CyberArk Software Ltd. reports 109% Net Income decline in 2020 while 7.0% Revenue growth
02/11/2021 • About CyberArk Software Ltd. (
$CYBR) • By InTwits
CyberArk Software Ltd. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- CyberArk Software Ltd. is a fast growth stock: 2020 revenue growth was 7.0%, 5 year revenue CAGR was 23.6% at 2020 ROIC 0.54%
- EBITDA Margin is quite volatile: 6.0% in 2020, 18.1% in 2019, 16.7% in 2018, 10.8% in 2017, 19.6% in 2016
- CyberArk Software Ltd. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2016-2020 is 4.5%. Average EBITDA Margin for the same period was 13.6%
- CyberArk Software Ltd. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.9%. At the same time it's in pair with industry average of 3.7%
- CAPEX is quite volatile: $3m in 2020, $2m in 2019, $16m in 2018, $3m in 2017, $2m in 2016
- The company has potentially unprofitable business model: ROIC is 0.5%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.9x while industry average is -1.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 7.0%. Revenue growth showed acceleration in 20Q4 - it increased 11.5% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin dropped on 12.1 pp from 18.1% to 6.0% in 2020.
Gross Margin decreased on 3.3 pp from 85.6% to 82.2% in 2020. SG&A as a % of Revenue increased on 5.9 pp from 54.5% to 60.4% in 2020.
Net Income margin dropped on 15.8 pp from 14.5% to -1.2% in 2020.
Investments (CAPEX, working capital and M&A)
In 2020 CyberArk Software Ltd. had CAPEX/Revenue of 1.5%. CyberArk Software Ltd. showed small CAPEX/Revenue decline of 1.0 pp from 2.6% in 2017 to 1.5% in 2020. For the last three years the average CAPEX/Revenue was 1.9%. During the last 5 years CAPEX as a % of Revenue topped in 2017 at 2.6% and was declining since that time.
Return on investment
The company operates at low but positive ROIC (0.5%) and negative ROE (-0.9%). ROIC decreased on 7.3 pp from 7.8% to 0.54% in 2020. ROE dropped on 12.4 pp from 11.6% to -0.86% in 2020.
Leverage (Debt)
Debt level is 0.9x Net Debt / EBITDA and 19.0x Debt / EBITDA. Net Debt / EBITDA jumped on 4.5x from -3.6x to 0.9x in 2020. Debt increased on 3.1% while cash dropped on 36.9%. During 2016-2020 Net Debt/EBITDA bottomed in 2017 at -5.7x and was growing since that time.
CyberArk Software Ltd. has no short term refinancing risk: cash is higher than short term debt (7,117.3%).
Management team
Ehud Mokady "Udi" is a the company's CEO. Ehud Mokady "Udi" has spent 16 years with the company. The company's CFO is Joshua Siegel "Josh". Joshua Siegel "Josh" has 9 years tenure at the company.
