CyberArk Software Ltd. (NASDAQ: CYBR) is expected to release its second-quarter earnings results on Wednesday before the market opens. The results will be benefited by continued focus on investing and innovation as well as growth and scaling of its operations. Despite an increase in costs and expenses, the bottom line will be driven by higher top-line growth.
A meaningful portion of the company’s revenues is generated through deals of significant size, and purchases of its products and services often occur at the end of each quarter. A significant portion of revenue is generated from customers in the financial services industry, including banking and insurance.
The margins are expected to decline due to its investment in expanding its sales force and marketing activity relative to the growth it achieved. The company expects to continue to expand its sales and marketing personnel significantly. Along with this, the company is likely to incur increased amounts on research and development and general and administrative costs associated with scaling its business.
CyberArk is making significant investments in its business in order to drive future growth. The company faces intense competition from a wide variety of IT security vendors operating in different market segments and across diverse IT environments, which may challenge its ability to maintain or improve the competitive position or to meet planned growth rates.
Analysts expect the company’s earnings to jump by 30.60% to $0.47 per share and revenue will climb by 25.20% to $97.29 million for the second quarter. The company has surprised investors by beating analysts’ expectations in all of the past four quarters.
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For the first quarter, CyberArk reported a 113% jump in earnings as a 33% growth in license revenue and a 34% increase in maintenance and professional services revenue drove the top line higher. Overall, the demand trends remained healthy across all geographies with a growing pipeline of activity.
For the second quarter of 2019, CyberArk expects revenues to grow 24-26% year-over-year to a range of $96 million to $98 million, and adjusted EPS to be in the range of $0.45 to $0.48. For the full year of 2019, the company anticipates revenue growth of 21-22% to a range between $415 million and $419 million and adjusted EPS in the range of $2.10 to $2.16.