CYBR - Earnings call transcript Q1 2024

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Operator

Thank you for standing by. My name is Kath, and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quarter 2024 CyberArk Software Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to Erica Smith, Senior Vice President of Finance and Investor Relations. ahead. go Please

Erica Smith

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

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

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

release any today. to any or undertaking forward-looking statements any expressly disclaim revisions We statements or application made publicly to

measures on Reconciliations the measures updated today's available A investor today's also on directly the discussion Relations be non-GAAP outlines to financial release financial will section. webcast in in the is Investor are call. comparable as call. GAAP today's our available in call an Additionally, most also of press financial well discussed website as in presentation today's that

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

Matthew Cohen

a a weeks who, is most need the Executive by complex and information acknowledging out Founder secure most Cyberark's today. call joining ago. identified organizations. valuable we start Udi and fit the market founding along Chair CyberArk's celebrated to Thanks, global Mokady, within which for Erica, thanks, the team, visionary world's want the everyone, XXth to with a few anniversary, just and I

a its list. access in moved has a segment grown of priority CyberArk evolved has become and management CyberArk identity the way, market, critical Since pioneered security founding, the ways. Along CISO's privileged consistently the many and layer that up

driven to our world unwavering was mission against success of the threats. cyber by Our securing commitment an

we cutting-edge To and So together, execute transformative importantly, mission, value can innovation fearlessly delivered our customers. most a move to forward. our threats. in escalating of world consistently all we Perhaps constantly a

the We security day every on first we in have decision relentlessly been make of mindset focused our founding. X since

execution recognized later, has security. privileged customers identity and As first resonating with to level a as that all broadly security mindset identities unique controls on customers. with the our value strong leader we created are in the result with secure years proposition of is platform the XX right partners, of security our identity our trust our and Today,

surface growing that of the only confident opportunity. am scratching market large are rapidly and we I this

And income QX Our demonstrate by Total solutions growing strong The XXXX. we XX% durability revenue, on results highlighted quarter ARR million, of our is million, first and we ARR built year-over-year. throughout XX% exceeded growing for $XXX across our results execution that and $XXX EPS. of experienced year-over-year. the of guidance demand operating significantly subscription momentum

our $XX.X the revenue operating million, quarter up share earnings in Total $XX from beverage per a at business significantly big the was period. approximately XX%, came income first Non-GAAP $XXX loss loss in $X.XX a ago XXXX, highlighting accelerated million. $X.XX, of model. Non-GAAP growth year a operating to of improvement in from reaching live of million in the

point to cash the million in $XX last report profitable commitment of and quarter year from to of significantly free thrilled growth. are flow in million up proof $X We for QX a our

will confidence gives talk momentum metrics, full the year for all business and to results our raise Josh XXXX on guidance of strength us which The the about our later.

number Identity a and of the machine by digital identities. success pace ongoing increases and common breach. the transformation, exponential to including secular cloud human attacker fueled the is major ongoing in tailwinds, Our innovation, denominator migration of is every cybersecurity in

Our attack, XX% have in from organizations a XX% an suffered from research year. identity-related about cyber increase has of significant the over shown that prior

privileged Last quarter, and merely proliferation by risks identities entire today's landscape, recognize extensive the controls security The and IT, by spectrum and are CISOs we afford. managing safeguarding risk a identities identities. security the AI identities faced security severe of the increased threat discussed customers for rise human elevation and challenges further of of they cannot exasperated workforce In without across developers, machine CIOs that is access of machines.

to result, at no organizations all We CyberArk address longer secure solutions customers machine in rely and helping environments, as human yesterday's access on can paradigm and identity to shift a today's identities, problems. are undergo need they a As all hybrid security. multi-cloud and environments. They including approaches

effectively. deep expertise from controls to Our risk our retailer and privileged for domain differentiation group comes mitigate access each identity and privileged

each secure the group. of life entire across identity We manage discover, cycle and

the to a all are privilege intelligent controls positioned We security comprehensive from platform. zero vendor access across just-in-time apply identity access, standing a standing best privilege unified approach, and

flywheel expand begins It momentum. new land quarter. nearly all signed to Our and first with customers motion and the continues the logos, and in XXX subscription gain we

logos day and with groups the more power security. about This land secure to from half majority identity or our with importance approximately X. PAM, the the choosing two volumes speaks of solutions new of While bought of many of identity multiple customers these platform

EPM examples with motion and has group database that to Today, logo that beyond selling new perfectly personnel. services marketplace. included that our in identity shadow evolved a to closed quarter well developers, high-risk Cloud for was servers, showcases only the and the flows much exciting IT a market, ACV a platform from workstations financial The administrators. securing deal PAM new protect X-figure of cloud PAM deal including Azure programs IT users, and large modern and routes privileged market which broader a Conjur and landed few PAM, A company

and and the They a and planning traditional and Health Privilege about example, resolution. NHS ever with browser. secure Cloud grow are powerful today and their have the and by than of And relationship new with excited -- SSO SSO off password solutions are new with our Cloud with we Secure sessions, their workforce healthcare future. MFA customer kicked relationship we we EPM this wrapping workforce Social and more quarter, workforce in an easily footprint to As We is Each the identity have secure our Care. web U.K. customers of MFA body CyberArk manager, to identity and great Department access verticals. reimagined more great A government our controls are in circumvented.

