- Earnings call transcript Q3 2022

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Operator

Good morning. My name is Rob and I will be your conference operator today. At this time, I would like to welcome everyone to the CyberArk Third Quarter 2022 Earnings Conference Call. [Operator Instructions] Thank you. Erica Smith, SVP, Investor Relations and ESG; you may begin your conference.

Erica Smith

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

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

report to Commission website. undertaking Exchange the release Our might with updates the Form Securities to results press to in those application your XX-F today's and herein. those or projected any U.S. attention revisions these annual in forward-looking forward-looking and are the any risk to actual in release on materially I posted that contained direct referenced differ any filed statements. CyberArk factors publicly statements from disclaims made company's the expressly CyberArk's or

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

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

Udi Mokady

reached to strong solutions had see demonstrating Thanks, the momentum joining of call. end third continue largest million, ARR from our for our ARR for of with the thanks, metrics history. we our up and business. quarter QX, XX% million the of underscore Subscription A consecutive million a Erica $XXX everyone, year-over-year. third to number for strength at accelerating $XXX results. growth demand reached We $XXX the key the durability in sequential increase Total our in quarter, and the of the

the our million again While that remember kicking transition accelerating continues the reported subscription of to in with ARR to success, the line benefits remains It reaching and top best our in transition subscription to XX% important the are metric revenue on impact $XXX total our is QX. measure growth to P&L.

Officers and priority top quarter. would the of line higher For year our quarter platform, $XX million. Strong transformation, adoption growth the Information demand year-to-date, the at XX% XX% of midpoint total to of revenue the about call. on SaaS talk secular push list. growth. the strong will of are revenue growth, the by later continue last significantly about which the we discussion Trust XX% last for with focus Starting tailwinds, in Normalizing of significantly we and tailwinds year, to our this mix a quarter the identity profitability. over in ARR security prioritization execution the headwind our quarter, With solutions the Security frame grown guidance of Josh created was year ongoing have the mix raising which digital full secular Zero third today, to and innovation of our innovation our our third about will Identity XX%, Chief attacker To Security the than

our renovation in is a escalations the attack center common and With discussions. front privileged in chain. the denominator be heightened And continue attacker threat landscape, to

prompts with fatigue, for strong a Security MFA challenge on has the data CyberArk platform. the need and strategy set. has The management victim performance growing the authentication the and is generator been access, our pipeline increased PAM demonstrated our the momentum Identity, results; Identity use quarter. secrets We particularly an into PAM more request pickup our of pleased a defense techniques MFA Digging multifactor for Another product clearly across of is attackers bypass until in CyberArk continued third were of EPM with robust where approach. the an approved. through in the This solution side, and integrated

rip of Fortune center business and management Trust. with CyberArk This controls European nearly cloud with chosen Identity workforce government give plans strategic new personal as passwords with Privilege not just Identity expanding to a Secrets with breadth we customer to months. a had Security the strong A front, of Zero CyberArk just platform and QX, few environment, Security the deep expand its and This landed our in born of quarter against in in and the security And a PAM, logo in foundation agency Secrets expertise and increased from customers. all level we lock Privilege XXX will landed highest IT Management and protect is the X-figure Cloud recent that company machine new new demand thousands workforce human of the in a accelerating also with on global to embraced XXX of of major our its manager Cloud level is and X were example their signing race deal, PAM. retailer for help adoption across down protect EPM employees discussions. On password in EPM, password to replace EPM. include: The leverage front a growing a our manufacturing identities, enterprise-wide the scale on surface A to examples Zero demonstrating manufacturer the Trust with ransomware. mandate, Board management. is framework endpoints Based landed robust digitize the but attack and

examples long-standing the increase in customers velocity management add-on major well of our EPM secure XXX its of portfolio. is $X number in portfolio the A additional Cloud its business increasing management revenue a now greater a privileged as ACV and with bringing relationship to in cloud of annual customer, and who became deal, across contributing the expanded leading include: users. largest as sequence customers the energy deepened XX% landed is retailer across well expanding a CyberArk to with to is more second transformation expansion of Privilege subscription than at cross-selling with In the PAM customer than the $XXX,XXX had Our QX, to This recurring over nearly and company with end A X,XXX previously with Fortune XXXX, large few APJ, September. expansion Secrets in further with million. PAM QX.

customer down will over As its XX,XXX EPM. of initiative, with Zero endpoints part this lock Trust

have in We it about past. the spoken

is increasingly the enterprises Zero which While has industry talking growth. increasingly Trust to few a been strategies today are Zero years, executing our about Trust contributing for

program success security Our key identity and practices. scale our channel is to to partners continue their

new market, across VARs, channel and We program advisories improved have added and collaboration our efficiencies enhance to routes MSPs.

