SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 6-K
 

 
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
 
For the month of August 2018
 
Commission File Number: 001-36625
 

 
CyberArk Software Ltd.
(Translation of registrant’s name into English)  
 

 
CyberArk Software Ltd.
9 Hapsagot St.
Park Ofer 2, POB 3143
Petach-Tikva, 4951041 Israel
 (Address of principal executive offices)  
 

 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
 
Form 20-F  ☒            Form 40-F ☐
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐
 

 
EXPLANATORY NOTE

On August 7, 2018, CyberArk Software Ltd. (the “Company”), issued a press release entitledCyberArk Announces Strong Second Quarter 2018 Results.” A copy of this press release is furnished as Exhibit 99.1 herewith.

Other than as indicated below, the information in this Form 6-K (including in Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

The U.S. GAAP financial information contained in (i) the consolidated balance sheets, (ii) consolidated statements of operations and (iii) consolidated statement of cash flows included in the press release attached as Exhibit 99.1 to this Report on Form 6-K are hereby incorporated by reference into the Company’s Registration Statements on Form S-8 (File Nos. 333-200367, 333- 202850, 333-216755 and 333-223729).

2

SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
CYBERARK SOFTWARE LTD.
 
       
Date: August 8, 2018
By:
/s/ Joshua Siegel
 
   
Name: Joshua Siegel
 
   
Title:   Chief Financial Officer
 
 
3
 
EXHIBIT INDEX

Exhibit
  
Description
   
 
 
4

 

Exhibit 99.1
 
CyberArk Announces Strong Second Quarter 2018 Results
Second quarter total revenue of $77.7 million increases 35% year-over-year
GAAP operating income of $7.0 million and non-GAAP operating income of $17.0 million
Cash flow from operations of $56.2 million increases 90% year-over-year
Deferred revenue of $129.6 increases 56% year-over-year

Newton, Mass. and Petach Tikva, Israel – August 7, 2018 – CyberArk, (NASDAQ: CYBR), the global leader in privileged access securitytoday announced financial results for the second quarter ended June 30, 2018.

“CyberArk had a great second quarter,” said Udi Mokady, CyberArk Chairman and CEO.  “We exceeded our guidance across all metrics.  We posted strong revenue growth, profitability and operating cash flow. Our growth was driven by strong execution and robust demand from both new and existing customers across all geographies.  We were thrilled to sign nearly 200 new logos in the second quarter bringing our total number of customers to more than 4,000, which demonstrates that we are still in the early innings of our market opportunity.  In addition, the significant value our solution provides coupled with our unwavering commitment to customer satisfaction drove our add on business during the quarter. Given our strong execution in the first half of the year and our tremendous market opportunity, we are positioned well for the remainder of 2018.”      
 
Financial Highlights for the Second Quarter Ended June 30, 2018

Revenue:

·
Total revenue was $77.7 million, up 35% compared with the second quarter of 2017.
·
License revenue was $41.1 million, up 36% compared with the second quarter of 2017.
·
Maintenance and professional services revenue was $36.6 million, up 35% compared with the second quarter of 2017.
 
Operating Income:
 
·
GAAP operating income was $7.0 million, an increase from $1.0 million in the second quarter of 2017.  Non-GAAP operating income was $17.0 million, an increase from $8.8 million in the second quarter of 2017.
 
Net Income:
 
·
GAAP net income was $8.4 million, or $0.23 per diluted share, an increase from GAAP net income of $3.2 million, or $0.09 per diluted share, in the second quarter of 2017.   Non-GAAP net income was $13.5 million, or $0.36 per diluted share, an increase from $7.7 million, or $0.21 per diluted share, in the second quarter of 2017.
 

The tables at the end of this press release include a reconciliation of GAAP to non-GAAP gross margin, operating income and net income for the three months and six months ended June 30, 2018 and 2017. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”
 
Balance Sheet and Cash Flow:
 
·
As of June 30, 2018, CyberArk had $377.5 million in cash, cash equivalents, marketable securities and short-term deposits.  This compares to $330.3 million as of December 31, 2017 and $283.2 million at June 30, 2017.
·
As of June 30, 2018, total deferred revenue was $129.6 million, a 23% increase from $105.2 million at December 31, 2017 and a 56% increase from $82.8 million at June 30, 2017.
·
During the six months ended June 30, 2018, the Company generated $56.2 million in cash flow from operations, a 90% increase from $29.7 million in the first six months of 2017.
 
