CyberArk Software Ltd. CYBR is scheduled to report fourth-quarter 2024 results before market open on Feb. 13.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

The company forecasts fourth-quarter non-GAAP earnings per share in the range of 65-75 cents. The consensus mark is pegged at 71 cents per share, implying a year-over-year decline of 12.4%.

CyberArk’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 97.7%.

The cybersecurity firm projects revenues between $297 million and $303 million. The Zacks Consensus Estimate is pegged at $301 million, suggesting year-over-year growth of 34.94%.

Let’s see how things have shaped up for this announcement.

Factors to Consider for CYBR Stock

CyberArk’s fourth-quarter performance is expected to have gained from the rising demand for privileged access security and cyber security solutions, driven by a rapid increase in data breaches and expanding digital transformation strategies.

The proliferation of cloud computing and cheap resource-sharing has further increased the demand for proper security policies, protocols and products. These factors are likely to have prompted organizations to allot increasing portions of their IT budgets for security solutions. CyberArk is capitalizing on this scope and growing rapidly in the cybersecurity space with its privileged access management solutions. These solutions allow customers to secure, manage and monitor privileged account access and activities.

CyberArk’s strategic mix shift toward software-as-a-service and subscription-based models is likely to have driven top-line growth in the to-be-reported quarter. Our model estimate for Subscription revenues in the fourth quarter is pegged at $231.6 million, suggesting a year-over-year increase of 54.1%. The segment’s contribution to the company’s total revenues is anticipated to have reached 77.1%, significantly up from the year-ago quarter’s 67.3%.

Our estimate for Perpetual License revenues is pegged at $5.3 million, indicating a year-over-year decline of 33.5% due to CyberArk’s continued efforts toward shifting the business model to subscription-based from a perpetual license.

Strength in renewal rates is likely to have brought some stabilization in Maintenance and Professional Services revenues. Our model estimate for Maintenance and Professional Services revenues in the fourth quarter is pinned at $63.3 million, suggesting a year-over-year decline of 2.3%.

Robust demand for CyberArk’s software-as-a-service solution and on-premise subscription offerings is likely to have driven CyberArk’s annual recurring revenues (ARR) in the to-be-reported quarter. Our estimate for ARR is pegged at $1.16 billion, of which Subscription is likely to have contributed $974.7 million, while Maintenance and Professional Services are expected to have contributed $185.2 million.

Nevertheless, like every other company in the technology space, CyberArk also suffers from overall softness caused by budget cuts and postponement of deals due to the uncertain macroeconomic environment. These challenges are likely to have hampered CYBR’s top-line growth in the to-be-reported quarter.

What Our Model Says About CYBR

Our proven model does not conclusively predict an earnings beat for CYBR this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.

Though CYBR currently carries a Zacks Rank #2, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

Akamai Technologies AKAM, Twilio TWLO and Accenture ACN are some stocks that have a favorable combination.

Akamai Technologies has an earnings ESP of +0.09% and a Zacks Rank #2 at present. AKAM shares have plunged 22.2% in the trailing 12-month period. AKAM is set to report its fourth-quarter 2024 results on Feb. 20. You can see the complete list of today’s Zacks #1 Rank stocks here.

Twilio has an earnings ESP of +3.28% and sports a Zacks Rank #1 at present. TWLO shares have rallied 104.6% in the trailing 12-month period. TWLO is slated to report its fourth-quarter 2024 results on Feb. 13.

Accenture has an earnings ESP of +4.05% and a Zacks Rank #3 at present. ACN shares have gained 5.1% in the trailing 12-month period. ACN is scheduled to report its second-quarter fiscal 2025 results on Feb. 20.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Accenture PLC (ACN) : Free Stock Analysis Report

Akamai Technologies, Inc. (AKAM) : Free Stock Analysis Report

CyberArk Software Ltd. (CYBR) : Free Stock Analysis Report

Twilio Inc. (TWLO) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research