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CyberArk Stock Down 10.0% despite Earnings Beat

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Cybersecurity company CyberArk (CYBR) announced its second-quarter earnings results on August 7. In the first hour of trading, its stock was down over 10.0% to $114.0.

The company reported sales of $100.2 million, a year-over-year rise of 29.0%. Its adjusted EPS rose 64.0% to $0.56 in the second quarter. In comparison, it reported revenue of $77.71 million and EPS of $0.36 in the second quarter of 2018.

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CyberArk CEO Udi Mokady said, “We were pleased that our results exceeded expectations across all guided metrics. 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.”

Analysts expected CYBR to post revenue of $97.29 million and EPS of $0.47 in the second quarter. So why did CyberArk shares fall despite its earnings and revenue beats? It was most likely a case of profit-booking by investors. The stock was trading at a high valuation, and CYBR also announced the resignation of its CFO, Ron Zoran.

CyberArk stock has fallen 18.0% since the start of August. Despite the recent pullback, it’s returned 54.0% year-to-date. Peers Palo Alto Networks (PANW), FireEye (FEYE), Proofpoint (PFPT), and Fortinet (FTNT) have returned 11.7%, -20.6%, 40.3%, and 14.2%, respectively, since the start of 2019.

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Important metrics in the second quarter

CYBR’s license revenue rose 27.0% to $55.2 million, while its maintenance and professional services sales rose 31.0% to $48.0 million in the second quarter. The company’s non-generally accepted accounting principles operating income rose to $26.5 million in the second quarter, up from $17 million in the previous year’s quarter. Its net income rose from $13.5 million to $23 million in the same period.

CyberArk ended the second quarter with $537.9 million in cash, cash equivalents, and marketable securities, up from $451.2 million in December 2018. In the first six months of 2019, CYBR’s cash flow from operations rose 20.0% to $67.3 million.

How does CyberArk view 2019?

CyberArk expects revenue of between $102 million and $104 million in the third quarter. It expects operating income of between $21.75 million and $23.25 million and EPS of between $0.45 and $0.48 in the quarter. Analysts expect CYBR to post revenue of $101.19 million and EPS of $0.44 in the quarter.

CYBR expects revenue of between $419 million and $423 million in 2019. It expects operating income of between $106 million and $109 million and EPS of between $2.24 and $2.3 in the year. Analysts expect CyberArk to post revenue of $419.1 million and EPS of $2.17 in 2019.

As of 3:35 PM ET today, CYBR was down 8.2%.

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