Business Outlook

Based on information available as of August 7, 2018, CyberArk is issuing guidance for the third quarter and increasing its guidance for the full year 2018 as indicated below.
 
Third Quarter 2018:
 
·
Total revenue is expected to be in the range of $77.75 million to $79.25 million, which represents 20% to 22% year-over-year growth.
·
Non-GAAP operating income is expected to be in the range of $11.4 million to $12.6 million.
·
Non-GAAP net income per share is expected to be in the range of $0.25 to $0.28 per diluted share.  This assumes 37.5 million weighted average diluted shares.
 
Full Year 2018:
 
·
Total revenue is expected to be in the range of $320.0 million to $324.0 million, which represents 22% to 24% year-over-year growth.
·
Non-GAAP operating income is expected to be in the range of $64.0 million to $67.0 million.
·
Non-GAAP net income per share is expected to be in the range of $1.43 to $1.50 per diluted share.  This assumes 37.0 million weighted average diluted shares.
 
Conference Call Information
 
CyberArk will host a conference call today,  August 7, 2018 at 5:00 p.m. Eastern Time (ET) to discuss the company’s second quarter financial results and its business outlook. To access this call, dial +1 844-237-3590 (U.S.) or +1 484-747-6582 (international). The conference ID is 2687958. Additionally, a live webcast of the conference call will be available via the “Investor Relations” section of the company’s web site at www.cyberark.com. Following the conference call, a replay will be available for one week at +1 855-859-2056 (U.S.) or +1 404-537-3406 (international). The replay pass code is 2687958. An archived webcast of the conference call will also be available in the “Investor Relations” section of the company’s web site at www.cyberark.com.


About CyberArk                                                                                                       
CyberArk (NASDAQ: CYBR) is the global leader in privileged access security, a critical layer of IT security to protect data, infrastructure and assets across the enterprise, in the cloud and throughout the DevOps pipeline. CyberArk delivers the industry’s most complete solution to reduce risk created by privileged credentials and secrets. The company is trusted by the world’s leading organizations, including more than 50 percent of the Fortune 100, to protect against external attackers and malicious insiders. A global company, CyberArk is headquartered in Petach Tikva, Israel, with U.S. headquarters located in Newton, Mass. The company also has offices throughout the Americas, EMEA, Asia Pacific and Japan. To learn more about CyberArk, visit www.cyberark.com, read the CyberArk blogs or follow on Twitter via @CyberArk, LinkedIn or Facebook.

Copyright © 2018 CyberArk Software. All Rights Reserved. All other brand names, product names, or trademarks belong to their respective holders.

Non-GAAP Financial Measures
CyberArk believes that the use of non-GAAP gross profit, non-GAAP operating income and non-GAAP net income 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 operating income or net income or any other performance measures derived in accordance with GAAP.

·
Non-GAAP gross profit is calculated as gross profit excluding share-based compensation expense and amortization of intangible assets related to acquisitions.
 
·
Non-GAAP operating income is calculated as operating income excluding share-based compensation expense, acquisition related expenses, and amortization of intangible assets related to acquisitions.
 
·
Non-GAAP net income is calculated as net income excluding share-based compensation expense, acquisition related expenses, amortization of intangible assets related to acquisitions and the tax effect of the non-GAAP adjustments.
 
The Company believes that providing non-GAAP financial measures that exclude share-based compensation, acquisition related expenses, amortization of intangible assets related to acquisitions and the tax effect of the non-GAAP adjustments 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 the variety of equity instruments that can impact a company’s non-cash expense.  The Company believes that expenses related to its acquisitions and amortization of intangible assets related to acquisitions do not reflect the performance of its core business and impact period-to-period comparability.


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 measures to evaluate its business.

