CYBR - Earnings call 4 2023 | CyberArk Software Ltd.

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Operator

Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the CyberArk Software Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Erica Smith, Senior Vice President, Finance and Investor Relations. Please go ahead.

Erica Smith

Dennis. you, Thank Good morning. today year and XXXX us review strong joining CyberArk's to financial quarter for full fourth you Thank results. Financial Josh With are me our and Matt today Chief Siegel, Cohen, our on Chief Executive the Officer. call Officer; After prepared call a session. question-and-answer open up to we remarks, will the

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

actual Our in projected those materially may results from these forward-looking statements. differ

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

Additionally, on call. discussed this measures non-GAAP will conference financial be

directly in GAAP webcast today's Reconciliations investor most website our in section. call that also IR updated available financial as well comparable press A the financial as an also measures presentation the available on outlines in today's to call. today's discussion are release is of in the

call our Matt CEO, to turn over that, I'd like the to With Cohen. Matt?

Matthew Cohen

growing . Demand And motion call XXXX, XX% in great to recurring an company nimble today. a and in growth all leadership bookings were our subscription. end beating in year had our and Identity year, fourth solidified backdrop. quarter. fourth Early year We the Erica, to delivered a over $XXX for metrics. market. ARR accelerated record fourth guidance the adjusted a We the growing continued resulting record-breaking the subscription income sequential the million, $XXX across joining in XX% million, and entered our and and having position quarter, exceeded light another reached revenue, year-over-year. Security our round platform to new add momentous thrilled from with EPS. CyberArk. Thanks, guidance pay in and selling fully XXXX, operating year-over-year. Subscription revenue for our coming thanks, We everyone, Total quarter of quarter, We off total amazing we across we out the in AR range were ARR of reached we for net our XX% it macroeconomic

operating came growth $XX Total $X.XX. revenue Non-GAAP income reaching approximately non-GAAP per in earnings million, million. and at we accelerated $XXX generated of to XX%, share

We growth also the operating well million the revenue million and or with income consistently approximately accelerating $XXX the for we guided of beginning to breakeven operating at year, outperformed of XXXX. of above $XX total delivered a X% XX%, non-GAAP margin throughout

Non-GAAP earnings a million year we of flow, and were we or thrilled margin full share flow $XX guide while cash generate XXXX. free per cash $X.XX for the in did to for X% not

and strategy execution. about including generating channel alignment sales marketing, Our improved between We performance pipeline and go-to-market fine high-quality our platform success. all customer volumes motion, our tuned selling, solutions. across We our speaks the record

our all mission delivered right security with of secure our And groundbreaking identities controls privileged lastly, against R&D level the platform. to to identity

Throughout to yet reminded All identities, trends attack new identity. methods. by environments XXXX, strong were roads driven organizations again In that is there constant and in benefiting new the of durable execution, addition lead proliferation demand cyber to from one we're attacks. new

world securely that which the can urgent effectively address these mission-critical of controls. nature a new context security apparent. becomes platform of the only trends, vendor with the our CyberArk center the and requirements, In is on platform

call going massive and challenges, innovation, last to to solve to cadence the the how I'm also over outline customers for in which are security helping typical years, these few quarterly solutions business groundbreaking our growth identity speaks CyberArk. our our the changes our break Given from

workforce. has is and of at Access identities number today entire machines organization of of identities the a these unique Every spectrum different complexity, of of rate. And increasing its to requiring developers an levels from exponential IT identities own level for the risk across and controls. core each has to

what market. of take this me from spectrum our addressable has through customers and seeing Let you expanded and identities we that how are

on for customer of privileges users CyberArk core management IT team. have privileged securing or a typically A maybe focused access who a like database access high and starts operations levels cloud application administrator with is standing or

deploy, brings but IT, controls. they and number of security organizations even PAM under a that users they road map IT also third-party vendors central growing a As follow within shadow

a of there's of a expansion the As PAM. number leveraging users result, continuous

Adoption further access. access is methods or even accelerates just-in-time begins adoption delivered as new like service, through easier customers an cost we to dynamic a when of when given PAM lower cases and tackle new path use revolutionary ownership. It accelerate help

by curve access even adoption by the to allowing at cuts increasing controls while access databases, modern federated dynamically entitlements the time down the other and signing access. workloads security cloud Just-in-time also further targets, of

organization. in The for few has expansion years dramatically significant has up opened program the even the modern opportunity within and last extended CyberArk a TAM evolved IT

is fastest this persist. that human for growing healthy see to moving the rates have expanding for community. second, in IT But one of a continued PAM areas the identities our developer You beyond growth ARR

