-
Total ARR: $1.215 billion.
-
Revenue: $318 million.
-
Operating Margin: 18%.
-
Free Cash Flow: $96 million.
-
Net New ARR: $46 million.
-
Subscription ARR: $1.028 billion.
-
Subscription Revenue: $250.6 million, 79% of total revenue.
-
Gross Margin: 85%.
-
Net Income: $50.3 million or $0.98 per diluted share.
-
Cash Balance: $776 million.
-
New Logos Signed: Approximately 200.
-
Employees: Approximately 3,930 worldwide.
-
Q2 2025 Revenue Guidance: $312 million to $318 million.
-
Full Year 2025 Revenue Guidance: $1.313 billion to $1.323 billion.
-
Full Year 2025 Non-GAAP EPS Guidance: $3.73 to $3.85 per diluted share.
-
Full Year 2025 Adjusted Free Cash Flow Guidance: $300 million to $310 million.
Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
-
CyberArk Software Ltd (NASDAQ:CYBR) reported a strong first quarter 2025, exceeding all guided metrics with total ARR reaching $1.215 billion and revenue of $318 million.
-
The company achieved an 18% operating margin and generated $96 million in free cash flow, highlighting robust financial performance.
-
CyberArk's Identity Security platform is gaining traction, with significant demand for solutions that secure human, machine, and AI identities.
-
The integration of Venafi and Zilla Security is progressing well, contributing positively to the company's results and expanding its market reach.
-
CyberArk's innovation in Identity Security, including new solutions for AI agents and machine identities, positions it as a leader in the cybersecurity landscape.
-
Despite strong results, CyberArk is cautious about macroeconomic uncertainties, which could impact future performance.
-
The company faces challenges in educating the market about the importance of machine Identity Security, as awareness remains a gap.
-
CyberArk's guidance reflects a conservative approach due to potential macroeconomic headwinds, indicating caution in its outlook.
-
The transition from maintenance to subscription models is ongoing, with a slight uptick in conversion activity but still representing a small portion of growth.
-
Competitive pressures in the Identity Security space are increasing, with many vendors entering the market, though CyberArk maintains a strong position.
Q: Matt, can you discuss customers' willingness to buy multiple products as CyberArk becomes more of an identity platform? A: Matthew Cohen, CEO: Every conversation we have with customers is multiproduct or multi-solution based. Customers want to tackle their entire Identity Security problems. We focus on elevating our team's ability to discuss the platform and work on 3-year roadmaps with customers, even if they start with one solution. This approach builds confidence in the lifetime value of our customer base.
Q: Erica, can you talk about the maintenance business and how you see its decline or shift this year? A: Erica Smith, CFO: The maintenance business is at $188 million, and customers are more willing to move to our SaaS and subscription solutions. We saw a slight uptick in conversion activity in Q1, and we expect this trend to continue, with maintenance ARR decreasing by about $15 million. The readiness of our customer base is increasing, and we anticipate more conversions throughout the year.
Q: Erica, regarding guidance, have you seen macro headwinds, or are you just embedding potential worsening in your updated guidance? A: Erica Smith, CFO: We have not seen macro headwinds. Our Q1 results were strong, and pipeline and close rates remain consistent. We took a more conservative approach in our guidance due to macro volatility, but if trends persist, there's room to adjust guidance upwards.
Q: Can you discuss the adoption trends for Venafi and Zilla across different customer segments? A: Matthew Cohen, CEO: Venafi has seen universal interest across all segments, driven by the need for machine Identity Security. Zilla is in earlier stages, but customers are interested in modern IGA solutions to manage governance and administration efficiently. We expect Zilla to contribute more significantly in the back half of the year and into 2026.
Q: How do you think about pricing for nonhuman identities as their numbers increase? A: Matthew Cohen, CEO: Pricing for nonhuman identities, like machines and AI agents, will follow a curve where the price per identity decreases as numbers increase. However, the total deal size will grow, and we expect average deal sizes to be larger than those for human identities.
Q: Have you seen any changes in the competitive environment with the addition of Venafi and Zilla? A: Matthew Cohen, CEO: We haven't seen significant changes in the competitive environment. Many competitors solve narrow Identity Security use cases, while CyberArk offers a comprehensive platform for human and machine identities. Our platform's ability to solve broader security challenges differentiates us in the market.
Q: How do you address the awareness gap in machine Identity Security, given that many machine identities have access to sensitive data? A: Matthew Cohen, CEO: The moment for machine Identity Security is now, with security teams gaining central authority over these decisions. When CISOs have control, CyberArk wins. Our focus is on helping CISOs gain visibility and control over machine identities.
Q: Can you clarify the certificate life cycle change and its impact on the industry? A: Matthew Cohen, CEO: The CA/Browser Forum has mandated a reduction in certificate lifespans to 47 days by 2028 or 2029. This change emphasizes the need for automated management of short-lived certificates, and CyberArk offers solutions to address this challenge.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
