CyberArk Software (CYBR) 8 Aug 242024 Q2 Earnings call transcript

Good morning, and welcome to the Second Quarter 2024 CyberArk Software Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Sri Anantha, Vice President, Investor Relations. Please go ahead.

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

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

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

be website IR call. CEO, the today's this the today's the in also financial that discussed measures of call. our our over Reconciliations as turn today's on webcast like to discussion Matt A conference well to release financial press the financial outlines that, in call non-GAAP are I to is available Cohen. section. With would also call Additionally, updated an most presentation investor will GAAP comparable in directly on measures available as in

year the to against with business. strong the the Venafi company. continuing half to with of and position strategy the momentum first, was our results our strengthen that new clear second we to leverage share executed acquisition $XX.X the business cash flow highlights for call of this in security Thanks, Sri, quarter. positioned and of vision strategy in strong at and all power million everyone, effect a the margin QX exceptionally thanks, second guidance all million. That's first quarter, our outside pleased a $XX.X our the or million grew free flow operating million, million EPS. and across our are $X.XX, model. proof model. Subscription exceeded earnings Non-GAAP $XXX.X seasonally record Total of year-over-year. XX% record grew year-over-year. in results today. After aspects with a our with operating fourth $XXX significantly exceeded the and income ARR and industry-leading revenue, income we the build our track, Non-GAAP growing delivered highlighting identity identity our of subscription was subscription cases. our expectations in solutions. More We million, to as quarter, extend and across our strong XX% came across of started and half from In point few the joining year-over-year, and of a year of well proposed revenue quarter. $XXX second later, per but and flywheel business on ARR operating Net a report cash leadership are of ARR platform XX% XX% of another total free our We we use $XX for

cash be a to delivered flow. ARR faster to companies new software XX% and among elite That's free in on meaningful drove an growth, year-over-year ARR that We are increased testament upside class profitability than relentless growth. incredibly focus driving our of net proud profitable and

security of CISOs platform, and for and unified world. around unique identity the leader our proposition Our as the the present the expanded security, position clear in solving identity value needs

for guidance to gives identity identities, no momentum of identities The raise challenges and personas traditional Three Josh our different strength on secure metrics, will new has market. new of results discuss longer all types levels and business four that CISOs XXXX fundamentally The methods and later. Today, new our environments the recognize the work. us full-year to forces, one which secure or complexity. and redefining with attack each methods of having enterprise modern are unique of confidence the

identity to multi-cloud and groups IT, four accessing developers, environments, hybrid moved and and meaning workforce, heterogeneous parameter-based targets increasingly The security are in identity-centric. These machines. groups on-prem, located has are from

no back Given identity. landscape, in today's all roads that to surprise it's threat this lead complexity,

nearly XX% once. Last were them than all victims year, of more organizations identity-related and of attack cyber an of

secured resonating growth. As with end-to-end a controls. and securing privileged platform only every one our identity the new and of it's evident vision. the that our the paradigm customers this is vision identity with fundamental on right CyberArk's deliver be human Increasingly, is momentum is This required. for needs experts driving machine I around around tremendous with world, that to business fueling it's to and level talk this customers new unified paradigm centers and

close portions in strength trust budget pipeline In of CyberArk. execution security, consolidating identity importantly, to rates of and and and land their QX, the with build. are most our Customers spend, robust strong and expand consolidating platform resulted allocating significant

secured further Since and IT identity, PAM, Less grown we with a users ]. As landed [ and international the customer CyberArk another factors a have a machines with look X-figure with with a their then, an Prudess that as X-figure workforce ago, they deal. all with management. at with can example together, logo of quarter, they EPM, protection workforce ACV this than these deal agency year new government expanded sequence and identities coming strategic

