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 May 2020
 
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 May 13, 2020, CyberArk Software Ltd. (the “Company”), issued a press release entitled “CyberArk Announces First Quarter 2020 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, 333-230269 and 333-236909).
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: May 13, 2020
 
 
 
By:
 
/s/ Joshua Siegel
 
 
 
 
 
 
Name: Joshua Siegel
 
 
 
 
 
 
Title:   Chief Financial Officer
3

EXHIBIT INDEX

     
Exhibit
  
Description
   
  
 
4


Exhibit 99.1


CyberArk Announces First Quarter 2020 Results
Total revenue of $106.8 million
GAAP operating income of $2.6 million and non-GAAP operating income of $21.5 million
CyberArk Acquires Identity as a Service Provider, IDaptive

Newton, Mass. and Petach Tikva, Israel – May 13, 2020– CyberArk, (NASDAQ: CYBR), the global leader in privileged access management, today announced financial results for the first quarter ended March 31, 2020.

“The health and well-being of our global community of employees, customers and partners continues to be our first priority,” said Udi Mokady, CyberArk Chairman and CEO.  “We were pleased to deliver results in line with or exceeding all guided metrics for the first quarter.  Privileged Access Management (PAM) is even more critical today with attackers exploiting the sudden and dramatic change in enterprise IT created by remote work environments.  In this higher threat environment, our level of engagement with customers has increased as they look to better secure their extended enterprise by expanding their PAM programs. Given our leadership position in PAM, our team’s extensive experience during prior market downturns as well as our ongoing commitment to innovation and customer satisfaction, we believe that we will emerge from the COVID-19 pandemic stronger than before.  We are also pleased with today’s acquisition of Idaptive, which positions us as the only modern identity security platform, adds another SaaS offering to our portfolio, and expands our Total Addressable Market.”      

“Given the weakened economic environment due to Covid-19, we expect customers to make more cautious purchasing decisions which will impact our revenue and cash flow from operations in the near term,” stated Josh Siegel, CyberArk Chief Financial Officer.  “We believe deal close rates, particularly for new business and in certain verticals, will be less predictable and have therefore decided to withdraw our full year 2020 guidance.  We continue to believe in the long-term growth opportunity given that Privileged Access Management is a priority for customers.  The management team remains focused on delivering growth and profitability in 2020. As we monitor COVID-19 developments, our current plan is to manage expenses for the full year to better align with our top line, but also make disciplined investments and hire for key roles.  We believe this approach will allow CyberArk to navigate through the current environment and prepare the Company for accelerated growth when the business environment stabilizes.”

Financial Highlights for the First Quarter Ended March 31, 2020

Revenue:

Total revenue was $106.8 million, up 11% compared with the first quarter of 2019.
 
License revenue was $51.7 million, up from $51.3 million in the first quarter of 2019.

Maintenance and professional services revenue was $55.2 million, compared to $44.7 million in the first quarter of 2019.

Operating Income:

GAAP operating income was $2.6 million, compared to $13.6 million in the first quarter of 2019.  Non-GAAP operating income was $21.5 million, compared to $25.5 million in the first quarter of 2019.
Net Income:

GAAP net income was $2.4 million, or $0.06 per diluted share, compared to GAAP net income of $13.7 million, or $0.36 per diluted share, in the first quarter of 2019. Non-GAAP net income was $19.6 million, or $0.50 per diluted share, compared to $21.5 million, or $0.56 per diluted share, in the first quarter of 2019.

The tables at the end of this press release include a reconciliation of GAAP to non-GAAP gross profit, operating income and net income for the three months ended March 31, 2020 and 2019. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”
 
Balance Sheet and Net Cash Provided by Operating Activities:

As of March 31, 2020, CyberArk had $1.2 billion in cash, cash equivalents, marketable securities and short-term deposits. This compares with $509.7 million in cash, cash equivalents, marketable securities and short-term deposits as of March 31, 2019.
As of March 31, 2020, total deferred revenue was $210.7 million, a 23% increase from $171.1 million at March 31, 2019.
During the first quarter of 2020, the Company generated $33.8 million in net cash provided by operating activities, compared to $45.9 million in the first quarter of 2019.
CyberArk Acquires IDaptive Holdings, Inc

In a separate announcement, CyberArk announced the acquisition of Idaptive, a leading Identity as a Service (IDaaS) provider.  Together, CyberArk and Idaptive will deliver the industry’s only modern identity platform with a security-first approach.

