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 2019
 
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, 2019, CyberArk Software Ltd. (the “Company”), issued a press release entitled “CyberArk Announces Strong Second Quarter 2019 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, 333-223729 and 333-230269).


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 7, 2019
 
 
 
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 2019 Results
Second quarter total revenue of $100.2 million increases 29% year-over-year
GAAP operating income of $13.0 million and non-GAAP operating income of $26.5 million
Company Announces Chief Revenue Officer Transition

Newton, Mass. and Petach Tikva, Israel – August 7, 2019 – CyberArk, (NASDAQ: CYBR), the global leader in privileged access security, today announced strong financial results for the second quarter ended June 30, 2019.

“We were pleased that our results exceeded expectations across all guided metrics,” said Udi Mokady, CyberArk Chairman and CEO.  “Every region contributed to our strong growth and we were thrilled to sign more than 200 new logos in the second quarter.  Our innovation not only sets the standard for Privileged Access Security but also strengthens our leadership position in the market.  With our strong first half of 2019, we are pleased to increase our guidance for the full year on both the top and bottom line.”      

Financial Highlights for the Second Quarter Ended June 30, 2019

Revenue:


Total revenue was $100.2 million, up 29% compared with the second quarter of 2018.

License revenue was $52.2 million, up 27% compared with the second quarter of 2018.

Maintenance and professional services revenue was $48.0 million, up 31% compared with the second quarter of 2018.

Operating Income:
 

GAAP operating income was $13.0 million, an increase from $7.0 million in the second quarter of 2018.  Non-GAAP operating income was $26.5 million, an increase from $17.0 million in the second quarter of 2018.
 
Net Income:


GAAP net income was $13.4 million, or $0.34 per diluted share, an increase from GAAP net income of $8.4 million, or $0.23 per diluted share, in the second quarter of 2018.   Non-GAAP net income was $23.0 million, or $0.59 per diluted share, an increase from $13.5 million, or $0.36 per diluted share, in the second quarter of 2018.

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, 2019 and 2018. 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, 2019, CyberArk had $537.9 million in cash, cash equivalents, marketable securities and short-term deposits.  This compares to $451.2 million as of December 31, 2018 and $377.5 million at June 30, 2018.
 

As of June 30, 2019, total deferred revenue was $174.2 million, a 34% increase from $129.6 million at June 30, 2018.
 

During the six months ended June 30, 2019, the Company generated $67.3 million in cash flow from operations, a 20% increase from $56.2 million in the first six months of 2018.
 
Business Outlook

Based on information available as of August 7, 2019, CyberArk is issuing guidance for the third quarter and increasing its guidance for the full year 2019 as indicated below.
 
Third Quarter 2019:
 

Total revenue between $102.0 million and $104.0 million, representing 20% to 23% year-over-year growth.

Non-GAAP operating income between $21.75 million and $23.25 million.

Non-GAAP net income per share between of $0.45 and $0.48 per diluted share.

o
Assumes 39.4 million weighted average diluted shares.

Full Year 2019:
 

Total revenue between $419.0 million and $423.0 million, representing 22% to 23% year-over-year growth.

Non-GAAP operating income between $106.0 million and $109.0 million.

Non-GAAP net income per share between $2.24 and $2.30 per diluted share.

o
Assumes 39.1 million weighted average diluted shares.
 
Chief Revenue Officer Transition
Ron Zoran, CyberArk’s Chief Revenue Officer, plans to transition from the Company to pursue other business opportunities, including assisting early stage technology companies as a board member.  Ron will continue to serve as Chief Revenue Officer of CyberArk through September 30, 2019 and to help ensure a smooth transition, he will also continue to serve as an advisor into the first quarter of 2020. The Company has initiated a search to identify a new global head of sales.

