CyberArk Software Ltd. Net Income jumped on 194% and Revenue surged on 31.1%
02/14/2019 • About CyberArk Software Ltd. (
$CYBR) • By InTwits
CyberArk Software Ltd. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- CyberArk Software Ltd. is a fast growth stock: 2018 revenue growth was 31.1%, 5 year revenue CAGR was 39.0% at 2018 ROIC 11.5%
- CyberArk Software Ltd. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 is 7.5%. Average EBITDA Margin for the same period was 17.0%. In 2018 SBC/Revenue was even higher: 10.5%
- CyberArk Software Ltd. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's in pair with industry average of 3.1%
- CAPEX is quite volatile: $9m in 2018, $7m in 2017, $3m in 2016, $2m in 2015, $1m in 2014
- In the last 5 years the company invested considerably less than D&A: $22m vs. $27m
- The company has business model with average profitability: ROIC is 11.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
CyberArk Software Ltd.'s Revenue jumped on 31.1%. Revenue growth showed acceleration in 18Q4 - it increased 35.7% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 5.9 pp from 10.8% to 16.7% in 2018.
Gross Margin increased slightly on 1.9 pp from 84.0% to 85.9% in 2018. SG&A as a % of Revenue decreased on 4.6 pp from 60.0% to 55.5% in 2018. Stock Based Compensation (SBC) as a % of Revenue increased slightly on 0.84 pp from 9.6% to 10.5% in 2018. SBC as a % of Revenue stuck to a growing trend at 2.7 pp per annum in the last 5 years.
Net Income margin increased on 7.6 pp from 6.1% to 13.7% in 2018. The efficient tax rate was 9.2% in 2018 while the average for the last five years was 20.0%.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 2.5%. The company's CAPEX/Revenue increased slightly on 1.2 pp from 1.3% in 2015 to 2.5% in 2018. It's average CAPEX/Revenue for the last three years was 2.1%.
Accounts receivable as a % of Revenue decreased on 3.2 pp from 17.3% to 14.1% in 2018. Accounts payable as a % of Revenue increased on 5.5 pp from 4.7% to 10.2% in 2018.
CyberArk Software Ltd. has spent
$18m on M&A in 2018 which accounts for 5.4% of revenue.
Return on investment
The company operates at low ROIC (11.5%) and ROE (11.5%). ROIC increased on 5.2 pp from 6.4% to 11.5% in 2018. ROE increased on 6.5 pp from 4.9% to 11.5% in 2018. During the last 5 years ROIC bottomed in 2017 at 6.4%.
Leverage (Debt)
The company has no debt. Cash jumped on 61.6%.
Valuation and dividends
The company's trades at EV/EBITDA 60.8x and P/E 79.6x.
Management team
Ehud Mokady "Udi" is a the company's CEO. Ehud Mokady "Udi" is a founder and has spent 3 years with the company. The company's CFO is Joshua Siegel "Josh". Joshua Siegel "Josh" has 8 years tenure at the company.
1.7% of the company is owned by insiders. Insider ownership didn't change in 2018.
At the end of financial year the company had 1,146 employees. The number of employees jumped on 12.9%. Average revenue per employee in 2018 was
$299,476 and it surged on 16.2%.