Access meaningfully developers scientists. Our TAM privileged as to has engineering cloud solution and data expanded teams brings to and Secure Cloud include our controls as well the

native with to access are a they discovery organizations reduces access developers in go of to entitlements quickly This provide environments for yet cloud zero the true nightmare, speed of programs. dabbling from control Always modern and on developers innovation measurably environments. cloud and as actual standing a greatly their privilege promise cloud security can is approach. We innovative risk solution

or SCA customers security that Access have never choose between speed. and Cloud our to Secure ensures innovation

other and in is most pipeline one continues But we as to about quarter to developers are XXXX. in offerings, SCA in infrastructure excited machine on the critical enter data newest rise or these of cloud, as access we we creating that are results one QX, workloads work is strong focused While build. and had cloud of This the the and areas our applications, workloads. a of identities. extending This need they APIs

riskiest our complex one Machine the the components they of and modern solution. of use protect management the identities that most and to secrets represent enterprise machines customers to turn these secrets

the secrets our to It bring enterprise impeding and machine Our the with customers. our human secrets the sprawl. all together while Vault and elevates are never and solution workflows, management avoiding securely manage ability at requirements satisfies CISO's while exploding developers' centrally scale, identities conversations machine

our think and results, top success Manager quarter we Secrets included was with X Conjur Cloud. of we fourth pleased about our of early As are the in XX deals,

developers We've they requirements. and need approaches of time an entirely I But IT. in approach but the machines, covered are to evidence limited breaches. enterprise security, on of workforce and major security, have on want identity identities. to to now provide move part Legacy of new MFA We their again is in own, covered and securing that workforce the SSO time

workforce, holistic for like making fourth comprehensive and unified This intelligent sessions, traditional created identity controls, When Manager, Web Leveraging a identity secure reconsider once building our way top workforce into innovations MFA they approach can of workforce SSO SSO we and has privileged CyberArk Workforce market-leading and the causing become quarter the Privilege combined CyberArk and Any more we again paying more had enterprise solutions. and Password approach MFA Secure have by with CISOs reinvented solution where intelligent Secure a securing the secure. one on workforce. is to privileged, the to with controls are off record Browser.

worth for CyberArk to It's Browser. Secure moment discuss pausing a our

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a We the are market. in delivering changer game

move Privileged We controls time, efficiency at business to from the and threats same on that customers help are and forward. their save operational driving focusing cyber

If into a we fourth for back move second. quarter the

On side, in signed the quarter. logos new new about the business fourth XXX we

in-depth or As X more landed security solutions. threat prioritize landscape, are controls this increasingly with new in logos customers severe

customers QX, in in of to sizes. with solutions, fact, our new In X a deal number landed more contributing new the business largest increase or significant

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new business measurably to school improve security London the the looking a In quarter, this Management. went with This its and Secrets logo win, EPM and they Economics, leading PAM, posture. School across broad platform of globally significantly was

all our through of financial closed the CyberArk. This services ecosystem, deal a Fortune SaaS customer AWS Marketplace. In a introduced of X-figure ACV to an XXX was power the example partner

customer Endpoint, and of We approach CyberArk securing the Secrets, third-party this are Privileged everywhere thrilled identities. gate workforce to vendors see a out applying access,

into and outperformance. into expand strategy our to our is moving from motion on focus Our built platform is contributing land

consolidating strategic this buying looking retailer And more X-figure Privileged examples ACV cloud and and they in extended A across agency U.S. products in few Secrets protection deal. include of deals their users, chose Identity defense a Secrets, access. EPM, for Secure XXX a Flows, expansion another and as session with with customer their with Management, Compliance, more quarter remote government adviser the returned secure CyberArk. PAM, CyberArk workforce Fortune for X-figure major deal our access depth, and quarter, more identity, XXXX, trusted and are spend platform, that quarter CyberArk Identity Web ACV from A last landed users

all as address. and have throughout vertical, the profitability, every line business we Touching demonstrate a that each our sizes across demonstrated platform summarize, of revenue. can land briefly identity our percent security improving expand every challenges operating business expense the deals year, in that To all leverage on with help

we grew XX% XX%. non-GAAP grew year, our the over while revenue operating just expenses over For

and striking innovation growth profitability are and right and driving cash the We investing flow. balance in between

few a stellar I our minutes, we confident With just performance targets and hear guidance strong you Josh the from XXXX set. long-term the have in remain will very in in

we strengthening learning top cutting-edge experience customer As outstanding and ahead, and growth, XXXX leadership for use analytics position and innovation leveraging identity look journey. artificial the value machine customer of our industry-leading our scale priorities delivering business, and to our expanding data across in driving including delivering and platform, security intelligence our the are

very wish have excited Camacho worked CyberArk. to also XX tremendous I to for Chief March him and her closely with a her as contribution thank years to to for I stay Eduarda welcome our for Officer. ensure and seamless to her future. strategy go-to-market the I'm with field drive we of customer the respect than Operating CyberArk through Chris ability well end our to his outcomes and want more also and have transition, execution. lead Kelly and for He'll

a in are is position competitive position our strong. We leader as security identity the in incredibly of strength and

is our landscape We Security platform and with priority the are our customer threat addressing a keeping a at top critical customers. need Identity