and head-to-head competition logistics large after pick IDAS a a vendor. leading for PAM workforce This identity CyberArk company, a with quarter,

Our factors our platform best-in-class amazing were this logo. security the and deciding new winning breadth of in

also expansion base growth solutions motion all our management vector is base quarter within strength is Our across our deals. Overall, expansion strong important for and our with customer platform our a CyberArk accelerating of we sequence an in selling particular had business.

and rapidly. devices. managed The machines world proliferation of remit machines of often a these The the applications Traditionally, an machine security and machines identity This components becoming identities grappling identities. top to Each variety outside secured teams Organizations secrets complexity across is changing needs workloads a growth to AI sits the from of of certificates. ever-growing are from securing multiple managing control. of one to the and further is machine is number be larger life of security to IoT of to to keys digital cycle with bots accelerating challenge.

need programs platform. a exponentially security realize to they local and can beyond practice scale through identity enforced and enterprise-ready is single an this security threat loosely scale need However, landscape. security increases identity into risk their their identity in open policies approach is machine tools. tied unsustainable machine today's They human and Customers source increasingly program that vaults,

while the focus win Pensions I customer am identities they U.K. stronger an the their Department on map XXXX. our been kicking a focused with as CyberArk long-standing program exhibited management expanded with that security relationship great posture. us on all machine for One a and robust are human With identity Work cybersecurity with was We a and key describing in has expanded since who aligning supporting off CyberArk the partner, for secrets road U.K. government's strategic a program. with

looking a about approach, servers, to removing SSO the it for can and protecting lease attackers. identity-based strategy. endpoint, deal turn this And to protects one using in rights broader also food is which extend entry X-figure reasons ACV workstations as strategy how quietly also detecting most Latam attackers and and quarter. and This in targeting the everywhere being the By that its to without endpoint first organizations local customer talked organizations enforcing from for approach needs goes off company the and threats we MFA. EDR part are high of This is beyond multinational EPM a proceed main We identity the point the who attack the reduce agents workforce earlier deploy administration a of CyberArk reimagined signed common detected, privilege surface.

and experienced servers. the past to to the solution's a adenine years, ability achievement in During and to growth strong trust few $XXX and is testament recently surpassed workstations zero EPM ARR. This extend million security

new We and in are growth customers. both existing excited about the further our EPM business, potential for with

exploding interfering the though to talked them privilege their innovation. without as of start the speed securing also population We of and developers about need with identities

our the cloud without least multi-cloud change environments. Access privilege by hybrid scientists and or preferred of and Cloud solution having just engineers to natively and in their work standing data provides access privileged workflows. still permissions while to with zero privileges allowing SCA, Secure best-in-class granting Our controls applies to It principle developers, efficiently

identities. cloud to to traction CyberArk exciting include major important with workforce our for customer solution. plans releases. to recently and Last is are helping the our broadly managed a innovation MSP X-figure move routes our we access human identity. QX they continue new was security center, And Cloud, partners the cloud, discussed solutions about the and our reach quarter expand accelerate that their excited CyberArk solutions market service a and SaaS To console. to in by this customers' in ACV with a Privilege quarter, step XXXX. and most the a increase incredibly MSPs nonhuman consume an launched single through the signed are deal deal key excellent high MSP the a Gartner, our deployed on market managed the also expected see focus secure to channel, retailer, but build continued MSPs. console XX% we to first cited secure We secrets as providing offering. that And a a differentiator of this By and and we year, command services customers with to According

use of first cloud-first a threats world Browser, for all purpose also and solutions. the of identity-centric enabling are built our productivity and secure while about browser. ease against the industry's Secure availability general protects very across emerging We CyberArk It is customers CyberArk excited

and Secure Browser integrated workforce customers unified believe is attacks, serves also solutions, Logan [ but designed seamless is providing a security our our also cookie ]. as drive to for experience Secure and only beyond of solutions. access a We methods fast-growing customers, and user not from like attack Browser at will adoption protect platform. harvesting natively our portal browser-based direct our help enhance entire both It with to

its Lastly, of solutions, recently two CyberArk has workforce identity. and Privilege received for Endpoint Manager authorization FedRAMP high SaaS

move in CyberArk's strategies FedRAMP help principles future. to efficient implement and that the a public High and more to investment secure zero Our sector to commitment highlights trust adhere

you our As customers more a excited weeks. about we what to these impact all developments, great I'm even for of in in excited have I by am in and Nashville all just few talk store at as

tremendous truly of to innovative about. talk lineup developments have We a

please to moment, evident deeper Josh deep a this go but the of look there. of P&L into morning just we wanted focused my forward emphasize seeing you many tune and that in, most although will So I tremendous to in comments results, profitability QX the to targets to introduced and deliver on on and we equally was flow. last track in on remain This potential we we long-term well for committed remain year. the growth, cash our delivering

main four off first first in kicked the will with summary, you I our XXXX momentum continued and the a we quarter, In strong takeaways. leave year quarter. with from

remain of and is CISO's list. priority strong, demand our for identity First, top at the solutions security

human our to is the apply right identity, Second, platform machine. unified every customer security meeting a level identity of clear privileged requirement to and controls

we and win Third, for and to in opportunity. capture security-first of making are bigger investments a clear us market approach is disciplined growth have And the helping a runway our long fourth, large differentiator share a a for market, deals. CyberArk growing

you. Josh, turn I'll to over the call

Joshua Siegel

free operating cash of revenue margin Matt. QX, and healthy metrics. expansion reported across quarter significant another We for exceeded generated flow. Thanks, strong CyberArk. expectations strong our all drove guided growth ARR We and

