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CyberArk Announces Strong Third Quarter 2023 Results

Company Exceeds Expectations Across all Guided Metrics

Subscription Portion of Annual Recurring Revenue (ARR) of $504 million; Growth of 68% Year-over-Year

Total ARR of $705 million; Growth of 38% Year-over-Year

Subscription Revenue of $122.9 million in Q3; Growth of 65% Year-Over-Year

Record Total Revenue of $191.2 million in Q3 Exceeds Guidance; Growth Accelerating to 25% Year-Over-Year

Company Significantly Raises Full Year ARR Guidance to a Range of $758 million to $768 million from $743 million to $753 million

CyberArk (NASDAQ: CYBR), the identity security company, today announced strong financial results for the third quarter ended September 30, 2023.

“Strong execution and robust industry tailwinds drove our outperformance in the third quarter and our results significantly exceeded expectations across all guided metrics,” said Matt Cohen, CyberArk's Chief Executive Officer. “We delivered one of the best financial performances in the company’s history in the third quarter and our business accelerated. Our identity security platform is gaining momentum in both our customer base and with new customers who recognize the critical requirement to secure all identities, human and machine, with intelligent privileged controls. The durable demand for our solutions is the result of the severe threat landscape paired with the exponential growth of identities and environments. We delivered robust net new ARR, 68 percent growth in Subscription ARR to $504 million and 38 percent growth in total ARR to $705 million. Our consistent execution, strong competitive position and confidence in the demand environment is best demonstrated by the significant increase in our full year ARR guidance. As the clear leader in identity security, we have a tremendous opportunity in front of us and are well positioned to deliver strong long-term growth, profitability and cash flow.”

Financial Summary for the Third Quarter Ended September 30, 2023

  • Subscription revenue was $122.9 million in the third quarter of 2023, an increase of 65 percent from $74.2 million in the third quarter of 2022.
  • Maintenance and professional services revenue was $64.3 million in the third quarter of 2023, compared to $64.6 million in the third quarter of 2022.
  • Perpetual license revenue was $4.1 million in the third quarter of 2023, compared to $13.8 million in the third quarter of 2022.
  • Total revenue was $191.2 million in the third quarter of 2023, up 25 percent from $152.7 million in the third quarter of 2022, outperforming guidance.
  • GAAP operating loss was $(25.7) million and non-GAAP operating income was $16.9 million in the third quarter of 2023, outperforming guidance.
  • GAAP net loss was $(14.6) million, or $(0.35) per basic and diluted share, in the third quarter of 2023. Non-GAAP net income was $19.6 million, or $0.42 per diluted share, in the third quarter of 2023, outperforming guidance.

Balance Sheet and Net Cash Provided by Operating Activities

  • As of September 30, 2023, CyberArk had $1.2 billion in cash, cash equivalents, marketable securities, and short-term deposits.
  • During the nine months ended September 30, 2023, the Company’s net cash provided by operating activities was $9.3 million.
  • As of September 30, 2023, total deferred revenue was $423.1 million, a 12 percent increase from $376.1 million at September 30, 2022.

Key Business Highlights

  • Annual Recurring Revenue (ARR) was $705 million, an increase of 38 percent from $512 million at September 30, 2022.
    • The Subscription portion of ARR was $504 million, or 72 percent of total ARR at September 30, 2023. This represents an increase of 68 percent from $301 million, or 59 percent of total ARR, at September 30, 2022.
    • The Maintenance portion of ARR was $200 million at September 30, 2023, compared to $211 million at September 30, 2022.
  • Recurring revenue in the third quarter was $174.4 million, an increase of 36 percent from $128.5 million for the third quarter of 2022.

Recent Developments

Business Outlook

Based on information available as of November 2, 2023, CyberArk is issuing guidance for the fourth quarter and full year 2023 as indicated below.

Fourth Quarter 2023:

  • Total revenue is expected to be in the range of $206.5 million and $211.5 million, representing growth of 22 percent to 25 percent compared to the fourth quarter of 2022.
  • Non-GAAP operating income is expected to be in the range of $19.0 million to $23.0 million.
  • Non-GAAP net income per share is expected to be in the range of $0.41 to $0.50 per diluted share.
    • Assumes 47.1 million weighted average diluted shares.