X to in after As to together more October responded. CyberArk's how into our XXXX, ]. want X on about XXXX. coming am I they I am enthusiastic and proud here I mass our reflect [ very talk October attack global team accomplishments future so I the did how of about we even and pause team

loss culture tragedy, increased and As and our continue success. families, navigate team communities entire are drive and stress, to great friends, what colleagues our through

more the turn who Josh, in now XXXX over call will with financial detail. outlook results and I provide will discuss our to you record our for

Joshua Siegel

again Matt. growth Total at results the record We a quarter and outstanding XX%, metrics. significantly $XXX.X accelerated in and to million posted our guidance. quarter guidance exceeding all our fourth in Thanks, revenue coming across this beat

cash of flow ourselves operating upsell, growth, meet logos. Our Identity Security free top improved strong platform the to momentum continues drive financial line new to This generation. us leverage and of and at we beginning the strategic objectives set cross-sell the durable year, allowed for

total XX% Demonstrating in reached of year-on-year year-end, the as at and high is ARR million guidance in platform. to portion increased and of the CyberArk $XXX reached added XX% customers land continued our new $XX momentum continue The in above We our coming subscription with $XXX consolidating now expand are our a and net record ARR. range. on more XX% subscription end business, million ARR and million growing and of

absolute both bookings. to In we impressive addition, we quarter our Compared record for a dollars an ARR, had in of mix year-end new subscription net also SaaS of a added million $XXX bookings, and XXXX, record.

to portion XX, annual with which $XXX line of maintenance our December slightly million was The at revenue recurring declined expectations. in

our activities ARR rates to and growth. conversion see year-on-year single-digit represents like-for-like renewal continue strong only percent We still of a

X,XXX more than quarter. now end customers. over at grew nearly ARR in Our cohort The over strong demonstrated customers by $XXX,XXX the fourth with recurring also more in to XX% of than also to the the XXX with execution customers of XX% revenue $XXX,XXX annual in is being increase

briefly of The on is users the wanted strong and upon cohort upsell our of biggest to macro. I the touch execution, driver additional and touched of platform. solutions the this across Matt new cross-sell

our budgets to deals. improved productivity rates converted solutions strong, allocated, remain pipeline, prioritized and deals as nicely ACV continue be Our X-figure progressed including and several close we

build We growth. strong support pipeline our well future to a continue as to new

accelerated the bookings fourth continues to revenue total our subscription Recurring year-on-year, into for of reached and in it to revenue. XXXX, portfolio XX% year. lines now of With recurring of quarters Moving full fourth $XXX.X the of revenue last XX% SaaS compared year reaching safe revenue of steam. up again, of the on mix That's gain XX% in the a say million, making the XX% fully the is we growth our momentum details recurring quarter. company. the revenue total in showing to to the total XX% Recurring quarter are revenue each

revenue growth XX% total our subscription of Digging line reached representing with year-on-year into $XXX.X quarter. fourth million XX% the in the specifics, and accelerating to revenue

XX% $XXX.X million. bookings Our the $XX.X than the that, $XX.X the revenue record The each major services Of and of in was year-on-year, quarter. SaaS growing XX% of faster coming professional $XX.X maintenance in with and million territories professional that's fourth and the over revenue at services million for million, had Americas was quarter. a grew XX% our recurring maintenance quarter. with Americas reaching revenue Geographically, revenue from

been million EMEA it across revenue and the of fourth in geographies APJ to strategy, XX% foundation and grew in by of revenue. by to to XX% $XX.X in our is million grew year-on-year quarter. strength see $XX.X a Diversification has great the our always all

the now the XX% that in growing non-GAAP We year-on-year. of of universal reconciliation EMEA press non-GAAP line full year release. All on and our Americas, discussed in be also reflected GAAP the P&L with the to the APJ each will strength see Please tables items see basis. a full

gross to XX% gross in fourth compared costs. That's profit margin is gross our and our revenue of $XXX.X to quarter management an expansion tight last margin year. the The cloud quarter XX% of due million. fourth Our outperformance was the

the Our of operating $XX.X guidance. income end our exceeded million top significantly of

Our operating revenue by came driven Net investments outperforming leverage was significantly in share, outperformance. $XX.X and also diluted million, our our that's disciplined guidance. $X.XX at per income

growth march operating of year, or full of towards operating XX% meaningful we and growth XXXX. for Rule XX% ARR and income operating margin year. we to expecting $XXX returned continue We delivering revenue Moving $XX.X million in XX% to accelerating at million, XX. growth a in review great to margin. ARR, about full revenue on came began finished We XX%, with profitability, to the X% and year now year the non-GAAP breakeven grew hitting the

at EPS share. came Our diluted in per $X.XX

including We in marketing. with X,XXX ended approximately employees December worldwide, over X,XXX sales and