Financial and operational results
FY ended 12/31/2020
CyberArk Software Ltd. ($CYBR) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 216.6 | 261.7 | 343.2 | 433.9 | 464.4 | 7.0% |
| Gross Profit | 186.5 | 219.9 | 294.7 | 371.3 | 381.9 | 2.8% |
| SG&A | 115.9 | 157.1 | 190.3 | 236.5 | 280.4 | 18.6% |
| EBITDA | 42.4 | 28.2 | 57.4 | 78.5 | 27.7 | -64.7% |
| EBIT | 36.0 | 20.3 | 47.3 | | | |
| Tax | 8.1 | 8.4 | 4.8 | | | |
| Net Income | 28.1 | 16.0 | 47.1 | 63.1 | -5.8 | -109.1% |
| Stock Based Compensation | 16.1 | 25.2 | 36.0 | | | |
Balance Sheet
|
|---|
| Cash | 173.0 | 161.3 | 260.6 | 792.4 | 500.0 | -36.9% |
| Accounts Receivable | 33.3 | 45.3 | 48.4 | | | |
| Accounts Payable | 2.7 | 2.0 | 4.9 | | | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 5.9 | 7.0 | 18.6% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 503.7 | 518.5 | 2.9% |
Cash flow
|
|---|
| Capex | 2.8 | 6.8 | 8.6 | 7.0 | 7.2 | 2.0% |
| Acquisitions | | 41.3 | 18.5 | | | |
Ratios
|
|---|
| Revenue growth | 34.7% | 20.8% | 31.1% | 26.4% | 7.0% | |
| EBITDA growth | 19.6% | -33.6% | 103.6% | 36.9% | -64.7% | |
|
|---|
| Gross Margin | 86.1% | 84.0% | 85.9% | 85.6% | 82.2% | -3.3% |
| EBITDA Margin | 19.6% | 10.8% | 16.7% | 18.1% | 6.0% | -12.1% |
| EBIT Margin | 16.6% | 7.8% | 13.8% | | |
| SG&A, % of revenue | 53.5% | 60.0% | 55.5% | 54.5% | 60.4% | 5.9% |
| SBC, % of revenue | 7.4% | 9.6% | 10.5% | | |
| Net Income Margin | 13.0% | 6.1% | 13.7% | 14.5% | -1.2% | -15.8% |
| CAPEX, % of revenue | 1.3% | 2.6% | 2.5% | 1.6% | 1.5% | -0.1% |
|
|---|
| ROIC | 13.7% | 6.4% | 11.5% | 7.8% | 0.5% | -7.3% |
| ROE | 10.4% | 4.9% | 11.5% | 11.6% | -0.9% | -12.4% |
| Net Debt/EBITDA | -4.1x | -5.7x | -4.5x | -3.6x | 0.9x | 4.5x |
People
|
|---|
| Insider ownership | 1.7% | 1.7% | 1.7% | | | |
| Employees | 823 | 1,015 | 1,146 | | | |
| Revenue/Employee, th. $ | 263 | 258 | 299 | | | |
CyberArk Software Ltd. ($CYBR) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 107 | 106 | 107 | 145 | | 11.4% | 6.3% | -1.4% | 11.5% |
| EBITDA | 5 | -0 | -6 | 23 | | -69.2% | -102.8% | -142.0% | -8.5% |
| Net Income | 2 | -4 | -16 | 12 | | -82.6% | -132.2% | -204.2% | -41.9% |
Balance Sheet
|
|---|
| Cash | 813 | 552 | 507 | 500 | | 169.2% | 61.4% | 46.5% | -36.9% |
| Short Term Debt | 0 | 0 | 0 | 7 | | - | - | - | 18.6% |
| Long Term Debt | 489 | 494 | 498 | 519 | | - | - | - | 2.9% |
Ratios
|
|---|
| Gross Margin | 84.0% | 80.9% | 79.0% | 84.3% | | -1.9% | -4.0% | -5.3% | -2.7% |
| EBITDA Margin | 4.7% | -0.4% | -6.0% | 16.1% | | -12.4% | -16.1% | -20.2% | -3.5% |
| Net Income Margin | 2.2% | -4.1% | -14.9% | 8.3% | | -12.0% | -17.4% | -29.0% | -7.7% |
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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Zscaler, Inc. ($ZS) | - | 56.5% | 51.3% | 59.2% | 42.4% |
| ServiceNow, Inc. ($NOW) | - | 38.0% | 36.0% | 32.6% | 30.6% |
| SailPoint Technologies Holdings, Inc. ($SAIL) | - | 40.5% | 33.8% | 15.9% | 26.6% |
