CYBR - Earnings call transcript Q1 2022

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to CyberArk First Quarter 2022 Earnings Call. At this time, all attendees are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] Thank you.

to like would I welcome Ms. Now, Smith. Erica please ahead. Ma'am, go

Erica Smith

Udi you us XXXX a Officer; today you. today results. Good prepared review and to joining we Thank morning. are call Financial the quarter Thank Josh to Siegel, Chief Officer. up for CyberArk's will me open on question-and-answer Chairman call Chief session. Mokady, and With After Executive financial remarks, first the

be refer the considered me let you certain year call remind our management’s today for of on judgment our available may the projected statements, Before on we begin, full operations regarding XXXX. of the best forward-looking statements that and reflect specifically which currently made quarter beliefs second discussion the results expectations based information. to I and

or CyberArk publicly pandemic, statements disclaims as to made in website, COVID-XX of response the to those filed global might company’s in Securities related the the direct to factors differ statements. I forward-looking the from our impact are and that any on to updates XX-F attention pandemic. the scope or well the economies application and adjust CyberArk’s contained release today’s Commission, duration in those results any posted Form forward-looking and with materially your on referenced these to as in risk and press undertaking US any its release to Exchange ability expressly revisions Report projected here Annual Our in.

in as measures updated call. most today’s are presentation in financial in non-GAAP discussed also this measures directly well financial outlines the the investor release, Additionally, be financial to an as discussion that press on GAAP today’s call. conference will comparable Reconciliations available

Officer, not color of we remind for be to that, our section. for viewed in or A calculated is to the the a comparable should mix, also other on substitute you call With reported webcast our our impact want I’d turn Chairman on over Mokady. the the metrics. today’s call like or but headwind Chief provide it available GAAP bookings also Udi? website to revenues Udi Executive as We that GAAP revenue to subscription additional IR of and

Udi Mokady

off and thanks The third start million the again and record continues in picked and Total testament to ARR million growth accelerated increase once ARR with we once our best have everyone, reached our the our but accelerated, a XXXX. the record-setting strong up for we to raising metric to ARR sequential subscription outside results QX, Erica, fundamentals. year-over-year. fourth ARR to to fourth performance. to growth guidance XXX% it In ARR be accelerated best $XXX total the quarter, rate again XXXX call. for ARR health our $XXX of incredible the and accelerating XX%, fantastic reached and execution our business quarter about a evaluate additional had to growth given momentum quarter, later, full talk the year. will Josh outpacing and are We the market Thanks, business. subscription speed, joining bookings of the

quarters, initial eight the transition a XX-quarter for We that demonstrate important transition. the our plan XX%. an go-to-market surpassing just also were XX%, complete reaching ahead achievement, has our That the in mix an with organization with transition in engine. well quarter, great the target achieved transformed milestone, bookings of our to booking thrilled We into subscription paired five of subscription to

the in higher total at even of quarter bookings strong bookings about subscription total $XX the with grown our much our license XX% have in about first Our the first the by of headwind of first creating faster. last quarter. in significantly the our came quarter Normalizing quarter in would with year $XXX revenue exceeded million revenue lines to framework, mix growing mix, a the line guidance million first so revenue

demonstrate. clearly results Our

critical First foremost, landscape and heightened the given particularly geopolitical threat Identity tensions. significantly more than ever, Security is and

severe the digital are with Second, into discussion. accelerate. Security continue demand every around adoption to growth. Russia's will invasion for we push to multiyear positioned growth tensions, pillars the Secular and innovation, against tailwinds to execute of customer the Ukraine, starting of further transformation, transition our Identity a zero I heightened durable Security growth, platform well privileged opportunity. Identity access Geopolitical centered third, trust and subscription the frame on attacker and And innovation threat of incredibly landscape. today to have of center continues

that and an survey their identities have in Security an Unmanaged effects. business-critical and crippling recent created and half debt. have could cybersecurity Identity explosion Our identified than respondents to landscape protect are significant of Less applications. Identity organizations risk, of human exposing controls acute the digitize place to race which to identities our threat machine Security unprotected

on Another key past ransomware statistic, over two surveyed year, each average. the of XX% organizations attacks experienced in

Security. reinforce demand Identity Our of durability survey the for results

factors in application from play these environments. In estates customers in and more the contributions into commercial All continued more with pickup and new in had each doubled DevOps, Identity Kubernetes regions Geographically, self-hosted exceeding all and our as our first of management, cross-sell expectations. as than all Momentum container we Privilege again. build across large-scale strong deals add-on even first SaaS we the are with to and from prospects Endpoint increasingly logos, well Cloud, Privileged transition quarter. CyberArk sequence securing off-the-shelf, customers' solutions came quarter. Access, with Manager for