X% year cash flow full a $XX.X XXXX, the free cash margin. was For or million flow free

are are transition, beginning at reminder, XXXX of confident the and this with a free subscription piece we As flow results. after just we to still expansion cash we the model be the to inflect our our that consider last of

our to Turning guidance.

business, seeing and that in momentum to with guidance quarter XXXX earlier. the XXXX, meet the the our Matt reflects the our first the we're outlined combined For priorities year full confidence

million expect midpoint, we first million year-on-year million to expect we of the to the at quarter income $XX.X XX% range operating total and $XXX For $X.X the XXXX, which $XXX of growth of represents for million quarter. in revenue non-GAAP the first

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

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

revenue we to commitment year the of our income expect in XX% of year at leverage, XXXX, $XXX range operating we in full midpoint $XX.X Reflecting the million to now to be full range the of expect growth continued total range. to million. a million, operating $XXX million $XX.X year-on-year the For our representing

expect million about average we expect to and the We our diluted EPS $X.XX in $X.XX to full diluted for share, XX per million between shares weighted XXXX. year be $XX.X about taxes

revenue expect midpoint. XX, about million growth to We be annual and $XXX at million at the or year-on-year between XXXX, recurring XX% $XXX December

and We the free in first flow of to the Day. are the remain pointers we for be about also the full to million target expect time range to issuing the flow outlined year. confident at model $XX long-term for our provide help cash Investor a $XX XXXX, to also million expenses year want I guidance cash few that for free and for we

and an as revenue. our dollars, we improvement to absolute to While we see of and percentage both expect in a in in innovation line expect do sales items continue engine invest marketing to in

our marketing IMPACT and quarter Tour Tour We in XXXX, second expenses quarter the begin quarter. increasing World for IMPACT will once that again hold our the our in event impact in World XXXX customer of our second

X.X% expected total revenue. is CapEx to be of Our

continued amazing our motion deliver platform. quarter tailwinds and made up, our of we to sum that land demand showing The year and durable and results security another for thrilled a have. execution stellar full must identity have to So are expand

Security, well the profitability XXXX I As positioned levels in call flow cash to will a model all drive the leverage areas, and deliver discussed. and operator to our Q&A. company Identity and just turn across Operator? in expanded is recurring for the I CyberArk revenue leader the over in now

Operator

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

Saket Kalia

market question start on way, love prepared into is, to on sign you. your market, given I'd by maybe remarks. that is in noise for make some the remarks pipeline with the single you helpful, Does think of how the are to that very the in identity or The sense? workforce the there dig seeing just And CyberArk what Matt, you positioned? competitively, do broader platform? prepared

Matthew Cohen

SSO does, It I is is say as we think and the differentiated I I that that in the in MFA while approach a that kind environment market. workforce to there, of thing competitive question. and are independent really first would as security that actually outlined important. said prepared it's happening are remarks, strongly, and of the is our great I of And unique some the And the -- things feel

longer cover perspective. have them. how identity workforce no for sufficient actually security They're an must the from You you

users, a us a reinvent access and or differentiation kind of place the the same browser of what management, where legacy in so idea you the web a that or same that our point, would we highly security and of notion kind them in on of consider us, those solution it our space takes within in our to heels in put that -- take holistic the security unified a when And sit the you as at also time connect further. can there market. as identity some a your layers do even in their of out and the back are manage actually we have our can users together password sessions actually, for puts that the ability Then platform Privileged you to and terms that there. brings the that way workforce of conversation secure brings but approaches

the to we're a we pipeline. as really entering atmos we're competitive it building see of And XXXX. kind in We now feel our our seeing hasn't compete like than terms there right ability out ever in been for us we certainly, that sweet into So spot better market. go in in of

Saket Kalia

And Got to to maybe follow-up my it. Got free you. Great the I inflect I the flow it, see very for cash guide. appreciate and this for year, early know clear. it's Josh, are want that cash beyond maybe free some beyond the about takes us for that about that and talk metric XXXX. puts you But XXXX of metric? structurally what with flow to anecdotally, think

Joshua Siegel

Thanks, Yes. Saket.

to we at And years, course, as on seeing having puts up each next the that around year. And the think XXXX, really Rule of full-blown flywheel which bookings that renewals, mostly increasingly our leverage that the then, operating tripping are again the we're it's really through we going we in effect then and years and it's expanding in already getting income the couple SaaS the reflecting think it's get the renewals the XX. we're gone of last subscription built the years. about I this that is road in round of to of of couple of

confidence strong track the us goals gives that there. so hitting to medium our that we're And on