Our strong platform our results scale. the security power for broader we ongoing business model highlight our adoption the and durability our solutions, as of the demand identity of of

compared revenue ARR to ARR demonstrating and that's significantly $XXX momentum XX% single total first the results. reached in our to XX% growth growth. last now million the in growing top year-on-year annual the recurring was of million reached year-on-year. net $XXX end $XX is $XXX.X our $XXX guidance ARR into and of $XX exceeding revenue. million Total million year-on-year, Subscription Moving added about like-for-like activity conversion quarter of accelerated million and reaching business, represents XX% million, our continued XX% Maintenance grew year. that's and the a in the still new ARR, digit We of and

growth. strong cross-selling upselling of has solutions and our strategy been Our significant in a new factor

quarter, at an customers and to of ARR, of grew more the This for cohort to $XXX,XXX fact than than the first the of over is X,XXX demonstrated ARR cohort $XXX,XXX, more the the grew end with of customers. customers XXX over by they that

into revenue lines. of details moving Now the the

For was for the total and the last XX% outperformance subscription contract average revenue an relative growing first first Subscription XX% primary experience total million, revenue of XX% representing in on $XXX.X self-hosted quarter, and the million, deals $XXX.X XX% bookings, That's our to recurring quarter our growing did our compared of we of in revenue. accounted revenue, XX% reached while guidance. year. year-on-year driver to increase duration year-on-year was

recurring $XX.X $XX.X Maintenance and million. services was million. that, revenue was Of revenue maintenance

and growing up I that showed line Professional revenue about levels. services XX% year-on-year, longer revenue bookings year-on-year. renewal was with year-on-year. $XXX.X regions was million. EMEA $XX growth, geographic From million, XX% million, XX% rates APJ and $XX our duration million, historic strong a was $XX.X all the in Americas spoke maintenance benefiting healthy remained growing revenue partly earlier. from revenue was perspective, Our

in all discussed our GAAP to of full the items press release. a non-GAAP will the to P&L, line non-GAAP basis. be reconciliation Moving the see on Please tables

outperformance, slower driven gross we in by the to The $XXX.X $XX last quarter the quarter gross certain was of incur main we that pace, outperformance primarily income the the gross and particularly operating compared three, expansion The our did driven was was profit expect revenue outperformance. revenue first timing experience quarter, now marketing-related million. three to First factors: income first the or a by operating In hiring million margin in expenses quarter, XX.X% R&D. in XX.X% second of our margin, year.

X,XXX million outperforming Net income came per in $X.XX We at $XX guidance. March approximately our and or diluted significantly with share, sales X,XXX worldwide including ended employees in also marketing.

We our $XX.X flow, fully of sales thrilled We our reps, were strong million flow see healthy cash growth particularly quarter. deliver to ones. continue quota-carrying to in cash in free the ramped

strong particularly for partly and the bookings fourth cash of remind to flow While would quarter we quarter of first quarterly, the guide I the cash do in function not flow and seasonally investors is stronger flow that is cash XXXX. a this in us strong year, renewals

expect year, follow to to an remainder quarters the third patterns in fourth cash of quarter. quarter and seasonal that's third For flow second the typical the lower and from uptick we the the

Turning now to guidance. our

revenue subscription the XXXX, bigger of our overall the expect $XXX to do mix quarter a $XXX second For portion at year-on-year make recognized million, of the to we SaaS in growth XX% impacting revenue second up expect which of midpoint. quarter, million represents We total in period.

million We quarter. the in of range million income second expect to operating non-GAAP $XX the $XX for

weeks, World in a expenses begin planned a increasing will our events will Tour and we the marketing couple reminder, in Impact our quarter. June customer our for hold of As Impact also

our is reflected in a We guidance. seeing stronger are pace, hiring which also

in non-GAAP share. of to range expect diluted $X.XX per be We to the $X.XX our EPS

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

And income our the our at growth leverage, our range the $XXX increasing of a metrics. the look as million of to commitment expect our midpoint. to year increasing XXXX, we to $XX.X year, all the now million. to are lead continues we XX% operating total at year range million, For pipeline of year-on-year to way. for continued we Reflecting SaaS revenue are full guidance the full in operating $XX.X remainder driving We $XXX million across representing the

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

$XXX or at We XX% million raising now December range million the revenue and of midpoint. are in be also our XX annual growth about year-on-year at the $XXX recurring to

We increasing million flow year now free $XXX million. full XXXX range also cash the in the significantly to of being are guidance for to our $XXX

are we We will strong Demand to another I platform with quarter the solution on our imperative. of up, well for sum a security now operator to value kick tremendous call are remains delivers Operator? Q&A. and over business To positioned our XXXX our we off for believe the robust, to identity thrilled results. turn is execute targets.