Full Year 2023:

  • Total revenue is expected to be in the range of $735.3 million to $740.3 million, representing growth of 24 percent to 25 percent compared to the full year 2022.
  • Non-GAAP operating income is expected to be in the range of $17.7 million to $21.7 million.
  • Non-GAAP net income per share is expected to be in the range of $0.72 to $0.80 per diluted share.
    • Assumes 46.5 million weighted average diluted shares.
  • ARR as of December 31, 2023 is expected to be in the range of $758 million to $768 million, representing growth of 33 percent to 35 percent from December 31, 2022.
 

(1)

Gartner® Magic Quadrant™ for Privileged Access Management, by Felix Gaehtgens, James Hoover, Michael Kelley, Brian Guthrie, Abhyuday Data, 5 September 2023
 

(2)

The Forrester Wave™: Privileged Identity Management, Q4 2023 by Geoff Cairns, October 11, 2023

Conference Call Information

In conjunction with this announcement, CyberArk will host a conference call on Thursday, November 2, 2023 at 8:30 a.m. Eastern Time (ET) to discuss the Company’s third quarter financial results and its business outlook. To access this call, dial +1 (888) 330-2455 (U.S.) or +1 (240) 789-2717 (international). The conference ID is 6515982. Additionally, a live webcast of the conference call will be available via the “Investor Relations” section of the company’s website at www.cyberark.com.

Following the conference call, a replay will be available for one week at +1 (800) 770-2030 (U.S.) or +1 (647) 362-9199 (international). The replay pass code is 6515982. An archived webcast of the conference call will also be available in the “Investor Relations” section of the company’s website at www.cyberark.com.

About CyberArk

CyberArk (NASDAQ: CYBR) is the global leader in identity security. Centered on intelligent privilege controls, CyberArk provides the most comprehensive security offering for any identity – human or machine – across business applications, distributed workforces, hybrid cloud environments and throughout the DevOps lifecycle. The world’s leading organizations trust CyberArk to help secure their most critical assets. To learn more about CyberArk, visit https://www.cyberark.com, read the CyberArk blogs or follow on LinkedIn, Twitter, Facebook or YouTube.

Copyright © 2023 CyberArk Software. All Rights Reserved. All other brand names, product names, or trademarks belong to their respective holders.

Key Performance Indicators and Non-GAAP Financial Measures

Annual Recurring Revenue (ARR)

  • Annual Recurring Revenue (ARR) is defined as the annualized value of active SaaS, self-hosted subscription and maintenance contracts related to perpetual licenses in effect at the end of the reported period.

Subscription Portion of Annual Recurring Revenue

  • Subscription portion of ARR is defined as the annualized value of active SaaS and self-hosted subscription contracts in effect at the end of the reported period. The subscription portion of ARR excludes maintenance contracts related to perpetual licenses.

Maintenance Portion of Annual Recurring Revenue

  • Maintenance portion of ARR is defined as the annualized value of active maintenance contracts related to perpetual licenses. The Maintenance portion of ARR excludes SaaS and self-hosted subscription contracts in effect at the end of the reported period.

Recurring Revenue

  • Recurring Revenue is defined as revenue derived from SaaS and self-hosted subscription contracts, and maintenance contracts related to perpetual licenses during the reported period.

Non-GAAP Financial Measures

CyberArk believes that the use of non-GAAP gross profit, non-GAAP operating expense, non-GAAP operating income (loss), non-GAAP net income (loss) and free cash flow is helpful to our investors. These financial measures are not measures of the Company’s financial performance under U.S. GAAP and should not be considered as alternatives to gross profit, operating loss, net loss or net cash provided by operating activities or any other performance measures derived in accordance with GAAP.