Operator

is next TD of line Shaul Cowen. with question from Eyal Your the

Shaul Eyal

guidance. building it Congrats on prepared journey on well results me my expanding congrats customer CyberArk's that remarks, you. on Matt, to through kind pertains platform. maybe journey. let those a of us as echo also taking Thank and

where release to can with I expand opportunity with us what maybe with CyberArk a press else a is coming that Indiana here have their top the follow-up? they years? guys on out core put PAM in expanding they're just you You a with deployment? University And relation on And CyberArk it Hospital, doing of share good

Matthew Cohen

It that's before us, on I help thought is IT, move where spectrum traditionally Shaul, opens and just Thanks, everybody indicator identities, a cover And people starts full we kind after expand see board of a the market the go as customer such think the in the comments a of for Yes. us to we of really the it of when overall you walking remarks. remarkable through. understand opportunity do which enterprise. up will, what to it's us SaaS our of have I thanks particular do good the customer of descriptions want partake the we what fits everybody opportunity we for platform. is example, beyond about as was and kind that to bill, of if the we When that

started And they start the started bring when multiple idea get But the build as such identities road expansion is identities. map solutions, more opportunity people can on the to them customers the here get on the there's into more for more out with that solutions platform. longer-term an even like we as they bring

a secure. I or the at every area it nonhuman for think or good of way another think we market is us point proliferation CyberArk, identity, equals that be whether us about can to human another for machine here

And bring take platform. their attack under aspects the into and day them they as and to other start like really that's definitely so in threats for customer day if identities health of by help out come all kind enterprise that, all in we care, you of terrible also to sitting a expand that's their ransomware can years

us So great coming certainly actually the for example a it's see and care a vertical is we years. exploding health for that in us

Shaul Eyal

it. term elongated question, or sales you a macro-driven Got heard mentioning it. I my Got And next you either haven't one. cycle. Josh, the for

guys, than them of other unlike is not macro or kind maybe period adding like than of Are sales cycle your think and that? handful a you behind elongated elongated implying, Why rather as sales environment I companies cycle. companies things a those covering to actually becoming are you're stabilizing commentary? amongst better better alluding stabilizing

Matthew Cohen

is the is it. When Yes, a is about we're both whole you've that, are cycles. about at money it said, actually colleagues and being which than I'll kind the cyber, within talk something areas one. listen, my And There important us are speaking, spend talk there about. of excited take tough and that proud on C-suite That it particularly of talk tough cyber But they're that to important. I prioritized. year, the everybody our through what's of -- generally living more question heard is throughout with of is has And customers, And stack. the tech that macro. no most kind rest to budget

to putting and those they're on And Identity spend to year, they going of luxury with the spend, together are their us. areas lucky when been the we've throughout spending really budgets, when to one of customers be Security don't where they're avoiding going have

if customer broader ground us to so our you door, And base that more for opens out will, in market. go and the within even a much for harvest into the fertile

Now what that said, adjusted also arm execution are, we sure as we boxes. checking I make is proud were to extra our we about that the actually

team them the world of understand sure make in early. CFO structure bring to Don't value help the trained macros. into the discussion early actually them. on Bring statement. Joshes We to they We the the these them understand of more were how avoid part the the discussion to so deals appropriately for

we've but tough do our phenomenal the to execution the of a macro been of year able more effectively. much nature mission-critical it teams, navigate solutions our the between so and And throughout

Now up here the would see back get towards forward. half as I shoring we year look say to we of some start those we the macros of as

think So is of the it But I testament to the role speaking, we and a encouraging us as for look security Security Identity today. generally out. that's stack

Operator

of is line Fatima Boolani with next Your Citigroup. the question from

Fatima Boolani

massive a just on when about the is what anniversary of Matt, But installed with momentum SaaS lot family I the did the brain your we're and coming to start solutions. essentially you seeing transition. CyberArk yout you, to talked new going multiple mark customers to wanted with landing between's the now you're peek base into with

love follow-up for terms and Josh, behavior >And renewal any quick on of you commentary So potential I'd please.? patterns. then buying or cycle I high-level wave like have in from name look could a

Matthew Cohen

Yes.

question. great So

is next and that we think I to are first the what we to as we see, continues purchase out these time all, that go landing of logos compress.

can a land can get deal somebody we follow-on QX. QX. or QX, So and we into in

of before even that get excited so the sales the a of anniversary And expand to of that's flywheel renewal gets things because and to us we to date, one honest, most the able And accelerate. first the continues to be we're the motion. process land drive

as of come compelling of only prime as as that upsell new have change to more the of over methodology we expansion kind and the we're And they sales to last that we enabling understanding the of opportunity they to all base. do that's that quarters, being point team a sales upsell existing where of and in start kick of the motion for solutions conversation conversation creates basic just said, And kind Now telemetry, have, at play. mentioned, able couple an renewal -- consumed, the get you on these contracts actually be on our the in not always. into read to see more of up for different renewal the also you a what it's but event because a cross-sell should suite of there a to they the introduce think

really selling And that more we'll the then that's maps becoming and when -- in road open. this part with become customers, make what's the introduce improve wallet other cycle more and to is to continue that proficient SaaS we've that they next the the understand through renewal adoption and seen motion. sales team it's solution something improved best already curves sure the of at And even has again, profession as