Operator

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

Saket Kalia

particularly the out and Matt, examples bit with just little about here talk IBM was lot wondering broader were a the there, maybe to of and in I of so on some particularly multiproduct And PAM if you start the you. of could could maybe terms competitively. you on M&A that right, since Hashi, wake backdrop just identity. in time also kind know customers. I you touch call, with spend a there of many

competitively. kind you're just So seeing of curious what

Matthew Cohen

kind we shoulders is platform put else Yes, sleep competitive Saket. everybody that's great continued see to out the evolution And a us and there. think above our question, I begins what heads it's of where environment

ability to are that PAM the the onto us one to spectrum on just of identity, message. of IT from traditional than platform. bring to are competitors that That differentiate We able able out and story identity there our than aren't really more our that deliver consistently more the to tell groups

be us and between isn't continue story, like starts else's or of the able access. there, to to how out to into to lot, spaces us brings vendors start to And So hear SSO a in of in on top allows to our identity which ability space much it PAM to about workforce take difference differentiate an world solution, us to able look talk share. that our that us that you is are at me when platform. we identity broader the Then MFA bring you back into able do but allows ours SSO overall be MFA be commoditized that identities wrap talking start privilege we controls to about security the emphasize somebody

only had see our about that where strongly shared. momentum for is some acquisition talk enterprise out approach the hit the it for in before and earnings Conjur together Cloud security we we scalable talking by I our that And secret this to not story wants Secret really identities. building, our examples SaaS you The well that really the were machine in Hashi. strong which you been products of on this to Hub We a is secure piece, putting kind we've quarter. And especially final solutions. pivot Hashi a the first involved had while, in of and the And secrets on of an but how IBM acquisition and we've track have getting

as increase is in size to this backbone. prior the and starting that put want in are actually we've pick to customers the also in quarter, in deals and quarters especially And what place those seen enterprise up

it's of a the more to Hashi is become sale. back IBM sale buying competitive feeling scale enterprise So and how hand, the disruption good them our IBM viewed posture in market. an against The about of as security of been we've point

in just our will around I security. be and to capture it market secrets that able to lean ability machine identity think to

Saket Kalia

I Got one it. if That for of a ton can makes you. follow-up Josh, sense. ask

to but me guide. really the metrics I the stood flow mean, that think to guidance in increase the one cash up, was part great the free out of -- go the I see all

of of renew back think of that pipeline at I a incremental about sorry, Or where lot subscription biggest think maybe point this else? renewal driver renewal there, -- that sort I As make maybe raising margins. are it the something the talked in point, that flywheel would Is a is sense? at for for that we've subscription that higher sort historically, bigger And sort year? but does on of

Joshua Siegel

a and it the is of QX, started out, and to was base thanks you strong of is on first -- first kind the had quarter asking. which mean, coming based QX just transition what to also It and see from year of QX, flywheel for into nice around a included particularly I to, part of new this as we the of really now come of beginning you of the flow. of the kind the start in and cash Yes, but obviously, piece last first business, all, alluding really a model kind Saket, great which the not a is off of off last point glimpse cash renewal really power starting flow. of which after of effect, strong

And boost which having from our the cash like which were able well we by collections still of quarter to know do. early QX to as you excellent control and supports continuing first we expenses, also to and the bookings, course,

billings our first we are, reports -- for well-executed collections, create continue in then, that rate kind all the course, the for the confidence of the the the to not part And actually business as raised it a and of And I we of of execution do. cash flow. just overall, at the the stellar us assuming expect overall collect rest to year renewal metrics, that we that bullishness the also flow that cash we really at and our the that quarter. first flywheel the as mentioned So for revenue that gives one, does that recurring

so story flow. cash think I a complete it's And around

Operator

line comes Your of next the from Gregg question Moskowitz. Mizuho. with

Gregg Moskowitz

due quite very industry, I because within own base. and your EPM solution low you've of think just that installed it's having yet penetration across adoption lack an this might AVR to CyberArk I'd And much honestly, rates ask enough. Matt, be curve going remain of of But you about there awareness important in belief to is been can cases, anything an like a cases, forward? further the perhaps in other think be might EPM can some the a accelerate do solution that that and

Matthew Cohen

Gregg. Yes,

how So that in And EPM. security feel us and you've installed the feeling environment, And the landscape about against idea core you threat that need stronger endpoint. breach. protect we about I think you know at the agent heard is really can control EPM even this talk endpoint the that our an in this threat

your You it on need servers.

