CyberArk, known for its privileged access management (PAM) capabilities, has been expanding into other aspects of identity security to extend its reach in the broader identity and access management (IAM) market.

Speaking to Computer Weekly during a recent trip to Singapore, Matt Cohen, CEO of CyberArk, said the company’s business has been growing exponentially outside of PAM, in areas such as access and secrets management, endpoint privilege management (EPM) and, more lately, cloud security.

CyberArk takes a unique view around IAM – that is, to bring privileged controls to IAM capabilities such as single sign-on (SSO) and multifactor authentication (MFA). For example, it has capabilities to enable session management, isolation and step-up authentication to make single sign-on more secure, Cohen said.

“Our message across the board is if you bring a security-first mindset to the entire identity security landscape, then ultimately, we can differentiate our platform versus other providers in the market,” he added.

The IAM market is dotted with multiple suppliers, including Okta, Ping Identity, ForgeRock, SailPoint and Microsoft, each with strongholds in certain industries, use cases, market segments and deployment models.

Elaborating on CyberArk’s competitive edge in PAM, Cohen said privileged access was built on the idea that identities need to be secured, not managed.

“If you look at what Okta does, they manage identities from the perspective of making access more seamless. They were never a security company to begin with. They’re coming from a place of streamlining productivity and operations. And now, they’re trying to move into IGA [identity governance and administration] and PAM, but in PAM, they’re coming from operational efficiency into security,” he added.

Amid the identity sprawl, with users having to use multiple accounts and identities managed by different systems, Cohen noted that organisations would want to work with a provider that understands privilege controls and helps them to apply the controls to their workforce. “That has allowed our growth to accelerate.”

IGA specialist SailPoint has been tackling the identity sprawl problem too, but Cohen does not view them as a competitor. “They’re big on IGA and they’re still our largest go-to-market partner in the space. We do more of what we call modern IGA, around light workflows, identity compliance and lifecycle management, and if somebody wants to go big on governance, we’ll point them to SailPoint.”

On Microsoft, Cohen claimed that while the software giant is a formidable player in cyber security, its PAM solutions don’t “go deep enough into core security controls”.

“They recently came out with a very light version of EPM, which is one of our core growth areas. I was happy when that happened because, for us, the biggest problem we have with EPM is awareness, and now Microsoft comes in and makes everybody aware that you should be implementing least privileges on the endpoint.

“But in a bake-off against Microsoft, we can still win in the POC [proof-of-concept] and the technology side for core enterprise security controls,” he said.

CyberArk currently has 8,000 customers worldwide – some 2,000 of them are using its Privilege Cloud while 5,000 customers, particularly those in regulated industries like financial services and government, are using its on-premise PAM offering.

Cohen said on-premise customers could also be using CyberArk’s cloud offerings, “because they understand that even if they want their [PAM] vault on-premise, they’re okay with consuming a service for other solutions”.

These include capabilities to secure cloud-native services through zero-standing privileges, a term coined by Gartner in 2019. “The idea is that the account should be set up with no privileges, but when I need to use the services, I will apply privileges just for that instance,” said Cohen.

“The minute I’m done using that, it goes back to a zero-standing privileged account. So, if someone steals that credential, there are no privileges associated with it when it’s not in use. That’s a much more secure way to manage controls in cloud environments,” he explained.

Even as CyberArk is broadening its IAM capabilities, Cohen said there are no plans to go into the business-to-consumer (B2C) market. “Our solutions are best equipped for the enterprise, and even on the CIAM [customer IAM] side of the of the business, our access technology is very strong in the B2B [business-to-business] space.”

Cohen said the company had seen over 40% growth in annual recurring revenue over the past several years and has been able to drive “expansive revenue growth over the last several quarters as we came out of the subscription transition”.

CyberArk’s (NASDAQ:CYBR) second quarter results were robust, with the subscription business performing particularly well and the company’s business model transition beginning to mature. While the stock appears to be priced broadly in line with the market, the company’s consistent growth and improving margins could continue to support the stock going forward. There are signs that demand is softening, though, which is unlikely to be priced into the stock at this point.