Fatima Boolani

on perpetual impact from maintenance . help you quarter work growth I of prior customer this what on customers simply I'm that get be predecessor you converting to through converting Josh, a form coming the in prio-perpetual we of as relates perpetual appreciate maintenance. base on maturation, proportion to factors going if you growth of is the matter, the it related any And any ARR and customers that. some your customers? if and had sitting as can characterize to will, the curious

Joshua Siegel

Yes. Thanks, Fatima.

as into 'XX go already whole still conversions bunch a think at growth coming digits even back mid-single from our quarters really 'XX. seeing we and We're of look it single I we of and into digits, conversions. ARR reflecting

we already we view. what We're in really should similarly as and think 'XX. I behave it XXXX, We look think saw at the changing that not to into 'XX end

Matthew Cohen

Is are is you're in and they base you And you other patterns, just versus while a rest try still base yes. buying add this maintenance, of you the was perspective, first the to from of element at less base? is that just their buying top customers we're okay, they're that will, the understand, expansion I'll on And thing what's looking answer on -- strategy when one any which of the analyze that, there solutions? seeing if

push When Then who are in sales, solutions you're much gated as a otherwise, expansion they're subscription and you're analyze fast those them wanting accounts. or is the on really platform. to base, the to we yourself actually paying in to SaaS get than your the as new expansion because them maintenance hard move at rate the not sitting people buying their on model that different which possible

them move because be customer leeway And bit us product perpetual on higher. flexible that fact, upsell when SaaS is not them more and to we ready, with or subscription significantly self-hosted when that when to happy and so to move a to move gives SaaS, ready an that they're in them on-prem to little base the keep move they're over them

as think said, going in us I you're strategically, that XXXX. So Josh aggressive to don't be see

base start to for our NRR any because able drive of call plans really out own migrate ability by you'll see customers their excited have. I to But be SaaS. that to we think we're

Operator

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

Robbie Owens

around speak into approach? an to full it your IGA it you IGA? fully? when Is look more thoughts going light the market Matt, opportunity, Or you're that identity are something is to to dive what

Matthew Cohen

of is siloed of access they nature posture can. still their are the most at think in robust that detriment question. the And that implement organizations that Rob, I silo security that great posture. kind of not taking customers and And we fundamentally in that security PAM see the

stack modern in focusing our in being base. our with to identity management adding workflows on and increasingly out combination sit the even manage in to able customer SEA our IGA combination PAM we with So that solution, there

see us so to I And continue think in that. invest you'll

center, these that you increasingly and into all modern order to if large-scale cloud, legacy partnership workloads as a win with you taking believe and again, real to that approach. we to do move we hybrid estate, that Now as with But need bigger the sit have business. data assets move somebody a a a great fine SailPoint the in in needs we go deployment we're SailPoint IGA that across

have of from team governance, has and us to this components our I to platform the And what to market talking days And hear more unique. all every we me makes point us bring the and hear that makes come. is that of what of from privilege in controls, That's time, unique. think access solution you'll about that components components the forward, they knows

Operator

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

And is and more the I big little cloud to a Congratulations understood strong on just an opportunity could Yes, your on this us additional give secure about product. think access to what detail results become? going bit wanted of you some guidance. how

Matthew Cohen

so customers and And the reason favorite they a in community for developer there pontificate in granted little world these have that users thanks about entitlement frankly, And moved bit asking he over we a little fast into their it. control. of the and to me a in for Jonathan, speed. the idea gave estate. order But moved, lack all cloud as here, cloud they and my that real unfettered leads of to to access listen, of to fundamentally chance out facilitate area Thanks, about here good that believe

of we to the security control. And Now we into the make comes what the to environment. back that discovery out we important, with estate trying cloud sure managing like way, of there really overall But on-prem can of think real data like, tap a and at ultimately, and to great that that's have harvest. that the they're world, them some understand managing partner posture cloud by looks that ways and able lot presenting look to even vendors we

solution levels, on our you the on-prem. is SCA to did so And need idea cloud have [ same you your ] of the the that as estate in control built concepts same

make actually isolating You that sure need sessions. you're to

controlling in sure be need ability to there to record, able sure you and is make especially make to actually You need to entitlements, that the you that understand audited industries.