] well relationship [ formed platform to shows land be security secure. after we power Prudess our the of is like Prudess do great need identity with have speed initial the and to how ] with [ of and it deep what The organizations expansion aligned

workforce of IT, users. continues high-risk administrators programs as As cloud PAM scope include well expand shadow to and the to database as

privileged more continuing competing a replace We biotechnology leading security X-figure a these a and their rip logo to controls modernize win, a identity personas. PAM And customers our are new vendor. deal with replace signed help to across programs company agile broader,

comprehensive the CyberArk's factor password speed protect afforded with machine IT modernize enhance if workforce organization the privileges with are differentiating was manager while the wanted not allowing their substantial population or of and access access, foundation to solution a Workforce of SCA data cloud with often to the and having have of privilege but innovation. as identities functionality, principle efficiency without of and security platform secure security Secrets is just pace the SCA developer identity for to cloud efficiently Privilege the our Management. Every of to customer of to and growing developers light, any, natively also the paradigm always-on rapidly to with only a user work the the security first At Cloud, scientists key them today our least preferred Tier in change developer X, protection one pursuit has shift we in applies interfering place. and developers, workflow. security with without developers engineers

fully offering. they and to choosing standing CyberArk. SCA, from for securing SAP, as modern zero a a In that privilege see the second enable saw leading key unified a and we software environments. zero now their differentiator deal Cloud, seamlessly can approach With solution SCA quarter, just-in-time standing cloud the while standing included company, strong privilege In access traction with access enterprise Privilege continue this

don't privileged On as before users. critical the spectrum passwords. mind reimagined is provide one evidenced and the MFA functionality identities, own identity workday. the more customer do that throughout solution problem. and secure the than are of workforce more We browser to high-profile become their the quarter, the of workforce differently needed web in especially workforce by identity can once strongest for things ever was is wrapping need top security this SSO securing second of MFA because SSO today Traditional and sessions, Each powerful breaches. In performers our solving we many and manage the with workforce controls again on

the workforce Privilege Endpoint endpoint Manager. extends to addition, In with protection

controls add benefit two a sessions top managing CyberArk long need had bringing U.S. who means its showcase the suite customer and time they power their The browser can on that's can of financial our following With PAM existing company is to of the by SSO secure workforce. integrated more deals that. exactly The to WPM, services A workforce within from MFA the privileged passwords. keep web broader to secure also access security of additional do now and they secure vendors, CyberArk's platform. ability a layer

AWS the the of certification, In by a to example endpoint when a the company of they EPM deal a workforce, closed workforce deploy that at high FedRAMP EPM with workstations the securing with major X-figure chose to solution. Choosing our their implementing privilege protect lease through our aviation High landed different importance marketplace.

Underpinning we quarter, its met. value identity, X-figure identity Hub, empower quarter, an and strategy to we one move their with and our native the recognized outstanding the security machine security We momentum a Secrets secrets a combined, in management the agility resulting Secrets the machine is to when and solution, Conjur continues ACV And deal. demonstrated our who major long-standing from deal within Cloud In need a current mid developer Hub CyberArk the airline our outstanding of workflow. had team's which customer within quickly CyberArk build.

rotate increase cloud Machine urgent scrutiny heard guidance becoming the standards need to are themselves identities with inflecting, AI, the computing machine there's landscape machine identities in growing protect due like increasing is identity also that increasingly identities. more that have and rise XX emerging of from complex and believe for to the market is We we days. machine protecting regulatory Google's every an certificates all to exponentially and customers the

is weak are happening point a identities organizational targeted increasingly in as security by All this controls. of machine adversaries as

to out of regulatory position excited review. identities which the machine very acquisition Venafi, in expanding are and We building pending our with is be leadership undergoing

