CyberArk Software (CYBR) 10 Aug 222022 Q2 Earnings call transcript

Good morning. My name is Rex, and I'll be your conference operator today. At this time, I would like to welcome everyone to the CyberArk Q2 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator I'd EFG. introduce time, Investor Smith, Relations and like this Erica to SVP, At Ms. may your you Smith, begin conference.

XXXX me Thank will remarks, you, Udi Josh to to quarter Siegel, today up for Mokady, open joining results. Rex. Good Executive question-and-answer Officer. a morning. the review Thank Chairman and Chief CyberArk's call Officer; today Financial the we call on you Chief us financial session. are With and second prepared After

made remind beyond. management's of me refer call you third on let on begin, our full statements forward-looking reflect the the our XXXX may certain which currently we regarding the beliefs best quarter, year projected considered be discussion Before and specifically to I today of that results for based and expectations available statements information. judgment operations

Commission, or Exchange with Our annual differ website. any statements might to statements. in today. direct in your disclaims in from factors forward-looking today release publicly expressly CyberArk on to projected to press report the Form application US I are those contained actual any the posted to results updates risk filed Securities the and that or CyberArk's the attention release made company's these forward-looking materially any revisions those undertaking and referenced XX-F

an be Additionally, today's presentation in investor available today's call. Reconciliations well non-GAAP press comparable in financial this updated on measures the release will financial also in are to as GAAP measures call. conference discussed that the financial discussion most as outlines directly

Chairman section. metrics. Udi A our that, is of call With Chief in revenues mix I'd IR as the for also or Executive not impact available of or substitute headwind over reported to Mokady. call to to like we Udi? on shift. and a bookings revenue the additional remind a GAAP for color the Officer, that you also subscription should our website turn comparable on other be today's But it to provide want We GAAP webcast viewed our calculated

second and Endpoint categorize platform, to momentum. the in logos for joining with outstanding and Momentum to quarter, best everyone, momentum an PAM, had customers. an our and and Security existing Management channel Privilege Erica, Thanks, momentum by Access, Solutions, Identity thanks the for new momentum across call. We our

into measure Before performance. few metrics our to diving provide metric I stellar best details, that to financial the remains want a success. our the ARR underscore

reached $XXX year-over-year engine. So, million, subscription XX% drawing demonstrating XXX% continued grew Total subscription $XXX a million. year-over-year reaching the acceleration of ARR ARR our

XX% scaling our mind We target. Or how P&L. at to keep continues are pleased with It recurring to accelerating growth ARR the our range guidance $X And with total billion quickly in is revenue $XXX growing said business to QX. is that much exceeded XX%. to revenue in are faster revenue important our impact growth million, subscription than another posted in we transition our we way, the reported coming

full about execution, Normalizing we grown the headwind from In ARR quarter. guidance have well quarter. revenue bookings raising our of growth. $XX guidance. by year, year nearly would million XX% quarter The revenue bookings range total given about in the and second fact, line will Josh the combination best was the of our XX%, subscription our last mix and XX% framework, strength revenue second the our revenue of bookings again at mix talk evidenced by subscription above this later. above to guidance higher ARR are it the our mix the But were

Starting innovation and growth, be to profitability. continue pillars with Our growth.

Security Identity attacker are the Nearly They innovation staying centered and information security zero the few hundreds of senior of last weeks to the Over trust on professionals. with ahead digitize, discussion facing every top conference adopting to and CISO we chief priority security recent our trends RSA Impact from ready to met challenges event, customer industry. are officers the of list. pushing major the the accelerating

and the surpassed $XXX,XXX trends customers our the regions. see year. revenue, leading the as from motion kicked SaaS you tailwinds foundation in all from quarter. secular gear, of strong over in execution X,XXX platform QX our Our have annual with over last continues to selling into way We some higher recurring the up in almost XX% a growth, which serve of

to Our and move is model both to customers. transformative value our us subscription delivering business to

innovations customers, it workforce. customers Fortune beginning in XXX banks, then like based for signing insurance its comes Privileged on our combination in next horizon. productivity, program second major Access contributing management restaurant conservation logos, across management increasing and like and North UiPath business Endpoint among in integrations. The and Manager companies. a quarter, enterprise-wide, buying are This our their cyber PAM and customer Security another new advanced cloud Secrets PAM entire well single are a PAM. platform and risk, with and business. approach enhancing new PAM with wins we to examples the in increasingly, manufacturing commercial truly sign-on diversification SSO retailers, greenfield had power the combination and And Identity including next-gen session wins adaptive back Access, insurance up few expanding all our is a year-over-year new Identity when deal, for management, by life the multiple delivering to to others. Privilege and and retailer password controls one our of like MFA Access highlights two and MFA, creating Cloud, nearly companies, secure had intelligent workforce other in any resonating, to differentiated predominant many continued privileged well-known over enterprise a include: Fintech, web XXX up We our our help remains school vendor. a A and While through landing quarter with with the segment society QX, protecting XX% workforce adaptive Access and chain security password impressive on CCube spot Manager, infrastructure Endpoint expanding logos is the replicated included digital into American not critical strong implementing Momentum requirements, and embraced energy of landed cycle catalysts many ServiceNow pick cyber as mitigate of A transformation is systems Security; seamless

