CyberArk Software : Idaptive Presentation

INVESTOR PRESENTATION

August 2020

CONFIDENTIAL INFORMATION

1

CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS

This presentation 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, performance or achievements to differ significantly from the results, 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: the duration and scope of the COVID-19 pandemic and the impact of the pandemic and actions taken in response, on global and regional economies and economic activity, which may have a material impact on the demand for the Company's solutions and on its expected revenue growth rates and costs; the Company's ability to adjust its operations in response to any impacts from the COVID-19 pandemic; difficulties predicting future financial results, including due to impacts from the COVID-19 pandemic; the drivers of the Company's growth may change; the Company's ability to sell into existing and new industry verticals; the Company's sales cycles and multiple licensing models may cause results to fluctuate; the Company's ability to sell into existing customers; potential changes in the Company's operating and net profit margins and the Company's revenue growth rate; the Company's ability to successfully find, complete, fully integrate and achieve the expected benefits of future acquisitions, including the Company's ability to integrate and achieve the expected benefits of Idaptive; real or perceived shortcomings, defects or vulnerabilities in the Company's solutions or internal network system; the Company's ability to hire qualified personnel; the Company's ability to expand its channel partnerships across existing and new geographies; the Company's ability to further diversify its product deployments and licensing options; 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 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.

2

CYBERARK AT A GLANCE

33%	>6,000	>50%	>35%
2014 - 2019
Revenue CAGR

Customers (2)	Fortune 500	Global 2000
Maintenance	Channel Partners	Certified C3 Partners
Renewal Rate (3)

28%	>90%	>450	>150
Operating
Margin

Revenue

Operating Income (1)

Notes:

1. Presented on Non-GAAP basis. For a reconciliation to GAAP operating income at end of presentation
2. As of Q2 2020
3. We measure the perpetual license maintenance renewal rate for our customers over a 12-month period, based on a dollar renewal rate of contracts expiring during that time period. Our perpetual license maintenance renewal rate is measured three months after the 12-month period ends to account for late renewals; Info is for the year ended December 31, 2019

STRONG BUSINESS MOMENTUM

2019 $434M $123M $142M 5.3K

33%		6x		6x		24%
CAGR						CAGR

2014

$103M

$22M

$23M

1.8K

REVENUE

OPERATING INCOME

OPERATING CASH FLOW

CUSTOMERS

4

STRONG BUSINESS MOMENTUM

Manufacturing		Telecom	Pharma
21 OF THE TOP 25		20 OF THE TOP 25	18 OF THE TOP 25

Insurance		Banks	Energy
20 OF THE TOP 25		23 OF THE TOP 25	21 OF THE TOP 25

6,000+	More than	More than
35% of Global
Global Customers	50% of Fortune 500
2000

PRIVILEGED CREDENTIALS IN THE NEWS

6

PRIVILEGE IS EVERYWHERE

ALL IDENTITIES CAN BE PRIVILEGED UNDER CERTAIN CONDITIONS

Hybrid Cloud

SaaS

IaaS / PaaS

*nix Server	IoT	IT Ops Tools
			Cloud Native	Containers	VM's &	Serverless
App Server	Database	Network Devices	Apps		Storage
		Code	Code			Code

Admin

DevOps

Apps / Robots

3rd Party Vendors

Workforce

IDENTITIES

Office

WFH

Temporary Location

Mac

PC

Mobile

WORKPLACES

WORKSPACES

CYBERARK'S MISSION

Provide a modern approach

to IDENTITY SECURITY

anchored on privilege to protect against advanced cyber threats

8

SECULAR TRENDS ARE DRIVING ENTERPRISES' NEED FOR SECURITY

MANAGING RISK	COMPLIANCE
•	Data Breach	•	GDPR
•	Network Takeover	•	Sarbanes Oxley
•	Loss of Critical Information	•	HIPAA
•	Reputational Damage	•	PCI

• Complex, Hybrid Architecture
• Multiple and Decentralized Data Sources and Environments

• Organized criminal groups were behind 39% of breaches(1)
• 23% of attackers identified as nation-states or state-affiliated(1)

• Proliferation of IT Assets and Devices
• Rise of DevOps

CLOUD MIGRATION

HACKER INNOVATION

DIGITAL TRANSFORMATION

Notes:

1. Verizon, 2019 Data Breach Investigations Report

THE ATTACK SURFACE CONTINUES TO GROW

10

THE ATTACK CHAIN REMAINS THE SAME

Hybrid

Cloud

11

CYBERARK IDENTITY SECURITY PLATFORM

Admin

On-Prem

Infrastructure

DevOps

	CyberArk SaaS Identity		On-Prem Apps
Apps / Robots	Security Platform	CyberArk
	Connector

3rd Party Vendors

Identity

Directories

(AD / LDAP)

Workforce

IaaS / PaaS

SaaS

CYBERARK COMPLETE IDENTITY SECURITY

Security First Approach | AI Powered | Frictionless Experience | Everywhere

12

CYBERARK IDENTITY SECURITY PLATFORM SERVICES

CyberArk SaaS Identity

Security Platform

• Least Privilege / JIT Access
• Continuous Contextual Access
• Session Isolation & Management

• Secrets Vault

• AI Powered Identity Engine

• Directory Services

• Unified Discovery & Policy Engine

• Endpoint Identity Security

13

CYBERARK IDENTITY SECURITY PORTFOLIO

WORKFORCE	PRIVILEGED	SECRETS
ACCESS MANAGEMENT
AND WORKSPACE	MANAGEMENT
	PRIVILEGE CLOUD	CORE PRIVILEGED ACCESS SECURITY
IDAPTIVE	SaaS	On-Premise	APPLICATION ACCESS MANGER
Access Management for MFA,	Foundational PAM Controls for Credential and Session Management	Secrets Management for
SSO and Lifecycle Management	Applications, Tools, Containers,
			and DevOps
ENDPOINT PRIVILEGE MANAGER		ALERO