CyberArk secrets new combining machine security. to and be We management set secured, and managed, SSH All to machine management with discovered, need management standard Venafi modern a cycle identity machine are identified we solutions communication management, to end-to-end management, by identity connections identity for machine technology overlap. identities will their key believe safe. keep our certificate and complementary that no automated life

and logos more see platform products. In spots CyberArk you with multiple day the ability quarter, new multiple X. signed words, logos, landed types customers half land multiple and from new other XXX of these X from our these can As solutions. with protecting deal of in provides are or to with In examples, we approximately identities second the

of quarter all event up of held more we marquee strong with in strong. our last than runner showcased At security serving addition, machine in management XX% level machine compared identities and every the workforce but securing human expanding of our platform, we privileged identities capabilities customer Impact, all to particularly our secrets our and identity of front a vision controls. were year. base identity right was we across access are the attendance In fundamental offerings expansion had within innovation solutions, the May, are our or with with that our

product AI and We two artificial across I within innovations want to ITDR. exciting embedded security provides CyberArk's whole of CORA Security announced intelligence identity portfolio, focused highlight here, platform. our AI the them Identity but CORA

data do set effectively to AI of the and unique on Our behavior all detect ultimately, more, CORA enables analyze recommend threats action. sessions, and identities,

transform that it and and the interact addition, will platform deliver adoption and security reducing our time with with assistant fundamentally This information users made user takes natural critical admin easier language. analysis. understands to an is lives In are significantly identity faster how

all ITDR, or Response, risk or and a is identity directory, need market across We, to about discussed believe product. of to infrastructure able a active just be look or ITDR automated Detection limited capabilities broader and detect be Threat CyberArk they sometimes identities They to before damage need take the not part should to separate is vendor's then monitoring at response be done. to as Identity platform.

combination and improves ITDR powered use engagement identify ITDR increased enhances our CORA resiliency, detect with risky by drives AI behavior, CORA enhances will much of productivity more. and capabilities The security secrets and of anomalous Our platform. powerful and AI

following the takeaways I summary, today's. want to from leave with In you

accelerate CISOs customers consolidating and our top security momentum with for spend in a priority First, business. to continues is Identity CyberArk. are

to Second, and security momentum is our by every a controls our security by imperative privilege teams solution developers. that in the selling level is by market. identity Boards, applying the recognized the increasingly operations is increasing C-suite, and right of

charge when security leading and thought to in execution are the the we leadership it identity Third, comes space.

acquisition of pending moat further company. leadership ongoing innovation our and and as Our the extend our will competitive solidify help further and identity Venafi position position security

fact remain faster And security. lastly, executing to close progressing we that to clear and identity rates the our testament are at customers are are strong, budgets deals a a pace allocating

in strength the our the entire were financial in our we now QX. I Rule continues Josh, growth the a our Momentum results. revenue to about across our is cash guidance. and solid talk to our turn XX will build will free platform XX% company flow and With XX% increase of margin, call outstanding driving results who of our our strong over and yearly business,

Thanks, was growth, strong leverage, and our healthy strong robust and for Security across us another solid Once our helping new net strong growth, execution Matt. CyberArk. delivered guidance is Identity logos, QX subscription flywheel again, for highlighting we our durable platform. flow. line top metrics, free operating exceeded and XXX we our quarter all demand new ARR cash drive

$XXX guidance of grew that's year-on-year, million in ARR. reached Annual Total results. Now million moving XX% total $XX revenue growing into net with year-on-year our XX% end exceeded $XXX.X reaching million, recurring revenue and top the range. new the

a an SaaS from year reached up year. Subscription and ARR for ARR. year-on-year percent million. grew the compared record bookings ARR last added $XX still represents in from is to the our growth. XX% non-QX any million quarter. and As period and our that's million larger XX% share $XX net Maintenance ARR single-digit ago second second We of in of a the increase expected, a $XXX total quarter activity ARR new quarter $XXX now in was year made last the million conversion of Like-for-like subscription

customers seeing which the customers a cross-selling solutions growth. momentum significant now that continues of of in are in than is X,XXX ARR is business more XX% nearly new the platform, in factor to grew to over In cohort Our quarter, second benefit grew with and strong cohort the the than our $XXX,XXX ARR with year-on-year. -- $XXX,XXX and across our upselling XXX from more we

