Review of Q1 earnings. CyberArk (CYBR-NR) is scheduled to print Q2 earnings this week while facing a tight spending environment. 1Q Revenue of $221.6m (up 37%) and EPS of $0.75 exceeded consensus estimates. Subscription portion of ARR grew to $621m (+54%) and operating cash flow was $68.6 million in Q2.

Despite a solid top-line for Q1 CYBR's Q2 top-line guidance of $215m-$221m came up light relative to prior consensus guidance of $219m. CYBR's management did indicate they expected SaaS would be a greater percentage of the mix. Also, management is focused on profitable growth, so we look for upside to operating income and EPS going forward.

CYBR has been leveraging acquisitions and internal development as it looks to transform itself into a full-blown IAM provider. The latest acquisition Venafi provided an end-to-end machine identity solution and expands CYBR's TAM by $10b to $60b. The race to consolidate the IAM space is on and CYBR has been pushing into a number of different product areas within IAM like Identity Governance and Administration (IGA).

CYBR signed 200 new clients in Q1 most of them PAM clients. A material percentage of these clients procured other CYBR adjacent solutions in conjunction as other types of customers (i.e. developers) signed on to the solution and are growing CYBR's user base.

Channel commentary regarding CYBR's June quarter has been good leading into the Q2 print this week. Between new customer and replacement activity CYBR has a lot of opportunity to win business. However, we recognize IT Security spending has been tightening as evidence by commentary from Security companies that have already reported June quarter earnings. We also cannot deny the "Crowdstrike effect" and what impact it may have on 2H spending.

CYBR

CyberArk Software, Ltd. (CYBR)

CyberSecurity

CyberArk - Q2 Earnings Preview

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