Cautionary Language Concerning Forward-Looking Statements
 
This release may contain 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, performance or achievements to differ significantly from the results, 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 in the rapidly evolving cyber threat landscape; failure to effectively manage growth; near-term declines in our operating and net profit margins and our revenue growth rate; real or perceived shortcomings, defects or vulnerabilities in the Company’s solutions or internal network system, or the failure of  the Company’s customers or channel partners to correctly implement the Company’s solutions; fluctuations in quarterly results of operations; the inability to acquire new customers or sell additional products and services to existing customers; competition from IT security vendors; the Company’s ability to successfully integrate recent and or future acquisitions; 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 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.
 
###
 
Investor Contact:
Erica Smith
CyberArk
Phone:  +1- 617-558-2132
ir@cyberark.com

Media Contact:
Liz Campbell
CyberArk
Phone: +1-617-558-2191
press@cyberark.com


 
 CYBERARK SOFTWARE LTD.
 Consolidated Statements of Operations
 U.S. dollars in thousands (except per share data)
(Unaudited)
 
 
 
Three Months Ended
   
Six Months Ended
 
 
 
June 30,
   
June 30,
 
 
 
2017
   
2018
   
2017
   
2018
 
 
                       
Revenues:
                       
 License
 
$
30,318
   
$
41,121
   
$
63,270
   
$
79,615
 
 Maintenance and professional services
   
27,162
     
36,592
     
53,245
     
69,881
 
 
                               
       Total revenues
   
57,480
     
77,713
     
116,515
     
149,496
 
 
                               
 Cost of revenues:
                               
 License
   
1,907
     
2,510
     
3,491
     
4,907
 
 Maintenance and professional services
   
8,093
     
9,198
     
15,776
     
18,089
 
 
                               
        Total cost of revenues
   
10,000
     
11,708
     
19,267
     
22,996
 
 
                               
 Gross profit
   
47,480
     
66,005
     
97,248
     
126,500
 
 
                               
 Operating expenses:
                               
 Research and development
   
9,561
     
13,808
     
18,775
     
26,792
 
 Sales and marketing
   
29,500
     
35,521
     
57,178
     
70,103
 
 General and administrative
   
7,409
     
9,714
     
14,287
     
18,613
 
 
                               
        Total operating expenses
   
46,470
     
59,043
     
90,240
     
115,508
 
 
                               
 Operating income
   
1,010
     
6,962
     
7,008
     
10,992
 
 
                               
 Financial income, net
   
1,127
     
225
     
1,675
     
2,066
 
 
                               
 Income before taxes on income
   
2,137
     
7,187
     
8,683
     
13,058
 
 
                               
 Tax benefit
   
1,109
     
1,190
     
2,099
     
1,740
 
 
                               
 Net income
 
$
3,246
   
$
8,377
   
$
10,782
   
$
14,798
 
 
                               
 Basic net income per ordinary share
 
$
0.09
   
$
0.23
   
$
0.31
   
$
0.41
 
 Diluted net income per ordinary share
 
$
0.09
   
$
0.23
   
$
0.30
   
$
0.40
 
 
                               
 Shares used in computing net income per ordinary shares, basic
   
34,729,119
     
36,001,580
     
34,563,040
     
35,724,717
 
 Shares used in computing  net income per ordinary shares, diluted
   
36,194,471
     
36,923,520
     
36,147,712
     
36,680,585
 


 
 Share-based Compensation Expense:
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
   
Six Months Ended
 
 
 
June 30,
   
June 30,
 
 
 
2017
   
2018
   
2017
   
2018
 
 
                       
 Cost of revenues
 
$
504
   
$
758
   
$
957
   
$
1,413
 
 Research and development
   
1,523
     
2,007
     
2,832
     
3,511
 
 Sales and marketing
   
2,018
     
2,874
     
3,689
     
5,291
 
 General and administrative
   
2,197
     
2,774
     
3,963
     
5,121
 
 
                               
 Total share-based compensation expense
 
$
6,242
   
$
8,413
   
$
11,441
   
$
15,336
 


 
CYBERARK SOFTWARE LTD.
 Consolidated Balance Sheets
 U.S. dollars in thousands
 (Unaudited)
 
 
 
December 31,
   
June 30,
 
 
 
2017
   
2018
 
 
           