representing year-on-year. revenue. revenue was to revenue quarter. $XXX.X of the revenue growing million all from XX% $XX.X services revenue in year-on-year the total into $X.X revenue and year-on-year. on revenue Please Recurring second XX% second geographic XX% revenue was discussed compared year-on-year P&L Americas in year. and APJ Maintenance rates line was with XX% lines $XXX.X levels. historic million. of and Subscription the go $XXX be of growing that, the reached our revenue, regions the reconciliation details growth, $XX.X Recurring year-on-year our million, remained will GAAP items non-GAAP million million, $XX.X Moving for basis. million, at million. From maintenance of year and the XX% tables EMEA renewal a Of the strong continuing XX% was release. was see full for up press Professional accounting last quarter was maintenance $XX.X services XX% was in revenue All perspective, to non-GAAP in a XX% ago and growing and $XX.X showed professional healthy million, growing total million, the now period, up to

from quarter, or XX.X% operating loss $XXX.X compared of our million was profit gross diluted last from second significantly our guidance XX.X% outperforming of in the quarter also ago second $XX.X million The second gross margin margin, year Net per in from million highlights share, of business period. year. the share operating XX.X% was quarter income $X.XX up at operating of $X.XX In million last model. improvement margin. the or per the $XX.X leverage came period up the the also year. ago gross significant earnings to the operating quarter in or $X.X Second income That's up year our inherent and in

X,XXX and with marketing. June worldwide, including X,XXX sales ended about in employees We

cash in first in was of year. in deliver million in this We $XXX to the $XX.X in quarter, year. ahead That's our $XX.X second of of clear the pleased models. have million flow delivered are we free means revenue cash a free cash negative inherent quarter expectations. of to a the potential quarter second of demonstration flow, months compared recurring million the the flow as another which believe strong is We our X well That last

our expected proposed is guidance, which Before to second close half going the still of on acquisition, Venafi touch briefly I XXXX. into in to want

previously, Venafi about million recurring CyberArk, our ARR durable customers. with had we approximately XXX XX% model. adding revenue As to $XXX Like in is of Venafi's noted than revenue more subscription

It's Importantly, we find financial to to margins. to acquisition confident meets expect accretive we Venafi non-GAAP that opportunity and that. Venafi, strategic did rare be exactly immediately an objectives. We're both with

our to guidance. let's Now turn

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

quarter. million third income $XX.X We in the of range for operating expect $XX.X non-GAAP million to the

in $X.XX be to We expect share. diluted non-GAAP EPS to range $X.XX the our of per

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

For our across range the revenue $XXX We XX% growth increasing of are at representing the total million all million, of full-year midpoint our XXXX, the expect range. guidance we in now to $XXX metrics. year-on-year the

for at the remainder SaaS As the to lead way. to continues year, we expected look be of our the pipeline

our Reflecting model operating continued our the of and to driving commitment power subscription leverage.

income full-year non-GAAP increasing we $XXX.X are expect share earnings per We share. operating our million million. a per $X.XX $X.XX diluted $XXX.X and to range to our be to of between

taxes weighted expect million We diluted XXXX. million about full-year and about $XX XX.X for in the shares average

about annual range We of a growth revenue $XXX XX% the recurring December million midpoint. year-on-year raising at to are million XXXX, $XXX also to at our or XX,

year flow at XX% significantly will margin cash are for cash $XXX to the range We a flow that to million free million represent full midpoint. of the guidance increasing our $XXX free

to and not note contribution third XXXX for Venafi. of want I include full-year acquisition from proposed the does the that our quarter guidance

we after call our update the quarterly the the in Venafi will guidance closed for earnings first We acquisition transaction.

guidance. finish first half the of to strong we and up, our are thrilled quarter out sum strong to confidently raise year another report a To

progress acquisition to We Venafi towards the look are joining CyberArk leader with we closing this and made have the the later pleased industry forward year.

growth, reporting security will on cylinders. Identity CISOs, Operator? industry XX% and we is operating value XX% for turn the tremendous the delivering customers. And firing our now, now a margin, margin all our cash over flow is operator I call clear are for With a Q&A. priority leader, for platform ARR free the top to

