CyberArk Software : presentationPDF

INVESTOR RELATIONS

PRESENTATION

February 2021

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 and the resulting 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 impacts from the COVID-19 pandemic; difficulties predicting future financial results, including due to impacts from the COVID-19 pandemic; the Company's plan to begin actively transitioning its business to a recurring revenue model in 2021; changes to the drivers of the Company's growth; 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 systems; 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.

OVERVIEW

CYBERARK AT A GLANCE

$274M

6,600

>50%

>35%

ARR

Customers (2)

Fortune 500

Global 2000

(31 Dec '20)

>40%

>90%

>450

>160

Total Recurring

Revenue Growth

Maintenance Renewal Rate (3)Channel Partners

Certified C3

Partners

Y-Y (1)

Notes:

1.Year over year growth rate from Q4 2019. Recurring revenue = SaaS + Subscription (TBL) revenue + Maintenance Revenue related to perpetual license contracts 2.As of December 31, 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, 2020

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

6,600

Global CustomersMore than 50% of Fortune 500

More than 35% of Global 2000

NEED FOR IDENTITY SECURITY

CONFIDENTIAL INFORMATION

SECULAR TRENDS ARE DRIVING ENTERPRISES' NEED FOR SECURITY

MANAGING RISK

• • Data Breach

• • Network Takeover

• • Loss of Critical Information

• • Reputational Damage

CLOUD MIGRATION

• • Complex, Hybrid Architecture

• • Multiple and Decentralized Data Sources and Environments

COMPLIANCE

• • GDPR

• • Sarbanes Oxley

• • HIPAA

• • PCI

• • NIST Zero Trust Framework

DIGITAL TRANSFORMATION

• • Proliferation of IT Assets and Devices

• • Rise of DevOps

HACKER INNOVATION

• • Organized criminal groups were behind 39% of breaches(1)

• • 23% of attackers identified as nation-states or state-affiliated(1)

(1)Notes:1. Verizon, 2019 Data Breach Investigations Report

TECHNOLOGIES CHANGE. ATTACK PATHS DON'T.

SOLARWINDS BREACH: 18,000+ ORGANIZATIONS IMPACTED

PRIVILEGE IS EVERYWHERE

ALL IDENTITIES CAN BE PRIVILEGED UNDER CERTAIN CONDITIONS

WORKPLACES

WORKSPACES

CYBERARK'S MISSION

Provide a modern approach to IDENTITY SECURITY anchored on privilege to protect against advanced cyber threats

IDENTITY SECURITY DEFINITION

AdminsDevOpsApps / RobotsWorkforce

3rd Party

CustomersOn-Prem InfrastructureOn-Prem

AppsCI/CD PipelinesSaaS

IaaS / PaaS

IDENTITY SECURITY BUSINESS VALUE

Defend Against

Attacks:

Secure

Drive Operational

Efficiencies:

Simplify

Enable the Digital Business:

Automate

Satisfy Audit and

Compliance:

Standardize

• • Foundational, risk-based PAM controls

• • Adaptive and context based Access

• • Least Privilege, JIT access

• • Human and machine identities

• • Broad, Hybrid platforms

• • Trusted advisor, CyberArk Labs

• • Consistently Enable Privileged Users

• • Centralized visibility and control

• • Self Service

• • Native Access

• • SaaS model

• • Technology Partnerships

• • CyberArk Blueprint

• • Platform for current and future IT environment

• • Broadest out-of-the-box integrations

• • Velocity and Agility

• • API First

• • Maximum uptime and availability

• • Cloud Agnostic

• • Brand Reputation

• • Financial Impact

• • Alignment with industry standard risk frameworks and regulations

• • Centralized visibility with full audit trail

• • Reallocate staff to strategic priorities

• • Continuous Compliance

CYBERARK IDENTITY SECURITY PLATFORM

Endpoint Privilege Manager

Workstations | Servers

Vendor Privileged

Access ManagerPrivileged

Access Manager

Cloud | On Premises

Cloud Entitlements

Manager

Security First • AI-Enabled • Frictionless • Everywhere

Customer

Identity

IDENTITY SECURITY PLATFORM

CHALLENGES: SECURING THE CLOUD

19%	15,000+	$4.4M	#1
Of data breaches involve	Permissions to access services	Average cost of a cloud	Over-permissioned accounts and
misconfigured cloud servers.	across AWS, Azure and	misconfiguration data breach.	roles is the top-ranked cloud
GCP…and counting.	service misconfiguration.
(tied with stolen credentials for #1 threat)
2020 IBM Cost of a Data Breach	2020 IBM Cost of a Data Breach	ESG Research - Trends in IAM: Cloud-
Report	Report	driven Identities

>40%

of companies involved in the largest recent breaches turned to CyberArk

Source: IDG's"Biggest breaches of the 21stCentury"

Published 1.28.18 and internal CyberArk analysis

CYBERARK NAMED A LEADER IN GARTNER 2020 MAGIC QUADRANT FOR PRIVILEGED ACCESS MANAGEMENT

Positioned Both Highest in Ability to Execute and Furthest in Completeness of Vision.