CyberArk’s COVID-19 Response: Business Operations

As the COVID-19 situation evolved, CyberArk quickly took action to protect its community of employees, customers and partners and is continually evolving its COVID-19 response plan.  To date, following actions have been taken:

Created an executive level task force to respond to the situation and monitor guidance from the World Health Organization, CDC as well as local authorities to shape the Company’s policies and guidelines.
Closed offices and enabled all employees to work securely from home.
Transitioned sales and marketing to focus on virtual and digital programs.
Restricted non-essential business travel.

CyberArk’s COVID-19 Response: Customers, Partners and Community

Transitioned support and service staff to be available from remote locations 24 hours a day, 7 days a week to help our customers and partners implement business continuity strategies in response to the COVID-19 pandemic.
Converted the Company’s major customer events in the U.S. and Europe to a global virtual program.
Adjusted our Security Services organization to deliver all services remotely.
Offered CyberArk Alero to customers at no cost into June. Alero enables remote employees and contractors to securely access CyberArk.
Published research from CyberArk Labs communicating information about how attackers are capitalizing on the disruptions caused by COVID-19.
Donated to local charities to help support COVID-19 response efforts.
Business Outlook

Based on information available as of May 13, 2020, CyberArk is issuing guidance as indicated below:
 
Second Quarter 2020:

Total revenue between $95.0 million and $105.0 million.

Non-GAAP operating income between $7.0 million and $16.0 million, which includes expenses from the acquisition of Idaptive.

Non-GAAP net income per share between $0.17 and $0.35 per diluted share, which includes expenses from the acquisition of Idaptive.

o
Assumes 39.4 million weighted average diluted shares.

Full Year 2020:
 
Given the uncertainty created by the COVID-19 pandemic as well as its impact on the overall economy, our business, our customers and our partners, we are withdrawing our full year 2020 guidance for total revenue, non-GAAP operating income, and non-GAAP earnings per share that we provided on February 12, 2020.
 
Conference Call Information
 
CyberArk will host a conference call today, Wednesday, May 13, 2020 at 8:30 a.m. Eastern Time (ET) to discuss the Company’s first 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 1148659. 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 1148659. 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 management, a critical layer of IT security to protect data, infrastructure and assets across cloud and hybrid environments, 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 © 2020 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, amortization of debt discount and issuance costs and the tax effect of non-GAAP adjustments.
The Company believes that providing non-GAAP financial measures that exclude, as applicable, share-based compensation expense, acquisition related expenses, amortization of intangible assets related to acquisitions, non-cash interest expense related to the amortization of debt discount and issuance costs 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 non-cash interest expense related to the amortization of debt discount and issuance costs 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, non-cash interest expense related to the amortization of debt discount and issuance costs 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: the duration and scope of the COVID-19 pandemic and the impact of the pandemic and actions taken in response, on global and regional economies and economic activity, which may have a material impact on the demand for the Company’s solutions and on its expected revenue growth rates and costs; the Company’s ability to adjust its operations in response to any impacts from the COVID-19 pandemic; difficulties predicting future financial results, including due to impacts from the COVID-19 pandemic; the drivers of the Company’s growth may change; the Company’s ability to sell into existing and new industry verticals; the Company’s sales cycles and multiple licensing models may cause results to fluctuate; the Company’s ability to sell into existing customers; potential changes in the Company’s operating and net profit margins and the Company’s revenue growth rate; the Company’s ability to successfully find, complete, fully integrate and achieve the expected benefits of future acquisitions, including the Company’s ability to integrate and achieve the expected benefits of Idaptive; real or perceived shortcomings, defects or vulnerabilities in the Company’s solutions or internal network system; the Company’s ability to hire qualified personnel; the Company’s ability to expand its channel partnerships across existing and new geographies; the Company’s ability to further diversify its product deployments and licensing options; 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
 
   
March 31,
 
   
2019
   
2020
 
             
Revenues:
           