“Ron was one of the very first employees of CyberArk and has provided invaluable technology and sales leadership over the years,” continued Mr. Mokady. “On behalf of the Company and the Board, I want to thank him for his significant contributions to the company, which have been instrumental in helping establish CyberArk as the leader in Privileged Access Security.  We wish Ron all the best in his future pursuits and believe his extensive experience will be valuable to emerging technology companies.  Ron has built an exceptional sales organization that is well positioned to capitalize on the opportunities ahead of us. We appreciate his commitment to the Company, support and leadership during this transition period.”

“CyberArk has provided me with significant opportunities including being part of the world’s most talented and progressive team of security professionals extending across CyberArk executives, employees, customers and partners,” stated Ron Zoran, CyberArk Chief Revenue Officer.   “My decision to leave the Company was difficult, but at this stage of my career I want to leverage my experience to scale and grow early stage technology companies.  Given my long tenure at the company and strong personal relationships with the entire team, I remain fully engaged to ensure a smooth transition.”

Conference Call Information
 
CyberArk will host a conference call today, August 7, 2019 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 +1 877-823-7693 (U.S.) or +1 647-689-4543 (international).  The conference ID is 6476456. 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 +1 800-585-8367 (U.S.) or +1 416-621-4642 (international). The replay pass code is 6476456. 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 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 500, 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 © 2019 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 gross profit, 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 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 the tax effect of the non-GAAP adjustments 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 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 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, 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; potential 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, channel partners, managed security service providers, or contractors to correctly implement, manage and maintain 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 a wide variety of 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,
 
 
 
2018
   
2019
   
2018
   
2019
 
 
                       
Revenues:
                       
 License
 
$
41,121
   
$
52,201
   
$
79,615
   
$
103,485
 
 Maintenance and professional services
   
36,592
     
47,980
     
69,881
     
92,631
 
 
                               
       Total revenues
   
77,713
     
100,181
     
149,496
     
196,116
 
 
                               
 Cost of revenues:
                               
 License
   
2,510
     
2,906
     
4,907
     
5,494
 
 Maintenance and professional services
   
9,198
     
12,305
     
18,089
     
23,284
 
 
                               
        Total cost of revenues
   
11,708
     
15,211
     
22,996
     
28,778
 
 
                               
 Gross profit
   
66,005
     
84,970
     
126,500
     
167,338
 
 
                               
 Operating expenses:
                               
 Research and development
   
13,808
     
16,995
     
26,792
     
33,326
 
 Sales and marketing
   
35,521
     
43,573
     
70,103
     
85,078
 
 General and administrative
   
9,714
     
11,426
     
18,613
     
22,331
 
 
                               
        Total operating expenses
   
59,043
     
71,994
     
115,508
     
140,735
 
 
                               
 Operating income
   
6,962
     
12,976
     
10,992
     
26,603
 
 
                               
 Financial income, net
   
225
     
2,485
     
2,066
     
3,906
 
 
                               
 Income before taxes on income
   
7,187
     
15,461
     
13,058
     
30,509
 
 
                               
 Tax benefit (taxes on income)
   
1,190
     
(2,058
)
   
1,740
     
(3,429
)
 
                               
 Net income
 
$
8,377
   
$
13,403
   
$
14,798
   
$
27,080
 
 
                               
 Basic net income per ordinary share
 
$
0.23
   
$
0.36
   
$
0.41
   
$
0.73
 
 Diluted net income per ordinary share
 
$
0.23
   
$
0.34
   
$
0.40
   
$
0.70
 
 
                               
 Shares used in computing net income per ordinary shares, basic
   
36,001,580
     
37,522,410
     
35,724,717
     
37,285,788
 
 
                               
 Shares used in computing  net income per ordinary shares, diluted
   
36,923,520
     
38,993,170
     
36,680,585
     
38,735,078
 

 Share-based Compensation Expense:
                       