Gartner, Magic Quadrant for Privileged Access Management, Felix Gaehtgens, Abhyuday Data, Michael Kelley, 4 August 2020

This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request fromhttps://lp.cyberark.com/gartner-mq-pam-leader

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.

MULTIPLE DRIVERS FOR LONG-TERM GROWTH

Q4 AND FULL YEAR

RESULTS

2020 FULL YEAR FINANCIAL HIGHLIGHTS

$274M	53%	>35%	27%
ARR	of 2020 Total Revenue is	of New License Bookings	Deferred Revenue
(31 Dec '20)	Recurring Revenue	in 2020 SaaS &	Growth Y-Y in 2020
Subscription
43%	41%	1300+	400+%
ARR Growth	Recurring Revenue	New Logos*	SaaS Deferred
Y-Y in 2020	Growth Y-Y in 2020	Revenue Growth Y-Y
in 2020

*CyberArk added ~280 logos in Q4, 2020. Full year new logo count includes approximately 500 logos acquired from idaptive.

RECORD REVENUE IN 4Q 2020

$ Millions

$145

$130

Q4 2018

$109

<5%

Q4 2019

~10%

% of New License Bookings from SaaS and Subscription

Total Revenue

Q4 2020

ACCELERATION OF SAAS AND SUBSCRIPTION

$145

Q4 2018

Q4 2019

Q4 2020

Professional ServicesPerpetual LicenseRecurring Maintenance

*Rounding causes numbers not to sum to total.

Subscription (TBL)SaaS

48% of Total Revenue is Recurring Compared to 38% Last Year

$145

Q4 2018

Professional Services

*Recurring Revenue growth

Recurring Revenue = SaaS + Subscription (TBL) + Recurring Maintenance

*Rounding causes numbers not to sum to total.

Q4 2019Perpetual LicenseQ4 2020

Recurring Revenue

+$18M Headwind

Q4 2018Professional Services

Perpetual License

Recurring Revenue = SaaS + Subscription (TBL) + Recurring Maintenance

Q4 2019

Recurring RevenueQ4 2020Headwind

Headwind reflects an assumption that SaaS, subscription and perpetual bookings mix as a percentage of total bookings remained the same as the prior year (with the incremental SaaS and subscription booked as perpetual license). This estimate is useful for quantifying the impact of our bookings mix on our recognized revenue, but should not viewed as comparable to, or a substitute for, revenues provided in accordance with U.S. GAAP.

*Rounding causes numbers not to sum to total.

ACCELERATION OF ANNUAL RECURRING REVENUE (ARR)

$ Millions

$274

Q4 2018

Q4 2019

Q4 2020

FULL YEAR TOTAL REVENUE IMPACTED BY BOOKINGS

MIX SHIFT

$ Millions

$464

$434

$343

~5%

~10%

2018

2019

% of New License Bookings from SaaS and Subscription

Total Revenue

2020

RECURRING LICENSE OF $50 MILLION IN 2020

$ Millions

Professional ServicesPerpetual LicenseRecurring MaintenanceSubscription (TBL)SaaS

*Rounding causes numbers not to sum to total.

$464

53% of Total Revenue is Recurring Compared to 40% Last Year $ Millions

$434

$464

*Recurring Revenue growth

Recurring Revenue = SaaS + Subscription (TBL) + Recurring Maintenance

*Rounding causes numbers not to sum to total.

53% of Total Revenue is Recurring Compared to 40% Last Year $ Millions

+$45M Headwind

Professional Services

Perpetual License

Recurring Revenue = SaaS + Subscription (TBL) + Recurring Maintenance

Headwind reflects an assumption that SaaS, subscription and perpetual bookings mix as a percentage of total bookings remained the same as the prior year (with the incremental SaaS and subscription booked as perpetual license). This estimate is useful for quantifying the impact of our bookings mix on our recognized revenue, but should not viewed as comparable to, or a substitute for, revenues provided in accordance with U.S. GAAP.

*Rounding causes numbers not to sum to total.