our hospitals cloud universal a business I want Scalability great identity Sophos were airlines, schools driver signed leisure We because access customer Identity Privilege In our Pen great insurance this New customer company and deciding business new and in A grappling to privilege meet were software. increased protecting in trying factors. but increasing requirement. response and aggressive landed in Cloud digital wins, stringent cyber Azure transformation bought the for Cloud. Privilege multiple in one a network Superior becoming global its customers, requirements picked the part timeline. more. across impact business. X-figure company and ACV potential highlight of some travel scalability examples requirements deal, sense In industry. XXX consoles access government with a Cloud cryptocurrency its from year-over-year. new urgency up compliance and with After verticals solution, ransomware major both security, We landscape board to migration integration secure its XXX ships, infrastructure. the including all few. for from Privilege from threat deployment against Privilege quarter. and much major the be to a Security heightened that a competitive transportation technology continues and concrete attacks homegrown was with the a to critical still and a insurance retail vendor the Manager landed to to board CyberArk logos and many options, Cyber leading including CyberArk There Endpoint remote a were XXX, of is tensions deal. the of deal, as picked meet and local of the to its a to geopolitical secure doubled the nearly cloud to in division with threat Office highly It a saw state against Office devices cruise pandemic key sizes CyberArk

more seeing We velocity new business, customers in faster. to expanding solutions users adding our add-on and increased are also

in with company PAM health major company more and expanded more is to also transportation leverage a A to privileged the into examples, web for protection XXXX. a from and this Privilege Cloud XXX customer team employees CyberArk they than secure built to on more endpoints, As sessions users amazing Endpoint Fortune standardize is Privilege customer implementing applications relationship with landed government Secrets PAM, users. success strategy in will Manager has XX,XXX A plan Manager to Everywhere an and and securing including expanding DevOps. secure across now XX,XXX quarter provide state XX,XXX visibility touch points. and customer across The

company. the of manage is Our is rollout and in certifications into average security and single will picked the land but number and dynamics, customer were the quarter transition broad identity I our building partners ahead work, and target and integrators, evaluating as thrilled are to with advisories across and identity providers workforce of service security both the exceed get trending global a specifics strategy MFA. wanted on first a booking PAM, Enablement CyberArk XX% our transition we DevSecOps. focused VARs that and up. timeline Josh well for of subscription expand our up sign-on CyberArk practices certified now operating the number Access scaling system reiterate to are of and this at now significantly

XX% over customers thrilled transition XXX We seeing in from have want company, have $XXX,XXX On in even identity almost the on in SaaS We're annual regions. we a effect innovation, while now XXXX. market. security transforming that where based than already also foundation revenue, We that in a recurring continue up subscription to are all SaaS see action. with building over strong QX comprehensive, I our is into platform scalable more to been flywheel have industry's we we CyberArk been most the the highlight first more

meaningful business. of risk protects availability, compromised four on demand levels and to the of secure Endpoint CyberArk the our used to machine engines provide identities. drive ARR. CyberArk Identity Manager, visible like human the leading recently for with Identity lines but We all attack enhances with Cloud, CyberArk achieved Most the in of is security customers subscription it centered Manager Privileged mitigation highest which PAM point and contributions data to making are increasing that beyond Our our extends Along of platform breaches, gains. well productivity is strength Secrets and growth credentials. security, the Identity against Privilege announced and

status SSO, CyberArk high user services and sensitive out EPM. management further growth and cloud in solutions. a unifies integrated rolled most into solution extend environments, Privilege building status Federal Linux, The Identity, expanding analytics, for significantly In great our Manager in the behavior also new for FedRAMP Our opportunity reached and one for directory in putting solution. in-process government's unclassified position MFA, life to incredible authorization. April, adaptive we Endpoint into us data on US EPM cycle with

that capabilities sharing very looking vendor solution quarter provider our into July. security Management, CyberArk. We identity excited we to heightened we access and help We customer to customers to the best event we and more late application workflow of their the in at on position Access announce Privileged modern cybersecurity automation centered roots any to our platform the our how in our the landscape. about Impact threat in integration are navigate forward With in first no-code Idaptive, Life, for are a advanced are and details integrate of added company technology acquired and

have We to an execute opportunity. massive this multiyear against incredible opportunity growth

platform. Josh. continue for security outlook and for to companies. welcome call change us Officer. Over the will detail, turn provide a to great to leadership leadership you our identity Before want demand increase driving strong Simon as second the Mouyal, the Chief experience in strong our addition including in CyberArk raising and years who our results I to our to of his quarter I'm and XXXX, to year XX in will transformational ARR discuss improve I SaaS position brings and our growth, more now who and joins to hand over how guidance excited for see he further you, our Josh, Josh, I the team to in Marketing financial year. full over team with Simon

Josh Siegel

we to posted website like results. we'd to you remind And walk that our that first Udi. slides through Thanks, the

we first and amazing a strong to to quarter by Udi build Momentum our kick off demand As continues the had environment. year. fueled business, stellar execution a mentioned, in

portion with total back of of combination In revenue terms and in but as of framework portion business the the in seasonality the the and total XX% The is XX% line the that guidance subscription grew the XX% We'll first strong and in recurring with an over total. to year of to is fourth portion mix reminder, million quarter our a year-on-year. demonstrates generated the first XX% year-on-year. in million subscription million in our represents cylinders. with bookings. a subscription the off in the when the our just quarter firing higher of XXX% really on The million a XX% the bookings $XX portion, acceleration just all total incredible example quarter. thrilled with growth. of of revenue we that health $XXX which sequential and revenue fourth XXXX only come were enterprise now ago, We outperformed of revenue. again underscores revenue a annual was grew reached mix the million mix also momentum we recurring $XXX.X accelerating with And or the $XX increase acceleration the Total in quarter. of the saw we was headline best software ARR P&L, annual than annual moment, guidance for business results $XXX business as anticipated March an Starting of quarter of subscription of recurring XX, growth subscription the off Perhaps the the

year-on-year. Moving declined to quarter. revenue license and self-hosted to and $XX.X of revenue, of in the revenue with transition, That's the $XX.X SaaS subscription progression subscription Consistent from represented reached subscription increasing generated XX% revenue first XXX% contracts million our total perpetual million.