across expanding our Our a Fortune in solution land a EPM differentiators, Privileged amazing In is CISO The deal, and Cloud security two to of highly sign-on after and PAM single financial long-term vision Kubernetes competitive maintaining as and replacing just customer at vertical with and our CI/CD such our mindset first A key quarters edge company unwavering is existing the purpose. MFA. is services to expanded protect PAM from expand customer the commitment a pipelines was strategy with XXX across experience. examples and healthcare included demonstrated also an in and company largest our the XX strong Access because top PAM partner secrets management like with with the continued cited eight quarter legacy landed Secrets QX manufacturing and of wins. our ecosystem. solution. has had in management a the Momentum

managed relationships We and are with strengthening with security the providers service excited particularly AWS. SIs, about our

the very number with indicator strong partners. building across momentum number are tripled average the increase business CyberArk. significantly professionals the nearly of of with practices certified of their up, identity partners products certifications our to Our Year-to-date, with plans with a has also security CyberArk trending

We deals us in strong a will our pipeline and also term. confidence our the long AWS growth Marketplace. deepened closed contributor The that AWS QX, be with to our relationship over give

Moving on strategy. to the innovation, the cornerstone of our

partners that marquee and both our Magic We competition. for were Quadrant and between the Access distance a and industry. and benefits innovation, challenge breadth every day putting ourselves more is pleased platform. the and we named security-first lead security be to DNA X,XXX are impact threat Our approach landscape. we of considerable The the and XXXX the X,XXX time in live at this a our than recognize Gartner positioned customer our and leader July well people event, to Privileged furthest person depth, in we showcased Management, vision in are the was more differentiation in of annual virtually and us ability our fourth row. completeness a to Customers recent of priority At We highest hosted execute understood feedback in identity for event incredible. in severe increasingly much the

identities is product a increases At the now same across with application across through This announcements. the the demonstrated also win-win elegantly changer. CyberArk, while in environments the in in Cloud glass we can CyberArk management Secrets A workflows DevOps familiar Developers from access Conjur -- how centralizing single alignment all availability. can types of visibility rotate cloud-native secrets secrets secure pane all environments. driving seamlessly for backbone hybrid secure solution security It across Hub as cloud AWS. all secrets the control early We application Security. team enterprise. the between highlights positions and business few forward. and and for a is and game time, for

certifications solution, In along identity integration identity Privileged with analytics. compliance privileged the in our advanced In which power addition with SaaS security faster we platform. deployment comes integration into of Conjur tactive flows, workflow to the with of delivery, much the value from and and tight Access, introduced Cloud streamlines comprehensive, automation. across Access Dynamic application Access third streamlined identity Manager security access risk-driven with our Entitlements and Secure streamlines campaigns And cloud Cloud no-code Identity marks and cloud pillar. modern

enhanced in multi-cloud accelerate Azure time, privilege secure time, better of we AWS, access principle in for provider of lease cloud session acquired This our solutions development DevOps in just security beyond and CXM, permissions Google Cloud allies Trust. security, consoles. cloud To and compliance enhances well functionality just Platform. cloud a Going the July, for to and and monitoring basic Zero and security significantly integrate in

to We security working talented are welcome security map. cloud privileged are road experts and XX deliver cloud to to looking about pleased together against our forward

on profitability. Moving to

P&L by continues impacted subscription to Our reported the transition. be

changed haven't investment our We approach.

including and rapid delivering rates growth revenue innovation. returns, are We excellent accelerated

We expect subscription XX profitability and we the cash company of Rule growth, as transition flow to with strong a dynamics. past move be

Before are macro I all hearing about broader turn over I business. Josh, not it we The to uncertainty wanted about the our talk economic impacted has environment. to

the very business closely our in trends We are more watching frequently. and analyzing

execute We strategy. continue to our

rates strong. are Our close

Our is at record an demand. and acceleration pipeline seeing in are levels, we

first the half our fact, performance of In history, one the and was company's the QX demonstrates. best of XXXX in

is Identity First than ever. Security foremost, critical and more

and Security machines. identities, Second, users workforce increasingly our gaining platform across momentum, are privileged Identity we and protecting is

history. over financial Josh, in ARR position discuss our off XXXX, total opportunity. will to the and execute detail revenue our including we provide quarter great multi-year the and the raising our call in growth who results for outlook against are ability our Third, confident you best increasingly guidance. third turn and will lastly, with our we more full you. I in year Josh, in now durable are to to a And competitive

Thanks, Udi.