leadership cornerstone Moving on the and to security. our position in identity innovation, of strategy

for these Customers access, tour compliance generally ability today. also access the identity strengthen available streamlining demonstrate In and analytics. both we out are are discuss XX our to gaining CyberArk a fatigue taking countries. certifications we systems. lock on and In Hub organizations discussions events, innovations CyberArk way secure quarter, early rolled user-friendly easier daily. to in discovering quarter excited Conjur to pillar at and is makes Impact by human Identity MFA I the world and gaining it last a providing protective the began event third machinery announced the will enforce Profitability XX in unauthorized new we final to is also which October, help traction customer comprehensive now from field. our to Secret and cities continuously the our During about technique Cloud Compliance

haven't impacted be approach. to our the investment continues by changed we P&L reported our subscription transition, While

We are booking including accelerated delivering innovation revenue growth. well a as as and returns, rapid excellent

Rule the dynamics. expect as past company subscription move continue of we We be to a transition XX to

the update which see with the our over environment. regards our guidance. in ARR, to I did growth and the in ARR increase on are The Before nearly impact I our significant to turn acceleration what seeing it have wanted in XX% broader on uncertainty a business third to revenue quarter you not you Josh, macroeconomic macro we in

Our solutions are mission-critical and is being identity prioritized. security

and deals incremental large We this some meaningfully approvals slow require incremental the headwinds not FX cycles sales third quarter. have in did but seen down

the Our in trends watch identity our platform very in are benefits more subscription we analyzing continues frequently. the pipeline top gain our and continue momentum. and and line demand are security business our and to In the are closely closing, of kicking to robust transition situation

ever in been growth demonstrates in performance, competitive strong Our ARR position have that the are best particular, we we our in.

execute and experience durable the business, of now we I we against our long multiyear confident the detail over over turn will in and profitability our flow best-in-class growth and for full year that XXXX. provide opportunity deliver discuss to you and Given a term. and results are durability cash more to financial fourth who Off Josh. call our the our Josh, quarter with outlook strong can you, will

Josh Siegel

recurring which quarter to metrics. milestone on Thanks, ARR the our Udi. target. subscription our XXX% in And third over our we With passing Growth the we of is of to million. consecutive annual total million, now had $XXX The just ARR strong billion reflected billion our revenue third reached XX% XX% ARR. $X.X of $XXX and a for mentioned, growth, are represents portion continued increasing key quarter that's as accelerated Udi the and strong passed year-on-year way $X towards

bookings and Total was with quarter, XXXX. Total $X the portion the on accelerated The That's second Just mind of only came million portion our impacted top ARR $X.X about growth $XXX at in was total in ago, $XXX revenue this just of and up subscription growth total. the million XX. September of million at quarter in sequentially a that revenue in Keep million. growth XX% year and million. year-on-year. $XXX revenue to FX XX% the range of revenue again XX% maintenance about

revenue the million, quarter. a our at came of move Consistent XXX% reached in to million. Subscription revenue details. with $XX.X the license Moving third business representing revenue growing subscription model, XX% into year-on-year, total perpetual in $XX.X

we we by million EMEA growing just X $XX.X the headwind to share reached mix XX%. into APJ XX% continue million was would our XXXX it Taking headwind. important revenue to XX% consideration, or the revenue. Economically, when would growth approximately factors: by Americas when the third year-on-year, Americas of second, by grown quarter. total. expectations mix the year-on-year, validating take the currency million XX% for XX% and of that business million quarter $XX diversified. maintenance by in coming of XX% of above year-on-year XX%. million first, revenue. grew and compare total the million XX% like-for-like headwind revenue of bookings at total the Recurring APJ by subscription have representing approximately by market total Americas keep in mind Security. $XX.X grown Our It's XX% was of just revenue maintenance quarter Geographically, That's million calculated results $XX mix XX% mix; third million, revenue were in from third we is the created grown the Subscription and the million. the mix, The professional in XX% to $X in by normalize for that's the revenue, million, EMEA approximately $XX or services would revenue XX%. that $XX $XX.X to XX% year. in higher quarter professional If revenue the revenue impacted have EMEA from XX%, That's came grew $XXX.X last total year-on-year reached recurring and to with services have $XX.X accelerated revenue. in The by third well Identity was

mix a are the over with press progress in of of All pleased reached reconciliation XX% quarter. see last the will non-GAAP our discussed be full in on GAAP subscription the We APJ great the to non-GAAP increasing also basis. making release. P&L is line now items tables its the which Please