plus revenue. subscription total Recurring with our recurring services growing related $XX.X XX% million defined and that's million revenue year-on-year. and from reached to million our services perpetual in the $XX.X maintenance as XX% $XX.X maintenance $XXX.X was revenue, revenue total or of professional revenue, license maintenance Our professional million services

of the quickly execution, XX% revenue recurring. our our target more strength approaching With are we than of from of

X executing Our set. of subscription of the target our we our bookings subscription have subscription in the bookings, well in The XX% target reached to of guidance headwind Americas, in percentage of had the revenue, by that SaaS APJ now now Taking revenue compare $XX was would it mentioned, had a calculated the for our shift to XX% have great Normalizing SaaS for XXX%, license We that non-GAAP would the on mix XX%. perspective. of total sales with revenue significantly well mix, we over timeline million of about is to now accomplishment or SaaS mix by EMEA revenue would strong nearly with P&L the the XX% quarters, business mix and the quarter. full strongest in GAAP XXXX, press bookings the $XX to in EMEA in If and the quarter last just the over accelerated when subscription Please the increased Geographically, tripling outlined our standout XX%. more release. the in mix the grown be early look the transition by approximately completing quarter first bookings line will All mix created XXXX is well reconciliation revenue surpassing our SaaS, quarter a first of tables across region. geographies, and adjusted total XX% a generating by non-GAAP substantially ahead the Economically, portion in see and quarter quarter, representing XX% of of transition, transition the Americas, than the revenue, revenue XX%, items subscription basis. into XX%. as representing for discussed that's the only about license year. APJ our consideration, five to year-on-year. Udi have of ahead from transition headwind business, we of Americas also calculated of created a like-for-like diversified. grown first bookings perpetual the self-hosted when by and had the again, headwind growth subscription total XX% XX% million mix we the The the in a the particular, million was growth revenue. during XX $XX over

in or million the in gross an first increase profit That's SaaS year, gross last XX% Our compared was result $XXX.X first the business. margin. with XX% of quarter primarily margin our the gross quarter

expenses a generating growth, million and of innovation operating resulting We increase continued XX% of $XX.X the in make investments million, loss quarter. an to $XXX.X in and operating to drive year-on-year

and foreign Adjusting headwind exchange rates in lowered Our first million per million for revenue diluted $XX discussed. approximate the was the margin X% the we loss Net calculated were positive by operating FX, $XX.X million operating $X.XX for and been $X.X the headwind quarter. would from results share quarter. have or first

culture, a that's sales and over We the X,XXX employees and ended including X,XXX to with continue testament top attract talent, marketing. March retain in our success in than and more our and we employees to worldwide, market,

was bookings, million strong well an renewals, free just strong the contributed sheet in balance great as investments. cash ended result cash free quarter For the we $XX and billion $X.X a or quarter, margin. our to flow flow This as of XX% collections. strong cash flow first seasonally is cash and quarter The flow our fourth with cash

growing the Now, turning base. for full year tailwinds, of to reflects our our XXXX execution robust guidance, and the our guidance the second and quarter ARR industry

For the we $XXX total second XXXX, quarter revenue of million. to million expect $XXX

about million a non-GAAP $XX.X quarter. loss for We second expect $X.X the to million of operating

from to second earnings share. mix million and $X.XX our diluted to XX% of calculated a per quarter. about of range expect share the bookings net of $XX This for non-GAAP approximately guidance profitability basic assumes revenue headwind per We $X.XX and and loss subscription

XX.X shares million Our taxes. in assumes diluted and guidance also million basic and about $X

the the million range For total we million. are year and full in midpoint $XXX.X of of revenue our guidance $XXX.X full to expect now of raising the year XXXX,

underlying mix also We revenue increasing for from are increasing now headwind also assumption subscription the our and year. to approximately the guidance bookings, $XX to is our XX% million

million. $XX.X non-GAAP to we So and full year, $XX.X the loss for be expect between operating million

non-GAAP expect in to and the loss to per range of share We $X.XX. $X.XX basic diluted be our net

about full year, expect million For XX.X we in and the $XX basic taxes. about diluted and million shares

reiterate Given on XX%, that impact of we business surpassed XXXX. the subscription the we for mix want our transition to bookings

on the the As is impact the faster revenue and SaaS-heavy having transition. growth slope we last quarter, of talked transition an exiting about profitability

portion subscription business. of health the quarters, headwind continue metrics year's face revenue and recurring the a last evaluate of given profitability to will few ARR mix. next to booking we to the best and the the our revenue For Annual are