Least Privilege for Workstations	Third Party Remote Access to CyberArk PAM
and Windows Servers

HYBRID TO MULTI-CLOUD

SECURITY FIRST APPROACH | AI-POWERED| FRICTIONLESS EXPERIENCE | EVERYWHERE

DELIVERING THE MOST COMPREHENSIVE PAM SAAS PORTFOLIO

ENDPOINT

PRIVILEGE

MANAGER

Enforce least

privilege, credential theft protection and application control at scale

PRIVILEGE	ALERO	IDAPTIVE
CLOUD

Store, rotate and isolate	Implement Zero Trust	Modern AI-powered
credentials, monitor	access, Just-in-Time	IDaaS Platform
sessions and deliver	provisioning and	enables adaptive
risk reduction to the	biometric	MFA, SSO for context
business	authentication for	aware zero trust
	remote vendors	access

15

INNOVATION IS IN OUR DNA

Zero Trust Remote Vendor

Access SaaS Offering

Secure DevOps

Secrets

Detect and Prevent

Kerberos Attacks

Admins and Privileged

Business Users

IDaaS Platform for Adaptive SSO and

MFA

Detect and Prevent

Privileged Threats

Secure and Monitor

Privileged Sessions

Secure Endpoint

Credentials

Vault and Rotate

Privileged Credentials

Privileged Attacks

Research

Secure Cloud and

Virtual Infrastructure

Protect Privilege in

Application

16

C3 ALLIANCE

150+ CERTIFIED PARTNERS

250+ CERTIFIED JOINT SOLUTIONS

Identity &

Orchestra

Robotic

Vulnerabi

Analytics

ICS

Access

Authentic

ITSM

Detection

tion &

DevOps

Process

Discovery

SIEM

Governan

HSM

lity

Manage

ation

Respons

Automati

ce

Manage

ment

e

on

ment

200+ PLUG-INS

CPM Plug-ins

PSM Plug-ins

MULTIPLE DRIVERS FOR LONG-TERM GROWTH

Growth Vectors

Industry Tailwinds

Deliver New

Innovation

Expand & Cross-Sell with New Products

Land New

Customers

Extend CORE

PAS Deployment

Favorable Competitive	Digital Transformation	Increasing Attack Surface	Escalating Cyber
Landscape			Threatscape

40%

of the companies involved in the largest recent breaches turned to CyberArk

Source: IDG's "Biggest breaches of the 21st Century"

19

FINANCIAL OVERVIEW

20

TRACK RECORD OF STRONG GROWTH

COVID-19 RELATED LICENSE REVENUE IMPACT IN 1H 2020

26%

			GROWTH			($mm)
	31%						Maint. / PS
		$434
	GROWTH
					License
	$343
			$196
$262	$151
			$196	$213
$114
			$93	$114

$238

$192

$148

$103$99

2017

2018

2019

6 Months 2019

6 Months 2020

21

PROFITABLE WHILE INVESTING FOR GROWTH

Non-GAAP Operating Income1 and Margins

($mm)

28%

26%

	20%		$90	$123	26%	18%
	$52				$52		$38

2017

2018

2019

6 Months 2019

6 Months 2020

1 See appendix for Non-GAAP reconciliation

22

HISTORY OF STRONG CASH FLOW

Operating Cash Flow	Total Deferred Revenue
($mm)	($mm)

$226

$130	$142		$190	$174
			$150
$81		$67	$105
		$53

2017	2018	2019	6M 2019	6M 2020	2017	2018	2019	Jun-19	Jun-20

23

GLOBAL BUSINESS ACROSS DIVERSE INDUSTRIES

Revenue by Geography

9%

30% Geographies

FY2019

61%

Americas

EMEA

APJ

Bookings by Vertical

		3%
		4%9%3%
4%	9%
5%	4%	9%
28%
5%	4%
5%	5%
6%		Verticals
		7
			FY2019

6%

	14%
7%	8%
7%

Banking

Government

Manufacturing

Healthcare

Energy

IT Services & Software

Insurance

Telecom

Retail

Professional Services

Pharmaceuticals

Transportation & Travel

Other

NASDAQ: CYBR

www.cyberark.com

25

GAAP TO NON-GAAP RECONCILIATION

(in thousands)	2017	2018	2019	6M 2019	6M 2020

GAAP operating income to Non-GAAP operating income:

Operating Income

Share-based compensation

Acquisition related costs & amortization of acquired intangibles

Facility exit costs

Non-GAAP operating income

$20,326	$47,292	$62,284	$26,603	($2,308)
25,237	35,964	55,517	22,148	33,059
5,945	6,624	5,605	3,176	7,704
342	580	--	--	--
$51,850	$90,460	$123,406	$51,927	$38,455

GAAP net income to Non-GAAP net income:
Net Income	$16,015	$47,072	$63,064	$27,080	($1,930)
Share-based compensation	25,237	35,964	55,517	22,148	33,059
Acquisition related costs &	5,945	6,624	5,605	3,176	7,704
amortization of acquired intangibles
Facility exit costs	342	580	--	--	--
Amortization of debt discount and issuance costs	--	--	1,966	--	8,517
Non-GAAP tax adjustments	(5,644)	(13,717)	(18,251)	(7,892)	(11,078)
Non-GAAP net income	$41,895	$76,523	$107,901	$44,512	$36,272

26