Financial and operational results
FY ended 12/31/2018
CyberArk Software Ltd. ($CYBR) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 103.0 | 160.8 | 216.6 | 261.7 | 343.2 | 31.1% |
| Gross Profit | 88.3 | 138.2 | 186.5 | 219.9 | 294.7 | 34.1% |
| SG&A | 53.4 | 83.2 | 115.9 | 157.1 | 190.3 | 21.1% |
| EBITDA | 21.2 | 35.5 | 42.4 | 28.2 | 57.4 | 103.6% |
| EBIT | 20.5 | 33.2 | 36.0 | 20.3 | 47.3 | 132.7% |
| Tax | 4.5 | 5.9 | 8.1 | 8.4 | 4.8 | -43.3% |
| Net Income | 10.0 | 25.8 | 28.1 | 16.0 | 47.1 | 193.9% |
| Stock Based Compensation | 0.9 | 3.2 | 16.1 | 25.2 | 36.0 | 42.5% |
Balance Sheet
|
|---|
| Cash | 124.2 | 234.5 | 173.0 | 161.3 | 260.6 | 61.6% |
| Accounts Receivable | 19.3 | 20.4 | 33.3 | 45.3 | 48.4 | 6.9% |
| Accounts Payable | 1.8 | 2.5 | 2.7 | 2.0 | 4.9 | 151.2% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 1.4 | 2.1 | 2.8 | 6.8 | 8.6 | 27.5% |
| Acquisitions | | 53.7 | | 41.3 | 18.5 | -55.4% |
Ratios
|
|---|
| Revenue growth | 55.7% | 56.1% | 34.7% | 20.8% | 31.1% | |
| EBITDA growth | 121.9% | 67.3% | 19.6% | -33.6% | 103.6% | |
|
|---|
| Gross Margin | 85.7% | 85.9% | 86.1% | 84.0% | 85.9% | 1.9% |
| EBITDA Margin | 20.6% | 22.1% | 19.6% | 10.8% | 16.7% | 5.9% |
| EBIT Margin | 19.9% | 20.7% | 16.6% | 7.8% | 13.8% | 6.0% |
| SG&A, % of revenue | 51.9% | 51.7% | 53.5% | 60.0% | 55.5% | -4.6% |
| SBC, % of revenue | 0.9% | 2.0% | 7.4% | 9.6% | 10.5% | 0.8% |
| Net Income Margin | 9.7% | 16.0% | 13.0% | 6.1% | 13.7% | 7.6% |
| CAPEX, % of revenue | 1.4% | 1.3% | 1.3% | 2.6% | 2.5% | -0.1% |
|
|---|
| ROIC | 20.5% | 16.9% | 13.7% | 6.4% | 11.5% | 5.2% |
| ROE | 9.9% | 12.8% | 10.4% | 4.9% | 11.5% | 6.5% |
| Net Debt/EBITDA | -5.9x | -6.6x | -4.1x | -5.7x | -4.5x | 1.2x |
People
|
|---|
| Insider ownership | 1.7% | 1.7% | 1.7% | 1.7% | 1.7% | 0.0% |
| Employees | 430 | 644 | 823 | 1,015 | 1,146 | 12.9% |
| Revenue/Employee, th. $ | 240 | 250 | 263 | 258 | 299 | 16.2% |
CyberArk Software Ltd. ($CYBR) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 72 | 78 | 85 | 109 | | 21.6% | 35.2% | 30.6% | 35.7% |
| EBITDA | 6 | 9 | 11 | 30 | | -19.0% | 233.2% | 192.7% | 120.0% |
| Net Income | 6 | 8 | 8 | 24 | | -14.8% | 158.1% | 381.5% | 580.7% |
Balance Sheet
|
|---|
| Cash | 182 | 205 | 205 | 261 | | 3.5% | 44.0% | 41.2% | 61.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 84.3% | 84.9% | 85.7% | 87.8% | | -0.0% | 2.3% | 2.6% | 2.2% |
| EBITDA Margin | 8.7% | 12.2% | 13.5% | 27.8% | | -4.3% | 7.2% | 7.5% | 10.6% |
| Net Income Margin | 8.9% | 10.8% | 9.6% | 22.2% | | -3.8% | 5.1% | 7.0% | 17.8% |
Peers in Systems Software
Below we provide CyberArk Software Ltd. benchmarking against other companies in Systems Software industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Advantego Corp ($ADGO) | | | | | 973.8% |
| Solbright Group Inc ($SBRT) | | | 286.4% | 25.4% | 414.0% |
| Duos Technologies Group Inc ($DUOT) | | 61.0% | -9.8% | -36.4% | 210.2% |
| Dell Technologies Inc. ($DVMT) | | | | | 145.7% |
