Newton, Mass. and Petach Tikvah, Israel – August 9, 2016 – CyberArk (NASDAQ: CYBR), the company that protects organizations from cyber attacks that have made their way inside the network perimeter, today announced financial results for the second quarter ended June 30, 2016.

“The second quarter was another strong quarter for CyberArk,” said Udi Mokady, CyberArk Chairman and CEO. “Our top line growth demonstrates the increasing demand for our privileged account security platform while our bottom line outperformance shows the power of our business model. As we move into the second half of the year, we plan to continue making thoughtful investments including enhancing our technology platform and expanding market presence.”

Financial Highlights for the Second Quarter Ended June 30, 2016

Revenue:

• Total revenue was $50.4 million, up 39% year-over-year compared with the second quarter of 2015.
• License revenue was $30.0 million, up 35% compared with the second quarter of 2015.
• Maintenance and Professional Services revenue was $20.4 million, up 45% from the second quarter of 2015.

Operating Income:

• GAAP operating income was $8.5 million for the quarter, up from $6.5 million in the second quarter of 2015.
• Non-GAAP operating income was $13.6 million for the quarter, up from $8.2 million in the second quarter of 2015.

Net Income:

• GAAP net income was $6.4 million, or $0.18 per diluted share, compared to GAAP net income of $4.9 million, or $0.14 per diluted share, in the second quarter of 2015.
• Non-GAAP net income was $10.5 million, or $0.29 per diluted share, compared to $6.5 million, or $0.19 per diluted share, in the second quarter of 2015.

The tables at the end of this press release include a reconciliation of GAAP to non-GAAP operating income and net income for the three months and six months ended June 30, 2016 and 2015. 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, 2016, CyberArk had $259.0 million in cash, cash equivalents, marketable securities and short-term deposits, compared to $238.3 million as of December 31, 2015.
• During the first six months of 2016, the Company generated $21.4 million in cash flow from operations, compared to $35.1 million in the first six months of 2015.

Business Outlook
Based on information available as of August 9, 2016, CyberArk is issuing guidance for the third quarter and full year 2016 as indicated below.

Third Quarter 2016:

• Total revenue is expected to be in the range of $51.5 million to $52.5 million, which represents 29% to 31% year-over-year growth.
• Non-GAAP operating income is expected to be in the range of $10.1 million to $11.0 million.

• Non-GAAP net income per share is expected to be in the range of $0.21 to $0.23 per diluted share.  This assumes 36.0 million weighted average diluted shares.

Full Year 2016:

• Total revenue is expected to be in the range of $210.5 million to $212.5 million, which represents 31% to 32% year-over-year growth.
• Non-GAAP operating income is expected to be in the range of $48.4 million to $50.0 million.

• Non-GAAP net income per share is expected to be in the range of $1.03 to $1.07 per diluted share.  This assumes 35.9 million weighted average diluted shares. 

Conference Call Information
CyberArk will host a conference call on Tuesday, August 9, 2016 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 47864998. 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. 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 47864998. 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. 

Non-GAAP Financial Measures
CyberArk believes that the use of 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.

• For the three and six months ended June 30, 2016, non-GAAP operating income is calculated as operating income excluding share-based compensation expense and amortization of intangible assets related to acquisitions. For the three and six months ended June 30, 2015, non-GAAP operating income is calculated as operating income excluding public offering and acquisition related expenses as well as share-based compensation expense.
• For the three and six months ended June 30, 2016, non-GAAP net income is calculated as net income excluding share-based compensation expense, amortization of intangible assets related to acquisitions and the tax effects related to the non-GAAP adjustments. For the three and six months ended June 30, 2015, non-GAAP net income is calculated as net income excluding public offering and acquisition related expenses as well as share-based compensation expense and the tax effects related to the non-GAAP adjustments.

Because of 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 providing non-GAAP financial measures that exclude share-based compensation, public offering and acquisition related expenses and amortization of intangible assets related to acquisitions 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. The Company believes that expenses related to its public offerings, 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.