  • Non-GAAP gross profit is calculated as GAAP gross profit excluding share-based compensation expense, amortization of intangible assets related to acquisitions, and impairment of capitalized software development costs.
  • Non-GAAP operating expense is calculated as GAAP operating expenses excluding share-based compensation expense, acquisition related expenses and amortization of intangible assets related to acquisitions.
  • Non-GAAP operating income (loss) is calculated as GAAP operating loss excluding share-based compensation expense, impairment of capitalized software development costs, acquisition related expenses and amortization of intangible assets related to acquisitions.
  • Non-GAAP net income (loss) is calculated as GAAP net loss excluding share-based compensation expense, acquisition related expenses, amortization of intangible assets related to acquisitions, impairment of capitalized software development costs, amortization of debt discount and issuance costs, gain from investment in privately held companies, and the tax effect of non-GAAP adjustments.
  • Free cash flow is calculated as net cash provided by operating activities less purchase of property and equipment.

The Company believes that providing non-GAAP financial measures that are adjusted by, as applicable, share-based compensation expense, acquisition related expenses, amortization of intangible assets related to acquisitions, impairment of capitalized software development costs, non-cash interest expense related to the amortization of debt discount and issuance cost, gain from investment in privately held companies, and the tax effect of the non-GAAP adjustments and purchase of property and equipment allows for more meaningful comparisons of its period to period operating results. Share-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in the Company’s business and an important part of the compensation provided to its employees. Share based compensation expense has varying available valuation methodologies, subjective assumptions and a variety of equity instruments that can impact a company’s non-cash expense. The Company believes that expenses related to its acquisitions, amortization of intangible assets related to acquisitions, and non-cash interest expense related to the amortization of debt discount and issuance costs do not reflect the performance of its core business and impact period-to-period comparability. The Company believes free cash flow is a liquidity measure that, after the purchase of property and equipment, provides useful information about the amount of cash generated by the business.

Non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies in the industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. In addition, there are limitations in using non-GAAP financial measures as they exclude expenses that may have a material impact on the Company’s reported financial results. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP. CyberArk urges investors to review the reconciliation of its non-GAAP financial measures to the comparable U.S. GAAP financial measures included below, and not to rely on any single financial measure to evaluate its business.

Guidance for non-GAAP financial measures excludes, as applicable, share-based compensation expense, acquisition related expenses, amortization of intangible assets related to acquisitions, non-cash interest expense related to the amortization of debt discount and issuance costs and the tax effect of the non-GAAP adjustments. A reconciliation of the non-GAAP financial measures guidance to the corresponding GAAP measures is not available on a forward-looking basis due to the uncertainty regarding, and the potential variability and significance of, the amounts of share-based compensation expense, amortization of intangible assets related to acquisitions, and the non-recurring expenses that are excluded from the guidance. Accordingly, a reconciliation of the non-GAAP financial measures guidance to the corresponding GAAP measures for future periods is not available without unreasonable effort.

Cautionary Language Concerning Forward-Looking Statements

This release contains forward-looking statements, which express the current beliefs and expectations of CyberArk’s (the “Company”) management. In some cases, forward-looking statements may be identified by terminology such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential” or the negative of these terms or other similar expressions. Such statements involve a number of known and unknown risks and uncertainties that could cause the Company’s future results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to: changes to the drivers of the Company’s growth and its ability to adapt its solutions to IT security market demands; fluctuation in the Company’s quarterly results of operations due to sales cycles and multiple pricing and delivery models; the Company’s ability to sell into existing and new customers and industry verticals; an increase in competition within the Privileged Access Management and Identity Security markets; unanticipated product vulnerabilities or cybersecurity breaches of the Company’s, or the Company’s customers’ or partners’ systems; complications or risks in connection with the Company’s subscription model, including uncertainty regarding renewals from its existing customer base, and retaining sufficient subscription or maintenance and support service renewal rates; risks related to compliance with privacy and data protection laws and regulations; risks regarding potential negative economic conditions in the global economy or certain regions, including conditions resulting from financial and credit market fluctuations, rising interest rates, bank failures, inflation, and the potential for regional or global recessions; the Company’s ability to hire, train, retain and motivate qualified personnel; reliance on third-party cloud providers for the Company’s operations and SaaS solutions; the Company’s history of incurring net losses and its ability to achieve profitability in the future; risks related to the Company’s ongoing transition to a new Chief Executive Officer; risks related to sales made to government entities; the Company’s ability to find, complete, fully integrate or achieve the expected benefits of strategic acquisitions; the duration and scope of the COVID-19 pandemic and its resulting effect on the demand for the Company’s solutions and on its expected revenue growth rates and costs; the Company’s ability to expand its sales and marketing efforts and expand its channel partnerships across existing and new geographies; regulatory and geopolitical risks associated with global sales and operations, as well as the location of our principal executive offices, most of our research and development activities and other significant operations in Israel; changes in regulatory requirements or fluctuations in currency exchange rates; the ability of the Company’s products to help customers achieve and maintain compliance with government regulations or industry standards; risks related to intellectual property claims or the Company’s ability to protect its proprietary technology and intellectual property rights; and other factors discussed under the heading “Risk Factors” in the Company’s most recent annual report on Form 20-F filed with the Securities and Exchange Commission. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Gartner Disclaimers