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

Okay. on strong congrats the Great. and Questions execution. here,

appreciate Thanks, Saket. it. I

with Absolutely. just you. start to Matt, maybe

your could you I how just areas of it sort in remarks, was leadership, undeniable like versus market. in think in could areas that offer just Because identity secrets there's and prepared about think right, competitors, lot that. during sounds like if just understand management. workforce we but least I all a functionality how you're the more two you about PAM you hear But talk differentiating like to you CyberArk's wondering feel those at wanted

ability love Thanks, I time I bit that is strategy little growth more two our differentiate actually be answering core on our because pillars the versus think able competitors. here a might it's kind Saket. to spend question. of market those on to to it I

the a and in offer the breach it. system, the those core is, high-risk into So a every controls. going user daily admin competitors for And taken secure but a high-risk sign-on look user if the But basic That's accessing we we before, the We security workforce to important secure time there applications. But really this have the regular through we start long actually are number extra you're who's of security security when authentication. And is a web me accessing this is heard to multifactor with beyond the And idea do we like now, they're user stance user SaaS an how HR certain like a we we privileged identities. controls, securing and need workforce, you've applications. and increasing it say the been when you're they we've normal single that our their a those accessing reimagine sessions. tool. Workday go go need that SaaS securing you with time reality the if workforce, work, and can to environment, general need workforce really offer things

idea cases. for use And of controls of in tie things we the secure able we ability we be add talk password these for enterprise-grade users that those extra sessions. to browsing browsing. We cookieless manager, so about in can wrap in security to which We security need our so can The really browser. to the monitor like have be release. to workforce idea able heard The

into because how wait, integrated about one puts So solution solution competitors, that. I need substantiate saying, versus that wouldn't and think we the better for customers the the workforce. a to are these posture package, ideas security our go I our together we Why can increasingly get with

win having we rate. are So higher a

be a workloads legacy all growth that them on identities. talking sitting to the strong the it. It's about machine seeing the workforce say hear I'm still about you even are can going applications. modern They on and applications story data have discover describing to side, to can can excitement We I'd it's able group. coming can side. micro over similar them, we even sure that developer the and that's a these underneath of top naive full-scale the Microsoft, the are workflow AWS, sit to be you have in secret both security offer to what these people way us of the or control the hyperscalers, made of security decision on that we like we as that our all we story the use, basically talking layer within secure I want We choose post broad make get solution the heard be but manage sit the a about But about to also Secrets And talking minute out that who example choice. of better in out CyberArk or the to can ability idea of talking developers going identities to in Conjur that that in building be Cloud, how Cloud but stores get the And able Google, a can add they to be need the the applications was Hub to that a services of and airline in Venafi to the And control do security on Conjur identity team. actually container-based the the the of top. And that the applications so allows decision them. But center. We used can who was it controls combination modern can machine made, layer do we actually acquisition. we're we script spectrum tools became there. differentiate be under across of here, right sit only of machine that are idea the the the the we

So in expanding go I growth of this market. other actually runway we're certificates what think we us. think see and is of the just to identity, a Venafi we as of out ahead long And seeing there about opportunity forms machine the after and

metric makes ton inflection follow-up is sense. billings of flow isn't Josh, great for cash you a to subscription that in really see. flywheel meaningful? you. how more That think I of of but free with for focused maybe renewals that when the know is do The that that we've a on I'm just grows, just my much wondering, past, sort sort becomes about metric in

Saket, thanks.