XX% XX% an gross gross gross Our compared $XXX year. with profit third margin was That's margin quarter last million.

margin part pleased have large outperformance related a are the managed gross we to in SaaS. closely our expenses with We because

also are While to operational we our rigor. we drive make growth, ongoing continue investments to and innovation demonstrating

growth million our expenses investments a outpacing headwind better a our resulted than in which XX% coming $X resulted revenue XX% is point another significantly rate still million, Our thing to loss business. out, One of operating operating in guidance. $XXX year-on-year increase point growth the underlying in of XX% our adjusted leverage That's rate. expense operating our proof of meaningfully

our lowered by would third in results. the mix, operating mix impacted revenue operating ratable have being towards positive still are quarter. We shift the Normalizing which been for margin X% that

the level and sets to this not reminder, to of year the the the prior back a all beginning the mix transition. only As way

to as invest A and XXXX, our transition tenet part is to was business you XX If was that our subscription level our which of operating productively. operate CyberArk today mix set rigorously continue guiding a execution and company of of we Rule strategy. efficiently levels expense our to manage

delivering are was about Net $X.X third or significantly per We better share $X.XX on million than our guidance. that. the loss for quarter, diluted also

continue and top We the with acquisition including to ended over of people majority talent. worldwide, and employees of in approximately culture, CXM, We testament sales quarter September related the R&D. XX to about with in attract marketing. to which retain a That's X,XXX X,XXX ending our the are

flow was $XX.X cash flow or for and the which the meaningfully is set strength year guardrails full a cash ahead we the of months of flow model. free of million For X X% the cash free subscription free our margin XXXX, demonstrates first

our Now to turning guidance.

the Our full quarter for robust tailwinds, industry base. guidance and fourth our ARR strong growing and year execution reflect the

about For XX% million midpoint. $XXX.X to at of represents $XXX.X quarter we expect non-GAAP And to million which quarter. of year-on-year million fourth about the of the the total revenue operating we $X expect fourth XXXX, for million income $X

to $X.XX per to We expect EPS from non-GAAP diluted range share. our $X.XX

$XX remains quarter. that profitability assumes and the calculated Our fourth be in guidance resulting for bookings increase XX%. it an million is $XX and mix The expected subscription to and between still headwind revenue over million

mix, for you XX%. revenue the our If range growth midpoint the is of estimated at over the normalize

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

million. For the total $XXX.X the full revenue range million expect year XXXX, we in to of $XXX.X

underlying between a $XX Our headwind of million million assumption revenue $XX forecast. quarter reflects our and the and bookings mix the fourth guidance higher assumes a increase and headwind in

growth the normalize XX%. is for the midpoint you estimated revenue If mix, over at our

despite We full in year are discuss adjusted guidance increase the pleased our FX very I will headwind headwinds which range the to minute. a midpoint of in increase

operating between basic full year, million, share in our non-GAAP the to $XX.X loss our For to net of loss the the expect $X.XX non-GAAP we per $XX.X and range be for to range million diluted and be $X.XX.

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

to growth, or revenue million at respectively. also are full our now $XXX we We be year-on-year and the XX% between recurring increasing which year and million for guidance XX% $XXX expect XX between annual December

you our We a for continue strength to our to We are I ARR thrilled expect did guidance. demonstrates to FX. movements. It to impact million raise to the euro considerable ARR which we our last of million higher the currency pound expectations to update business. from impact see estimated further quarter about want because currency on of year $X related can in we and than about see the $X full discussed is

we moves ago. provided currency from more few are impact I is than currency a already lower in reflected guidance which discussed the by million estimate million also $X $X will These about the moments moves in recognized our We revenue August.

cash it over to anticipate X non-GAAP will Moving free net a that period. percentage income we about be points XX above to XX-month flow; margin our

quarter. Third was another quarter strong

the long-term We and are Identity flow, value creating the capitalizing remain Security of that the growth durable. shareholders. demand strong confident platform for turn deliver highly our will opportunity focused call that for is to Q&A. now in profitable us massive cash operator on I'll front our We on Operator? for over

Operator

from Barclays. And question line first Kalia Instructions] [Operator of Saket the your comes from

Saket Kalia

great. Okay,

outside too, that? these make secrets. traditional about there a just bit landing was EPM, with of question of results. wondering mean, are Udi, Does of bit as are to along your non-PAM little you. often I was there what In little were There maybe was the a I products cross-sell talk with able is, start examples, performance access Udi, Maybe of the Yes, just the becoming PAM. several you And if that you how points? of Solid we'll set to PAM well. you business sense? could I see traditional extent