GARTNER is a registered trademark and service mark of Gartner and Magic Quadrant and Peer Insights are a registered trademark, of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved.

​Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

Gartner Peer Insights content consists of the opinions of individual end users based on their own experiences with the vendors listed on the platform, should not be construed as statements of fact, nor do they represent the views of Gartner or its affiliates. Gartner does not endorse any vendor, product or service depicted in this content nor makes any warranties, expressed or implied, with respect to this content, about its accuracy or completeness, including any warranties of merchantability or fitness for a particular purpose.

 
CYBERARK SOFTWARE LTD.
Consolidated Statements of Operations
U.S. dollars in thousands (except per share data)
(Unaudited)
 
Three Months Ended Nine Months Ended
September 30, September 30,

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 
Revenues:
Subscription

$

74,249

 

$

122,879

 

$

192,198

 

$

321,766

 

Perpetual license

 

13,790

 

 

4,056

 

 

35,385

 

 

13,028

 

Maintenance and professional services

 

64,631

 

 

64,301

 

 

194,976

 

 

193,990

 

 
Total revenues

 

152,670

 

 

191,236

 

 

422,559

 

 

528,784

 

 
Cost of revenues:
Subscription

 

12,214

 

 

21,281

 

 

32,487

 

 

54,859

 

Perpetual license

 

703

 

 

642

 

 

1,980

 

 

1,173

 

Maintenance and professional services

 

19,548

 

 

19,816

 

 

56,751

 

 

60,446

 

 
Total cost of revenues

 

32,465

 

 

41,739

 

 

91,218

 

 

116,478

 

 
Gross profit

 

120,205

 

 

149,497

 

 

331,341

 

 

412,306

 

 
Operating expenses:
Research and development

 

48,437

 

 

51,733

 

 

138,844

 

 

157,653

 

Sales and marketing

 

90,298

 

 

98,859

 

 

254,536

 

 

299,376

 

General and administrative

 

20,738

 

 

24,642

 

 

60,342

 

 

67,038

 

 
Total operating expenses

 

159,473

 

 

175,234

 

 

453,722

 

 

524,067

 

 
Operating loss

 

(39,268

)

 

(25,737

)

 

(122,381

)

 

(111,761

)

 
Financial income, net

 

3,641

 

 

12,424

 

 

6,269

 

 

33,912

 

 
Loss before taxes on income

 

(35,627

)

 

(13,313

)

 

(116,112

)

 

(77,849

)

 
Tax benefit (taxes on income)

 

2,902

 

 

(1,296

)

 

7,948

 

 

2,434

 

 
Net loss

$

(32,725

)

$

(14,609

)

$

(108,164

)

$

(75,415

)

 
 
Basic loss per ordinary share

$

(0.80

)

$

(0.35

)

$

(2.67

)

$

(1.82

)

Diluted loss per ordinary share

$

(0.80

)

$

(0.35

)

$

(2.67

)

$

(1.82

)

 
Shares used in computing net loss
per ordinary shares, basic

 

40,834,640

 

 

41,899,371

 

 

40,488,909

 

 

41,539,052

 

Shares used in computing net loss
per ordinary shares, diluted

 

40,834,640

 

 

41,899,371

 

 

40,488,909

 

 

41,539,052

 

 

CYBERARK SOFTWARE LTD.