 
Three Months Ended


Six Months Ended

   
June 30,
   
June 30,
 
   
2018
   
2019
   
2018
   
2019
 
                         
 Cost of revenues
 
$
758
   
$
1,251
   
$
1,413
   
$
2,208
 
 Research and development
   
2,007
     
2,394
     
3,511
     
4,701
 
 Sales and marketing
   
2,874
     
4,878
     
5,291
     
8,563
 
 General and administrative
   
2,774
     
3,373
     
5,121
     
6,676
 
                                 
 Total share-based compensation expense
 
$
8,413
   
$
11,896
   
$
15,336
   
$
22,148
 

CYBERARK SOFTWARE LTD.
Consolidated Balance Sheets
U.S. dollars in thousands
(Unaudited)

 
 
December 31,
   
June 30,
 
 
 
2018
   
2019
 
 
           
 ASSETS
           
 
           
 CURRENT ASSETS:
           
 Cash and cash equivalents
 
$
260,636
   
$
341,738
 
 Short-term bank deposits
   
106,399
     
97,566
 
 Marketable securities
   
59,948
     
59,279
 
 Trade receivables
   
48,431
     
45,275
 
 Prepaid expenses and other current assets
   
6,349
     
10,876
 
 
               
 Total current assets
   
481,763
     
554,734
 
 
               
 LONG-TERM ASSETS:
               
 Property and equipment, net
   
15,120
     
15,790
 
 Intangible assets, net
   
14,732
     
11,556
 
 Goodwill
   
82,400
     
82,400
 
 Marketable securities
   
24,261
     
39,328
 
 Other long-term assets
   
31,863
     
60,690
 
 Deferred tax asset
   
23,481
     
25,046
 
 
               
 Total long-term assets
   
191,857
     
234,810
 
 
               
 TOTAL ASSETS
 
$
673,620
   
$
789,544
 
 
               
 LIABILITIES AND SHAREHOLDERS' EQUITY
               
 
               
 CURRENT LIABILITIES:
               
 Trade payables
 
$
4,924
   
$
4,615
 
 Employees and payroll accruals
   
32,853
     
30,577
 
 Accrued expenses and other current liabilities
   
13,271
     
20,157
 
 Deferred revenues
   
92,375
     
106,921
 
 
               
 Total current liabilities
   
143,423
     
162,270
 
 
               
 LONG-TERM LIABILITIES:
               
 Deferred revenues
   
57,159
     
67,268
 
 Other long-term liabilities
   
6,268
     
25,718
 
 
               
 Total long-term liabilities
   
63,427
     
92,986
 
 
               
 TOTAL LIABILITIES
   
206,850
     
255,256
 
 
               
 SHAREHOLDERS' EQUITY:
               
 Ordinary shares of NIS 0.01 par value
   
95
     
98
 
 Additional paid-in capital
   
303,900
     
342,618
 
 Accumulated other comprehensive income (loss)
   
(939
)
   
778
 
 Retained earnings
   
163,714
     
190,794
 
 
               
 Total shareholders' equity
   
466,770
     
534,288
 
 
               
 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
 
$
673,620
   
$
789,544
 


CYBERARK SOFTWARE LTD.
Consolidated Statements of Cash Flows
U.S. dollars in thousands
(Unaudited)

   
Six Months Ended
 
   
June 30,
 
   
2018
   
2019
 
             
 Cash flows from operating activities:
           
 Net income
 
$
14,798
   
$
27,080
 
 Adjustments to reconcile net income to net cash
               
 provided by operating activities:
               
 Depreciation and amortization
   
4,676
     
5,551
 
 Amortization of premium and accretion of discount on marketable securities, net
   
208
     
(42
)
 Share-based compensation
   
15,336
     
22,148
 
 Deferred income taxes, net
   
(4,710
)
   
(1,857
)
 Decrease in trade receivables
   
12,357
     
3,156
 
 Increase in prepaid expenses and other current and long-term assets
   
(6,138
)
   
(9,656
)
 Increase (decrease) in trade payables
   
2,003
     
(123
)
 Increase in short-term and long-term deferred revenues
   
27,845
     
24,655
 
 Decrease in employees and payroll accruals
   
(5,168
)
   
(7,595
)
 Increase (decrease) in accrued expenses and other
               
 current and long-term liabilities
   
(4,983
)
   