XX% the growth guidance, from rebounding midpoint with our already in guidance. the saw at is of you XXXX revenue As

reiterate hasn't approach our of XX the subscription profitability want is we once the transition that to masked to return Rule the transition, operations to We out. to our changed. of also and by play investment The expect dynamics

of for and That's the Given we business, recurring we our between which at year at guidance be XX, $XXX expect million XX% are midpoint. year-over-year now the $XXX increasing annual revenue, acceleration a growth December XXXX. full our to million

which ARR guidance, ARR about note. to total to growth maintenance impacts decline, you rate. We our continue think to When important it is expect the

raising underlying first booking second, we our higher are of our business guidance combination the confidence demonstrates midpoint after increasing the First, ARR headwind revenue just in we the and year demand And full quarter of the means strong assumptions and guidance. year mix the the are seeing. our

cash while we that seasonally In a with strong it margin will our terms of a very quarter, flow, XX-month line be had still we income in non-GAAP net first anticipate period. over

The kick CyberArk. off another for a quarter be stellar year was will quarter standout to confident I'm first what

Our transition the for bookings target is now mix us. subscription behind

now will We are massive us. opportunity in call over of focused capitalizing on I the Q&A. the to turn on operator front for the

Operator

the is first of [Operator Kalia Instructions] Your question from Saket Barclays. line from

is line open. Your

Saket Kalia

Okay. questions morning, Great. here. my Hey, taking guys. for good Thanks

Udi Mokady

Absolutely.

Saket Kalia

to CyberArk just all, and and you what a maybe for results, zoom that to to talk like you broader little Great bit the has see of little is identity out extent you. helping platform just Udi, maybe competitively. the could bit feel about Hey, environment, first the you us competitive a

Udi Mokady

from great Saket, you. to hear thanks Sure, and

ever I this of not say been best, in. competitive So one the positions that we've best would the is honestly, with if

environment, from the and traditional critical and and in are threat And in PAM been up it, R&D, making would I through in the because enterprise disruption And secure the cycles changing is we're just -- in to front, say, our investments with show private they of keep it's PAM of working is are, those starts and identity there investing in it's in environment, platform we're long some hands lasting. sales that to opportunities. equity the make security up sure haven't investing we that renewal this in particularly this vendors IT. pace On and landscape still change

front. PAM the on that's So

Hashi. vendor, we see IDaaS see For approach Okta our Access, But the different. we fundamentally in and Microsoft, so is DevOps,

all selected, made really buy to with in want business at journey security us reports created Quadrant your with seeing I Gartner machine, the full we question. in And and difference. speedboats customers for center whether that our XXXX we're platform the for creating wafer We're there, think out excellence platform. IDaaS. the Magic And on a PAM, for expertise or the across better also expertise it human and Forrester and the they I those identities, units of analyst we're but PAM it's selling on in to think based our and take the

So to really opportunity. in line, say in would the us full identity bottom security go best after puts the the I position PAM foundation

Saket Kalia

Great it, ARR. full follow-up. it. Got the for year the you see my Josh, got up, particularly Very to maybe clear. go for

was entire the deals? stronger that's a of felt understanding question Just just was note not you asked sure ARR. to so year, It make most was answer, anything the guide sort to the that beat quarter in feels versus the how sure in the the I expecting timing portion the about it's there beat just question's full feel were the want what thing. asked, in on than on through, like but maybe It the year like to up quarter. going on of flowing the of Again, again, make is early

Josh Siegel

our quarter, you assumptions now environment. year. and increase the And attest that our the outperformed for for of ARR we're to in outperforming our year in but was the guidance is in really to think saw fact The by impacted on to really it, Yes, seeing from demand ability the quarter question. because what business for that overall hi, thanks the we underlying this alluding we And bookings, able quarter. and the for we're in first the the booking early confidence the I first revenue great to Saket year the from were increasing mix and we're thanks, the the raise also

Saket Kalia

queue. in Okay. Got back get I’ll you. it. Thank

Josh Siegel

Thank you.

Operator

Stifel. from Your next Adam line question is from Borg of the

Your now line open. is

Adam Borg

just is either or thanks And EMEA. Josh, taking Great. This question. Udi on for for either much the very

talked demand I the SaaS there, believe the the seeing? more given but So April? bookings. just or it's changed the either and trends maybe war you you're little your traction bookings talk a about triple-digits, see of proximity the up just footprint, has and month in And anything larger negatively to positively about to bit great

Udi Mokady

actually and kick the Sure, it's I'll in and I team say we pipeline. strong they attention, Udi EMEA very it cybersecurity. meeting urgency from and are person would fresh about leadership to if off. here, look creating the demand we're the at need a only talk And of tailwind and reporting strong macro take a serious

think So for saw previous are And the I Europe. some of of a trends in in well-performing years increased it's definitely awareness Americas we the reaching region. us,

Adam Borg

That’s maybe follow-up. And as a quick great. just

XQ, great So in see velocity to in and and sales talked logos record cycle. the friction reduced past that in it improving a the you about probably was new

emphasis, that. if again. capitalize a to traditional, you curious on kind investments better the making starting you're market other of Just from more Thanks down enterprise greater to your see are and what stronghold

Udi Mokady

logos is quick fact and we the market. from -- our you XXX say as I it's spots fronts, look two-thirds of the as the segment which QX commercial Yes, see with that, there CyberArk on came of end the certainly, And so Cloud, enterprise have SaaS. the high new in have we're to that SaaS mid-market, and commercial and again, it, those both that and solution landing more landing value, all the more in the would Identity. we they're both front In landing call time again, EPM with sector, is, we can on Privilege of we market, embracing about

Adam Borg

Excellent. Thanks, again.