| Finjan Holdings, Inc. ($FNJN) | | -6.2% | 292.3% | 174.6% | 63.0% |
| |
|---|
| Median (48 companies) | | 18.2% | 14.6% | 14.0% | 19.0% |
|---|
| CyberArk Software Ltd. ($CYBR) | | 56.1% | 34.7% | 20.8% | 31.1% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| StrikeForce Technologies Inc ($SFOR) | 97.0% | 96.9% | 98.3% | 95.4% | 94.0% |
| Varonis Systems, Inc. ($VRNS) | 90.2% | 90.6% | 90.5% | 90.4% | 89.8% |
| Check Point Software Technologies Ltd. ($CHKP) | 88.2% | 88.5% | 88.5% | 88.6% | 89.6% |
| Tableau Software, Inc. ($DATA) | 91.0% | 88.7% | 88.0% | 87.1% | 87.7% |
| Attunity Ltd. ($ATTU) | 90.7% | 84.9% | 83.9% | 84.1% | 87.5% |
| |
|---|
| Median (53 companies) | 76.1% | 74.5% | 73.1% | 73.9% | 73.5% |
|---|
| CyberArk Software Ltd. ($CYBR) | 85.7% | 85.9% | 86.1% | 84.0% | 85.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Check Point Software Technologies Ltd. ($CHKP) | 54.3% | 52.4% | 49.8% | 50.7% | 48.8% |
| SolarWinds Corporation ($SWI) | | | -8.0% | 44.0% | 44.8% |
| Finjan Holdings, Inc. ($FNJN) | -192.1% | -295.2% | 2.2% | 30.2% | 42.0% |
| Oracle Corporation ($ORCL) | 46.2% | 43.8% | 40.8% | 40.2% | 40.8% |
| CA Inc. ($CA) | 33.9% | 36.7% | 37.2% | 36.1% | 35.3% |
| |
|---|
| Median (47 companies) | -2.4% | -6.6% | -9.8% | -5.4% | -4.7% |
|---|
| CyberArk Software Ltd. ($CYBR) | 20.6% | 22.1% | 19.6% | 10.8% | 16.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| The Rubicon Project, Inc. ($RUBI) | 15.6% | 11.4% | 12.0% | 26.0% | 16.0% |
| CYREN Ltd. ($CYRN) | 2.4% | 4.4% | 3.2% | 5.8% | 9.2% |
| ServiceNow, Inc. ($NOW) | 8.0% | 8.7% | 7.6% | 7.8% | 8.6% |
| Qualys, Inc. ($QLYS) | 10.4% | 12.2% | 11.7% | 16.4% | 8.2% |
| Zscaler, Inc. ($ZS) | | 12.5% | 7.8% | 6.5% | 8.0% |
| |
|---|
| Median (48 companies) | 2.9% | 2.2% | 2.1% | 2.2% | 2.6% |
|---|
| CyberArk Software Ltd. ($CYBR) | 1.4% | 1.3% | 1.3% | 2.6% | 2.5% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Finjan Holdings, Inc. ($FNJN) | -42.6% | -113.5% | 3.4% | 46.6% | 64.1% |
| Fortinet, Inc. ($FTNT) | 9.2% | 2.1% | 5.3% | 15.0% | 28.0% |
| Check Point Software Technologies Ltd. ($CHKP) | 22.2% | 23.7% | 24.7% | 26.8% | 25.5% |
| MAM Software Group, Inc. ($MAMS) | 13.3% | 19.3% | 21.1% | 24.2% | 25.2% |
| Red Hat, Inc. ($RHT) | 15.1% | 14.1% | 14.2% | 16.4% | 22.4% |
| |
|---|
| Median (56 companies) | 0.0% | 0.0% | -4.3% | -4.7% | -1.9% |
|---|
| CyberArk Software Ltd. ($CYBR) | 20.5% | 16.9% | 13.7% | 6.4% | 11.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NXT-ID Inc. ($NXTD) | | | | | 9.7x |
| Symantec Corporation ($SYMC) | -3.2x | -1.5x | -5.0x | 10.0x | 4.7x |
| SolarWinds Corporation ($SWI) | | | | 6.2x | 4.1x |
| Oracle Corporation ($ORCL) | 0.4x | 1.2x | 1.6x | 2.4x | 2.4x |
| ServiceNow, Inc. ($NOW) | | | | 9.0x | 0.9x |
| |
|---|
| Median (22 companies) | -2.1x | -1.4x | -1.0x | -0.3x | -0.4x |
|---|
| CyberArk Software Ltd. ($CYBR) | -5.9x | -6.6x | -4.1x | -5.7x | -4.5x |