Market

Market conditions for software companies and cybersecurity vendors remain highly uncertain. Amazon's (AMZN) recent results suggest that the worst of cloud spending optimization efforts has now passed, but individual software company results are highly idiosyncratic. Fortinet’s (FTNT) poor second quarter earnings has created uncertainty about the strength of cybersecurity spending, but increasingly this appears to be a hardware related issue. Software vendors have generally reported solid results so far in the second quarter, and most management teams have suggested that the demand environment has stabilized.

Despite this, CyberArk still appears to be selling into a tough environment, with increased deal scrutiny and longer approval cycles. CyberArk has suggested that its go-to-market teams have adapted to this environment, which has enabled the company to continue landing new customers and expanding within existing customers. CyberArk has also suggested that identity security is critical for customers and that its importance is only increasing. For example, in CyberArk’s recent Identity Security Threat Landscape Report, every organization surveyed expected an identity related compromise in the year ahead.

CyberArk

Identity is an integral part of the modern approach to security, which gives CyberArk a large opportunity going forward. CyberArk is a leader within Privileged Access Management, and its main threat at this point may be the expansion of platforms in adjacent verticals. CyberArk believes it is differentiated by its ability to secure all identities across all environments using intelligent privileged controls. While companies like HashiCorp (HCP) and Okta (OKTA) have introduced or are planning on introducing competing solutions, CyberArk believes that the competitive landscape hasn’t changed across its portfolio.

CyberArk is supporting its competitive position through the introduction of new solutions, which broaden and further differentiate its platform. recent product introductions include Secure Cloud Access, Secure Browser and a range of AI solutions. Secure Cloud Access provides secure native access with zero standing privileges across multi-cloud environments. CyberArk Secure Browser is a Chromium-based web browser that supports enterprise Zero Trust initiatives. It offers integrated security and centralized policy management, with features including cookieless browsing, data exfiltration protection and a password replacement solution.

CyberArk's investments in AI are aimed at making it easier to apply intelligent privilege controls to all identities. CyberArk’s Identity Security platform contextually authenticates identities and dynamically authorizes the least amount of privilege required. For example, AI-enabled policy creation automation processes endpoint data to automatically adjust policies and reduce risk. While I generally do not believe AI will create a sustainable competitive advantage for most companies, cybersecurity could be different. Data relevant to cybersecurity has velocity, variety and volume, and large vendors can directly leverage this data to Boost solutions which are critical to customers. As companies like CyberArk continue to grow and broaden their product portfolios, scale and access to data is likely to be an important differentiator.

Sales also appears to be a focus area for CyberArk at the moment, with the company extending its reach through the channel and building out its customer success organization. According to a recent Gartner report, something like 30-40% of cybersecurity spend will move to MSPs in the next three years. As a result, MSPs are a key part of CyberArk’s growth strategy. CyberArk is gaining traction with companies like GuidePoint, which has contributed to key wins and is helping CyberArk reach new customer segments.

Financial Analysis

CyberArk’s revenue increased by 24% YoY in the second quarter, which is only a modest deceleration from growth in the first quarter and is fairly consistent with growth over the past year. Given the uncertain macro environment, consistent performance is being given a premium at the moment, and CyberArk is performing well in this regard. Subscription revenue grew 61% YoY in the second quarter and subscriptions accounted for 95% of bookings. CyberArk’s ARR increased 40% YoY in the second quarter, and the subscription portion of ARR grew 77%.

Strength is reportedly fairly broad based across CyberArk’s portfolio, with Privilege Cloud, EPM, Secrets, Secure Web Sessions and Workforce Password Manager specifically highlighted. CyberArk also appears to be having success with its platform strategy. The expansion business performed well in the second quarter, and customer adoption of multiple solutions is increasing. Amongst new logos, more than 50% of customers are purchasing multiple solutions.

Performance in the second quarter was also fairly consistent across geographies. EMEA had a meaningful revenue headwind from the fact that the subscription bookings mix increased by nearly 13% in the second quarter.

CyberArk appears to be fairly optimistic in the face of macro uncertainty. The company’s pipeline is reportedly building at a record pace and the company’s win rates are strong. As a result, CyberArk is projecting fairly consistent growth through the rest of the year. Revenue growth in the third quarter is expected to be roughly 21% YoY, and 24% for the full year. ARR is now expected to increase 31% YoY in 2023.