Udi Mokady

Absolutely.

about new having as in very and us point growth talked EPM opportunity. points expanding strong I our landing and us with gives and think increasingly our both landing time actually landing then more last excitement about back PAM a into access we we're logos which that durable for

the PAM working on like side, well. logos the course, still workforce Of example bolts the with we with speed landing but EPM. new really are also huge majority others customer of them the and we see here into the gave then access in examples yes, cross-selling management and and password access opportunity And

Saket Kalia

just a follow-up great. dig my it. ARR into for Maybe it. for Got Got you. maybe That's bit. Josh, little maintenance

been talk that And what's driving sequentially. a couple realistically of about for think about to think starts when should that? sort how we just sequentially I you of up quarters. that's decline Can sort of

Josh Siegel

that we that Thanks, see anticipate Yes. on well year. rates the continue we'll anticipate couple piece Thanks move decline a dollars can in decline year the see actually quarter it's of the on ARR. because joining in of already customers. even higher And do of we maintenance. a renewal we we for the those a for really But well, preserving Saket. maintenance million ARR Yes, maintenance fourth the as still Basically, we're call. to into small this have as next done we

talked As now remarks, from a that the bookings reducing towards well bookings even SaaS about of subscription. across that in XX% to prepared going you it area, and can even going see And business. I transition APJ into we're are the perpetual my the over really we're dramatically now,

Operator

please. your question next line the of name, from Please comes Your Fodderwala. Hamza provide company

Hamza Fodderwala

Stanley. Morgan from Fodderwala Hamza is This

is the consistent the years priority little or model those can in And now of beyond enterprise been how you now of X to X requirements? has just customers the level management been. a for making as base able it to you for Is like ago, a little large attracting go that it you. value you you it easier than bit a how regulatory in it's bit about the talk proposition theme last couple the channels? X perhaps after privilege attract the a is question SaaS particular. broader ever is today? about access quarters customers able the are fact higher Is just So that Maybe weren't talk seems It to new

Udi Mokady

speak to good as thing, Sure you to today.

So block increase we and them continuously over time drivers demand we see the to access the privileged definitely, for to security and priority. CyberArk, rising would if were management identity top

I overall think you drivers attack attackers analysts landscape [Technical is the the the almost and Difficulty]. any attack biggest where that

Operator

lost with Please Ladies back and a have the line. connection gentlemen, moment. the stay We'll on be we speaker. in

Udi Mokady

All right.

looks that. like there we're answering disconnect sorry So continue a here. in, your and about happy Udi to question, It back was

going insurance our So like the of enables there. And access a offering after cross-vertical channel I and really course, of sellers We've And our global a that with it's our really also answer making insider able And over Hamza, course, growth like growth channel time. and like growth management And the regulations team sales that a course, MSPs the growing then became deliver that board that. reach threat. the broad growth be the you been to and, of the course, advisories, top it ability talked credentials accessible that of customers continuously customers. from value-added diversifying variety the across additional to attackers driver security and and cyber over priority and demand. out SaaS to been time, are is alluded to really in collecting mentioned, opportunity rising identities, of for of at even about you identity to, answering list that our where we've drivers drivers of to privileged --

that is we strength, strength. second. list a for working the that in disconnected high So puts the execution sorry, And got us and combo CISO and really priority for both us and that again, in buyer

Operator

Piper next Sandler. And your of line comes Owens question from from the Rob

Rob Owens

rates, one? you you think best some in competition the competitive that number you're little around bundling historically of number is, guess, comments address what in touching been the given I Udi, time. and products? where seeing can bit you And here if I and versus you've you're Can about two, had talk on in you've your a additional size win that then or made position selling land expand

Udi Mokady

Yes.

across going of SaaS. of PAM And both across I we and we're acknowledgment leadership come the everything terms see is customers in CyberArk. to that to our better a delivery of ability from position think and offerings we consume our any that where look course, by and in in the innovation

broadening those up. continued very strong seeing of the definitely seeing continued with win and CyberArk invited PAM. suite, we're rates we're And PAM to, rates just the So innovation the increased makeup. any that is in our course, win X -- of go

just So being PAM. like we and invited ARR continuously perceived we're identity there prior answer, Identity, that's security-driven in my and for differentiated In double excited, saw we're solution. as the

ahead If with particularly want products. identities, about with EPM beautiful seen land opportunity identity. of a multiple and more our address sizes our to go I but sizes, And continuously is the ability you over in identity year, with we've And landing you regards land security earlier walk last again, the we with we with products. land most huge this is you when us with the how all about to deal think I then care CyberArk. asked just deal was we to land up, when and