protect you You endpoint. and investment secure ultimately, needed to your EDR to needed the

little Now about just EPM application of have is implementing isn't least I the protecting privileged removing admin to required really market It's in control, It's think explain conclusion about right. really a what workflow. it's that on the the still come and It's local ransomware. about you're to education we rights. bit about

company deeper prop trying a SSO value one to start do MFA. of the I've we're and into identity describing. that is each as I And groups tighter it what the Build and to understand into and think so human embed been EPM workflow of those

is or within everyone really that EDR we initial make beyond success workstation installed. the just sure to big And buying securing real make an butter have that with that our then I saw it start make years. ours that control bread you for not developers enough. else's, those Again, enterprises in been attacked sure Where described. prop value understands obviously, think and anybody industries regulated and take everybody industries. EPM EPM IT, sure I that was EPM can highly need highly understand And And and in

and invest frankly, is complement the tell out I the to describe only richer continuing able point in not our be bit talent also the the final deeper story in we're to there little call. a but started go-to-market to on So as and the to solutions, integration here to sellers

Operator

question next from line JPMorgan. Brian of Your with Essex comes the

Brian Essex

I a from up just EPM. want Gregg follow on on question to

go-to-market? it's layer next-gen you milestone, top adoption ARR substantial is customer this best-of-breed for to million maybe But EDR $XXX any on or any And TAM impact obviously, a see think great or a guys. adjacent do plans and EPM, and for on evaluate more I does see I to understand you sophistication, guess, of legacy identity of the customers? is you profile solutions the ER driving the profile focused? for customers Or like, endpoint they as customers the maybe the that see maybe to what do customer, look go demand you love tend would EPM? to are also adopt of demand And size

Matthew Cohen

Thanks, Brian.

with of organizations double down think, and first actually marketing I believe So think I component was organization our I foremost, a necessary that hitting to our as on in to increase we outside it's especially go-to-market one questions, our answer of which the Gregg, an in market, story the your in enterprises, tell is the ability to to be able larger adopted to the which fastest. and

the understood fact, bit EDR they understood thing. organizations in I a And started security same from X day threat landscape, they're first complementary. the on a doesn't got And that EPM tool think do earlier. with little people an mindset they very with that

take million that to see as care we've are start industries we again, think health started and I further under attack. that because areas penetrate built to are manufacturing we like as and off $XXX to business, started constantly expand those,

to almost map around the the ones and the are You accelerate to environment can started threat those with in us ransomware really have those help verticals momentum the the building that threat and product. industries and particularly really

finally, and enabling And more this and integrated investing and the talk then really it about portfolio one, idea industries I overall our market am to to marketing which it's take control in is then lessons the started think make other of the ahead, to capacity seamlessly when them why an story we interesting it security they about, understand how we into with. using overlay that should opportunity be, making get a, this clearer. sure do and -- the about we bring down thing. from make big is -- it customers It's help learned I that the the

and state put fast. flip governments, security mature like some as where local And areas get understand actually EPM a because let's the very they spot. less they they control being can of place landing over started the core markets, the to places It's see in

and It's easy lock adopt, product, a they down to can pathway at SaaS-based a the privilege endpoint.

quarters business business again, in expect I EPM to grow learning I in us think, approach. We're significant the for upside and So that and continue to we're the build through the driving ahead.

Operator

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

Robbie Owens

from just wanted overall. perspective of I which seeing year-over-year new net be I security environment helpful. a subscription you ARR, spending would to guess, and enterprise from flat could maybe you're wanted SMB, parse And that, or geographically to And on perspective. the versus ask ask was what I that within if question, a

Matthew Cohen

Thanks, Rob.

quarter, to So overall, to to we able our had drive momentum a strong in continue market. be the ability

You've with quarters up the conversation talk C-suite to for identity CISO, conversation story with the talking the with with me the difference CIO, security in about the auditors and top heard identity about them the really and elevating overall they security. to help of posture we list the is boards their security the enable to their do help their talk at how and and them as

to we continue see So that building.

of been just able strong. QX quarters. We what a And continue to the to was continuation over see see last we've couple that of

overall performance so look million we the be have is were actually it to high And net occurred made year able ARR we close full performance. demonstrated QX where level. to and with the new able and better. little or one raise that then due sense. stuff holidays bit As a It about ability itself, happy relates other to we basically very in the our and would renewals quarter a to had of come was that in the at ended where up the There wasn't $X to in element as

and overall, would that change was quarter So strong the there's a us, you I for no QX environment seen that tell we've in there. been out

Operator

Your of next question Fatima comes Group. the from Boolani with line Citi

Fatima Boolani

Matt, portfolio. increasingly remarks, about shared a you prepared higher a are with the who incidence lot across anecdotes landing products in of of your customers

recent specifically and in realizing contrast some share. activity as relative rates and bit maybe this internalize little the in to a manifesting that of to rates slower. And Can to you portfolio? retention I when So expansion us the about logo little you're bit in increased that talk more the a the newer dollar-based the wallet maybe

So just of scope base and in installed the the the the new logo the quarter. contrast within the momentum versus momentum and compare activity between that size

Matthew Cohen

Yes, absolutely.

mean, a customers. foremost, [ have us great X,XXX security worldwide, trust these ] perspective. and So of I than have customers first set a more we we from

them And our our PAM so team our seats access. into that Cloud that that It's strong to of them base secrets and EPM in. into Secure And monetizing to find into more we upsell ability excellent go sales really into an then position our workforce does back job footprint. into incredibly ourselves and an expand base expanding