through our walk As in prior that slides to results. we quarters, posted website the

a in mentioned had Udi Momentum our continues fueled by and tailwinds business, robust environment. just amazing As to now, secular we build second stellar demand a strong quarter. execution,

the of from guidance second revenue to growth rate the terms first $XXX.X headline of XX% at growth XX% in exceeded XXXX. in coming million accelerating In P&L, quarter the year-on-year quarter in sequentially total with the

trough and the The strong business and exiting million. the growing reaching on XX% of now reached and business high million. and begin $XXX the best fire to growth. recurring ARR metric be XXX% rates. again all portion continues XX% our year-on-year to second thrilled XX% back of subscription increasing are remain the continues subscription grow incredibly We the quarter, above total be The ARR. and revenue created revenue to evaluate in represents $XXX transition at by Annual to That's cylinders

of a only million because XX maintenance $XXX June in ago, total. portion or of $XXX portion large XX% of The subscription and renewals. Just part the at timing million the was the year was

revenue with of from progression at $XX accelerating reached into subscription, Moving the year-on-year. Subscription SaaS model our XX% about Consistent revenue XXX% of contracts and million quarter, generated second to self-hosted to with revenue business details. $XX total million. perpetual license the subscription represented in in and came growth the

revenue with maintenance professional services $XXX.X maintenance revenue XX% services revenue. Our XX% That's professional $XX.X $XX.X reached revenue and and growth recurring Recurring of accelerating million with year-on-year. to in million million. from was million total $XX.X

our We be target pleased of than more quickly revenue are approaching from recurring. of coming to XX%

lowered much Before to in wanted making impressive. our by our which impact, $X about moving outperformance point million even have did on, second that total that out quarter, we a more the revenue I negative currency

the above quarter expectations, XX% compared it the the Our of growth revenue last calculated accelerated year subscription our second and booking XX%. headwind total total quarter when XX% guidance bookings mix second revenue would mix. was framework. million year-on-year. to the with to approximately only second to mix in in have $XX Taking the mix Economically, created our both we consideration, headwind that quarter, compare bookings the like-for-like by exceeded our XX% into With guidance revenue, was highlights again

quarter As second rate normalized a about reminder, the growth implied our a for XX% guidance transition.

and full is by reached during well-diversified. So indication $XX outperformance the exceeding normalizing year-on-year APJ our XX% points to mix, The in revenue $XX that percentage approximately or XX% with by gain the all the total business about XX% grew traction If expectations. of by million the strength EMEA and XX% is five grown of grew in ahead or another of and revenue APJ and million Geographically, the a of by XX%. just Americas second strongest to revenue. The grew by by in $XX look we also the representing our EMEA and million, have SaaS XX% the percentage of had geographies continues XX% Americas bookings total Americas SaaS of revenue across quarter. again, for XX% of quarter. would subscription the total revenue. with revenue

Now and of see please our moving will non-GAAP the On press to full in be P&L reconciliation the P&L. the items to non-GAAP release. in discussed a line tables on basis, GAAP the

an Our the compared increase QX XX% SaaS gross gross was last and primarily second in result our the XX% or profit it's of quarter margin. in million $XXX.X margin gross business. year, with That's

quarter. drive year-on-year million make operating growth, operating of to in the innovation of $XXX.X resulting continue an We investments and $XX.X a to XX% in loss million, increase and expenses

approximately would results by margin from quarter. were in $XX X% operating lower this the been headwind. for a the mix, have Normalizing revenue million operating positive calculated Our second

the in -- Net $X.XX much about not level margin. or back operating million per beginning to a for reminder, was the way was year share a As the the result all even the and would this only quarter. sets the mix transition, to of prior diluted loss higher $XX.X which second

top our worldwide, added the including employees retain and in attract and talent. X,XXX That's XXX to just to a with June testament employees ending X,XXX quarter, continue We over culture. about marketing. We second sales in over

a cash cash quarter For was free to half the first million the X% cash XXXX, sheet, in or have strong we $X.X margin, continue and with $X.X flow and flow of balance investments. free billion ending

Turning to our guidance.

growing tailwinds, the guidance and third execution and for ARR Our reflects base. industry quarter strong the year full our robust

our $XXX of XXXX, million, revenue third the sequential another For the year-on-year to XX% of total quarter growth we expect which represents $XXX million at of acceleration to midpoint.

$X loss a loss a and We expect for we quarter, basic per expect range non-GAAP from net share. to operating $X.XX of $X.XX about $XX the non-GAAP EPS to diluted to million million and third of

the and bookings and and assumes for profitability the that XX% will will guidance headwind $XX million over our between revenue that remain Our subscription resulting $X million calculated third be quarter. mix

the bookings provide we headwind over going growth XXXX, start range for normalize forward half will you our for mix in mix the have mix, is revenue the Since If for for our the second target only midpoint the subscription of exceeded two to targets. a last we range now versus and estimated specific at of XX%. quarters, the

shares XX.X and Our basic guidance million assumes also about and million in taxes. $X diluted

of in full assumes For XXXX, bookings the mix the we of the $XXX our and guidance guidance and midpoint a in raising million. headwind million, the XXs $XXX of the between to and total million revenue are our million revenue subscription $XX now our range year of expect high $XX

