At a time when almost every day we hear about more and more technology companies laying off workers due to the deterioration in the macroeconomic environment, is the technology industryIs cyber proving immune to the crisis? At least that’s the opinion of Udi Mokdi, founder and CEO of Cyberark. According to Mokdi, “The cyber industry is the north star of the market. Even in the current period, it is a resilient industry, and it is here to stay. The continued growth of cyber companies, even against the backdrop of the high-tech crisis, demonstrates how critical services are – today more than ever.”
Cyberark deals in the security of preferred accounts and identities in organizations. The company published its second quarter reports and updated that it continues to recruit employees in Israel and abroad these days. During the second quarter, its workforce increased by 131 employees, about a third of them in Israel, at the company’s centers in Petah Tikva and Be’er Sheva. “We continue to strengthen the team in Be’er Sheva with the opening of additional jobs at the company’s development center in the Hi-Tech Park in the south,” Mokdi said. He added that the company launched special training for juniors, 22 computer science graduates (almost half of whom are women) and the course will be an opportunity for them to integrate into the Israeli cyber industry, as Cyberark employees.
In the second quarter, Cyberark recorded revenues higher than analysts’ forecasts and a net loss lower than them. The company presented a growth of 21.4% compared to the corresponding quarter to 142 million dollars. The increase in revenue from subscriptions was 144%, to 66 million dollars. The revenues from maintenance and services increased by 3.9% to 65.3 million dollars, and the revenues from the sale of perpetual licenses decreased as expected by 59.6% to 11 million dollars, this against the background of the change made by the company in its business model – moving from selling licenses to subscribers. Such a change hurts the results in the short term but should contribute to revenues over time. The ARR figure (annual recurring revenue) increased to $465 million compared to $315 million in the corresponding quarter and $427 million in the previous quarter.
According to generally accepted accounting rules (GAAP), Cyberark’s net loss deepened and amounted to $37.6 million, compared to $22.8 million in the corresponding quarter. On a non-GAAP basis the loss amounted to $10.7 million, which is 27 cents per share, while analysts were expecting a loss of 30 cents per share.
Improvement in the revenue and loss forecast
The first half ended with a 17.3% growth in revenue to $270 million, a net loss of $75.4 million according to GAAP rules and a net loss of $22.7 million Non-GAAP. During the half the company generated $10.7 million from current operations, a decrease compared to $49.5 million in the corresponding period in 2021. At the end of the period, Cyberark had $1.2 billion in cash, compared to a long-term debt of $520 million to the holders of its convertible bonds.
In the third quarter, the company expects revenues of 147-153 million dollars, and a net loss of 14-27 cents per share, which is 5.8-11.2 million dollars in total. At the annual level, the forecast increases to revenues of 589-601 million dollars (the previous forecast was about 584-599 million dollars), and the Non-GAAP net loss will amount to 57-82 cents per share, which is 23.2-33.4 million dollars. This is an improvement over the previous forecast.