Consolidated Balance Sheets

U.S. dollars in thousands

(Unaudited)

   
December 31, September 30,

 

2022

 

 

 

2023

 

 
 
ASSETS
 
CURRENT ASSETS:
Cash and cash equivalents

$

347,338

 

$

372,196

 

Short-term bank deposits

 

305,843

 

 

284,461

 

Marketable securities

 

301,101

 

 

249,539

 

Trade receivables

 

120,817

 

 

118,983

 

Prepaid expenses and other current assets

 

22,482

 

 

26,308

 

 
Total current assets

 

1,097,581

 

 

1,051,487

 

 
LONG-TERM ASSETS:
Marketable securities

 

227,748

 

 

322,026

 

Property and equipment, net

 

23,474

 

 

17,814

 

Intangible assets, net

 

27,508

 

 

22,050

 

Goodwill

 

153,241

 

 

153,241

 

Other long-term assets

 

217,040

 

 

213,243

 

Deferred tax asset

 

72,809

 

 

85,005

 

 
Total long-term assets

 

721,820

 

 

813,379

 

 
TOTAL ASSETS

$

1,819,401

 

$

1,864,866

 

 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Trade payables

$

13,642

 

$

12,624

 

Employees and payroll accruals

 

77,328

 

 

70,750

 

Accrued expenses and other current liabilities

 

33,584

 

 

33,022

 

Deferred revenues

 

327,918

 

 

357,282

 

 
Total current liabilities

 

452,472

 

 

473,678

 

 
LONG-TERM LIABILITIES:
Convertible senior notes, net

 

569,344

 

 

571,590

 

Deferred revenues

 

80,524

 

 

65,773

 

Other long-term liabilities

 

38,917

 

 

33,376

 

 
Total long-term liabilities

 

688,785

 

 

670,739

 

 
TOTAL LIABILITIES

 

1,141,257

 

 

1,144,417

 

 
SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0.01 par value

 

107

 

 

110

 

Additional paid-in capital

 

660,289

 

 

774,882

 

Accumulated other comprehensive income (loss)

 

(15,560

)

 

(12,436

)

Retained earnings (accumulated deficit)

 

33,308

 

 

(42,107

)

 
Total shareholders' equity

 

678,144

 

 

720,449

 

 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  

$

1,819,401

 

$

1,864,866

 

 

CYBERARK SOFTWARE LTD.

Consolidated Statements of Cash Flows

U.S. dollars in thousands

(Unaudited)

 
Nine Months Ended
September 30,

 

2022

 

 

 

2023

 

 
Cash flows from operating activities:
Net loss

$

(108,164

)

$

(75,415

)

Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization

 

11,883

 

 

15,097

 

Amortization of premium and accretion of discount on marketable securities, net

 

3,976

 

 

(2,724

)

Share-based compensation

 

88,593

 

 

102,565

 

Deferred income taxes, net

 

(14,267

)

 

(10,763

)

Decrease in trade receivables

 

23,865

 

 

1,834

 

Amortization of debt discount and issuance costs

 

2,234

 

 

2,245

 

Increase in prepaid expenses, other current and long-term assets and others

 

(19,769

)

 

(22,564

)

Changes in operating lease right-of-use assets

 

2,781

 

 

5,495

 

Increase (decrease) in trade payables

 

509

 

 

(980

)

Increase in short-term and long-term deferred revenues

 

58,814

 

 

14,613

 

Decrease in employees and payroll accruals

 

(16,285

)

 

(13,579

)

Increase in accrued expenses and other current and long-term liabilities

 

2,259

 

 

669

 

Changes in operating lease liabilities

 