| Rapid7, Inc. ($RPD) | - | 27.6% | 21.5% | 33.9% | 25.9% |
| Tenable Holdings, Inc. ($TENB) | - | 50.9% | 42.4% | 32.6% | 24.2% |
| |
|---|
| Median (23 companies) | 12.9% | 14.0% | 19.0% | 15.9% | 15.1% |
|---|
| CyberArk Software Ltd. ($CYBR) | - | 20.8% | 31.1% | 26.4% | 7.0% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Check Point Software Technologies Ltd. ($CHKP) | 88.5% | 88.6% | 89.6% | 89.5% | 89.4% |
| Progress Software Corporation ($PRGS) | 83.8% | 82.6% | 83.1% | 81.8% | 86.0% |
| Varonis Systems, Inc. ($VRNS) | 90.5% | 90.4% | 89.8% | 86.2% | 84.9% |
| Vmware, Inc. ($VMW) | 85.2% | - | 85.5% | 83.9% | 83.4% |
| Tenable Holdings, Inc. ($TENB) | 88.6% | 86.4% | 83.9% | 82.8% | 82.4% |
| |
|---|
| Median (23 companies) | 73.1% | 73.9% | 73.5% | 75.4% | 76.5% |
|---|
| CyberArk Software Ltd. ($CYBR) | 86.1% | 84.0% | 85.9% | 85.6% | 82.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Check Point Software Technologies Ltd. ($CHKP) | 49.8% | 50.7% | 48.8% | 46.0% | 45.1% |
| Qualys, Inc. ($QLYS) | 23.8% | 25.1% | 28.4% | 36.5% | 40.3% |
| SolarWinds Corporation ($SWI) | -8.0% | 44.0% | 44.8% | 44.7% | 39.8% |
| Progress Software Corporation ($PRGS) | 2.4% | 28.6% | 32.9% | 23.4% | 34.4% |
| Fortinet, Inc. ($FTNT) | 7.2% | 11.1% | 15.9% | 19.8% | 23.9% |
| |
|---|
| Median (23 companies) | -9.8% | -5.4% | -4.7% | -1.4% | -1.1% |
|---|
| CyberArk Software Ltd. ($CYBR) | 19.6% | 10.8% | 16.7% | 18.1% | 6.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Zscaler, Inc. ($ZS) | 7.8% | 6.5% | 8.0% | 9.5% | 12.0% |
| ServiceNow, Inc. ($NOW) | 7.6% | 7.8% | 8.6% | 7.7% | 9.3% |
| Qualys, Inc. ($QLYS) | 11.7% | 16.4% | 8.2% | 8.6% | 8.3% |
| Zuora, Inc. ($ZUO) | 3.4% | 3.3% | 2.8% | 5.7% | 7.8% |
| Proofpoint, Inc. ($PFPT) | 9.2% | 9.0% | 4.1% | 4.0% | 6.9% |
| |
|---|
| Median (23 companies) | 2.1% | 2.2% | 2.6% | 3.8% | 3.4% |
|---|
| CyberArk Software Ltd. ($CYBR) | 1.3% | 2.6% | 2.5% | 1.6% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Fortinet, Inc. ($FTNT) | 5.3% | 15.0% | 28.0% | 29.0% | 46.3% |
| Check Point Software Technologies Ltd. ($CHKP) | 24.7% | 26.8% | 25.5% | 24.2% | 25.6% |
| Qualys, Inc. ($QLYS) | 13.7% | 12.3% | 14.3% | 18.7% | 22.0% |
| Vmware, Inc. ($VMW) | 15.9% | - | - | 18.1% | 19.6% |
| Progress Software Corporation ($PRGS) | -4.9% | 13.5% | 18.5% | 7.6% | 16.0% |
| |
|---|
| Median (23 companies) | -4.3% | -4.7% | -1.9% | -6.4% | -6.4% |
|---|
| CyberArk Software Ltd. ($CYBR) | 13.7% | 6.4% | 11.5% | 7.8% | 0.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SolarWinds Corporation ($SWI) | - | 6.2x | 4.1x | 4.4x | 4.1x |
| Proofpoint, Inc. ($PFPT) | - | - | - | -27.4x | 2.5x |
| Progress Software Corporation ($PRGS) | -7.5x | -0.1x | 0.1x | 1.5x | 2.1x |
| Vmware, Inc. ($VMW) | -0.7x | - | -0.8x | 0.3x | 1.5x |
| ServiceNow, Inc. ($NOW) | - | 9.0x | 0.9x | 1.0x | 0.9x |
| |
|---|
| Median (11 companies) | -1.0x | -0.3x | -0.4x | -0.3x | -0.1x |
|---|
| CyberArk Software Ltd. ($CYBR) | -4.1x | -5.7x | -4.5x | -3.6x | 0.9x |