Operator

of Your Piper Rob next Owens from the is question from line Sandler.

line is now Your open.

Rob Owens

new Great. well. growth We'd the love to as touch logo on

it has earnings durability what been business like the inflection think feels seeing seen throughout spend, is I but given, Just your we've season of here. really

So can the head seeing but maybe here. you as maybe little the the June us pipeline speak you're into quarter -- bit that you to speak gave a you XXX number,

Udi Mokady

is executing like the buildup and I of pipeline the which pipeline portion The you're solutions the and business new talking business having new of actually landing been we've products asking So calls, I the And in as users. business new the is sizes, continues we've often on just the percent doubling spot. the channel great that -- more mentioned the strength also landing sales landing record spots, is that new would more to been more larger about talking pipeline, think channel grow. and we're several about deal last of about and with I business and in forward-looking say pipeline, pipeline more

So that execution team continues, demand this trend and of strong it's environment. that against the

Rob Owens

for Great. Thank you the color.

Udi Mokady

Thank you.

Operator

of Your next from Brian is the Essex Goldman from Sachs. question line

Your no open. is line

Brian Essex

how Hi. is consumed, of Good kind Could sizes given bit the Rob's benefit mix mix you we might durability SaaS Maybe do to do of the give macro consume a saw you of greater growth enterprises platform? growth to think the awareness, the I think platform you with or the more regard little of greater pivot during a pandemic, about being thank of little a and with you question. to were perspective, And the my head you durability if now challenging question. taking morning. have of an onset how you off when you maybe pullback to the -- us and either risk understanding guess, environment? Where in deal that and how into see

Udi Mokady

I Absolutely. many increase past and create so parts. to looking durable these position, say, a having platform would wide Identity those two to from that much We've initial, years done we're so opportunity. at leadership we're lending long-term our Security expanding a PAM in confident and

vector are. across we're if talked as center, being not Identity they of beginning, about geography, ago, the the And vertical. we at strategically, trickle across about this that the see strategic. Security They two seeing look you and customers we years are PAM talk If they definitely about attack. at And thinking

team regions solutions, perspective, would diverse the that to SaaS strengthening. where areas And here a wider demand in even stronger on You a I and for would that. you environment, different success. great it Josh the see crossed Europe execute of platform-based solution has like that's a times question, we a APJ with are only thought from those then have, just And the as how longer management prior and adoption we set we say, have vertical mentioned, seen take in

the at strong. the very durable we're we to realistic. allude the numbers. of demand So strength it's really When We look environment, believe pipeline we and and

Brian Essex

you very a it's expected the And to trends, CMO be see you to follow-up, Great. That's I structure company? to the just change? the guess, quick management want sales with hire. do know, and on days, but regard Maybe you of congratulate to early so hiring changes I I might the impacted within due anticipate what marketing how helpful. are

Udi Mokady

identity posture from Yes, position so of the was in the leadership organizational because -- on we're in we're there, on is out leveraging set actually the by question, it smooth marketing the and to base leadership that back getting that now to all we're gross our highly platform. element, out flywheel now expect that an reflected there prior setup effect the a perspective that both believe getting elevating best customer seeing right security team. from we transition sales and that that step and embraced And it we your this this

great Simon SaaS brands. that comes love we building in So and from

ground it so is running. And hit basically the

out next outwards. our with event mentioned, our upcoming prospects. and our pandemic expectation live and And like is our upwards event, So the July first first our is customers thing I of in

Brian Essex

Appreciate Excellent. color. you. Thank the

Udi Mokady

you. Thank

Operator

Fatima Boolani [Operator from next Instructions] Citi. question Your is from

is line now Your open.

Fatima Boolani

back go Udi, taking want you morning. to to for the Thank script. Good question. I my

can you quick have some competitive I endpoint vendors.. Josh, I'm that opportunity And us and for about weren't around if please. actually for follow-up the that of with opens or for much incremental talked how defined you the EPM. up previously addressing? management might quantify that endpoint And dynamic then traditionally privilege how of characterize You a support Linux curious change security co-optitive

Udi Mokady

privilege only First excited of for super it, so and and to us a say preventing I easy Mac there a our policies great this Linux cloud hybrid non-repeatable great endpoints position, and with Windows but other say, environments same which escalation that Linux for been leadership so to all, really centers SaaS us us servers than -- performance for great and of who would we're data and environment, Linux, for well endpoints, and addressing to strong UVA, one important for those a -- from place, course, the Linux are sentence points customers' in first And privilege more lease the, EPM just and manage all, but question, platform, taking is the solutions. along of and I endpoints would we've one I to a all really our of and of as the them is far, Windows EPM endpoints, the are, servers in it's both attack. and and have because takes doubled I'm about giving ransomware for into

do solution. leverage EDR after that it's we additional an basically it endpoint. multiple but not we we're the But advantage are channels today to be Security I the able EPM cover it So to standalone us enforcing points date. an the privilege make about we and the at more on have. about I a addressing, all gives applies we'll huge -- would think splash standpoint, our and of with vendors And a team TAM went we to Impact standpoint, environment. for the platforms. competitive very been Identity solution we excited first, expand our And we is Windows EDR from the have and just say, partnering even that a within lease events. the environment standalone From competitive the same to It's this, to what as talked again, Linux learnings have fully