(7,218

)

 

(7,187

)

 
Net cash provided by operating activities

 

29,211

 

 

9,306

 

 
Cash flows from investing activities:
Investment in short and long term deposits

 

(320,320

)

 

(204,461

)

Proceeds from short and long term deposits

 

363,905

 

 

243,630

 

Investment in marketable securities and other

 

(318,566

)

 

(322,049

)

Proceeds from sales and maturities of marketable securities and other

 

256,899

 

 

285,445

 

Purchase of property and equipment

 

(8,778

)

 

(4,253

)

Payments for business acquisitions, net of cash acquired

 

(41,285

)

 

-

 

 
Net cash used in investing activities

 

(68,145

)

 

(1,688

)

 
Cash flows from financing activities:
Proceeds from (payment of) withholding tax related to employee stock plans

 

(811

)

 

3,210

 

Proceeds from exercise of stock options

 

1,729

 

 

4,209

 

Proceeds in connection with employees stock purchase plan

 

12,322

 

 

11,776

 

Payments of contingent consideration related to acquisitions

 

(1,578

)

 

-

 

 
Net cash provided by financing activities

 

11,662

 

 

19,195

 

 
Increase (decrease) in cash, cash equivalents

 

(27,272

)

 

26,813

 

 
Effect of exchange rate differences on cash, cash equivalents

 

(5,045

)

 

(1,955

)

 
Cash and cash equivalents at the beginning of the period

 

356,850

 

 

347,338

 

 
Cash and cash equivalents at the end of the period

$

324,533

 

$

372,196

 

 
CYBERARK SOFTWARE LTD.
Reconciliation of GAAP Measures to Non-GAAP Measures
U.S. dollars in thousands (except per share data)
(Unaudited)
Reconciliation of Net cash provided by operating activities to Free cash flow:  
Three Months Ended Nine Months Ended
September 30, September 30,

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

Net cash provided by operating activities

$

18,481

 

$

14,353

 

$

29,211

 

$

9,306

 

Less:
Purchase of property and equipment

 

(4,618

)

 

(731

)

 

(8,778

)

 

(4,253

)

Free cash flow

$

13,863

 

$

13,622

 

$

20,433

 

$

5,053

 

GAAP net cash used in investing activities

 

(72,380

)

 

(42,788

)

 

(68,145

)

 

(1,688

)

GAAP net cash provided by (used in) financing activities

 

(1,602

)

 

5,510

 

 

11,662

 

 

19,195

 

Reconciliation of Gross Profit to Non-GAAP Gross Profit:
Three Months Ended Nine Months Ended
September 30, September 30,

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

Gross profit

$

120,205

 

$

149,497

 

$

331,341

 

$

412,306

 

Plus:
Share-based compensation (1)

 

4,030

 

 

4,780

 

 

10,962

 

 

13,112

 

Amortization of share-based compensation capitalized in software development costs (3)  

 

88

 

 

103

 

 

264

 

 

309

 

Amortization of intangible assets (2)

 

1,639

 

 

1,704

 

 

4,339

 

 

5,113

 

Impairment of capitalized software development costs

 

-

 

 

2,067

 

 

-

 

 

2,067

 

Non-GAAP gross profit

$

125,962

 

$

158,151

 

$

346,906

 

$

432,907

 

Reconciliation of Operating Expenses to Non-GAAP Operating Expenses:  
Three Months Ended Nine Months Ended
September 30, September 30,

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

Operating expenses

$

159,473

 

$

175,234

 

$

453,722

 

$

524,067

 

Less:
Share-based compensation (1)

 

27,712

 

 

33,821

 

 

77,631

 

 

89,454

 

Amortization of intangible assets (2)

 

154

 

 

139

 

 

458

 

 

410

 

Acquisition related expenses

 

1,653

 

 

-

 

 

2,244

 

 

-

 

Non-GAAP operating expenses

$

129,954

 

$

141,274

 

$

373,389

 

$

434,203

 

Reconciliation of Operating Loss to Non-GAAP Operating Income (Loss):  
Three Months Ended Nine Months Ended
September 30, September 30,