The number of job openings mentioning CyberArk in the job requirements remains at a depressed level. While this is probably a negative, there has been no associated slowdown in growth so far.

CyberArk's gross profit margins have been fairly consistent over the past 18 months, suggesting the negative impact of subscriptions is complete.

Operating profit margins have also been depressed by the business model transition. CyberArk's pace of hiring has fallen off significantly though, suggesting that with continued growth, margins should begin to Boost going forward. This isn't particularly concerning as CyberArk has been profitable in the past and this type of temporary drop in margins is expected when switching to a subscription model.

While the drop in job openings should be supportive of margins going forward, the extent to which they have dropped is somewhat concerning. Coupled with the uncertain macro environment and a drop in job openings mentioning CyberArk in the job requirements, there appears to be an elevated risk of a growth slowdown going forward.

Valuation

Based on its current growth and profitability profile, CyberArk appears to be priced broadly in line with comparable companies. While the stock price could continue to appreciate it if investor sentiment towards the company improves, there could also be significant downside risk if growth decelerates. CyberArk is still a long way from returning to profitability, and investors have shown little tolerance for unprofitable companies with low growth over the past 1–2 years.

For investors that believe in the long-term importance of identity security and in particular PAM, CyberArk's current share price probably still represents a reasonable entry point. Shareholders should be prepared for ongoing volatility in the near term, though.

Shares of CyberArk Software Ltd. jumped more than 12% today after the company posted quarterly results that topped both its guidance and the consensus analyst estimate.

CyberArk makes software that helps enterprises manage employee access to their applications. Using the company’s tools, an organization can provide single sign-on and multifactor authentication features for its workers. CyberArk’s software can also be used to process login requests from other users such as a supplier’s employees. 

The software maker’s other major focus is application secrets management. In software development, secrets are sensitive pieces of data such as encryption keys that help power an application’s security features. CyberArk offers a platform that companies can use to store encryption keys and related files. 

CyberArk’s revenue increased 24% year-over-year, to $175.8 million, in the second quarter ended June 30. The consensus analyst estimate forecasted $173.44 million. CyberArk also managed to top the high end of its own guidance by about $1 million.

“We had a great quarter, beating our guidance across all metrics, which demonstrates the momentum in our business and the durability of demand for our identity security platform,” said Chief Executive Officer Matt Cohen. “We had a strong new business quarter and existing customers expanded across our identity security platform.”

The company’s sales growth was driven by its core subscription software business. Like other enterprise software makers, CyberArk has spent the past few years shifting from selling licenses to a business model that emphasizes recurring revenue. That shift is now largely complete. 

The company’s subscription revenue surged 61% year-over-year in the second quarter, to $106.2 million. Revenue from perpetual licenses, meanwhile, declined by more than 50%. License deals generated $5.1 million in revenue for CyberArk during the second quarter. 

The company’s third major revenue source is its maintenance and professional services group. The group helps customers maintain their CyberArk software deployments and also provides cybersecurity advisory services. The unit’s revenues declined slightly, to $64.6 million, in the second quarter.

Thanks to the fast growth of its core subscription business, CyberArk generated an unexpected profit. The company ended the quarter with an adjusted net income of $1.3 million. That amounts to adjusted earnings of three cents per share, well ahead of the-12 cent loss analysts had anticipated.

For the full fiscal year, it’s forecasting revenue of $726 million to $736 million. Adjusted earnings per share, in turn, are projected to range between 16 and 38 cents per share. Both forecasts are in line with analyst expectations.

CyberArk also provides an ARR, or annualized recurring revenue, projection as part of its full-year guidance. The company raised its projection by $5 million in conjunction with the release of today’s earnings report. It’s now expecting ARR of $735 million to $745 million. 

Photo: Train825/Wikimedia Commons

© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

CyberArk (CYBR) came out with quarterly earnings of $0.03 per share, beating the Zacks Consensus Estimate of a loss of $0.13 per share. This compares to loss of $0.27 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 123.08%. A quarter ago, it was expected that this maker of software that detects attacks on privileged accounts would post a loss of $0.26 per share when it actually produced a loss of $0.17, delivering a surprise of 34.62%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

CyberArk , which belongs to the Zacks Computers - IT Services industry, posted revenues of $175.84 million for the quarter ended June 2023, surpassing the Zacks Consensus Estimate by 1.52%. This compares to year-ago revenues of $142.33 million. The company has topped consensus revenue estimates two times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

CyberArk shares have added about 10.6% since the beginning of the year versus the S&P 500's gain of 16.4%.