So, our if is revenue over for midpoint XX%. growth at normalize mix, the you estimated the

be non-GAAP the per to $X.XX. for diluted are our improving full the net operating million $X.XX million, of basic For $XX.X expect loss and in be loss and to share range $XX.X year, our non-GAAP and we to range we the

basic about diluted $XX in year, full we million the shares For and expect about XX.X and million taxes.

currency We and the CXM. our EPS facing acquisitions APi and expenses increased operating are pleased that loss from range are while absorbing the improving headwinds operating of and

transition once Today, our expect XX changed. subscription profitability Our play transition, of and masked to improved a that the approach bottom business profitability dynamics is over by the validation of has to out. our the is to return -- line further company still transition Rule not we the

which at and year We $XXX to for growth, XX% are be between meaningfully ARR, that's full expect now December XX% million increasing we million also XX, respectively. XXXX, year-on-year our to guidance or $XXX

strength to demonstrates ARR We considerable business. continue to raise our are thrilled our the we which see guidance, in

While we recognized want or of I half experienced FX. in in mention over still XXXX. second in CXM, ARR quarter, ARR will the we add, maintenance year. the I decline APi to anticipate also would a products $X did maintenance million contribute that sequential in to back from ARR revenue to not and increase anticipate the do we

not currency, do provide strength to FX isolating the overall we and guidance our constant our plan reinforces raise. in our outperformance from the While results of impact

a to and expect full million euro. to see revenue $X to pound annual of year year, impact We the recurring estimated full currency the that's about and for related the

We and ago. moves lower about already the will $X our our year for in minutes XXXX. currency recognized about net guidance that compared provided also the recent by will I lower moves $X rate These reflected the a year. million, few just the last by full income revenue That's estimate that currency impact are the million to operating

We anticipate margin to in it with flow. over be that will income free our cash period. line still a non-GAAP Moving XX-month net

Second strong quarter was another quarter.

results As business that Udi demonstrate building. momentum our is mentioned, is still in our

call operator in that strong Operator? is Q&A. confident profitable durable. back over long-term creating on highly our remain our value and the that are massive deliver platform capitalizing the the demand will for growth on shareholders. for for front flow, us now opportunity will cash We We Security focused Identity turn to I of

of question comes first line the Saket Kalia. Your Instructions] [Operator from

open. is line Your

my for questions, morning, Okay. Great. good guys, and here. Hey, taking thanks

Saket. morning, Good

with competitors to you a in perspective, strength more deals spaces, cross-selling think here about seeing Udi. or can from the sustainable? talk is Access you rather those morning, management And include it CyberArk just you're whether sounds start you, Conjur good is the winning? product secrets Maybe Hey, like think in just given you why and

Management, with go-to-market recognizing that, Privileged motion the for from a say complete position continuing a with would to of Customers I Security had leadership we're security multiple a solution our identities and Absolutely. machines. all more your in landed traction. of really the coming than our XX% Identity more users point, to are We selling on Access need new land again, leadership way in logos faster. position human workforce from solutions to the customers adding seeing And QX. products as And gain more platform. is with

Now, it's highly differentiated.

side, customers On and applications Access that support the customers with appreciating with bridges approach new to And we're with we're Secret peace gives highly allowing them of around we're all are we rep productivity. secure announced with that various DevOps, controls, differentiated management, side, password security with sessions that the mind use work which And cases high taking hub a web we access. to approach having scale. transparently, the security of workforce Secret at the the that can that innovation types an and like to taking on

motion So, we expect definitely, and taking more all that and cross-sell both with – the is to landing products place, continue. that the

how I really thought there ebbs the here at to are in of it qualitative quantitative FX, That's particularly and it. adjust have answer seen it. you address backdrop that? follow-up, potential is when answer for as a you CyberArk. guide? for Because the Got a strong just you for a about you have helpful very the macro topic think that flows of hear Josh, in be handicapping a it'd of macro Josh, how whether or kind you, to you you maybe Got before guide, Both backdrop. maybe just helpful.

the extent. and for I Thanks, quantitative Yeah. And think Saket, of to a qualitative it's question. both lot

budget how at look trends, heard we're consideration course, already today. you of current to with by a still quantitative income net change the have. how remarks we're the of our but in that our at way the a seem the the we're and heard my terms doing perspective, historical we also very on of On is and in even You we our impacted but be rates still comments myself, our guidance, macro quantitatively, pipeline remarks FX taking in feedback We our and Udi a looking able identity that and still into guide FX perspective, at environment, our qualitative mean we're I customers, remaining were priority same raise impact. always from top in both looking hearing the already that's a strong and security kind their From seeing of safe. close to current revenue, I -- lot our impact discussed pipeline, by responses affected, that's of our and

way are But we're our experienced that us in on the of with the table using we a feel touch second field, around and lot have in the looking pulse, we're and all So half. increasing time and guide. we as we well of like fingers and our confident the shape at this an the we're team, in we're good all points

