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Cyber Arc
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(CyberArk, symbol: CYBR), which deals in the field of identity security, reports mixed results for the fourth quarter of 2022. The forecast for the coming quarter is mixed, but the forecast for the whole year is still above analysts’ expectations. The company reported adjusted earnings on a non-GAAP basis of 16 cents per share, above expectations for 12 cents per share. However, on the top line the company recorded revenues of 169.2 million dollars below the expected 174.05 million dollars.
But what’s important is the continuation – Cybark does expect a weak quarter in the first quarter, but it hopes to make up for it later this year. The company expects revenues of 162 million dollars (mid-term) in the coming quarter, below analysts’ expectations of 163.6 million dollars. In the bottom line, the company expects an adjusted loss of 26.5 cents per share (mid-term), compared to analysts’ expectations for an adjusted loss of 11 cents.
So where does the optimism come from? In the annual forecast, the company expects to record revenues of 730 million dollars (mid-term), above the analysts’ expectations for revenues of 722 million dollars. In the bottom line, the company expects an adjusted profit of 17.5 cents per share (mid-term), above analysts’ expectations for an adjusted loss of 1 cent per share. If the company does reach this level of revenue, it means a 23% increase in revenue from year to year, better than in 2022 when the increase was 18%.
At the same time, the company reports that Udi Mokdi, founder, chairman and CEO of the company, will step down from his position as CEO of the company And will be appointed active chairman of the company’s board of directors as of April 3, 2023. The person who will replace him is the chief operating officer, Matt (Matthew) Cohen. Odi Mokdi said about the retirement: “My commitment to Cyberark is strong and ongoing. I will continue to be actively involved. The company has a stable business model due to the transition to a subscription model, and thanks to our powerful innovation engine we are considered the leading company in the field of identity security. Matt, who first served as VP of Revenue (CRO) and then as VP of Operations, he played a central role in driving the change of the company’s business model and proved himself to be a results-oriented leader.”
Matt (Matthew) Cohen joined Cyberark in November 2019 as Chief Revenue Officer. In November 2020 he was promoted to the position of Chief Operating Officer and was one of the leaders of the company’s transition to a subscription model. Prior to CyberArk, he served as Senior Vice President of Field Operations at PTC. During his 18 years at PTC, Cohen held various management positions.
Against the background of the reports, Mokidi added and said: “The mix of subscribers out of total orders reached a new record of 90% in the fourth quarter (compared to 71% last year), well above the assumptions for the mix we used in the forecast model. The high mix had a negative effect on the recognized income in the quarter and drove the annual recurring income ( ARR) to $570 million, an increase of 45% year-over-year and significantly above the forecast. In addition, the total addition of ARR and ARR from subscribers in the fourth quarter compared to the third quarter of 2022, set another record. Our customers are adopting our identity security platform, which is comprehensive most on the market, and our solutions are at the top of the priorities of the chief information security managers.”
And back to the data itself:
Annual recurring revenue (ARR) totaled $570 million, an increase of 45% per year. Appointments’ share of ARR amounted to $364 million, or 64% of ARR, doubling from $183 million, (46% of ARR a year earlier). The ARR of the Privilege Cloud solution has reached over $100 million, and now has more than 1,400 customers.
Recurring revenues totaled $142.6 million, an increase of 39% compared to $102.9 million last year. In full 2022, recurring revenue totaled $498.3 million, an increase of 43% over $348.7 million in 2021. It also signed more than 380 customers during the fourth quarter of 2022.
The company has more than 1,300 customers with ARR in the amount of more than 100 thousand dollars, an increase of more than 40% per year. After recruiting over 150 new employees during the quarter, the number of company employees worldwide reached over 2,750.
According to the company, “the recognition of revenue from subscription orders is not recorded in the quarter but on a staggered basis, and the staggered recognition affects Cyberark’s revenue, profitability and cash flow. If the mix of SaaS orders and subscriptions in the fourth quarter of 2022 was the same as the fourth quarter of 2021, then Cyberark’s total revenue would have grown by 27% year-over-year and operating profit would have been 14%. For the full year, Cyberark’s revenue would have grown by 32% and its operating profit would have been 7%. As the dynamics of the transition to a subscription model continue, the best measure to assess the health of the business is ARR” .
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