And in you of But PAM. need actually, so it standing our it that does, SCA solution takes says, environment, don't what all access. principles then the

can of assigned You have the access. or at entitlements actually point privileges

the level time their they inactive, a can Privileged that start and It's they accounts, cloud get that when can other the We a underrepresented their an that cloud is period fundamentally, right personal we that market. And talk and represented log the moving So the work entitlements is console, minute cloud to I actually vendors we're the I we of out, for sitting can approach. drive these a into it into privileges user, area to that they of we least entitlements X access, can actually and as right of piece at account, can and that. time. you it, can privileged services, those so account apply remove there use federated TAMs a in the out cloud this and a believe, is can excited developer log when not all hear, about in of of capitalize that uniquely positioned cloud are actually security on control the

quarters while with, we're you up for early do days, I a we leading the the remarkable to meaningful secure believe be would conversations tell meaningful -- couple area then our that accounts, I TAM is that our that actually of significantly of to this and growth. a and ARR in into how it's while a numbers long-term me, us cloud sets contribution our are So that enterprise at market, can

Operator

Tal is of Your next line question America. with from of Liani Bank the

Tal Liani

A few questions.

any Is client? or customers. one with . a synergy? by a What of for first lot synergy that customers spoke cetera. us What's land of one assuming management, through the et or a of to with journey with the terms the products? existing in is, a journey products? about different incentive to first client go of of your want products to it view can with it, from when motion I'm other Let's they The synergy sales a continue Where you happens is You take PAM. there you them take the one. point

Matthew Cohen

Sure.

examples. that of it depends you like think we the X I So different that you and on we or about motion, think really about the expand when give organization, will, synergy I'll if priorities think

where their machines might sitting organization invested You environment. and in in they that be out in their build an application modern heavily nonhuman a identities have to And and ability their IT move that's and if who the of identities. step priority secure likely their secures users most over the actually and it's next PAM case, from the someone the organization, to nonhuman

in we can approach, Conjur our controls easy it way, to that how Secrets can create and native a privileged least a these them product. we hey, or to can talking developer with the take And we do but friendly help about our Cloud product understand I'm is, especially a Hub deploy synergy

so around area might An areas, some And they've be you and financial their see And you might down ransomware. health is path okay, towards be expansion. where the in services. an go core be And that those be customers attacks might sitting first IT. alternative locked care, controls might it of they high in you

end points. They their need to to they secure Now need servers. secure their

of that be the EPM. of And actually of buys little there's pockets customer, areas deploy groups, start that a move third X over of different set honest, motion type in in that's in the to X, they expand then case, in And next into within and for customer. and X then everything, And natural extension enterprise, is upsell or expand they a to to look or work time solutions. to a different bit the broader that

of run to across So unified audit shared that unified is a services, ability single the pattern platform is all identity that. to one with the way other able element a there success question no though an the the drives be answer typical to underlying is

across analytics ability The run to of that. all threat

have And they consolidation not although consolidating terms day customers, they're of the longer these so for the X aims they're the being idea across fully term. future-proofed in platform, the

another was question. I think there

Tal Liani

with you there's do it bring to there? where vendor? vendor an existing existing Or have a is cases, replace new features compete You features is you where legacy a areas already vendor or that an these no greenfield in such to And kind of

Matthew Cohen

Yes.

and maybe it's general, think, lot for it's that's not are into I cases, into ready agent. again, access invested actually, stack. of a is we're competing sitting not there. they're outdated the legacy concept the endpoint them. things of EPM with the in new yet the In endpoints depends. of you a just that greenfield, move concept in power privilege it move or with sometimes it's modern having their and but EDR the When When on something EPM, for unprotected, And you lease understanding XDR,

level, level, work buy. group into generally you When tools. they're at the now to the open maybe but group working some enterprise secret the work they're At they're move source make space, using an speaking, trying

you're for the example, on top the and replacing themselves, that secret sure, of for the In sitting and developer providers services idea stores. source control in you're top cloud that's sitting greenfield, cloud that's native you're of or you're the space, or something on So open going this new. of

the took you kind there real the around represents that in but things of think I out quickly there, the really see estate, I that So market. we

Operator

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

Joshua Tilton

just your is identities pretty broader pilot act market what secure talked wave organizations to you PAM either tailwind feels Matt, a about the incremental credentials I that's remarks. a to for a hit maybe in see new was as thought like identity of big interesting the potential to prepared How copilot accounts the market? it about very you lot or do to

Matthew Cohen

level right? and question, larger identity good point, a And bring we that identity any to into it's our it them of believe really the all which Josh, Yes, can we of is needs speaks platform. the security,

So cases, hybrid in privilege human replace. it's With, a the take meant like we it's machine identity almost swaths all some if of a one. and that mirror large identity or generally augment in speaking, co-pilot granted the that of a example, human to machine

secure as to us AI kind of And to by vectors technology them up example great it co-pilot be creates against products of then able is that creates need new It identities. to themselves vectors more where for the into our And so a bat secured. vectors of to build And a be is lot able takes to growth. going kind we're make of them end with to to make multiple effective, the off, tools that AI. compete It attack better our environment. also we allows as fueled AI

if just to coming of was any the it if developer a we're the a secure the market increase on in, a I where you're number thing. coming good the your in workforce it's of to need or to that speaks market, on and member as going is we're And identity is if and it think identities security new new market