And love this because that up market and private including for second that -- say transition, sets management, I our I durable this this high in up long-term it us access Security it finished growth for Identity environment. sets with we priority would

helpful. guys. Very Thanks

line is open. comes question Hamza of the next your from Your Fodderwala. line Fodderwala,

prior macro something you more have headwinds more It those seen Maybe your going of upfront? overall good little for terms backdrop? has of morning. up-sell seems transition cross-sell, macro through my or perhaps talk there resilient or you momentum like cycles Udi maybe the either SaaS in you on Can current in jump how question. cycles even performance a this guys, would about taking transition bit partners Thank off or the where separating -- that's versus Josh. subscription you of more sales made Hey kind shortening for the is

absolutely. Yeah,

our it's motion can and pipeline value then market big the we execute high I -- like so on it we I built can this a pleased such are now, SaaS position with priority environment, a would so from SaaS I get motion landing and SaaS where customers with Conjur to and much with provide mentioned think And in of across of we spots quick land course, that Cloud. we're to where time demand the also we access variety now faster. be and say, in the again, out with with the again, then we the now to EPM landing have add-on Privilege spots portfolio, quickly came them into

So the in way the like we benefit having that strong a points we're execute -- perfect this the platform this on the and this landing with have emphasized, to multiple centralized for all the see including controls kind the in -- is really into record think environment. field increased And Josh so opportunity. to SaaS I of demand, platform really it's pipeline

quick far? rates when really like it's the expansion you customers renewal. just that those net for What cohorts But Josh. has for of early. so the at know subscription Maybe are look a or to I SaaS look like come early follow-up up started

so what cycle like we're in Yeah, so I we've and in early we consider expanding how are still first in of -- But right, see now best-in-class terms seen that retention you far mean for also the them. But we we're But the still and of what what duration getting renewals Hamza, we rates period it's early. far. what transition. really is

Okay. Thank you.

next Owens. the comes Your line from of question Rob

is open. line Your

comes cash lag from expect operating a standpoint? remind revenue the taking you free you when have but Thanks. profitability obviously for when of it transition, that question. of to And Thanks is? flow. Can it lag profitability, how making a you to us Great. kind talk you long my to as that through Rule return company Josh, XX about

being talked quarters about transition. a right, you're we've of Yes, past the kind of Rob. the Yes, couple lag always

So And finish years to obviously -- guiding margin we to stay will up the but a we're quarters, out not believe it improve as will next seeing the we'll transition. But are improve we that couple Rule already income XXXX. results. feel incrementally later confident years, talk years, we over that XX the we're definitely out coming XXXX into in of in -- will confident it as the of we XXXX. we be already margins about comfortable operating tuned, start operating of should couple But that of and

you. Thank Great.

comes next Fatima Your Boolani. from of question line the

open. Your line is

for Good go question. EPM morning. suite that the you to was CyberArk really and script because taking the comments DAA Thank thought my within logos of to [ph] our back course, solutions. Udi, and around landing wanted Hey, flagship. PAMs, your I in interesting I new of

So I'm it's AAM to a perspective from have on get for from standpoint you what please. then from get to I as standpoint to take level execution your market either franchise curious franchise? follow-up sales be a Josh, or large PAM the the And to going as a

like EPM, That's I we're seeing, landing Privilege great. I and with would said, say Cloud, Secret Management Access.

in Q-over-Q solutions. -- fact, of the for all doubled So at look in if those of those have And you subscription all become landing us. these in ARR spots from all

performing. very they're we're how So excited

believe XX We recent and Management. non-human identities, Secrets that speed on Management we that on are the fast we expanding we mean structure be to I identities both we approach your Access very conference, enterprise. As human really out execute I you with non-human Secrets love recall, in that identity question. the have structured survey the that's the agile opportunity build every a have identities allow human and our there us to put for and areas. are

So those transformation. after are that a with platform. digital going exploding single we're And with

announcement with on security being between the CyberArk gets the security a the very behind key and that DevOps, I with way the Hub, Secrets and the is strong transparently So rotating management and solution, of understanding the we're developers we developer the which Part bridging not integrating CyberArk of but develop we're central transparently, the Hub it. want our our is what those way, on backbone gap with and how the work AWS AWS, so executing managing see can it mentioned foray security while a Secrets with scenes doing to solution opportunity first coming in that all work same secrets.

how we're expanding go cloud after and fashion. of the example So that's of going same providers in all the an to we're

I question. think a follow-on had you

Hi, Rex.

line is open. Gregg Moskowitz, your

Thank Okay. a congratulations much QX. on very you and very good

and currency environment we're basis, increased on impressive in. the the that guidance ARR So macro given a was especially constant

