• Annual Recurring Revenue (ARR): Exceeded $1 billion, reaching $1.169 billion, including $166 million from Venafi.
• Revenue: Total revenue for Q4 was $314.4 million, with $47 million contributed by Venafi.
• Subscription Revenue: Reached $243 million, representing 77% of total revenue, with $41 million from Venafi.
• Operating Margin: Increased to 19% for Q4, with an organic margin of about 16%.
• Free Cash Flow: Record $221 million for 2024, with a 22% margin, including $15 million from Venafi.
• Net Income: $40.4 million or $0.80 per diluted share for Q4.
• Geographic Revenue Growth: Americas grew 17%, EMEA 26%, and APJ 19% year-over-year organically.
• New Logos: 346 new logos signed in Q4, totaling 1,013 for the full year.
• Employee Count: Approximately 3,800 employees worldwide, including 400 from Venafi.
• Zilla Acquisition: Acquired for $165 million in cash and $10 million in earnout, with $5 million ARR and over 125 customers.

• Warning! GuruFocus has detected 5 Warning Signs with CYBR.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• CyberArk Software Ltd (NASDAQ:CYBR) surpassed the $1 billion ARR milestone, demonstrating strong growth and market presence.
• The company achieved a significant increase in operating margin to 15% and generated $221 million in free cash flow for 2024.
• CyberArk's acquisition of Zilla Security is expected to enhance its identity governance capabilities, offering faster deployment and integration compared to legacy systems.
• The integration of Venafi has been accretive to CyberArk's financial performance, contributing significantly to ARR and revenue growth.
• CyberArk's unified identity security platform is gaining traction, with customers increasingly adopting multiple solutions across the platform, leading to larger deal sizes and new customer acquisitions.

Negative Points

• There are concerns about the complexity and integration challenges associated with the recent acquisitions of Venafi and Zilla Security.
• The company faces a competitive landscape with other vendors offering stitched-together solutions, which may challenge CyberArk's unified platform approach.
• The conversion of maintenance ARR to subscription ARR is progressing slowly, indicating potential challenges in transitioning existing customers.
• CyberArk's guidance for 2025 includes a $6 million FX headwind, which could impact financial performance.
• There is uncertainty regarding federal government spending, which could affect CyberArk's revenue from government contracts.

Q & A Highlights

Q: Investors often think about identity as a series of different swim lanes. How do you see customers' journey in thinking of identity as a platform versus a series of swim lanes? A: Matthew Cohen, CEO: Customers are increasingly looking for an integrated security posture across all identity swim lanes. They want a trusted vendor that can provide a comprehensive platform to secure their organization. In modern environments, such as SaaS and cloud, identities are dynamic, requiring a unified approach to manage their lifecycle effectively. Our acquisition of Zilla Security enhances our ability to offer a modern IGA solution, aligning with this integrated approach.

Q: Why is CyberArk well-positioned to secure AI agents, given their dynamic nature? A: Matthew Cohen, CEO: AI agents, acting like both machines and humans, require dynamic security as they access data and infrastructure. CyberArk's identity security platform is designed to manage such dynamic privileges. Our tools for dynamic secure access and machine identity offerings enable us to secure AI agents effectively. We will discuss this further at our upcoming Investor Day.

Q: Can you discuss how broad you're landing with new customers across products? A: Matthew Cohen, CEO: In Q4, our top three deals were new logos, and they were comprehensive, covering privileged access for IT, workforce, machines, and sometimes developers. Customers are increasingly opting for our full platform to address their identity security needs, leading to larger deal sizes.

Q: How does the Zilla acquisition align with your broader platform strategy? A: Matthew Cohen, CEO: Zilla's modern IGA solution addresses the dynamic access needs of modern SaaS and cloud environments. It complements our platform by managing entitlements, provisioning, and compliance, while also providing access controls. This integration enhances security across modern environments.

Q: What are your thoughts on federal government spending and its impact on CyberArk? A: Matthew Cohen, CEO: While there's some uncertainty in federal spending, CyberArk is well-positioned with a broad base of support across various agencies. Our FedRAMP investments allow us to offer cost-effective, modern solutions that are essential for government operations, minimizing scrutiny in this environment.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.