 License
 
$
51,284
   
$
51,656
 
 Maintenance and professional services
   
44,651
     
55,170
 
                 
       Total revenues
   
95,935
     
106,826
 
                 
 Cost of revenues:
               
 License
   
2,588
     
2,235
 
 Maintenance and professional services
   
10,979
     
14,850
 
                 
        Total cost of revenues
   
13,567
     
17,085
 
                 
 Gross profit
   
82,368
     
89,741
 
                 
 Operating expenses:
               
 Research and development
   
16,331
     
21,285
 
 Sales and marketing
   
41,505
     
51,196
 
 General and administrative
   
10,905
     
14,689
 
                 
        Total operating expenses
   
68,741
     
87,170
 
                 
 Operating income
   
13,627
     
2,571
 
                 
 Financial income (expenses), net
   
1,421
     
(736
)
                 
 Income before taxes on income
   
15,048
     
1,835
 
                 
 Tax benefit (taxes on income)
   
(1,371
)
   
551
 
                 
 Net income
 
$
13,677
   
$
2,386
 
                 
 Basic net income per ordinary share
 
$
0.37
   
$
0.06
 
 Diluted net income per ordinary share
 
$
0.36
   
$
0.06
 
                 
 Shares used in computing net income
               
 per ordinary shares, basic
   
37,046,472
     
38,222,867
 
 Shares used in computing  net income
               
 per ordinary shares, diluted
   
38,440,461
     
39,309,750
 

 Share-based Compensation Expense:
           
             
   
Three Months Ended
 
   
March 31,
 
   
2019
   
2020
 
             
 Cost of revenues
 
$
957
   
$
1,803
 
 Research and development
   
2,307
     
3,021
 
 Sales and marketing
   
3,685
     
6,400
 
 General and administrative
   
3,303
     
5,084
 
                 
 Total share-based compensation expense
 
$
10,252
   
$
16,308
 



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

   
December 31,
   
March 31,
 
   
2019
   
2020
 
             
 ASSETS
           
             
 CURRENT ASSETS:
           
 Cash and cash equivalents
 
$
792,363
   
$
812,667
 
 Short-term bank deposits
   
140,067
     
152,631
 
 Marketable securities
   
132,412
     
124,517
 
 Trade receivables
   
72,953
     
51,970
 
 Prepaid expenses and other current assets
   
8,406
     
11,943
 
                 
 Total current assets
   
1,146,201
     
1,153,728
 
                 
 LONG-TERM ASSETS:
               
 Marketable securities
   
54,408
     
65,706
 
 Property and equipment, net
   
16,472
     
16,427
 
 Intangible assets, net
   
9,143
     
8,110
 
 Goodwill
   
82,400
     
82,400
 
 Other long-term assets
   
72,091
     
78,970
 
 Deferred tax asset
   
24,451
     
24,863
 
                 
 Total long-term assets
   
258,965
     
276,476
 
                 
 TOTAL ASSETS
 
$
1,405,166
   
$
1,430,204
 
                 
 LIABILITIES AND SHAREHOLDERS' EQUITY
               
                 
 CURRENT LIABILITIES:
               
 Trade payables
 
$
5,675
   
$
6,172
 
 Employees and payroll accruals
   
41,345
     
26,384
 
 Accrued expenses and other current liabilities
   
27,132
     
21,672
 
 Deferred revenues
   
118,519
     
130,400
 
                 
 Total current liabilities
   
192,671
     
184,628
 
                 
 LONG-TERM LIABILITIES:
               
 Convertible senior notes, net
   
485,119
     
489,359
 
 Deferred revenues
   
71,836
     
80,253
 
 Other long-term liabilities
   
31,408
     
28,646
 
                 
 Total long-term liabilities
   
588,363
     
598,258
 
                 
 TOTAL LIABILITIES
   
781,034
     
782,886
 
                 
 SHAREHOLDERS' EQUITY:
               
 Ordinary shares of NIS 0.01 par value
   
99
     
99
 
 Additional paid-in capital
   
396,437
     
418,036
 
 Accumulated other comprehensive income
   
818
     
19
 
 Retained earnings
   
226,778
     
229,164
 
                 
 Total shareholders' equity
   
624,132
     
647,318
 
                 
 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
 
$
1,405,166
   
$
1,430,204
 



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

   
Three Months Ended
 
   
March 31,
 
   
2019
   
2020
 
             
Cash flows from operating activities:
           
