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 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 August 4, 2020, CyberArk Software Ltd. (the “Company”), issued a press release entitled “CyberArk Announces Second 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: August 4, 2020
By:
/s/ Joshua Siegel
   
Name: Joshua Siegel
   
Title:   Chief Financial Officer
 
3

EXHIBIT INDEX

     
Exhibit
  
Description
   
  


4

Exhibit 99.1

CyberArk Announces Second Quarter 2020 Results
Total revenue of $106.5 million
 GAAP operating loss of $(4.9) million and Non-GAAP operating income of $16.9 million
Deferred revenue grew 30 percent year over year

Newton, Mass. and Petach Tikva, Israel – August 4, 2020 – CyberArk, (NASDAQ: CYBR), the global leader in privileged access management, today announced financial results for the second quarter ended June 30, 2020.

“We were pleased to deliver results ahead of all guided metrics for the second quarter,” said Udi Mokady, CyberArk Chairman and CEO.  “The integration of our Idaptive acquisition is progressing well and the feedback from customers and partners has been positive.  Our SaaS solutions are gaining momentum resulting in record SaaS bookings in the second quarter, contributing to our strong 30 percent deferred revenue growth.  While SaaS acceleration results in a short-term revenue headwind, the recurring revenue base creates significant longer-term value for both our customers and CyberArk.  It was a very active quarter overall with the impact from the global pandemic confined to new business progression, which was in line with our expectations.  Cybersecurity market fundamentals remain strong, identity security is at the top of customers’ priority lists, and our pipeline growth is robust.  We are confident that we are positioned to accelerate growth as the overall business environment stabilizes.” 
    
Financial Highlights for the Second Quarter Ended June 30, 2020

Revenue:


Total revenue was $106.5 million, compared to $100.2 million in the second quarter of 2019.

License revenue was $47.9 million, compared to $52.2 million in the second quarter of 2019.

Maintenance and professional services revenue was $58.6 million, compared to $48.0 million in the second quarter of 2019.

Operating Income (Loss):
 

GAAP operating loss was $(4.9) million, compared to operating income of $13.0 million in the second quarter of 2019.  Non-GAAP operating income was $16.9 million, compared to $26.5 million in the second quarter of 2019.
 
Net Income (Loss):


GAAP net loss was $(4.3) million, or $(0.11) per basic and diluted share, compared to GAAP net income of $13.4 million, or $0.34 per diluted share, in the second quarter of 2019.   Non-GAAP net income was $16.7 million, or $0.42 per diluted share, compared to $23.0 million, or $0.59 per diluted share, in the second quarter of 2019.


The tables at the end of this press release include a reconciliation of GAAP to non-GAAP gross profit, operating income (loss) and net income (loss) for the three months and six months ended June 30, 2020 and 2019. 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, 2020, CyberArk had $1.1 billion in cash, cash equivalents, marketable securities and short-term deposits. This compares to $537.9 million at June 30, 2019.

As of June 30, 2020, total deferred revenue was $225.7 million, a 30% increase from $174.2 million at June 30, 2019.

During the six months ended June 30, 2020, the company generated $53.3 million in net cash provided by operating activities, compared to $67.3 million in the first six months of 2019.
 
Business Outlook

Based on information available as of August 4, 2020, CyberArk is issuing guidance for the third quarter of 2020 as indicated below.
 
Third Quarter 2020:
 

Total revenue between $107.0 million and $115.0 million.

Non-GAAP operating income between $8.0 million and $15.0 million.

Non-GAAP net income per share between $0.19 and $0.33 per diluted share.

o
Assumes 39.8 million weighted average diluted shares.
 
Conference Call Information
 
In conjunction with this announcement, CyberArk will host a conference call on Tuesday, August 4, 2020 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 (833) 968-2251 (U.S.) or +1 (778) 560-2670 (international).  The conference ID is 3597059. 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 (416) 621-4642 (international). The replay pass code is 3597059. 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 (loss) or net income (loss) or any other performance measures derived in accordance with GAAP.


Non-GAAP gross profit is calculated as GAAP gross profit excluding share-based compensation expense, acquisition related expenses and amortization of intangible assets related to acquisitions.
 

Non-GAAP operating income is calculated as GAAP operating income (loss) excluding share-based compensation expense, acquisition related expenses and amortization of intangible assets related to acquisitions.
 

Non-GAAP net income is calculated as GAAP net income (loss) 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 and the resulting 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 impacts from the COVID-19 pandemic; difficulties predicting future financial results, including due to impacts from the COVID-19 pandemic; changes to the drivers of the Company’s growth; 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 Relations Contact:
Erica Smith
CyberArk
617-558-2132
ir@cyberark.com

Media Contact:
Liz Campbell
CyberArk
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,
 
   
2019
   
2020
   
2019
   
2020
 
                         
Revenues:
                       
 License
 
$
52,201
   
$
47,864
   
$
103,485
   
$
99,520
 
 Maintenance and professional services
   
47,980
     
58,633
     
92,631
     
113,803
 
                                 
       Total revenues
   
100,181
     
106,497
     
196,116
     
213,323
 
                                 
 Cost of revenues:
                               