And so have. healthy about our talk that ability I we think expansion that that we in talk you as track heard

across identities. to is identities PAM. And our is I of most think question, which apply not enough clear and to earlier it the to comes need spectrum are controls the the differentiation back that the secure privileged spectrum They IT with buying into an of entire users just customers idea privileged it's

and think business our be to I continues to quarters to on strong, to excited we for come. and see So existing expand and we're upsell ability It's where been strong. take just that it the

From pretty of us start able longer-term we be That the any kind process we identity time it say, a in allows to with turning the new to expand perspective, of door groups. multiple to at look logos and can in into non-QX across customers quarter, the these a new happy them XXX get business that. we're

of in said happy my those is And that. we've land ability always anticipated really happy bit be back the QX. -- for doing and take us frankly, beginning And in logos. able those our work. we're And a this gotten and just landed really better logo answer. little we And with new deal because longer. They in, come to are macro, The an little bit expansion and better we're so to the about flywheel We've at a back deals they pipeline then more to on kicking ones are we when really new look to this the environment, it take at brings that logos.

Operator

comes from Gallo question your Joseph next is Jefferies. Mr. with line line open. Your the Joseph of Gallo,

Joseph Gallo

margin for flow us this you to you see less question. I'm quarter operating performance machine headset me? the Thanks the guidance, was impressive just It the hear sorry, you not Awesome rev think was than on. Is full head Can through primarily walk and working. my cash beat. turn raise moderating. mix although count year? dynamics Can the mentioned was the this the year for I that modestly shift growth, but somehow

is ARR any should growth a we So think the indicative highly other large investments XX% opportunity. of given just through

Joshua Siegel

operating through mean, metrics able raising the through we'll that -- I the cash here. start all be that we're revenue flow excited we're I'll the basically, through -- to the operating. from boards across Yes.

do half. With the anticipate into second a of color the as up we into into that, as to continue and terms regard the the we from on to well. side we investments, second QX some on go slower bigger QX revenue to half on catching In we're SaaS expect player hiring on and the hiring hiring be

some so side like always engine as in in multiple the at growth. And that's of to look we see pre-hire investment of of we'll the where R&D years course, also, when and go-to-market we

inching from think -- more on it the terms I continuing we kind up from fact SaaS another of we I towards perspective, than that see other don't the -- mix of business. some mix, see the in

Matthew Cohen

profile. kick me just and slower that of QX, is a And we April. maybe on bit just Josh one kind add solidly look a as talked, about in little when we hiring seen here We've of for in back said,

built our the up so going forward. guidance And brings and into actually anticipation expense, of that that's

are quarter nice One ramped had to I carriers. carriers, opportunity. We sets the able up we carriers, actually to up make ramping that quota really especially of quota the higher be the things throughout And when that year. QX to the is the for a us fully which at around nice here look what the quota we capture go opportunity capture in investing despite me, sure lower is in

we'll ahead us. opportunity the this of on on, exciting for growth able look opportunity be year capture more to to As goes

Operator

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

Hamza Fodderwala

I'm guidance slowest quarter expected broadly. a the actually guidance. tends it QX, in light thought we're on of early be more the to the Josh, of it's in better I curious, for seeing, seasonally the actually raise in question was it's I what the software think, year, year. than and you

that uncertain confidence raise did, you the you to macro given guide magnitude ARR environment? what's So somewhat still that what's by giving

Joshua Siegel

Yes. Thanks, Hamza.

I think earlier it in in seeing from we're the the demand QX the -- the really in starts pipeline pipeline with are the of in demand that's of we quota we we're coming being prepared carriers. coverage that on environment lot his the just already and demand quota questions and that where And remarks the overall and saw much the pretty the Matt other out and of is confident we I of guidance rest the what QX talked generating that fact and that kind going see a engine. Matt environment able we're and on the metrics. out and coming all, those And of the about that across course QX getting think everything and the well customer coming reps we're positioned base, just for then raise first forward what to we're of we're generation about go-to-market point year. a seeing from team alluded to

Operator

line Borg next comes Your Stifel. with from of question Adam the

Adam Borg

continued ITDR. Secure Kim for hoping adjacent you the about how the think think identity you I these broadly, either over markets opportunities often cloud, CyberArk to just opportunity with about about or great talk see time? kind traction the we as was we cloud Awesome.Maybe Access. more could on about cloud more security [ as it's of And Cloud hear

Matthew Cohen

Yes. Thanks, Adam.

environments. The opportunity are So access also targets, cloud. -- I and considered you've -- to traditional talk me secure not able traditional we access only assets that or those users that are would and secure to just of this hybrid to need environments cloud a And those IT about start increasingly the that's PAM we what tool groups with, how effectively. across but having hybrid identity we the to heard manage all be actually And effectively cloud of goes on-prem a was environments describing.