Linux. We have also to now

Fatima Boolani

And if very and in of the feedback robust was and strong. the business could hoping But you address Josh, quickly, any demand regions? be pretty team, activity environment was vis-à-vis current reserve sales getting write-down impact any from any I business? has more to the there the discreetly And conflict your suspension operations, I very helpful. of exposure Thank would you're regional quantification been any financial on EMEA appreciate Any business your you.

Josh Siegel

That And not in doing Fatima, area thanks. impacting anyway, in area, already not it's the business whole less results. Yeah, It's our is there. than guidance. our total We're X%. reflected

the see we a about don't being risk, volatility, flip cyber as tailwind when especially think kind it of on the side, material but us. it a elevates on impact So you geopolitical it's

Fatima Boolani

Thank you.

Operator

of the Moskowitz from question Gregg next line Mizuho. is Your from

is open. line now Your

Gregg Moskowitz

on bookings ARR, Okay. Thank far, you reaching schedule. acceleration congrats so well target for impressive taking of ahead subscription transition as the question. the so Very in far

as I become acceleration been to So, just it's Udi, that where of the valuable maybe showing? that had a EPM made on in Can EPM you a what has well. question, driver you've expand on point more so particular, key much

Udi Mokady

Yeah.

And handshake okay, -- The whole machine foundational if provisional that ransomware organizations for Trust. know mean allows really laterally it's it take can then the a from privileges. important end model endpoint benefit prevents that a added I the -- be to was Zero discovered it's somebody work from the at and doesn't additional years. over We'll really touch that, there's framework Trust an minimal over become think force or malware run Zero with point moving with. in really lease point preventing will someone EPM running to and it's establishing, is really that it and that I least spreading.

organization, in proper it transparent but very even And so help helps mode it applies an cyber drivers even many and privilege of if helps ransomware landing, major Zero it to users is the two prevent to from And, framework to user-friendly those landed. gaming. of super making we years support it all that, of course, Trust they it's and to from the investing feel basic in a to ransomware user. lease don't see landed run and It hygiene running the most solutions that

Gregg Moskowitz

as your well All business can Thank talk And as quarter, global for to Udi, a the over what this this rest government your as the year? That’s of you just then are expectations vertical great. follow-up, performed how right. you.

Udi Mokady

Yeah. No, absolutely.

world very US that's but do both the often solutions, say self-hosted. As world giving slides and we're it steady really, certifications the our nicely the the but want part investing see begin vertical be for certifications that for the in you government we're our the to at continues able elsewhere is And adoption are can that in we be the to important about to around We're also seeing security that SaaS around to an the important government, FedRAMP XX% giving I in seeing credit now, sell and we're worldwide, very us probably SaaS adoption global that of the would investment optionality, solutions to governments platform. scalability pie. for investments the presented, talked And and them. US in. federal I of on our

Gregg Moskowitz

Thank Perfect. you.

Udi Mokady

Thank you.

Operator

question line Fodderwala next from is from the Your Stanley. of Hamza Morgan

Your line open. now is

Hamza Fodderwala

Hey thanks question. guys, for taking my

full given volatility. the think, defensive then that, of relatively the has new out get appreciate all longer think as Maybe cycles. year? sales I how I'm you all great the think fairly about are just how for to handicapping you in for earlier. Josh. security really is the uncertainty geopolitical about So, CyberArk we now the should right net in had, seasonality the I year But detail there? And curious your in outlook, past, one relation the for that rest macro ARR

Josh Siegel

Yeah.

the Rica. transition even material year, changed, saw the driving think we're towards economy course morning I and we a think about that Costa think time. Hamza. model growth a confident has doing, with economy of side type demand not us of but profitability. mix the the mean this very it has and very of in strengthened addressed especially going to on this first will XX%, thanks at our basically earlier if really we're strong, what on other now with towards what's anything, is do when now have So was we environment today Obviously, I your this business to year. I in subscription over And Udi question, going that about regard resilient of the we events through news mean, I the pretty hitting

And so invest. we're continuing to

point before. that management about this we're will and already Udi experienced out I an team, talked However,

So the demand is, this point, but our environment we situation, where the where and at is understand that on confident we're we're cyber. constantly pipeline business around monitoring the very

sail second me? So remind was And the on second There a question, it's question… ahead.

Hamza Fodderwala

the the of for year. the ARR On seasonality rest

Josh Siegel

with as delta where the I on and think the -- and gets so it smaller. into we Yes, and year further clearly, delta the we're the get mix, further smaller

when compares of into half bigger much second have we get year. we So the the

smaller So see going started you're growth with quarter. a a strong growth ARR, the in first XX% we of and in off to

we're this of last did that we the the subscription that in business will kind narrowing it between the doing versus go So I XX headwind of XXs the delta think with in that the XXs year tandem -- year. high

QX jump. so we'll And QX, the have and narrowest

Hamza Fodderwala

Thank you.