 License
   
2,906
     
5,223
     
5,494
     
7,458
 
 Maintenance and professional services
   
12,305
     
15,167
     
23,284
     
30,017
 
                                 
        Total cost of revenues
   
15,211
     
20,390
     
28,778
     
37,475
 
                                 
 Gross profit
   
84,970
     
86,107
     
167,338
     
175,848
 
                                 
 Operating expenses:
                               
 Research and development
   
16,995
     
22,873
     
33,326
     
44,158
 
 Sales and marketing
   
43,573
     
52,347
     
85,078
     
103,543
 
 General and administrative
   
11,426
     
15,766
     
22,331
     
30,455
 
                                 
        Total operating expenses
   
71,994
     
90,986
     
140,735
     
178,156
 
                                 
 Operating income (loss)
   
12,976
     
(4,879
)
   
26,603
     
(2,308
)
                                 
 Financial income (expenses), net
   
2,485
     
(1,473
)
   
3,906
     
(2,209
)
                                 
 Income (loss) before taxes on income
   
15,461
     
(6,352
)
   
30,509
     
(4,517
)
                                 
 Tax benefit (taxes on income)
   
(2,058
)
   
2,036
     
(3,429
)
   
2,587
 
                                 
 Net income (loss)
 
$
13,403
   
$
(4,316
)
 
$
27,080
   
$
(1,930
)
                                 
 Basic net income (loss) per ordinary share
 
$
0.36
   
$
(0.11
)
 
$
0.73
   
$
(0.05
)
 Diluted net income (loss) per ordinary share
 
$
0.34
   
$
(0.11
)
 
$
0.70
   
$
(0.05
)
                                 
 Shares used in computing net income (loss)
                               
 per ordinary shares, basic
   
37,522,410
     
38,565,175
     
37,285,788
     
38,393,938
 
 Shares used in computing net income (loss)
                               
 per ordinary shares, diluted
   
38,993,170
     
38,565,175
     
38,735,078
     
38,393,938
 
                                 
 Share-based Compensation Expense:
                               

   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
     
2019
     
2020
     
2019
     
2020
 
                                 
 Cost of revenues
 
$
1,251
   
$
1,949
   
$
2,208
   
$
3,752
 
 Research and development
   
2,394
     
3,362
     
4,701
     
6,383
 
 Sales and marketing
   
4,878
     
6,753
     
8,563
     
13,153
 
 General and administrative
   
3,373
     
4,687
     
6,676
     
9,771
 
                                 
 Total share-based compensation expense
 
$
11,896
   
$
16,751
   
$
22,148
   
$
33,059
 


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

   
December 31,
   
June 30,
 
   
2019
   
2020
 
             
 ASSETS
           
             
 CURRENT ASSETS:
           
 Cash and cash equivalents
 
$
792,363
   
$
551,706
 
 Short-term bank deposits
   
140,067
     
247,965
 
 Marketable securities
   
132,412
     
120,050
 
 Trade receivables
   
72,953
     
60,136
 
 Prepaid expenses and other current assets
   
8,406
     
13,762
 
                 
 Total current assets
   
1,146,201
     
993,619
 
                 
 LONG-TERM ASSETS:
               
 Marketable securities
   
54,408
     
190,134
 
 Property and equipment, net
   
16,472
     
16,865
 
 Intangible assets, net
   
9,143
     
29,102
 
 Goodwill
   
82,400
     
133,280
 
 Other long-term assets
   
72,091
     
87,098
 
 Deferred tax asset
   
24,451
     
27,555
 
                 
 Total long-term assets
   
258,965
     
484,034
 
                 
 TOTAL ASSETS
 
$
1,405,166
   
$
1,477,653
 
                 
 LIABILITIES AND SHAREHOLDERS' EQUITY
               
                 
 CURRENT LIABILITIES:
               
 Trade payables
 
$
5,675
   
$
8,946
 
 Employees and payroll accruals
   
41,345
     
34,933
 
 Accrued expenses and other current liabilities
   
27,132
     
20,272
 
 Deferred revenues
   
118,519
     
145,526
 
                 
 Total current liabilities
   
192,671
     
209,677
 
                 
 LONG-TERM LIABILITIES:
               
 Convertible senior notes, net
   
485,119
     
493,636
 
 Deferred revenues
   
71,836
     
80,212
 
 Other long-term liabilities
   
31,408
     
30,007
 
                 
 Total long-term liabilities
   
588,363
     
603,855
 
                 
 TOTAL LIABILITIES
   
781,034
     
813,532
 
                 
 SHAREHOLDERS' EQUITY:
               
 Ordinary shares of NIS 0.01 par value
   
99
     
101
 
 Additional paid-in capital
   
396,437
     
435,769
 
 Accumulated other comprehensive income
   
818
     
3,403
 
 Retained earnings
   
226,778
     
224,848
 
                 
 Total shareholders' equity
   
624,132
     
664,121
 
                 
 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
 
$
1,405,166
   
$
1,477,653
 


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

   
Six Months Ended
 
   
June 30,
 
   
2019
   
2020
 
             
 Cash flows from operating activities:
           