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

Operating loss

$

(39,268

)

$

(25,737

)

$

(122,381

)

$

(111,761

)

Plus:
Share-based compensation (1)

 

31,742

 

 

38,601

 

 

88,593

 

 

102,566

 

Amortization of share-based compensation capitalized in software development costs (3)  

 

88

 

 

103

 

 

264

 

 

309

 

Amortization of intangible assets (2)

 

1,793

 

 

1,843

 

 

4,797

 

 

5,523

 

Acquisition related expenses

 

1,653

 

 

-

 

 

2,244

 

 

-

 

Impairment of capitalized software development costs

 

2,067

 

 

-

 

 

2,067

 

Non-GAAP operating income (loss)

$

(3,992

)

$

16,877

 

$

(26,483

)

$

(1,296

)

Reconciliation of Net Loss to Non-GAAP Net Income (loss):
Three Months Ended Nine Months Ended
September 30, September 30,

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

Net loss

$

(32,725

)

$

(14,609

)

$

(108,164

)

$

(75,415

)

Plus:
Share-based compensation (1)

 

31,742

 

 

38,601

 

 

88,593

 

 

102,566

 

Amortization of share-based compensation capitalized in software development costs (3)  

 

88

 

 

103

 

 

264

 

 

309

 

Amortization of intangible assets (2)

 

1,793

 

 

1,843

 

 

4,797

 

 

5,523

 

Acquisition related expenses

 

1,653

 

 

-

 

 

2,244

 

 

-

 

Amortization of debt discount and issuance costs

 

746

 

 

748

 

 

2,234

 

 

2,244

 

Unrealized Gain from investment in privately held companies

 

(324

)

 

(250

)

 

(324

)

 

(544

)

Impairment of capitalized software development costs

 

-

 

 

2,067

 

 

-

 

 

2,067

 

Taxes on income related to non-GAAP adjustments

 

(5,307

)

 

(8,894

)

 

(14,629

)

 

(22,808

)

Non-GAAP net income (loss)

$

(2,334

)

$

19,609

 

$

(24,985

)

$

13,942

 

Non-GAAP net income (loss) per share
Basic

$

(0.06

)

$

0.47

 

$

(0.62

)

$

0.34

 

Diluted

$

(0.06

)

$

0.42

 

$

(0.62

)

$

0.30

 

Weighted average number of shares
Basic

 

40,834,640

 

 

41,899,371

 

 

40,488,909

 

 

41,539,052

 

Diluted

 

40,834,640

 

 

46,641,527

 

 

40,488,909

 

 

46,134,041

 

 
(1) Share-based Compensation :
Three Months Ended Nine Months Ended
September 30, September 30,

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

Cost of revenues - Subscription

$

634

 

$

1,149

 

$

1,527

 

$

2,959

 

Cost of revenues - Perpetual license

 

42

 

 

11

 

 

103

 

 

30

 

Cost of revenues - Maintenance and Professional services

 

3,354

 

 

3,620

 

 

9,332

 

 

10,123

 

Research and development

 

6,983

 

 

7,867

 

 

19,787

 

 

21,797

 

Sales and marketing

 

13,654

 

 

15,800

 

 

37,415

 

 

43,990

 

General and administrative

 

7,075

 

 

10,154

 

 

20,429

 

 

23,667

 

Total share-based compensation

$

31,742

 

$

38,601

 

$

88,593

 

$

102,566

 

 
(2) Amortization of intangible assets :
Three Months Ended Nine Months Ended
September 30, September 30,

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

Cost of revenues - Subscription

$

1,598

 

$

1,704

 

$

4,231

 

$

5,113

 

Cost of revenues - Perpetual license

 

41

 

 

-

 

 

108

 

 

-

 

Sales and marketing

 

154

 

 

139

 

 

458

 

 

410

 

Total amortization of intangible assets

$

1,793

 

$

1,843

 

$

4,797

 

$

5,523

 

 
(3) Classified as Cost of revenues - Subscription.

 

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