developers to scaling hired exponential place they an have need innovate. sustainable environments, start once our organizations staying out and up speaking, at IT they there. there in ahead in our security so not that of to ability key And component able is blend platform, innovating, new they be securing they're take to put higher [indiscernible] And within identity SCA understanding cloud. go are of to users. And cloud generally controls in it this and they're we're Then in part the how And actually is rate. are a these developers population

point the a our and No in standing customers are applying So security point native to able controls us until is about which unique solution, allows to and allows tools for privilege, SCA privileges which access assigned securing population, to them that go allowing approach. be at of zero developer use to access. of the talk

here? how of that's markets then other what So is, all differentiation play which to way in? up do is building the these a your And question, right,

you understanding or place have start versus you And to discovering play you areas. about about cases, those major a entitlements CIM, mapping think when play in for the targets. When about can SCA about control discover, we at we to ultimately, understand CyberArk you And even our once the in privilege to touch, controlling try deploy It's specifically in a think is easy have really it's is IT, once some apply what's But and to privilege as to solution security start going even, on. controls. an place light to enforcement we you access and first cloud. access and access people tool

little just that's more on it. bit So a background

of to that overall an market bring from were describing. our cloud into you platform be other ability opportunity for to what some course, this access I that And be us to able able to differentiate apart. it's sets is of areas the us the think

Operator

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

Roger Boyd

on impacting updates any question clarify just just from duration guidance? ARR the And Josh, higher? how rest Great. duration what and that you expecting you're different the and of can But term the the to over revenue that perspective regarding I the might the do back Joe's throughout year a be guide. license want you've on to the to color seen quarters, what's X go past driving that tailwind

Joshua Siegel

that was there -- one Yes. driving trend of a it any I don't higher. think there wasn't

look quarter, side revenue And on first and the and the again as contributed $X.X over going go by range. XX-month but around it into it just pipeline, million saw, months, XX few for I up think the we tailwind months, and we I though the it kind time at kind quarter. to by we move dropping the down kind it between couple a look it's in of about when see we the of of about of think in a

Matthew Cohen

stepping quarter see that. all up the to our the it the with market is QX earlier I which products on I is of we the play, in year. that of great see look We analyze into try I this on hit and have And the shaping coming And where mix still into really point only, [indiscernible] up. do which we new idea we when QX, sessions quarters unfortunately QX. when mix the then the and look what and are think in the forward around is understand around moving, Josh bigger the pipeline, SaaS I do, what and in for really SaaS out

taken account towards even we've with for to SaaS. our that, our our the substantial in outlook it But pipe that guide. pretty we've is been into year. revenue raise able And Now in a shift

Operator

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

Andrew Nowinski

federal the U.S. I want about market. talk to

are the first, high high mentioned up on-prem? I You PAM to? pipeline and for larger more also second, can new that you And EPM they a opened how SaaS sell is you now. has in or guess FedRAMP now status status And demand FedRAMP quarter? have agencies then purchasing that with

Matthew Cohen

Yes.

have our start what those versus when think we High and FedRAMP let SaaS products. did for of identity It we EPM versions about I PAM. we So for way, products. starting announced we there, why first FedRAMP, only was clarify, by me And our the was think because with

into with even us to the the market just with order side the up heavy we level federal just market, why opens through and FedRAMP That's High. did also in the So the FedRAMP. not get FedRAMP be to and to able went and government state lift process, but That to not We the Identity in frankly organization. DoD federal side of of helps the state opportunity. at be get to also to but with sell EPM, civilian side, government believe we the the needed

bullish into and We of markets. to identity bring and ability very those optimistic our are EPM

have had we business Now many PAM we've existing years. an of for book with on-prem that

the market of We security bigger controls in in in piece capture invested version to to the the like and the the our investing have -- opportunity one the space, I'm have we in for and to beyond we'll as able points bigger in an FedRAMP on-prem We But federal are that a now certifications. bigger allows of time SSO, PAM And of years investment of we government. be us attacked being a federal biggest describing, think at industries ability MFA institute at level. but we've the well lock ahead. state that the be core identity our the get being is certification, and believe attacked end in meantime, that ahead. able in or it's attacked quarters growth well It's successfully verticals level story to history, far or the the to down are it's so done which being

Operator

with Your Oppenheimer. line Kidron of next question the comes Ittai from

Ittai Kidron

insert have questions, maybe I two I'll them at all once.

expected, point complementary color the complementary a more customers, activity us to would and than of to booking, on would Josh, EDR. you just little stronger question at be the the of products edge. now I is can much that how you, you give It complementary back EPM being is more right think clearly, browser. But mentioned portfolio going today. the Matt, And to your on there? duration, mix for First there the new of more the you of Any expansion great. color bit

think about well. edge I that product as as an

can edge, EPM evolve an EDR-like product as be into and closer competitive EDR you're so And closer with an product the and moving solution? to your

Matthew Cohen

time move both along, the take Sure. just questions. may to in us of interest but the I And

bookings bookings duration. in nothing with the to first performance at So do the look front, we has when on the quarter, remember,

million quarter. overall factor revenue. based was contribution But a bump across So to entire continued strength not upon The the of a portfolio. transparent. is business. business just to around be contributing It's about $X.X of It the in the duration wanted overall the of our up growth our it's strength

see strongly continue We of ARR the to grow platform. really for each just piece

in in that I a to machine showing effectively space. management call business, is kind sale identity the the strength Now in highlighted compete ability security the again, by excited because as I'm and secrets of that, very particular our

customers ability the new PAM also back would be to our So our securing as we go base developers solution. and I workforce I or talked that. about like in to earlier, into our highlight or around able workforce the and to quarter highlight, ability be go differentiated expand IT beyond compete effectively areas securing would to able into

So talk approach. across the the that from comes about strong I of portfolio, board, second entire bookings to and Remind can of kind overall point that me again the question?

