 billion.
Free cash flow guidance $203 million to $213 million for the full year 2024, representing 21% free cash flow margin at the midpoint.
Workforce Solutions ARR: Workforce solutions crossed the threshold of $100 million in ARR this quarter.
Secrets Management: Strong year of growth for Secrets Management, with a mid six-figure ACV deal from a leading US energy company.
CyberArk Secure Cloud Access: Introduced zero standing privilege for securing developer identities, enhancing security without impeding innovation.
Acquisition of Venafi: Closed the acquisition of Venafi on October 1, enhancing machine identity security capabilities.
Partnership with Wiz: Announced a strategic partnership with Wiz to unify identity security with cloud security.
Free Cash Flow: Reported $51.6 million in free cash flow for the quarter, representing a 21% margin.
Operating Income: Non-GAAP operating income was $35.4 million, a 15% margin, up from 9% year-over-year.
CFO Transition: Josh Siegel will step down as CFO in January 2025, with Erica Smith appointed as the new CFO.
Market Positioning: CyberArk positioned as a leader in the 2024 Gartner Magic Quadrant for Privilege Access Management.
Regulatory Risks: The company mentions the potential risks associated with forward-looking statements and the need to refer to risk factors in their annual report, indicating regulatory scrutiny.
Competitive Pressures: CyberArk faces competitive pressures in the identity security market, particularly with the integration of Venafi and the need to maintain a leadership position in the rapidly evolving landscape.
Supply Chain Challenges: The company discusses the complexities of managing machine identities and the need for integrated solutions, hinting at potential supply chain challenges in delivering these solutions.
Economic Factors: The call highlights the importance of identity security in a world where cyberattacks are prevalent, suggesting that economic downturns could impact customer spending on security solutions.
Integration Risks: The integration of Venafi into CyberArk's operations poses risks, including the challenge of aligning different corporate cultures and operational processes.
Customer Retention Risks: The mention of a large cohort of customers coming up for renewal indicates potential risks in customer retention and the impact on maintenance ARR.
Acquisition of Venafi: CyberArk closed the acquisition of Venafi on October 1, 2024, which is expected to enhance their machine identity security capabilities.
Partnership with Wiz: CyberArk announced a strategic partnership with Wiz to unify their identity security platform with Wiz's cloud security platform.
Workforce Solutions Growth: CyberArk's workforce solutions crossed $100 million in ARR, indicating strong demand for their identity security offerings.
Platform Selling Motion: CyberArk's strategy of platform selling is driving growth, with nearly 230 new logos added in Q3 2024.
Focus on Machine Identity Security: CyberArk aims to integrate Secrets Management with Venafi’s capabilities to create a streamlined machine identity solution.
Q4 2024 Revenue Guidance: CyberArk expects total revenue of $297 million to $303 million for Q4 2024, including approximately $41 million from Venafi.
Full Year 2024 Revenue Guidance: For the full year 2024, total revenue is expected to be in the range of $983 million to $989 million.
Full Year 2024 ARR Guidance: Annual recurring revenue is expected to be between $1.153 billion and $1.163 billion by December 31, 2024.
Free Cash Flow Guidance: Free cash flow guidance for the full year 2024 is increased to a range of $203 million to $213 million.
Non-GAAP EPS Guidance: Non-GAAP EPS for the full year 2024 is expected to be between $2.85 and $2.96 per diluted share.
Convertible Senior Notes Settlement: CyberArk plans to settle approximately 3.7 million shares associated with convertible senior notes maturing on November 15, 2024, as outlined in their SEC filing. This will be included in the fully diluted share count.
Cash Proceeds from Cap Call: The company expects a cap call associated with the convertible notes to result in cash proceeds of approximately $260 million.
The earnings call reveals strong financial performance, with revenue and ARR growth exceeding expectations, and a robust free cash flow. Positive guidance and the absence of macro headwinds further reinforce optimism. The Q&A highlights increased customer engagement and multi-product adoption, suggesting sustained demand. Despite conservative guidance due to macro volatility, the overall sentiment is positive, driven by strong earnings and optimistic future outlook.
The earnings call reveals strong financial performance, with record free cash flow and ARR surpassing $1 billion. Revenue and gross profit exceeded guidance, and the company is expanding its identity security solutions. Despite a cautious guidance approach due to macroeconomic volatility, management remains optimistic about product adoption and market opportunities. The Q&A highlights positive customer engagement and no significant competitive threats. The lack of a specific shareholder return plan is a minor negative, but overall, the positive financials and strategic positioning suggest a positive stock price movement.
The earnings call summary and Q&A reveal strong financial performance, with record free cash flow and significant revenue growth. The strategic acquisitions of Venafi and Zilla enhance CyberArk's offerings, while partnerships like the one with Wiz strengthen its market position. The guidance provided is optimistic, with increased free cash flow expectations and a return to the Rule of 40, indicating a balance between growth and profitability. Despite some uncertainties, particularly in federal spending, the overall sentiment is positive, suggesting a potential stock price increase of 2% to 8%.
The earnings call shows strong financial performance with record ARR growth and high margins. Despite integration risks with Venafi, the acquisition is expected to enhance growth. Positive guidance for revenue and free cash flow, alongside strong Q&A responses, indicates optimism. However, potential customer retention risks and convertible notes settlement could moderate gains. Overall, the combination of strong growth metrics and optimistic future guidance suggests a positive stock price movement in the short term.
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