What's Next for CyberArk?

While CyberArk has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Story continues

Ahead of this earnings release, the estimate revisions trend for CyberArk: favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.15 on $187.75 million in revenues for the coming quarter and $0.28 on $730 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Computers - IT Services is currently in the top 42% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the same industry, Nutanix (NTNX), has yet to report results for the quarter ended July 2023. The results are expected to be released on August 31.

This enterprise cloud platform services provider is expected to post quarterly earnings of $0.15 per share in its upcoming report, which represents a year-over-year change of +188.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Nutanix's revenues are expected to be $475.67 million, up 23.4% from the year-ago quarter.

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Zacks Investment Research

Company Exceeds Guidance Across all Guided Metrics
Subscription Portion of Annual Recurring Revenue (ARR) of $451 million; Growth of 77% Year-over-Year
Total ARR of $653 million; Growth of 40% Year-over-Year
Subscription Revenue of $106.2 million in Q2; Growth of 61% Year-Over-Year
Total Revenue of $175.8 million in Q2 Exceeds Guidance; Growth of 24% Year-Over-Year
Company Raises Full Year ARR Guidance to a Range of $743 million to $753 million from $735 million to $745 million

CyberArk (NASDAQ: CYBR), the identity security company, today announced strong financial results for the second quarter ended June 30, 2023.

“We had a great quarter, beating our guidance across all metrics, which demonstrates the momentum in our business and the durability of demand for our identity security platform,” said Matt Cohen, CyberArk's Chief Executive Officer. “We had a strong new business quarter and existing customers expanded across our identity security platform as we continue to deliver transformational value to customers, across hybrid and cloud environments. This drove robust net new ARR, with strong 77 percent growth in Subscription ARR to $451 million and 40 percent growth in total ARR to $653 million. The explosion of new identities, new environments and new attack methods has rapidly expanded the attack surface, creating an acute need for organizations to secure all identities, humans and machines. Today, organizations are turning to CyberArk to address their most pressing cybersecurity challenges. We have a tremendous opportunity in front of us and are executing our strategy. As the clear leader in identity security, we are well positioned to deliver strong long-term growth, profitability and cash flow.”

Financial Summary for the Second Quarter Ended June 30, 2023

• Subscription revenue was $106.2 million in the second quarter of 2023, an increase of 61 percent from $66.0 million in the second quarter of 2022.
• Maintenance and professional services revenue was $64.6 million in the second quarter of 2023, compared to $65.3 million in the second quarter of 2022.
• Perpetual license revenue was $5.1 million in the second quarter of 2023, compared to $11.0 million in the second quarter of 2022.
• Total revenue was $175.8 million in the second quarter of 2023, up 24 percent from $142.3 million in the second quarter of 2022, outperforming guidance.
• GAAP operating loss was $(39.9) million and non-GAAP operating loss was $(5.6) million in the second quarter of 2023, outperforming guidance.
• GAAP net loss was $(25.8) million, or $(0.62) per basic and diluted share, in the second quarter of 2023. Non-GAAP net income was $1.3 million, or $0.03 per diluted share, in the second quarter of 2023, outperforming guidance.

Balance Sheet and Net Cash Provided by Operating Activities

• As of June 30, 2023, CyberArk had $1.2 billion in cash, cash equivalents, marketable securities, and short-term deposits.
• During the six months ended June 30, 2023, the Company’s net cash used in operating activities was $(5.0) million.
• As of June 30, 2023, total deferred revenue was $418.7 million, a 19 percent increase from $352.1 million at June 30, 2022.

Key Business Highlights

• Annual Recurring Revenue (ARR) was $653 million, an increase of 40 percent from $465 million at June 30, 2022.
  • The Subscription portion of ARR was $451 million, or 69 percent of total ARR at June 30, 2023. This represents an increase of 77 percent from $255 million, or 55 percent of total ARR, at June 30, 2022.
  • The Maintenance portion of ARR was $201 million at June 30, 2023, compared to $210 million at June 30, 2022.
• Recurring revenue in the second quarter was $157.8 million, an increase of 31 percent from $120.4 million for the second quarter of 2022.