Operator

Stifel. from line your from of And question comes next Adam Borg the

Adam Borg

M&A. for on just Udi Maybe

and identity You you're appetite just about these I made even the broader with your larger recently the earlier. given execution, potentially dynamics, you how tuck-in solid M&A deals from here? a all that M&A going happening landscape, thinking changes few for of referenced small thinking forward XPM valuation was in

Udi Mokady

Yes.

very that team we're is company our first approach driving. I that's think strategy the on a Clarence

deliberate map in acquisitions buy done very that's we versus been look opportunities far. how would say, at continuously so we've so and build out the And the prudent we've and and I very,

we us in this dear have to and environment, to think our it entry in that will more will alluded but have I to as -- near strong because that opportunities be on right our applicable of think to even those customers. a opportunities. for muscle exercise to customers. be delivering that on we're past, We'll to it's focused have always have that and and really opportunities looking the portfolio to strategic wide it's that our things going of now, we always are I on strategy And

Operator

comes Company. question of Eyal the next & Your from line Shaul Cowen from

Shaul Eyal

maybe then kind the Is in of of of that the and initial Congrats of is model velocity kind you on X on the the execution initial And land. expand? and driving or of Udi, strong the cross can under the secondly, your it or key after presentation a back guidance. accelerated on some macro and takeaways highlighted on the customers between increased frame X transition pace? applied coming time you the what's strictly key that land faster the addressing upsell Maybe the sort that pace kind hand takeaways qualitative both? put of

Udi Mokady

Yes.

to opportunity X,XXX of it, for and a of the us, -- like an to with that us ability year-over-year, customer terms ARR. driving upsell solutions. it time to have customer we platform of services realize again, that us saw it as an And faster value we the we with easier better with a XX% And our offering in it's now cross-sell more with bringing quick yes, In platform fact to value our customers the both to with course, way mentioned, what's into cross-sell. the get take get to ability and the then the really for they for over the their in XXX,XXX consuming SaaS, and selling -- and go

driving ability closer that. how And past the to that. know velocity. address all it's to excited their to they're telemetry that's have to investments we're kicking in them. And that product success, customer much increase we the So in been needs our We're that's about and using

Shaul Eyal

from a color absolutely geographic perspective, APAC? Josh, going Understood. to Maybe U.S., additional on And what's on just EMEA, some maybe, stable. be appears everything trends

Josh Siegel

the out where in as subscription my regions. I EMEA, region. well growth pointed APJ, in saw of are the Yes. had they kind are XX% And obviously, Thanks, even over of at across did that headwinds. kind Yes, now consider remarks, SaaS and when mix largest changes about we that FX all Shaul. had hit, have XX%. and some good And them In EMEA both we selling you shift there of really in and we the particularly the both in

now is so time, in that APJ a with XX% balance of business. long Americas regions to So if a the and you EMEA mix, diversified and for on to XX% of FX and in growing seeing lines then the and kind quarter close would if for year-on-year we've add you been been all us add in I along you've beauty growth same XX% rate time the the And about think you following the or CyberArk of and the get overall, EMEA we're a kind basis. a of long

Operator

the Markets. And of your from from Eric next comes line Capital Heath question KeyBanc

Eric Heath

on on of management. guess secrets I'll ask I impressive an set results, Udi Josh. Congrats and

with maybe view updated just your of you would And on AWS Just an could the you announcements secret will, curious what's developer landscape competitive in been between the customer response, yourselves be integration kind us if from native solution? following of great. that then space, your management and recent crowd, particularly the give the HashiCorp if

Udi Mokady

see opportunity I customer to mentioned across Sure. city. also on question the events road. much road with impact on the had love our the because so it we I And

natively. been then the is on way adopt secrets security both and to yes, our to them take educate developer and central So the all, with backbone changing and we from event And force first July from and the developers begun. -- integration human we our buyer able going just AWS to organization to road. in see, the we relieves security they hearing have having we going -- and it management other the is that want the We're And and side to announced started change for work. that take Boston we've with the developer this platform we're that only similarly, that where taking And of our first they to for on relief on enabling now be our CyberArk we're cloud without to AWS but secrets. the this to work

In win from that security, see of in in those to different -- the expansion. prime security strong that's want we base. rate as really from Hashi, the we're developers and competitive customer is want think have for We through enable business motions. secure a that coming we definitely I the in come we opportunity come terms It's and space we're the we organization driver having competitor in -- with the to -- great but the and dynamic within