Recurring Revenue

Headwind

GLOBAL BUSINESS ACROSS DIVERSE INDUSTRIES

Revenue by Geography

Bookings by Vertical

Banking Government Manufacturing Insurance Energy Healthcare

IT Services & Software Retail

Telecom Pharmaceuticals Transportation & Travel Professional Services Other

PROFITABILITY AND CASH FLOW

NON-GAAP OPERATING INCOME ($M)

+Headwind 26%

Operating Margin

Free Cash Flow ($M)

$135

2018

2019

Operating IncomeHeadwind

2020

2018

2019

2020

Headwind reflects an assumption that SaaS, subscription and perpetual bookings mix as a percentage of total bookings remained the same as the prior year (with the incremental SaaS and subscription booked as perpetual license). This estimate is useful for quantifying the impact of our bookings mix on our recognized revenue, but should not viewed as comparable to, or a substitute for, revenues provided in accordance with U.S. GAAP.

DEFERRED REVENUE GROWTH DRIVEN BY SAAS BUSINESS

Deferred Revenue ($M)

Total SaaS Deferred Revenue ($M)

$46

Dec-18

Dec-19

Dec-20

Dec-18

Dec-19

Dec-20

2020 FULL YEAR FINANCIAL HIGHLIGHTS

$274M	53%	>35%	27%
ARR	of 2020 Total Revenue is	of New License Bookings	Deferred Revenue
(31 Dec '20)	Recurring Revenue	in 2020 SaaS &	Growth Y-Y in 2020
Subscription
43%	41%	1300+	400+%
ARR Growth	Recurring Revenue	New Logos*	SaaS Deferred
Y-Y in 2020	Growth Y-Y in 2020	Revenue Growth Y-Y
in 2020

*CyberArk added ~280 logos in Q4, 2020. Full year new logo count includes approximately 500 logos acquired from idaptive.

GUIDANCE

1Q 2021	2021
Total Revenue	$106 to $112 million	$484 to $496 million
Non-GAAP Operating (Loss) Income	$(2.5) to $2.5 million	$20 to $30 million
Non-GAAP EPS	$(0.03) per basic and diluted share to $0.07 per diluted share	$0.45 to $0.64 per diluted share
Weighted Average Shares Outstanding	39.2 million basic and diluted shares 40.7 million diluted shares	40.8 million shares
Non-GAAP Effective Tax Rate	~23%	~23%

Based on information available as of February 11, 2021, CyberArk is issuing guidance for the first quarter and full year as indicated above. Guidance assumes headwind of $10 million to revenue for the first quarter and $39 million for the full year. Headwind above reflects an assumption that SaaS, subscription and perpetual bookings mix as a percentage of total bookings remained the same as the prior year (with the incremental SaaS and subscription booked as perpetual license). This estimate is useful for quantifying the impact of our bookings mix on our recognized revenue, but should not viewed as comparable to, or a substitute for, revenues provided in accordance with U.S. GAAP.

HOW WE CALCULATE ARR

Annual Recurring Revenue (ARR) is the annualized value of SaaS, Subscription (term-based license) and Maintenance contracts related to perpetual licenses customer contracts as of the end of the reporting period.

TCV x 365

ARR =

Duration (days)

GAAP TO NON-GAAP RECONCILIATION

(In Thousands)

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

2017

2018

2019

2020

Q4 2018

Q4 2019

Q4 2020

$20,326 25,237 5,945

$47,292 35,964 6,624

$62,284 55,517 5,605

$6,006 71,849 13,453

$27,521 10,294 1, 643

$22,941 $18,789

18,031 18,474

1,112 2,620

342

580

--

140

327

--

--

$51,850

$90,460

$123,406

$91,448

$39,785

$42,084 $39,883

GAAP net income to Non-GAAP net income:

Net Income

$16,015

$47,072

$63,064

$(5,758)

$24,180

$20,736 $12,054

Share-based compensation

Acquisition related costs &

amortization of acquired intangibles

Facility exit costs

Amortization of debt discount and issuance costs

Non-GAAP tax adjustments & IP Transfer

Non-GAAP net income

25,237 5,945

35,964 6,624

55,517 5,605

71,849 13,453

10,294 1,643

18,031 18,474

1,112 2,620

342

580

--

--

--1,966

140 17,183

327

----1,966

--4,352

(5,644)

(13,717)

(18,251)

(15,771)

(3,003)

(4,014)

(4,851)

$41,895

$76,523

$107,901

$81,096

$33,441

$37,831

$32,649

THANK YOU