So two questions recently here, customers. larger focus CyberArk's Obviously, sales have vendors is enterprise. among if enterprise I reported security the about may. earnings have Udi, software cycles and some who longer spoken broader

not I I did does of including wanted clarify wanted your just to Josh, confirm Just any the include cycles believe as that that million million, FX enterprise sales which the to And then $XXX $XXX was headwind? among are customer well. you So secondly Thanks. to at prior elongation in level? any not for that guidance, any segments, ARR seeing

Great.

right correct. Gregg, you're -- So,

We seeing that. are not

performing think not seen the the shown talked And rates. on actually, in we as well I have we're the any speed about cycle. on exceptionally the impact I or close pipeline as strong through and results we've of -- going

a our So, and impactful And usual. through. it's our to very as going things important I really security are think projects being business us and down our for layer customers

connected we've some is did cycles close keep Security we're And in but again, not the As slow large top up. actually And seeing priority and more priority. the continuing process, of deals, mentioned, move same seen eye. the Identity down We're we to field. business. the a In very approvals Josh a the to it

the And to FX response Gregg, with question.

to of that. considered we $X the ARR So impact about put out guide that million $X FX included there last million

Thanks All guys. right. Super helpful.

Thank you.

of line comes Essex. question from Brian the next Your

Your open. line is

questions, you Josh, sequential of really set Great. increase taking on and Maybe, year-end, here. nice you. results our thank really new nice ARR. in net and Thank morning Good for

and bit of got considerations in back but new to how that the how confidence to the half looks difficult have maybe perhaps you're more confidence? we the about for model. like SaaS year, need you our do guidance think comp think you little there? net in level term and mean, seasonality XQ as make in and us ARR fine-tune you I mix sense of give like how a of about thinking growth, we and And a the the setup hit just we guide do it the about As for the get of a you've might

Brian. Thanks, Yes.

talking been is morning, as all we've that you out. to increase, guide pointed confident it confidence of significant, for about the which we're level So

subscription come to SaaS going it's business. the piece and from the of – So and

the some think SaaS and we'll the into more decline that Self-Hosted. subscription up with of it versus being As is than the SaaS and half, see could actually, about, continuing business Self-Hosted we for in talked maintenance two-thirds I go ARR with back heavy make

And So than we're terms I compared would of so course, be – into I it second QX of the growth going much rate to a difficult in probably half. continue see QX has think you're will compare. to that And that, slower seasonality, QX. right, the

super more Got maybe could one in. it. I That's if just And helpful. sneak

like new is us You as kind going there mentioned Marketplace identity, through but that marketplaces. up it's sounds know business you're the the within stages it deals, a and this of give particularly of it early kind traction is of maybe those around increasing or resellers truing what of a And through of dynamics amount of just like channel? traction there's initial commitment, sense an seeing? I you or are going there, you, for quarter, what enterprise the could kind

on marketplace? referring our commentary AWS You're to

Yeah.

Yeah, yeah. yeah,

we the be procure, faster I can that which up. say, AWS more of down first than with is I We that in an So would that, it's and system their AWS, to can and say, mile in this we of ability process. increased and – awareness incredible our leverage the marketplace the say, And resellers, leverage would love fulfilled would to kind what had I announced year the relationship say with through that's to pipeline But the our half, through VARs. and AWS AWS the enterprises I the business entire saw we channel, build we integrators the XXXX, that's augmenting really streamlined that can with and last was about process. work that year and of

mean, partners together. front. also they partner and it's the actually the them. I it's the VARs ecosystem all for is to inclusive AWS working on recognized So that and also to its of the integrators, them an part being good good They channel that's for really

line comes the Boyd. Your next Roger question from of

line Your is open.

channel question, mentioned in think a for I new the prepared Thanks had relatively CyberArk. is your Udi, Great. remarks, taking for congrats MSSP results. on and which nice you partners my

can you just maybe You talked for certifications the bit as a little you're you commercial talk cohort? but there Xx, that the work the momentum further the channel potential of about about into seeing

a that Yeah, with a as because them of partner go capability, us. market, existing they shortage motion that by by value manage And platform, customers our further down Many of security service really managed they relationship our them or coming Identity for of and – are long-term want that deliver service resonates being the and their see it to We that, to strong as our provider. staff, can movement – channel actually platform completely. exactly. to important partners are managed partners are provider's building Security

I go from, in sometimes a end-to-end and would mentioned. seeing an that MSP but a that for a helps you customer launches it's We is MSP example, after relatively and say, the from see or enterprises us managing early telco after kick launched benefit we're mid-market and goes So like in. program, PAM large for that

So, fast important for dual these platform. say and early we're and to days, our learn motion we'll for partners new for it many growth, certify it making it's leverage continuously but easier and and an be years. how would motion I onboard us see it's on a customers to

the question next Your from comes Adam line Borg. of

line Your open. is

thanks cyber and the taking Maybe much on question. insurance. guys Hey just for

I in awareness and that script. organizations it begin talked with. seems challenges You cyber more know And and the that we've in talked heightened that to there's more the insurance past. about just about about getting

what you're demand the if we are to Thanks of what between so drivers hear with about in international? in differences and overall, cyber US seeing love that? the inning there's And much. insurance even more regional So,