4,029
 
                 
 Net cash provided by operating activities
   
56,224
     
67,346
 
                 
 Cash flows from investing activities:
               
 Proceeds from short and long term deposits
   
7,775
     
8,948
 
 Investment in marketable securities
   
(30,563
)
   
(50,464
)
 Proceeds from maturities of marketable securities
   
20,114
     
36,653
 
 Purchase of property and equipment
   
(4,098
)
   
(3,231
)
 Payments for business acquisitions, net of cash acquired
   
(18,450
)
   
-
 
                 
 Net cash used in investing activities
   
(25,222
)
   
(8,094
)
                 
 Cash flows from financing activities:
               
 Proceeds from withholding tax related to employee stock plans
   
5,509
     
5,319
 
 Proceeds from exercise of stock options
   
8,090
     
16,572
 
                 
 Net cash provided by financing activities
   
13,599
     
21,891
 
                 
 Increase in cash, cash equivalents and restricted cash
   
44,601
     
81,143
 
                 
 Cash, cash equivalents and restricted cash at the beginning of the period
   
162,521
     
261,883
 
                 
 Cash, cash equivalents and restricted cash at the end of the period
 
$
207,122
   
$
343,026
 
 

 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,
 
   
2018
   
2019
   
2018
   
2019
 
                         
 Gross profit
 
$
66,005
   
$
84,970
   
$
126,500
   
$
167,338
 
 Plus:
                               
 Share-based compensation - Maintenance & professional services
   
758
     
1,251
     
1,413
     
2,208
 
 Amortization of intangible assets - License
   
1,444
     
1,444
     
2,674
     
2,888
 
                                 
 Non-GAAP gross profit
 
$
68,207
   
$
87,665
   
$
130,587
   
$
172,434
 

 Reconciliation of Operating Income to Non-GAAP Operating Income:
                               
                                 
   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
     
2018
     
2019
     
2018
     
2019
 
                                 
 Operating income
 
$
6,962
   
$
12,976
   
$
10,992
   
$
26,603
 
 Plus:
                               
 Share-based compensation
   
8,413
     
11,896
     
15,336
     
22,148
 
 Amortization of intangible assets - Cost of revenues
   
1,444
     
1,444
     
2,674
     
2,888
 
 Amortization of intangible assets -  Sales and marketing
   
199
     
144
     
397
     
288
 
 Acquisition related expenses
   
-
     
-
     
268
     
-
 
                                 
 Non-GAAP operating income
 
$
17,018
   
$
26,460
   
$
29,667
   
$
51,927
 

 Reconciliation of Net Income to Non-GAAP Net Income:
                               
                                 
   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
     
2018
     
2019
     
2018
     
2019
 
                                 
 Net income
 
$
8,377
   
$
13,403
   
$
14,798
   
$
27,080
 
 Plus:
                               
 Share-based compensation
   
8,413
     
11,896
     
15,336
     
22,148
 
 Amortization of intangible assets - Cost of revenues
   
1,444
     
1,444
     
2,674
     
2,888
 
 Amortization of intangible assets -  Sales and marketing
   
199
     
144
     
397
     
288
 
 Acquisition related expenses
   
-
     
-
     
268
     
-
 
 Taxes on income related to non-GAAP adjustments
   
(4,964
)
   
(3,846
)
   
(8,193
)
   
(7,892
)
                                 
 Non-GAAP net income
 
$
13,469
   
$
23,041
   
$
25,280
   
$
44,512
 
                                 
 Non-GAAP net income per share
                               
 Basic
 
$
0.37
   
$
0.61
   
$
0.71
   
$
1.19
 
 Diluted
 
$
0.36
   
$
0.59
   
$
0.69
   
$
1.15
 
                                 
 Weighted average number of shares
                               
 Basic
   
36,001,580
     
37,522,410
     
35,724,717
     
37,285,788
 
 Diluted
   
36,923,520
     
38,993,170
     
36,680,585
     
38,735,078