We have But organization to and platform edge applications. trusted to work to security and can developer natively. for continuously the both humans adopt be some and easy in deliver the by land value will also that to us, a then ability serves ways competitive critical expand this be low-hanging because also then be we the their strong by they because the of

Operator

from of Ho William from Your next comes Blair. Jonathan question the line

Jonathan Ho

my echo Let well. congratulations me as

maybe is solve little detail fatigue. the give serving how things you this Can a maybe that you on for about customers MFA bit CyberArk new of more that for business. helps driver talked -- and One as how challenge often was us a

Udi Mokady

actually brand it's And Jonathan. Thanks, new.

anyone we and where, MFA I beyond on example put the think Uber And that recent the those by But ended the point. refer all out reach. read, I that's that about analyzes it entry inundated hacker who theft that, also accepting challenge -- a was eventually again, user blog for to would was inside. the an was wants credential who up legitimate and

even the response example, a and if see but if shown logging the user the front friction MFA a combat of Security the organization, It's helps that even But were into is no that. that a as say the basically if you you're about CyberArk movement, enter solution, user if the will big we not on screen, mobile to matching that number feed actually I Identity solution then as recognition more you're where not talk And rolled on the the that system So of unique in user, I'll to that, be able not lateral escalation and log-in our credential, privilege we legitimate prevent agile and was functionality a I of end the very a the into a CyberArk platform because going number importantly, in put the front attack. the seen both authenticator. think. for adds that ceiling we CyberArk backbone But really screen. for that, to out then you're ourselves fatigue. identity, to part being And the number

of peace their professionals be right mind just to say machine accept, security gives do of can't the So they to users the that in that. to end it the have front human

we're So this demand approach -- not It's need is to seeing identities, is security driving Yes, challenge. it identity to solution. that just that. managing for our specifically need companies security a we go we after

that brand. So and we're as differentiator the demand CyberArk it's part seeing of the it's -- a for

Operator

Fitzgerald. Cantor Jonathan line the of And from question comes your Ruykhaver next from

Jonathan Ruykhaver

guys. Congrats,

question easier just capabilities realize lands IAM a likely secure still most that be existing expansion do access the web I early and controls to like motion And opportunity But you those privilege those session, to of Udi, think opportunity I So controls? new and into terms dynamic around by is might greenfield Cloud privileged the to to what leverage in drive you seeing replace potentially then just led opportunities. solutions. sell lot is of have Privilege that this Privilege

Udi Mokady

have that the Privileged we manage our market very broad and CyberArk. simple if Access company the controls. part to is give upon That's be come question. renewal, customers in can for a fact and to and single suite sessions. on a as a security in we to seeing web add It our and where us to said, Like differentiator the expand we're early very but also strategy from differentiated differentiated place that the a add in specifically and to basic a identity our security secure light great broad Access the time and it's place. the Dynamic Management Even have you And we can you land environment. on PAM modern of identity with solution, then Identity was be way them to sign-on over that's that way to and offering and

and premium process a in So it's way offerings the today vendor. strategy say, healthy in security is these It's would and we really everything I -- identity push that also to over gives sales this standard get solutions a every us do. us identity gives that

Jonathan Ruykhaver

engage see Yes. secrets That's you're it terms as helpful. public with public A doing And you SaaS Could just the to in beyond motion with channel. quick follow-up cloud your cloud to opportunity offerings. is related channel in to of guys? the SIs what on providers it update us relates also with the

Udi Mokady

Okay.

for very it's So strategic been us.

bring they with this that in our offering to will training the As central to and SaaS we a and SaaS and you our board we what event impact on transition us. the partner channels solutions. whole move it SaaS be everything value quick the expected. trained they're time to It's in also first that's in partners with our channel embracing our that like get do, around was on SaaS transition through They

would them I They world, the the to we're the can the them to trainings sense their build CyberArk the I we is say on getting business say, consuming count so faster If long-term the seats, advisories. a adopting really value. all regards way channel across well, that time With to our And and seeing with a in And here. SIs company of, there's is would it. then even around full the healthy get SaaS a both in landscape, practice. customer to certified or building that's really

the past continue partners expansion an in the same reflecting with as to cross-sell growth And AWS on about their that about So deals extending can momentum to and marketplace practices they us. -- results, the we're to all ability see way in AWS here in in talked Secrets with that AWS up. the today, of that a building marketplace, mentioned motion that that work active business see and seeing On we good is like the natively and we're they're other is we to addition reflecting. ability the we the Hub, building and talked also around we to complementary to regards to our