Operator

Wolfe line the next of Your from from Tilton is Joshua question Research.

Your open. now line is

Joshua Tilton

this question, of and guys first. the raise to the wanted net my maintenance maybe the subscription guys of taking on Can how expanding is possible versus guidance? results. for Thanks ARR new that I back guys. ARR into you comment much that Hey, you conservatism just go on congrats versus dynamic to declining baked

Josh Siegel

XX% I doing. is that really our which maintenance think we're of come new that about the it's of able even the a ARR. increase in make say reflective the that to up the more guide to I expansion reduction. And we're guide And ARR would decline -- anticipate powerful the a business some really net at fact that much in ARR for do from for have we maintenance, that lot actually Yes, excited because we makes we're

the So, the and it's around -- it's upsell renewals continued we're new customers. business not the that of existing and doing

Joshua Tilton

And the maybe regards that your guys maybe when you benefit continue is you in just all -- quarter? growth what bundling and strategy? And how be you're on possibly maybe could more you it to did in expand seeing sizes ASPs successful as deal to with

Josh Siegel

And uptick a actually seeing new new the I to which uptick really have it starting saw this deal to deal several We're in alluded on We on on think size. really, for an before, particularly as Yes. biz, row size. quarter. Udi quarters we surge biz

it's landing platform because strength. and -- products we the created more more with and users think So I of how

Joshua Tilton

it. Appreciate much. very Thanks

Operator

Boyd question Your Roger the of next from line Securities. from is UBS

is line now open. Your

Roger Boyd

Secrets you Wondering if management with as evolve Hey. EPM Thank AWS just to of you talk a growth you add marketplace, like that you on further pipeline nice LAX? and could push the congrats for size the and and cloud how marketplace, and expect things opportunity quarter. about Thanks. that

Udi Mokady

we AWS, at of in great the just and channels complements If strong we opportunities that thing a AWS and year doing build for actually Yes, about through and the and rest we partnership next mutual we're I new QX, evolved that and synergy last I'm streamline it's year. say, will examples very, year. where personally very kind had strong look -- pipe and bullish our customers, for QX, of there's are started can the a it the that with into what of continuing momentum building

that we'll tell that create more to in I can are be rolling additional the try that say There'll strong right you're give but even can definitely to the that of pipeline more AWS. solutions more streamlined elaborate built. with that will opportunity I we And a you, on there's we numbers, So are specific there ways customer works our collaboration. partner -- things some up in out event

Roger Boyd

plays worldwide. the infrastructure securing OT, follow-up. quick what CyberArk One operational seeing just Got critical Can given talk you infrastructure? just emphasis it. of demand, protecting And Makes security, on sense. the about in in role you're

Udi Mokady

multiple even when and have last, think operational Investor with last part we that leave customers Day even environment organizations environment. in technology because their network, locations usually that we that from -- electricity Yes, sometimes our in remote I it's -- painted I CyberArk, companies, seen companies, we've energy of we to yes, securing separate a say, their would but type

a of, roll customers Identity the CyberArk and become it's expand environment. their call, so, And Management, OT Security Access stage what out we blueprint Privileged to as they

I Sometimes the with directly the we have of, providers on the operational side. say, integrations built-in would endpoint

manage concern providers and agree rotate growing with for we secure a I those to part environments. where gateway important solution. partner sometimes organizations, able we're and identities bridge for it's to us of with these and they be infrastructure you, And the an

Roger Boyd

Great. Thanks a lot.

Udi Mokady

you. Thank

Operator

from Kidron Oppenheimer. Ittai from is question next Your

Your now open. is line

Ittai Kidron

from been I have Josh, kind standpoint, like questions is But, coming looks perpetual of financial asked. down. lot to, A want Thanks. just it a of

How on of guide quarter, get our as overall question revenue us around help part of next perpetual feel you is as perhaps kind maintenance I well? what quarter-over-quarter you it for Clearly, forward ARR. do think mean, everyone assumption think on second What revenue? the the increases maintenance is expenses with your is in inflation, hands price So carrying your can everywhere. is in down or your that products for time the then, inflation. we higher about first you going the do it's perpetual And pie?

going So going I'm understand, to how price just to trying increase play card of that you're kind forward.

Josh Siegel

particularly I'll very second as start forget so -- with it. that increases, are particularly, we do the But personnel I we maintenance question, have related. don't and also price so around – the things

services, increases. in maintenance, built of for terms ways price in terms terms in So of have in we of renewals,

gave mean, also, think a have kind But current year. into have we – our way annually, to mix to perpetual we And I And the of And headwind, the revenue, as incorporated to it's probably we I inflation. prices relates regard I best guiding every it model increased to similar think when perpetual, the that, our QX. those at think at increases as we look this about with related well. for year, look at QX. for the the price

Ittai Kidron

Excellent. good. Thank Very you.

Josh Siegel

Yeah.