Ittai Kidron

EPM into EDR.

Matthew Cohen

I side, are identity think definition comfortable we our EPM the of security. with on So very

be good yes, I security control mindset and the a And first a on right should it. place. I of in all the of for very the Our our be controls ability EDR is able just able a to that have I and have there. money security respectful customers, spend to I I'm next-gen them across businesses groups, EPM they EDR. definition ability like yes. And are that to EDR these It's to be identity ask time, those. control approach different go and and complement to how the to say, tell out our privileged them think apply I they me, four point lot to

space idea least you And of you're talking the privileged browser, by to to into can plenty the the larger there's the platform. integrate I control-focused our having side point. about of when think of security without us with But an that end same about privilege and plenty for our EDR of there's us think I carve out go browser thing, control of ahead market. way, the growth identity identity-centric the security And into talk

Operator

of Shrenik Baird. next Your line with comes question from Kothari the

Shrenik Kothari

timely. browser on very looks follow-up GA secular the the Matt,

demand just designed days, drive made and but harvesting early market believe I and also of to market all you products. One, know quite the other comment the still be moving to adoption but the only [indiscernible] fast. this growing the [indiscernible] browser was security said, you seems solutions go As the for [indiscernible] will browser you it's beyond not enhance

of for So on point just signs seeing just curious, follow-up solutions? driving or is other you and differentiated are landing kind Azure. And browser seeing quick a then becoming a already demand the

Matthew Cohen

Sure.

browsing browse password for designed to everybody in, freely think users other replacement built in with you control CyberArk other the I release, go cookieless ground browser, it's able just the obviously, targets security much, privileged a enterprise So from to to you right much and controls the So able secure with when securely. be within a get the security to with to, into more are perspective,

stops And against, which be of the attacks it protect or post-session locks authentication one difficult kind down to of hijacking. and to most important able most is

be perspective, easy and it platform. an sign-on pitch really a we our allows a and into the security into at underneath But it gateway copilot that, from access with able look a is you that it go nice presented you're and to So it your is navigation you identity browser, that tiles. single really story. to we When security

you to users. traditional allows infrastructure targets for your access able It targets, PAM to be

screen, to main do. the to right do in things and from would You normally actually can go right into service micro cloud portals you you into services. go browser the the go the back-end into providers' your you get can the that and write can have browser from back-end platform

a So path use for that able easier administrators leverage be and to much to creates effectively. users the platform and

we that they improved release, the to product and it of the tools. limited when the total and talk was of with in have space workforce our PAM in customers this friction pathway we So for see into when integration been look and removing allowing using user all access start usage, the customers

Shrenik Kothari

Got it.

Azure helpful, very the on And So Matt. just marketplace. quickly

Can kind kind and about bit You you or sense guys EPM through of go-to-market about a and to this talk new deal [indiscernible] mix that this relative aligned won PAM or around about flow a mentioned of you kind market. size any motion? route incremental marketplace with the of motion trends sound

Matthew Cohen

to you've to the exploit think the routes talk idea about of market. one that opportunities continue we heard -- of to in upside believe I And new Sure. prior quarters for the is us us

the You've context our that console, our heard push go down program, us with actually of the talk to able new to of to distributors, be the partnership partners launch MSP relationship. on SI and leverage ability in about MSP SI our market continue our channel

building stronger partnerships. So you and see, we're investing overall, in enabling

days lubrication it's speaks you as One for routes which deal to heard Azure the relationship but market business the of earlier the us opportunity And dollars We're In be sales it the continue perspective that can sales cycle. AWS our of is leverage frictionless out able help marketplace And as a allow we to co-sell forward. overall drive the that from in purchases. the on marketplace you've a marketplace. been built to those AWS this be marketplace. through sure. mentioned, our buying highlighted there and talk to buying drive to motion force sit went to that and to quarter, that great new a about vehicle then we've and part for the that for

Operator

Q&A back for turn over conference Cohen I to our now concludes the closing Matt remarks. will That session.

Matthew Cohen

focused partners celebrate world. the go to think around hard today over the and as work our CyberArkers delivering to I customers. well And XXth laser X,XXX back dedication we anniversary that innovation of and our about An fact owe we Thank as you. driving to is on want to value the our achievement as CyberArk

to leading to at We welcoming security event built company thrive years. over impact as of are at joining last vision that amazing Thanks X many look another the just today. weeks. for you for identity in an and the customer call forward We least in XX is our

Operator

concludes joining. that you call. for Thank Ladies today's and all gentlemen,

You may now disconnect.

CyberArk Software (CYBR) 2 May 242024 Q1 Earnings call transcript