Operator

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

Joshua Tilton

of results. to seems in you guys Congrats platform the X scrambling identity have My is, replicate on this vendor built. first kind that to complete every identity be

helping to the specifically maybe market? vendors And you in doing So is of have how kind on evangelize that complete what capitalize you over identity this are you the lead the other sale platform? that of a guys

Udi Mokady

question. Great No.

my unique it journey. in investment the platform most vendors attackers I versus -- as our a tell as PAM, coming attack a our I disruption with as tackling a And behind of [Technical in management identity customers motion difficult cybersecurity problem company the in all lot there's expanding in doing face-to-face differently and competitive of SaaS I would cybersecurity identity not the company. for up think lot all to course, meeting after an that, to there's and start private credible takedowns sought a that Difficulty]. experts and we expertise the benefit. mentioned the And it. coming think security that into distraction, mean, identity sometimes right that's I with the the can We came when in really on identity and vector and then is the are both PAM base, causing is the leg of the CyberArk equity most

Operator

line. connection have remain Please the Ladies lost with speakers. we and the gentlemen, on

Udi Mokady

All right.

think I much So up. I pretty wrapped

that. about Sorry

to much in that think marketing base. with Josh seeing and again, a opportunity. And also and the customer lot that panel. it way, up And of our competitive a prudent, effect the there are say, would pretty smart question a and stepping the sales in alluding we I on like I was opportunity capture we're is definitely wrapped flywheel

strong base. have a customer We

flywheel strong and that We have leverage. to us it base affect channel gives a

Joshua Tilton

I great. if have could follow-up, was I if quarter? was was it already business addressed and your apologize how just federal but That X the I in

Udi Mokady

say it slow. -- be the to about a would in an just general, that little the But was our cycles outstanding we're say of seeing business. I global government it continues quarter. that be XX% wouldn't it be outside. say, to would I we can I federal didn't expect wasn't

Operator

next from Bulian comes question Tim from And to from move of question Ittai line Oppenheimer. Your we'll next Citigroup. from on the Kidron the

Unidentified Analyst

is other EPM Ittai. results. This this Cloud is still large relatively the has on like to Manager adoption early about wanted How is how And solutions on Hersha ask I do you the which new. here? and to solution Entitlements just [ph] opportunity Congrats think relative access? for fared

Udi Mokady

we CM, view is that cloud identifying cloud transparent to events, a for It's component our that do it's actually private access call we there. with think rest and cloud easy consoles. impact solution Well, managing access. to regards environment, we pillar. and And -- about the presented big. a we the the security in that secure at With component in that solution very a larger to cloud as that of the in leading over it's that privilege has cloud much a pillar our we as Everything which includes

And and there as to which early. could as pillar that two, larger a EPM it's one, yes, going say, would I evolve big as So definitely pillar. we on it's of a continue much to be component be

Unidentified Analyst

ARR the Got the of mix it. a there on That's quarter, compare significant were had that helpful. products product to net And in then it when you for XQ? contribution change just any new

Udi Mokady

I discussed about No, say subscription XX% of the pie. we ARR I growing they're would the would is which the about EPM subscription PAM time, split identity last good that is all of secrets say XX%, XX%, management the is ARR piece is about probably about is like ARR news. is XX%.

Operator

Fargo. Andrew from comes question the Wells of Nowinski line from Next

Justin Donati

Justin This for Donati is on Andy.

expand and call. on talked here about the You lot a land motion your

could either your pipeline customers? you if wondering any between closing or new existing rates just on I'm your update provide versus So

Udi Mokady

and say our a robust approach. I know building Yes. that of we're kind don't fronts on I that's that would ready information I of there. kind both have a go-to-market pipeline

for go Our the reps pipeline. leveraging the and that customers the TQ continued new it's have robust of just I say to new logos. a after diversified customers portfolio would to channel we be that a course, landing existing of lines partnerships, have and both

Justin Donati

follow-up. a then just quick Great. And maybe as

us on customers update you just many $XXX,XXX solutions using? on how average ARR. are large Can over customers Regarding your those in

Udi Mokady

PAM a cross-sell. don't that growth most, we Again, probably value customer would easily you exceeded can say I also the that. have But the landing I and have that and a includes the -- have

would have we, there. products XXX,XXX over in large but also over ones at the we the upsell is some cross-sell the So get have least And like X not ones, the them solutions very just in and course, ARR significant of majority this see time, mix.