 Net income (loss)
 
$
27,080
   
$
(1,930
)
 Adjustments to reconcile net income to net cash
               
 provided by operating activities:
               
 Depreciation and amortization
   
5,551
     
6,911
 
 Amortization of premium and accretion of discount on marketable securities, net
   
(42
)
   
222
 
 Share-based compensation
   
22,148
     
33,059
 
 Deferred income taxes, net
   
(1,857
)
   
(3,766
)
 Decrease in trade receivables
   
3,156
     
15,677
 
 Amortization of debt discount and issuance costs
   
-
     
8,517
 
 Increase in prepaid expenses and other current and long-term assets
   
(9,656
)
   
(13,850
)
 Increase (decrease) in trade payables
   
(123
)
   
477
 
 Increase in short-term and long-term deferred revenues
   
24,655
     
28,627
 
 Decrease in employees and payroll accruals
   
(7,595
)
   
(8,116
)
 Increase (decrease) in accrued expenses and other
               
 current and long-term liabilities
   
4,029
     
(12,540
)
                 
 Net cash provided by operating activities
   
67,346
     
53,288
 
                 
 Cash flows from investing activities:
               
 Proceeds from (investment in) short and long term deposits
   
8,948
     
(108,138
)
 Investment in marketable securities
   
(50,464
)
   
(223,733
)
 Proceeds from maturities of marketable securities
   
36,653
     
102,239
 
 Purchase of property and equipment
   
(3,231
)
   
(2,874
)
 Payments for business acquisitions, net of cash acquired
   
-
     
(66,964
)
                 
 Net cash used in investing activities
   
(8,094
)
   
(299,470
)
                 
 Cash flows from financing activities:
               
 Proceeds from (payment of) withholding tax related to employee stock plans
   
5,319
     
(603
)
 Proceeds from exercise of stock options
   
16,572
     
6,125
 
                 
 Net cash provided by financing activities
   
21,891
     
5,522
 
                 
 Increase (decrease) in cash, cash equivalents and restricted cash
   
81,143
     
(240,660
)
                 
 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
 
$
343,026
   
$
551,753
 


 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,
 
   
2019
   
2020
   
2019
   
2020
 
                         
 Gross profit
 
$
84,970
   
$
86,107
   
$
167,338
   
$
175,848
 
 Plus:
                               
 Share-based compensation - License, Maintenance & professional services
   
1,251
     
1,949
     
2,208
     
3,752
 
 Amortization of intangible assets - License
   
1,444
     
2,239
     
2,888
     
3,175
 
 Acquisition related expenses
   
-
     
400
     
-
     
400
 
                                 
 Non-GAAP gross profit
 
$
87,665
   
$
90,695
   
$
172,434
   
$
183,175
 
                                 
 Reconciliation of Operating Income (Loss) to Non-GAAP Operating Income:
                               
                                 
   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
     
2019
     
2020
     
2019
     
2020
 
                                 
 Operating income (loss)
 
$
12,976
   
$
(4,879
)
 
$
26,603
   
$
(2,308
)
 Plus:
                               
 Share-based compensation
   
11,896
     
16,751
     
22,148
     
33,059
 
 Amortization of intangible assets - Cost of revenues
   
1,444
     
2,239
     
2,888
     
3,175
 
 Amortization of intangible assets -  Sales and marketing
   
144
     
160
     
288
     
273
 
 Acquisition related expenses
   
-
     
2,646
     
-
     
4,256
 
                                 
 Non-GAAP operating income
 
$
26,460
   
$
16,917
   
$
51,927
   
$
38,455
 
                                 
 Reconciliation of Net Income (Loss) to Non-GAAP Net Income:
                               
                                 
   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
     
2019
     
2020
     
2019
     
2020
 
                                 
 Net income (loss)
 
$
13,403
   
$
(4,316
)
 
$
27,080
   
$
(1,930
)
 Plus:
                               
 Share-based compensation
   
11,896
     
16,751
     
22,148
     
33,059
 
 Amortization of intangible assets - Cost of revenues
   
1,444
     
2,239
     
2,888
     
3,175
 
 Amortization of intangible assets -  Sales and marketing
   
144
     
160
     
288
     
273
 
 Acquisition related expenses
   
-
     
2,646
     
-
     
4,256
 
 Amortization of debt discount and issuance costs
   
-
     
4,277
     
-
     
8,517
 
 Taxes on income related to non-GAAP adjustments
   
(3,846
)
   
(5,066
)
   
(7,892
)
   
(11,078
)
                                 
 Non-GAAP net income
 
$
23,041
   
$
16,691
   
$
44,512
   
$
36,272
 
                                 
 Non-GAAP net income per share
                               
 Basic
 
$
0.61
   
$
0.43
   
$
1.19
   
$
0.94
 
 Diluted
 
$
0.59
   
$
0.42
   
$
1.15
   
$
0.92
 
                                 
 Weighted average number of shares
                               
 Basic
   
37,522,410
     
38,565,175
     
37,285,788
     
38,393,938
 
 Diluted
   
38,993,170
     
39,320,124
     
38,735,078
     
39,301,975