Recent Developments

Business Outlook

Based on information available as of August 10, 2023, CyberArk is issuing guidance for the third quarter and full year 2023 as indicated below.

Third Quarter 2023:

• Total revenue is expected to be in the range of $181.5 million and $186.5 million, representing growth of 19 percent to 22 percent compared to the third quarter of 2022.
• Non-GAAP operating income is expected to be in the range of $4.0 million to $8.0 million.
• Non-GAAP net income per share is expected to be in the range of $0.19 to $0.27 per diluted share.
  • Assumes 46.8 million weighted average diluted shares.

Full Year 2023:

• Total revenue is expected to be in the range of $726.0 million to $736.0 million, representing growth of 23 percent to 24 percent compared to the full year 2022.
• Non-GAAP operating income is expected to be in the range of breakeven to $9.0 million.
• Non-GAAP net income per share is expected to be in the range of $0.44 to $0.63 per diluted share.
  • Assumes 46.4 million weighted average diluted shares.
• ARR as of December 31, 2023 is expected to be in the range of $743 million to $753 million, representing growth of 30 percent to 32 percent from December 31, 2022.

Conference Call Information

In conjunction with this announcement, CyberArk will host a conference call on Thursday, August 10, 2023 at 8:30 a.m. Eastern Time (ET) to discuss the Company’s second 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 (647) 362-9199 (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.

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 https://www.cyberark.com, read the CyberArk blogs or follow on LinkedIn, Twitter, Facebook or YouTube.

Copyright © 2023 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

Annual Recurring Revenue (ARR)

• Annual Recurring Revenue (ARR) is defined as the annualized value of active SaaS, self-hosted subscription and maintenance contracts related to 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.

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.

Non-GAAP Financial Measures

CyberArk believes that the use of non-GAAP gross profit, non-GAAP operating expense, non-GAAP operating loss, non-GAAP net income/(loss) 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 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, and amortization of intangible assets related to acquisitions.
• 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 loss is calculated as GAAP operating loss excluding share-based compensation expense, acquisition related expenses and amortization of intangible assets related to acquisitions.
• Non-GAAP net income/(loss) 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, gain from investment in privately held companies, and the tax effect of non-GAAP adjustments.
• Free cash flow is calculated as net cash provided by (used in) 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, gain from investment in privately held companies, 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, 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 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, 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 to: changes to the drivers of the Company’s growth and its ability to adapt its solutions to IT security market demands; fluctuation in the Company’s quarterly results of operations due to sales cycles and multiple pricing and delivery models; the Company’s ability to sell into existing and new customers and industry verticals; an increase in competition within the Privileged Access Management and Identity Security markets; unanticipated product vulnerabilities or cybersecurity breaches of the Company’s, or the Company’s customers’ or partners’ systems; complications or risks in connection with the Company’s subscription model, including uncertainty regarding renewals from its existing customer base, and retaining sufficient subscription or maintenance and support service renewal rates; risks related to compliance with privacy and data protection laws and regulations; risks regarding potential negative economic conditions in the global economy or certain regions, including conditions resulting from financial and credit market fluctuations, rising interest rates, bank failures, inflation, and the potential for regional or global recessions; the Company’s ability to hire, train, retain and motivate qualified personnel; reliance on third-party cloud providers for the Company’s operations and SaaS solutions; the Company’s history of incurring net losses and its ability to achieve profitability in the future; risks related to the Company’s ongoing transition to a new Chief Executive Officer; risks related to sales made to government entities; the Company’s ability to find, complete, fully integrate or achieve the expected benefits of strategic acquisitions; the duration and scope of the COVID-19 pandemic and its resulting effect on the demand for the Company’s solutions and on its expected revenue growth rates and costs; the Company’s ability to expand its sales and marketing efforts and expand its channel partnerships across existing and new geographies; regulatory and geopolitical risks associated with global sales and operations, as well as the location of our principal executive offices, most of our research and development activities and other significant operations in Israel; changes in regulatory requirements or 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; risks related to intellectual property claims or the Company’s ability to protect its proprietary technology and intellectual property rights; 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.

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