CyberArk Software Ltd. Q3 FY2024 earnings call

• Strong third quarter results with total revenue of $240.1 million, growing 26% YOY; non-GAAP operating income of $35.4 million (15% margin); free cash flow of $51.6 million (21% margin). • Mission-critical nature of solutions: Over 90% of organizations are victims of identity-related cyberattacks, and CyberArk's solutions address this. • Power of the platform: Integrated platform for securing human and machine identities, strengthened by acquisition of Venafi. • Execution strength: Working with customers to deliver measurable risk reduction. • Growth in full platform deals: Leading healthcare company consolidated human and machine identities with CyberArk. • Workforce solutions growth: Crossed $100 million in ARR; solutions include SSO, MFA, and intelligent privilege controls. • Secrets Management growth: Strong competitive position, with a leading US energy company expanding with Conjur Cloud and Secrets Hub. • Acquisition of Venafi: Closed on October 1st; brings machine identity security capabilities to CyberArk's platform, addressing volume, variety, and velocity of machine identities.

Subscription ARR was $735 million, growing 46% year-over-year and accounting for 79% of total ARR. Net new subscription ARR was $59 million, a record outside of the seasonally strong fourth quarter. Workforce solutions crossed the $100 million in ARR threshold this quarter. Secrets Management saw strong growth. Venafi's results were not included in third quarter as the acquisition closed on October 1st, but guidance for fourth quarter and full year 2024 includes Venafi contributions.

• Fourth quarter 2024: Total revenue expected to be $297 million to $303 million (34% YOY at midpoint, including Venafi contribution); non-GAAP operating income $43.5 million to $48.5 million; non-GAAP EPS $0.65 to $0.75. • Full year 2024: Total revenue $983 million to $989 million (31% YOY at midpoint); operating income $135 million to $140 million; non-GAAP EPS $2.85 to $2.96; ARR $1.153 billion to $1.163 billion (includes Venafi contribution); free cash flow $203 million to $213 million (21% margin at midpoint, includes Venafi contribution).

• Actual results may differ materially from forward-looking statements. • Risk factors in the company's annual report on Form 20-F and press release, including those related to integration of Venafi and market conditions.

Q: Talked about the power of the platform and consolidation of identity solutions.

A: Customers recognize need for security across all identities, and CyberArk's solution selling approach provides quick on-ramp and extensible platform.

Q: Growth profile of Venafi relative to CyberArk's organic growth.

A: Venafi expected to have higher growth rate on ARR, with SaaS bookings increasing.

Q: Machine identity growth and pricing.

A: Secrets based on applications, Venafi's certificate life cycle management based on instances; potential for high-growth multiple opportunities.

Q: Workforce business growth and penetration.

A: Workforce solutions growing strongly, with low penetration rate among existing customers.

Q: Venafi ARR growth and SaaS mix.

A: Venafi growing in double digits, SaaS mix in Q3 around 10% but increasing.

Q: Margin outperformance.

A: Driven by revenue beat and planned expenses moving to Q4.