Absolutely.

the I'll So, with start innings.

we sign-on, them hygiene driver layers, think trends still single offering added and cyber insurance to of they with us. kind that know controls, MFA, to management customers market-leading security as privileged pushing we for be but access have it list. is is success where innings, CyberArk also the it's requirement early -- obtain the secular add really what would can the a achieve they trying important and can I proactive already have an of are We additional to lot

view insurers also Of as a CyberArk market leader space. course, in the the

the or it the mentioned, all that everything primarily we additional base we But broad advantage driver will us and insurers in additional where you accelerator US. European deal -- of nothing. becomes with we're major customer on often or in prospect markets trickle we then educating the really like primarily when like base So, both a accelerator and it a great in customers ones we because around It's it do still but see capitalizing And actually an requirement. themselves additional innings. market it's that course, this on early experience a investing the deal, it it insurance shows and to will And it as customers we believe the a the on have that. gives become up,

question of next Your comes Jonathan line from the Ho.

Your line is open.

shifting your understand and morning And from much maybe of strong how I you ARR? congrats permanent that good quantify SaaS? Hi license maybe wonder, us how existing impacts to could quarter. license the help or on

very single-digit in that ARR, seeing of book. from perpetual still still we're converting Yes. percentages still we're It's conversion, ARR small Of if from the talking -- coming of SaaS. of to the a notion growth about it's percentage It's is the the

vast seeing working base subscription, a are SaaS. convert convert. landing landing of -- The and is with customer been when lot to and with majority of SaaS we're we're which upside -- they the the closely -- for are great a us ready new have to vast, logos because we're

SaaS year their maintenance us for and course, solutions opportunities buying cycles complement complementing those conversations, shortened more existing Of -- to on-premise solutions. customers are conversion usually but we gives be it to a also on-prem and adding

thanks at Jonathan. of same have the congrats, the we time. And for So, that all

question next Your Heath. from comes Eric

line open. Your is

Josh, my well. Udi, Hey congrats as

mean also that as continue really of of think it's pretty you PAM kind is Udi, having demand a So clear kind well. strong

So even broader see And of demand to as PAM their and just curious and strategically architectures? such why I your thoughts about demand? kind the move zero PAM strong part how of guess CSOs to trust continue thinking of kind on accelerating cloud

can't you clear sleep Yes, insider have increasingly privileged cannot We're night it's become exactly controls take over It's It's that an CICO that. can access. turn entire over infrastructure, they security their that. off the an outsider if exactly at or controls. basically don't

can one, in of And becomes place. fundamental it the additional put So, then before really parallel, security seeing layer you a in privilege. proliferation layers

of map had privileges, solution a a out in where users organizations this. and on-prem more was a with more it infrastructure employee and they go after of our all cloud workforce adoption course, or need be So, more easier and proliferation examples has where to maybe to to and privileged managed the of a little holistic developer

don't Now the the you understanding you Trust, don't if our if really access have on controls lease that. – been endpoint, apply has can't achieve Zero market management And been privileged is it's in EPM. if privilege a you you don't place, which

out there layer. an built, how network party you channel and to [ph] third strong time firms clear a every does impactful on and layer big including of do Our security educating posture. we've Teaming exercise achieve the company course, And VARs it's Xs CICOs brings are their that become of analyze a a or advisory that course, and the Red

First and it's achieve foremost, and flag access, privileged over. if the they they capture game

why this, so it's that's why And is to and that's in for a important high it so them such in invest priority.

opportunity, it, leveraging PAM As identity investing we're network company, the channel after and positioning, market broader security the go we're our Josh a after going to opportunity. the leadership mentioned, strong both like in leveraging the

the comes line Joshua from Tilton. question next of Your

Your open. line is

just on SaaS-based you perpetual I just the question the up easier taking I or as separate simply on guys macro has much Thanks -- versus wanted licenses? quarter turn it's sold for can as because become Hey How when put functionality easily additional platform to now one to but I aside. on my congrats the conversation well. with follow cross-sell customer, and wanted I you a guys. Hamza's for customers question, just

is light, saw additional the for last success we the and and the leadership invested team customer the in see exactly and I SaaS so they that. light It's exactly take the can they the success with solution to This to on get – why, they infrastructure like paying in our onboarded first two that these you and expand they the really platform, would pushing set measure all our in SaaS. out in early there to need in really investment -- the with off to of continuously team can -- for the but creating customer that out go SaaS say, the strong as the also that They mentioned, investing a years, of they on credibility market leveraging the we solution is like Yes. The cross they can fact up to within platform, no acquired functionality power journeys -- are access. motion.