Net income
 
$
13,677
   
$
2,386
 
Adjustments to reconcile net income to net cash
               
provided by operating activities:
               
Depreciation and amortization
   
2,778
     
2,479
 
Amortization of premium and accretion of discount on marketable securities, net
    (10
)     (80
)
Share-based compensation
   
10,252
     
16,308
 
Deferred income taxes, net
   
(1,311
)
   
(2,516
)
Decrease in trade receivables
   
13,914
     
20,983
 
Amortization of debt discount and issuance costs
   
-
     
4,240
 
Increase in prepaid expenses and other current and long-term assets
   
(5,347
)
   
(8,160
)
Increase in trade payables
   
871
     
421
 
Increase in short-term and long-term deferred revenues
   
21,537
     
20,298
 
Decrease in employees and payroll accruals
   
(11,797
)
   
(14,162
)
Increase (decrease) in accrued expenses and other current and long-term liabilities
    1,294
     
(8,371
)
                 
Net cash provided by operating activities
   
45,858
     
33,826
 
                 
Cash flows from investing activities:
               
Investment in short and long term deposits
   
(2,913
)
   
(12,527
)
Investment in marketable securities
   
(35,768
)
   
(44,921
)
Proceeds from maturities of marketable securities
   
21,651
     
41,246
 
Purchase of property and equipment
   
(2,297
)
   
(1,327
)
                 
Net cash used in investing activities
   
(19,327
)
   
(17,529
)
                 
Cash flows from financing activities:
               
Proceeds from (payment of) withholding tax related to employee stock plans
    4,842
     
(799
)
Proceeds from exercise of stock options
   
9,918
     
4,806
 
                 
Net cash provided by financing activities
   
14,760
     
4,007
 
                 
Increase in cash, cash equivalents and restricted cash
   
41,291
     
20,304
 
                 
Cash, cash equivalents and restricted cash at the beginning of the period
  $ 261,883
   
$
792,413
 
                 
Cash, cash equivalents and restricted cash at the end of the period
 
$
303,174
   
$
812,717
 


 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
 
   
March 31,
 
   
2019
   
2020
 
             
Gross profit
 
$
82,368
   
$
89,741
 
Plus:
               
Share-based compensation - Maintenance & professional services
   
957
     
1,803
 
Amortization of intangible assets - License
   
1,444
     
936
 
                 
Non-GAAP gross profit
 
$
84,769
   
$
92,480
 

Reconciliation of Operating Income to Non-GAAP Operating Income:
               
                 
   
Three Months Ended
 
   
March 31,
 
     
2019
     
2020
 
                 
Operating income
 
$
13,627
   
$
2,571
 
Plus:
               
Share-based compensation
   
10,252
     
16,308
 
Amortization of intangible assets - Cost of revenues
   
1,444
     
936
 
Amortization of intangible assets -  Sales and marketing
   
144
     
113
 
Acquisition related expenses
   
-
     
1,610
 
                 
Non-GAAP operating income
 
$
25,467
   
$
21,538
 

Reconciliation of Net Income to Non-GAAP Net Income:
               
                 
   
Three Months Ended
 
   
March 31,
 
     
2019
     
2020
 
                 
Net income
 
$
13,677
   
$
2,386
 
Plus:
               
Share-based compensation
   
10,252
     
16,308
 
Amortization of intangible assets - Cost of revenues
   
1,444
     
936
 
Amortization of intangible assets -  Sales and marketing
   
144
     
113
 
Acquisition related expenses
   
-
     
1,610
 
Amortization of debt discount and issuance costs
   
-
     
4,240
 
Taxes on income related to non-GAAP adjustments
   
(4,046
)
   
(6,012
)
                 
Non-GAAP net income
 
$
21,471
   
$
19,581
 
                 
Non-GAAP net income per share
               
Basic
 
$
0.58
   
$
0.51
 
Diluted
 
$
0.56
   
$
0.50
 
                 
Weighted average number of shares
               
Basic
   
37,046,472
     
38,222,867
 
Diluted
   
38,440,461
     
39,309,750