Operator

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

Hamza Fodderwala

going to the installed you're question Sorry customers I'm time? there's Or sales forward? plan X,XXX, had how XX,XXX curious like you helpful. opportunity really like go for over more velocity that's of X a were Matt. going still around base, growth do after the distribution It majority to that. driving XX,XXX, the feel about I within from you really the and going to be continue prepared opportunity seems broad to in remarks on improve

Matthew Cohen

on if think T-shirt And logos. everybody question. and going every be new trying and you talking new to grab equally expansion walks opportunity what to get wanted and with build about for thanks me you Hamza, but the drive highlight happens, the a because logo Yes. that's go wonderful that the around he day our understands able our how it's to ability up can off us with channel. that CMO, were And for he's I I because base to important excited within the

about that do just you what partners direct. as space. Now said, our It's channel about in it's not we

it's in the best whether CSIs. have channel world, the the partners We

account an are are partners if heard programs. it's area an the attention the MSP where one bring driving out their to this more turning I'm excited of even that that reselling there it's which increasingly new of XXX them which example Fortune whether quarter, us a was is into about, to logos or You able

be new new the after able you to platform even own in entire market, product flywheel be the and into you start represent go that to customer go of you set. to to a ability the base, down its And enterprise as to their start vast embed to of have and terms logos able be your of all able to the and becomes after in within them logos MSPs with

on you're think productivity and do of to continue a able to outside the force ability key our we our which we growth point our and get driving see, a opportunity see in base this productivity then want ingredient the channel here, that and to also be market. to is the more multiplying of broader to capture really I channel and critical So want hitting effect is of the

Operator

line Ray next McDonough is from Your question the Securities. with of Guggenheim

Raymond McDonough

after. for get a for specifically to if on MSP the channel to around Josh you I I them wanted then Matt, opportunity. question could up you how down demand the market? Maybe Matt, are What the roll cyber help in insurance answer perspective for help MSPs of And and plays you those to that and from attack need enable follow-up But help doing achieve into what the Hamza's product market -- to follow the your one terms a of much can penetration?

Matthew Cohen

follow-up Great what market serve got that's it the and We've investments think market I in happen. by the about product Yes. management MSP is better. to the needs of a wing the MSP make And there way. thinking product just actually to whole

of some built we've still built. some And being it that of is and

as a program part the bill CyberArk in is need we reporting, flexibly. be tracking organization do finance but concluding of able product parts to to us, market even of think and that ability entire of the easier where the for to we're holistically. that of manage effectively the contribution of we The and the All more are these product, tenancy more the market. of and do idea easier like the on side, The what way serve platform. it to our within We run MSP it to in idea things which throughout

the It's And the of months XX not of big own one way. offshoot is an program. think shifts we've thing. think bit its that's It's of that last the so made little partner a just to in I of it channel

end got I and all driver with in towards towards people Security. is Identity the the absolutely of On in between PAM, intersections point, in It's there our mid-market, a is one lower of a insurance. end, enterprise think factor of business. can you've to time the growth the cyber insurance whether your cyber the get somebody drivers

an factor up and AWS by market. way, the it even can quickly way MSPs system those only insurance might able some their to for might routes of it's marketplace to procuring easy they the premium those in MSPs, to be what be the cyber look make the looking procure it companies manage complexity the lubricated a whole for Then stand leveraging it. addition requirements. and would They like. that by them way, through sure then, procuring from them it, are not But of And they're in obscuring their meet and through any

about, is about the particularly to us there's And talk of we for that we one the juxtaposition could tailwinds we take any routes one that that talk we and one and picking forward. market nice and a always as move you're on

Operator

call back will Matt turn the CEO, now closing remarks. I session. the Q&A the Cohen concludes to any This for

Matthew Cohen

thank optimism for in our to So partnership. success It's and and up work to you by about and we're for their talk for only our future. thanking had to the able employees hard of here them partners their XXXX that we I everybody. want our to finish dedication. want and thank the because support customers I

mentorship to his thank Chair. partner role forward the thank big last the his into talk in And with year. I for as on over support here. long-term personally, track Executive add I But to you a the strategy Udi look to and I want to personally, also to continuing him have him

to soon. and to With all look seeing real all said, care. forward that we being you Take talking you

Operator

Software Fourth Thank Earnings This you CyberArk joining. for and Year concludes Conference Call. the Quarter XXXX Full

You may now disconnect.

CyberArk Software (CYBR) 8 Feb 242023 Q4 Earnings call transcript