CyberArk Software, Ltd. (NASDAQ:CYBR) Q3 2018 Earnings Conference Call Transcript

Nov 07, 2018 • 04:30 pm ET

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CyberArk Software, Ltd. (NASDAQ:CYBR) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Third Quarter 2018 CyberArk Software Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to introduce your host for today's conference, Erica Smith, VP of IR. Please begin, ma'am.

Executive
Erica Smith

Thank you, Norma. Good afternoon. Thank you for joining us today to review CyberArk's third quarter 2018 financial results. With me on the call today are Udi Mokady, Chairman and CEO; and Josh Siegel, CFO. After prepared remarks, we will open the call up to a question-and-answer session.

(Forward-Looking Cautionary Statements)

Additionally, non-GAAP financial measures will be discussed in this conference call. A reconciliation to the most directly comparable GAAP financial measures is also available in our earnings press release, which can be found in the Investor Relations section of our website, where you will also be able to find a webcast of today's call.

With that, I'd like to turn the call over to Udi.

Executive
Udi Mokady

Thanks, Erica and good afternoon everyone. Thank you for joining the call today. The third quarter was another great quarter for CyberArk. Total revenue reached a record $84.7 million, increasing 31% year-over-year. We generated record non-GAAP operating income of $21 million and our net cash from operations was $89.2 million in the first nine months of the year, already exceeding the cash flow we generated in all of 2017. Given our strong results, we are raising our guidance for the full year, which Josh will discuss later in the call. Strong execution and robust market fundamentals drove our results again this quarter.

I wanted to highlight three major market trends. First, awareness and demand for privileged access security is stronger than ever and accelerating across all geographies. Second, securing privileged access is recognized as critical to the successful execution of digital transformation and cloud migration strategies. And third, Chief Information Security Officers are solving increasingly complex regulatory challenges by focusing on securing the environment and not merely checking a compliance box. Given our leadership position and the breadth of our solutions, we benefited from these macro trends in the third quarter.

In terms of our strategy, every team across the organization executed well and contributed to our strong performance this quarter and year-to-date. Innovation has been key to our success. The simplicity and enhanced functionality of Version10 of our core privileged access security solutions combined with a dramatically-simplified new pricing model is accelerating new customer acquisition. We ended Q3 with over 4,200 customers, adding nearly 200 new logos again this quarter. Year-to-date, new customer additions have grown by 37% over the first nine months of last year, accelerating from about 10% in the first nine months of 2017 and 28% in the first nine months of 2016. With the wins in the third quarter, we are honored to be helping secure the world's leading