 ASSETS
           
 
           
 CURRENT ASSETS:
           
 Cash and cash equivalents
 
$
161,261
   
$
205,193
 
 Short-term bank deposits
   
107,647
     
100,818
 
 Marketable securities
   
34,025
     
51,025
 
 Trade receivables
   
45,315
     
32,959
 
 Prepaid expenses and other current assets
   
7,407
     
10,344
 
 
               
 Total current assets
   
355,655
     
400,339
 
 
               
 LONG-TERM ASSETS:
               
 Property and equipment, net
   
9,230
     
11,858
 
 Intangible assets, net
   
15,664
     
18,017
 
 Goodwill
   
69,217
     
83,157
 
 Marketable securities
   
27,407
     
20,477
 
 Severance pay fund
   
3,692
     
3,558
 
 Other long-term assets
   
2,368
     
18,451
 
 Deferred tax asset
   
19,343
     
21,383
 
 
               
 Total long-term assets
   
146,921
     
176,901
 
 
               
 TOTAL ASSETS
 
$
502,576
   
$
577,240
 
 
               
 LIABILITIES AND SHAREHOLDERS' EQUITY
               
 
               
 CURRENT LIABILITIES:
               
 Trade payables
 
$
1,960
   
$
4,359
 
 Employees and payroll accruals
   
25,253
     
26,298
 
 Accrued expenses and other current liabilities
   
10,209
     
6,474
 
 Deferred revenues
   
66,986
     
81,660
 
 
               
 Total current liabilities
   
104,408
     
118,791
 
 
               
 LONG-TERM LIABILITIES:
               
 Deferred revenues
   
38,249
     
47,901
 
 Other long-term liabilities
   
242
     
1,400
 
 Accrued severance pay
   
5,712
     
5,445
 
 
               
 Total long-term liabilities
   
44,203
     
54,746
 
 
               
 TOTAL LIABILITIES
   
148,611
     
173,537
 
 
               
 SHAREHOLDERS' EQUITY:
               
 Ordinary shares of NIS 0.01 par value
   
91
     
94
 
 Additional paid-in capital
   
249,874
     
273,323
 
 Accumulated other comprehensive income (loss)
   
107
     
(1,154
)
 Retained earnings
   
103,893
     
131,440
 
 
               
 Total shareholders' equity
   
353,965
     
403,703
 
 
               
 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
 
$
502,576
   
$
577,240
 
 

 
CYBERARK SOFTWARE LTD.
 Consolidated Statements of Cash Flows  
 U.S. dollars in thousands
 (Unaudited) 
 
 
 
Six Months Ended
 
 
 
June 30,
 
 
 
2017
   
2018
 
 
           
 Cash flows from operating activities:
           
 Net income
 
$
10,782
   
$
14,798
 
 Adjustments to reconcile net income to net cash
               
 provided by operating activities:
               
 Depreciation and amortization
   
3,509
     
4,676
 
 Amortization of premium on marketable securities
   
190
     
208
 
 Share-based compensation expenses
   
11,441
     
15,336
 
 Deferred income taxes, net
   
(3,642
)
   
(4,710
)
 Decrease in trade receivables
   
3,412
     
12,357
 
 Increase in prepaid expenses and other current and long-term assets
   
(1,257
)
   
(6,272
)
 Increase (decrease) in trade payables
   
(869
)
   
2,003
 
 Increase in short term and long term deferred revenues
   
9,339
     
27,845
 
 Decrease in employees and payroll accruals
   
(1,953
)
   
(5,168
)
 Decrease in accrued expenses and other current and long-term liabilities
   
(1,391
)
   
(4,716
)
 Increase (decrease) in accrued severance pay, net
   
91
     
(133
)
 
               
 Net cash provided by operating activities
   
29,652
     
56,224
 
 
               
 Cash flows from investing activities:
               
 Proceeds from short and long term deposit
   
-
     
7,775
 
 Investment in short and long term deposits
   
(9,646
)
   
-
 
 Investment in marketable securities
   
(17,760
)
   
(30,563
)
 Proceeds from maturities of marketable securities
   
9,106
     
20,114
 
 Purchase of property and equipment
   
(2,038
)
   