Your next of Trevor the line question comes Walsh. from

open. is line Your

go-to-market is and And other, more -- one into do as either that competitive there engineering appreciate for around or too? morning. versus Good cycles, and fact you you, of strong team. an how Udi, in balance what I certain for far et XXXX just the about think do over has maintaining move one. to things kind aging pillar versus innovation customers, tighten cetera. quick question. products of have sales places potentially you remained my maybe But or Thanks. kind kind your demand option and might get growth we of the a taking that you or of how belts the Thanks the edge the as for no as challenging pick

real very -- of keep changing diversified. earlier around there's around. I than it, No, a themes there's say mean, Yes. very, We've we been Josh probably attention being would and cycles. do, we're We're alluded I to been close to experienced. advantage others we've

to We're such So portfolio geographically. And SaaS the now a a huge with. we're we have diversified portfolio, on very vertically. market go very diversified

have So of different a lot we levers.

and continue to close stay to Josh As and seeing pipeline, because in investing high record demand opportunity we'll we're mentioned, that. the that we're

appreciate been On the for innovation us it's and customers side, big a differentiator that.

of to any an with we new it us first or coming session, customer and go in side secure out to the for out PAM us Hub. market are with Security kind to the on an Identity invest Secrets They see So platform. did announcement just impact come or coming success breeds innovation success. side conviction the strengthening virus web The

very short to innovation. this to of the stayed to And be that because attacker market. been important going have innovation. It's innovation course, to answer success So to both continue nice in protecting do we've that away leads we're from always on always against

real. always keep we'll it So

question comes next Alex of from line Henderson. Your the

open. line Your is

One Thanks. the and OpEx side. Great. I product have two side on questions. one on the

the hedged what the finding the currency of you today, in in a on structure what On play much talk to you're how stay through how it's you the or could wondering extent -- that if of to question ability in would on a going the coding What a product if cost the side, be impacted XXXX the bit your half exchange extent little how impact side where the infrastructure community to changes? of you primary against they to an rate, and talk I the things. compete costs. if coding you're on was aggressively penetrating little about accrue? success Can the the of particularly about are is would that's benefit really year, more But back operational shekel bit FX structured

Great.

about to FX. talk and So I'll start, to hand over Josh I'll it

way. I think making it on CyberArk coding progress but community we're great doing penetrating the the

where the making and the from they is credibility that to security the a transparent team this more that with solution coater. in increasingly coming that it know So trust, security teams,

would not confident example more the for So where where -- and Secrets platform very, our backbone I the we we're say AWS it digging also again, adopt. having from developers. both a executing of the continuously using know that feel doing AWS in developer. in Hub, the to really make security, is for that great scene Secrets Hub need a to will managing sides stronghold, developers tunnel very approach very of of but coming that use/transparency ease on behind also course, of from it's is that And to we're developer where CyberArk educate secrets, the reducing solution kind that, it easy the is or made before will the even but even them. native

this to while Yeah. a some getting I shekel benefit $X because FX, year for about to getting on it's operating moving hedged talked $X we're a been the on for well earlier we're expense about income, and From on Hi, the regard revenue pretty sterling relative this we've euro today, really so Alex. P&L. This as $X guide. is With of because year guide million If a the has really weakened to won't again, hit about the a in million shekel by not because million it's mean, side only year that the from in the too hit us bit months. perspective, than we next will little the where I still some we it because impact for beginning shekel year, last benefit year of go quarter. of be year early what all year. think next XX next tell gotten But out we on this beginning the the in depends. the to towards typically further the nine side, hedge of of a about

from Andrew line next the of Nowinski. question comes Your

Your open. line is

that, in platform? same disruption to the for I impact were acquisitions have near-term customers that create. some if acquisition that Ping are then you. complete acquired the when And was given could a Thanks. more you these think CyberArk competitors primary Identity saw to IGA we solution your Thank wondering related asking of Great. the XXXX, typically of integrated the PAM

Great. Okay,

went those the been want weren't seeing customers that long-term have know equity, the of the to they as things companies about again there that was by even and that private channel that the investments a premise, we going worry a out enablement seen that for they we've companies fully again there. in and all in Ping it partners to And, in partner We've agree acquired competitive but out success. private. channels that really need So situations, and course, Are lot critical invest continue with there. disruption have to seen

And that again, after So there going will market. disruption. some we're be

agree taking that on as our saw that now IGA, Access PAM fledged IGA released compliance partner our care solution, use solution refer regards and to customers started with or allowing Identity And And want if Identity say, focused we impact. them to we've approach, cases, seen full of, at to really a I them our to continue much, I our but compliance very or premise. haven't It's SailPoint. you certify Access. would We they

we answer modern long-term, see the be we will will able within the more in think with convergence that and cases more to I use platform.

There like no I further remarks. turn are questions. to Udi At time, this closing call would Mokady over to for the

Great. Thank you.

you call hard special Thank around much, strong the Thank team to this for all you extend the momentum our and as of want to And want customers quarter of being this to Identity quarter. cornerstone stellar another success. with thank appreciation world and partners those their the thank and for thrilled entire CyberArk I joined work execution you. for are very always, also today. I the Security and We platform. who our the

today's This call. conference concludes

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