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CyberArk (CYBR) to Report Q3 Earnings: What's in Store?

Zacks Equity Research

CyberArk Software Ltd. CYBR is set to report third-quarter 2019 results on Nov 6.

For the quarter, the company expects revenues in the range of $102-$104 million, suggesting 20-23% growth from the year-ago reported figure. The Zacks Consensus Estimate is pegged at $103 million.

The company expects non-GAAP earnings per share to be 45-48 cents. The consensus estimate for earnings stands at 47 cents per share, suggesting 2.08% decline from the year-ago reported number.

The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average positive surprise being 47.69%.

In the last reported quarter, CyberArk’s non-GAAP earnings per share of 56 cents surpassed the Zacks Consensus Estimate of 47 cents and was higher than the year-ago quarter figure of 36 cents.

CyberArk’s revenues jumped 29% year over year to $100.2 million, and beat the consensus estimate of $97.21 million.

Strong revenue growth across all its geographical regions drove the top line. Increasing demand for privileged access security on the back of digital transformation and cloud migration strategies was a key growth driver.

CyberArk Software Ltd. Price and EPS Surprise

CyberArk Software Ltd. Price and EPS Surprise

CyberArk Software Ltd. price-eps-surprise | CyberArk Software Ltd. Quote

Factors at Play

CyberArk is benefiting from improving customer accounts, driven by increasing demand for Privileged Access Security on the back of digital transformation and cloud migration strategies. This is expected to have boosted revenues in the to-be-reported quarter.

Growing traction of Endpoint Privilege Manager within customers of all sizes and across industries is likely to have remained a tailwind.

Moreover, a large chunk of CyberArk’s current customer base belongs to the mid-market, prompting the company to focus on expanding its presence among small and medium-sized businesses. Initiatives taken earlier this year to formalize mid-market sales motion are expected to get reflected positively in third quarter top-line results.

The company’s expertise in securing multiple public clouds, which include Alphabet’s GOOGL Google Cloud Platform and AWS, might also have been a tailwind.

Moreover, in the last reported quarter, CyberArk expanded its relationship with Microsoft MSFT by joining the Microsoft Intelligent Security Association to deliver greater flexibility and efficiency for securing privileged access. This key partnership is expected to have positively impacted customer experience and possibly driven customer wins in the quarter to be reported.

However, an increase in expenses due to seasonal employee expenses and the marquee Americas customer event might have been an overhang in the third quarter.

Further, investments in business, and high expenses related to marketing programs and seasonal employee expenses are likely to have kept margins under pressure.

Moreover, intense competition from the likes of International Business Machines Corporation IBM in the access and identity management market might have been a headwind.

CyberArk currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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