(4,098
)
 Payments for business acquisitions, net of cash acquired
   
(41,448
)
   
(18,450
)
 
               
 Net cash used in investing activities
   
(61,786
)
   
(25,222
)
 
               
 Cash flows from financing activities:
               
 Proceeds from withholding tax related to employee stock plans
   
-
     
5,509
 
 Proceeds from exercise of stock options
   
1,926
     
8,090
 
 
               
 Net cash provided by financing activities
   
1,926
     
13,599
 
 
               
 Increase (decrease) in cash, cash equivalents and restricted cash
   
(30,208
)
   
44,601
 
 
               
 Cash, cash equivalents and restricted cash at the beginning of the period
   
174,156
     
162,520
 
 
               
 Cash, cash equivalents and restricted cash at the end of the period
 
$
143,948
   
$
207,121
 
 

CYBERARK SOFTWARE LTD.
 Reconciliation of GAAP Measures to Non-GAAP Measures
 U.S. dollars in thousands (except per share data)
(Unaudited)
 
 Reconciliation of Gross Profit to Non-GAAP Gross Profit:
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
   
Six Months Ended
 
 
 
June 30,
   
June 30,
 
 
 
2017
   
2018
   
2017
   
2018
 
 
                       
 Gross profit
 
$
47,480
   
$
66,005
   
$
97,248
   
$
126,500
 
 Plus:
                               
 Share-based compensation - Maintenance & professional services
   
504
     
758
     
957
     
1,413
 
 Amortization of intangible assets - License
   
992
     
1,444
     
1,835
     
2,674
 
 
                               
 Non-GAAP gross profit
 
$
48,976
   
$
68,207
   
$
100,040
   
$
130,587
 
 
 Reconciliation of Operating Income to Non-GAAP Operating Income:
 
 
 
 
 
 
 
 
 
 
Three Months Ended
   
Six Months Ended
 
 
 
June 30,
   
June 30,
 
 
 
2017
   
2018
   
2017
   
2018
 
 
                       
 Operating income
 
$
1,010
   
$
6,962
   
$
7,008
   
$
10,992
 
 Plus:
                               
 Share-based compensation
   
6,242
     
8,413
     
11,441
     
15,336
 
 Amortization of intangible assets - Cost of revenues
   
992
     
1,444
     
1,835
     
2,674
 
 Amortization of intangible assets -  Sales and marketing
   
289
     
199
     
535
     
397
 
 Acquisition related expenses
   
248
     
-
     
686
     
268
 
 
                               
 Non-GAAP operating income
 
$
8,781
   
$
17,018
   
$
21,505
   
$
29,667
 
 
 Reconciliation of Net Income to Non-GAAP Net Income:
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
   
Six Months Ended
 
 
 
June 30,
   
June 30,
 
 
 
2017
   
2018
   
2017
   
2018
 
 
                       
 Net income
 
$
3,246
   
$
8,377
   
$
10,782
   
$
14,798
 
 Plus:
                               
 Share-based compensation
   
6,242
     
8,413
     
11,441
     
15,336
 
 Amortization of intangible assets - Cost of revenues
   
992
     
1,444
     
1,835
     
2,674
 
 Amortization of intangible assets -  Sales and marketing
   
289
     
199
     
535
     
397
 
 Acquisition related expenses
   
248
     
-
     
686
     
268
 
 Taxes on income related to non-GAAP adjustments
   
(3,274
)
   
(4,964
)
   
(7,289
)
   
(8,193
)
 
                               
 Non-GAAP net income
 
$
7,743
   
$
13,469
   
$
17,990
   
$
25,280
 
 
                               
 Non-GAAP net income per share
                               
 Basic
 
$
0.22
   
$
0.37
   
$
0.52
   
$
0.71
 
 Diluted
 
$
0.21
   
$
0.36
   
$
0.50
   
$
0.69
 
 
                               
 Weighted average number of shares
                               
 Basic
   
34,729,119
     
36,001,580
     
34,563,040
     
35,724,717
 
 Diluted
   
36,194,471
     
36,923,520
     
36,147,712
     
36,680,585