Operator

our question next next on from of Citigroup. Trevor your from Tima question from And JMP line comes to Securities. go the We'll Bolani from Walsh

Trevor Walsh

you of XXX if as Udi, an a around I thought color little Zero performance, all, was Trust if which we far influencer. wondering for customer mention quarter being give And that new was at or influenced you strong the how maybe had a as was strong. could as brief logos so the

they've you customers those So Zero is what looking cost? a -- How already going guess, is that their plans that with around and Zero more support where engagements driving those Trust in to that on coming the happening guys? is Trust with there are engagements got type how that I architecture is -- identity of PAM actually Or on maybe dynamic current there piece? the

Udi Mokady

how question. say both. it's would it customers. see that our When executive center Zero is and replaying this That's to And I the part management we in both I you trust briefing achieve they do great Trust, the base, and us they security privileges. but existing with PAM happening can a in that with customer of Board to X how excess are identity back presented their their

motion So to privileged least critical everything the is that. really

of channels the that logos reduced strategy. in that are decision-making part we the impactful new assumed yes, our show massive in the an prevent for of amount they're the from pickup in for or massive impact looking customer really so again, that breaches, Trust to it's Zero as the a that and -- and and breach and lateral them solutions, prevent risk breach it's base. the to of seeing they any movement on prevent field of executing the way hear And definitely land And

So it's yes, both. in definitely

Operator

And line Brian Stephens. the Your from from comes of Colley question next

Brian Colley

you what maybe in see hone driving rank or kind of tailwinds clearly, So of to I lot some a of you you strong have momentum growth kind drivers biggest looking and logos, see the in on order for as with now. then growth business if XXXX, it's the of all kind just the drivers could X all into see wanted order business wins of or And rank maybe changed multiproduct customers? you as tailwinds adoption, forward, at PAM new what right greenfield kind if it's now? between various moving whether new right

Udi Mokady

Okay.

drivers, business would we're considered I Zero terms breaches. up Trust and for achieving preventing in of So it's really must-have put that -- a considered

there. how So need transformation, definitely innovation love innovation and then add impact this attack do prevention meaningful kind from business prevent driver. is and, say a having I demand. growing say, go-to-market we compliance a the breaches a surface drivers there's really That's much. on of but threat by -- insider business Zero terms I would the and business execution surface. Trust we result, then against in and it's attacker And growing that so areas of attacker attack underneath various That's digital the followed would ever-growing that where like

and management like both solutions I and we're logos builds executing, and share sales we mentioned, both put on we're to do upsell high speed front, builds that place we or continuously the speed Leveraging channel in this. secrets as business. So priority the market in team we're our our a new add-on and taking in cross-sell identity

Brian Colley

thinking channel here new further of that to business. and seems of innings your channel Got early deals mean the contributing think already new then it logo what of in an that clearly driving I us kind it's wins it. you're we're front? kind in kind curious you frame just up if drive I'm increase could the you what still just you on efforts incremental from can innings about with whether today? like percentage potentially think are expansion, it help and helpful. the of in And acceleration That's of

Udi Mokady

really producers in the And be to top the partners there. that hearing -- of our team -- is want we from wants I business than XX channel would our to XX% CyberArk channel on top for that notch business provider really for of our we with in a The talked channel well. that partners. I probably we top in up again, like the see the and top X I the love say continuously that opportunity. I partners. CEO about one Yes. has their continuously XX, and I'm that winner more are general think and terms were been past, kicking the move -- hearing the the executing of would off producers, our we

So it's a motion. growing

in it's invest a I see the certified they as like in You talked of -- more invest personnel. growth about CyberArk the We -- of on as the kind more, earlier, they succeed, they flywheel amount you that said effect, training.

the a across early so that's we it I big as the so the something opportunity flywheel. give we're the best middle And would the leverage of opportunity. of in I and -- working moved our the everything mentioned, And inning, there's wouldn't we execution put along in world it much of but I from innings top because MSSPs the and really this with on with best

Operator

back And to question-and-answer Mr. closing over Udi some call final for you the concludes Mokady. turn this I remarks. our session.

Udi Mokady

customers to much. demand for quarter. the again, momentum you. for Thank of and partners Thank cornerstone thank our business. our and Great. dear quarter, I always, our Talk you the I team execution the employees and soon. global strong work much. And this our Thank being success. in want hard And very strong for to you as thank our durable very We demonstrating want another had solutions and

Operator

today's concludes call. you Thank conference This your participation. for

disconnect. may You now

CyberArk Software (CYBR) 3 Nov 222022 Q3 Earnings call transcript