Operator

Heath from of Eric the KeyBanc Your Capital. next from line question is

is open. Your line now

Eric Heath

security it broadly? if access just affected more more in market And provide for your have of Thanks solution? a might the as hear this my on congrats your my business the in incident conversations taking just saw maybe And thoughts the the your quarter? tailwind that after an curious, I'll Udi, impact and Great. the to echo impact what customer for question, well. curious had you quarter, or on specifically, how maybe vendor

Udi Mokady

Yeah.

that company on be would I has diligent say security. So underscores to it that, every

became third-party to security those up that and of on it of importance ensuring come in so one point that comes an your up also in And names of brief things, vendor of or those the controls. that a investing example last one and access

six a cycle. six have to month We

security access parties, a a solution most seeing security-first it momentum approach. you we're of a users because helps have our PAM is So the are from but think well a, need is we're us really QX positioned. requiring makers the PAM of, third the were security-first I foundation for customers impact, emphasize from It thing in important approach didn't and coming and this

– So third-party the also it lead the approach I to example of think – security-first And we're our securing important thing vendor growing for the of most access. to that can that to proud importance and is awareness identity.

Eric Heath

And That's one just follow-up. Okay. helpful. quick

Secrets on Management. Just

your of base? that Just or Secrets you update the might of curious an your cloud competitive accelerating within Management positioning the maybe on customer and the changing adoption how an of launch version see timing

Udi Mokady

going it's give this It Yeah, will value the away some like, to – for reduced the more to specific take launched time so timing. year. It's be customers. of we'll

helps and adoption we've and time portfolio, across any it a competitive So do we in us edge. that done the will give that,

timing, like accounts container of this SaaS we're hybrid especially and In stay I and their meantime, will customers helping modern environment be marquee the terms and So, mentioned. year the within version in tuned. again, signing great up in some in their Kubernetes environments

Eric Heath

Great. Thank you.

Udi Mokady

you. Thank

Operator

Your next of line Walsh is Securities. Trevor from from JMP question the

Your line is now open.

Trevor Walsh

on my for question. follow-up quick you Maybe Thanks prepared for morning. around made just to Good remarks your one one you, wanted during I one Great. of points wins. the taking Udi.

customers that And it. in trend or that If there. space? follow-up the of something maybe to color of kind having make us generally of Was had homegrown solutions. you you I as more if You that, then some kind I we confirm clear. some home-grown that to access PAM wanted a just actually could replaced as give solution, PAM-related the more just a trend see us you the you I'm sure a around part cryptocurrency mentioned house mean, detail that company that the give can solution. a is of homegrown see within

Udi Mokady

when great with a we're rapidly familiar organizations say highly own their our It’s our was to were I replacing we in would saw strength is industry. create and some question. in financial an and that the the of we're early attempt years homegrown we it actually regulated in past, the that making that,

own company saw and it that was and at it its born a doesn't need. the it took type I think that -- just security on example of doesn't this on building it's stab a provide and scale where modern an not environment of kind they

So, course, it they're And And of great the a a wins are solution. type great was come for the born-in-the-cloud organization of highly in win in and targeted. are part quarter where organizations be and -- we and like us. to can we just saw other very financial similar in very

And actually the able was for that a their actually, case be to one a we will win it So, show a hoping great great I'm consent --. study name of definitely us. the disclose days and with because it's customer

Trevor Walsh

on job quarter. the again Thanks Good. good and

Udi Mokady

you very Thank much.

Operator

Your of the Fargo. is next from Andrew Wells question Nowinski line from

line is open. now Your

Justin Donati

Justin Thanks for for is on This Andy. question. taking my Hi.

you You've was anything color sorry, how talked if have your just add And you around been you. rates win quantify pipeline. win trending. about strong your any could just I wondering Thank the could there? --

Udi Mokady

comment, just we're at have don't would say, because I end of I call. my I numerical. fast to the Yeah. was back going initial the

best access we've probably of on of the expansion. in an one so that's very strong. the is position us, it competitive mentioned, the world I seen And for is front, As PAM

our So be up see we're trend differentiated there. very, to very very and excited win rates

Justin Donati

one for add-on what typically And follow-up question. the if of just I ask could is customers? next PAM, Okay. the Outside

Udi Mokady

other hence, identity Cloud them coming -- and CyberArk often, of introduces and the EPM flavor that around add-on whatever Privilege get that's would are business, our was about that consume with quick So talk those the EPM a very we CyberArk And with they're I part see especially would times solution to run-off had Secrets spots to blueprint expansion and of expanding and Secrets in accounts it our a combination say rotates land. package of be are that add-on and the given landing value there. beginning as by faster. can Management. we we're they followed Privilege the often, velocity in not because of business identity. Privilege And that and/or Cloud why our a Cloud And pace add-on that Management landing the and follow of the in But us between we strategic and

Operator

Udi There further go are Mokady, questions. please ahead. Mr. no

Udi Mokady

Thank much. Great. you very

special start quarter our subscription together as to platform. I want always, are also on Amazing. Security five strong the and execute an success. of for We shifting CyberArk Identity thrilled came want thank with to incredible our being this and team extend to us worked entire demand And for partners appreciation quarters. strategy transformation XXXX that you. Thank who to to hard cornerstone in I and customers with

Operator

And conference with that, attending. you this Thank today's for call. concludes

now may disconnect. You

CyberArk Software (CYBR) 12 May 222022 Q1 Earnings call transcript