I reason component the the kind that billings the the well. And flow excited always into the able we full whole maintenance for from significantly comes the year. one as We're think just about within right. the we're piece half the calculation. not think off but that also the to noise to guidance, first excited I we've based really free why you're all, the when it's shied is really things the of of cash really First strong in revenue of year, only think, away bookings deferred and goes for the renewal for I'm we generated around with raise of billings, is the QX of factors rates, continue really that of strong that

the think down the on that around the maintenance I and ARR we've revenue So everything goes growth ARR to subscription SaaS. become dramatically, deferred when is and the extent the for focused

still why I an the think is the that's and the more model. it we're out out helps kind from clear today becomes on growth, which of lot tail indicator business, impact transition ARR growth in the a predictor our really to that's of indicator really the of our business focused what of perpetual any strongest a wash of or because

Your next Jonathan the William of Ho question from comes with Blair. line

bring you of maybe to is give these bit you you additional more as vision perhaps channel on your And little partners Matt, commentary types with resonating a deals seeing of platform can us well? into customers? are how start

absolutely. I think platform combination very of to selling. Jonathan, foundation that our the the actually is so I the And it's mean us do market. of the is ability in solution differentiating both

come identity four these identity level to workforce, is the developers, talking about talking able every personas, customers, four we're we So this groups, and vision, to to machines. idea secure about these which with IT, the we're then be and privilege And the right of controls.

to trying with they're the each what based of access. identity ability the the to privilege of behaviors seeing, right with an what controls, controls call we upon to to do, understand the The only behaviors apply group we're integrated able trying is be intelligent is the that target that's possible and platform level way what that user

a discussion yet offer. across that about around the of introduces all ability the to the into I'm talking we vision how. groups. technologies even customers not we're able particular be high-level their this about so the And to identity notion expand with That

they platform, they with future I the one do if know into backbone a one with of absolutely, expand safe is but decides, integrated it's because securing platform get you when think groups IT, off what, customer Well, run the in to relationship resonating identity only user be experience, how feel you're one the one proof. that we I they the other the with can They comes. time We leader. those customers, Because want started unified able PAM that? And that of not reporting. feel even know audit and to relationship. to unified do do ability

and Now mentioned, actually as our group leveraging to from customers one about than get-go, than started new the with of more the of we platform. more want more identity more solution, get course, one because of half logos land with

to with to security our I the we So and our elevation their of map our think it's strategy, strategy. fundamental actually do customers long-term identity relationships as it's fundamental out

just it. of quick When given new there flow be quarter, to of Got this Or a at margins just strength the additional cash leverage sort follow-up. is level? look in this And normal in strength mean, we in should your we I performance? terms expect then the the the free

Jonathan. Thanks, Yes.

think I and for guide So year. our guided we full the increased

But from I to of back model So the lot half margin margin, we in that's do continuously indicators do going cash doing also what that free going to increase quarter the first the and revenue flow the to a cash the of yes, flow cash to second the that, the quarter our think from year. -- what and expectation flow come. have in be we our years able forward, leverage anticipate our that against

line comes Madeline America. the with Bank of question next from Brooks of Your

Nice performance this quarter.

Just ones me. two quick for

your or quarter I'm that with First you driven different just you to prepared host or out was of guess, understand confirm click really remarks, called I wins. on double in two of really ones. nice that those. a wanted oversized one deals large to versus all, second some trying And I by

other for for ourselves Josh business question getting XX% two a over solutions. you And with more second are then just me, or update And those of an on for some is landing metrics. both mentioned

you core above growth last if I I NRR portfolio? And know about So your think could on you other XXX. metric. a of the additionally, just any of type just time areas in how still spoke, trending should in was it type we PAM touch you versus think

it get So is now, an if where indication be of could we just kind would that of helpful.

percent deals actually of to across really make as breadth our XX the up of our business all top our from a results. And strong overall percent we Gap] continue see bookings. a [Audio driving markets

So a actually that the it's the when look covers the of we from perspective. indication under great of business strength

all think think about metrics the them. feel, I feel you seeing out we to we're we're when continuing of about think I there, good that

new lands, our I think with when we we that. think happy really about logo were

other board us, for feels talked as the plant we But and board, consistent in for mix while, to the and plant to new about maintain all like PAM getting of across continues we quarters. the reason product seeds that for So economy, lines. yes, I landing in the a we've that strong pie logos this message. We've lines. just underlying the that's multiple seeds prior seen the kind think to grow. the to spot this this continue general, And and solution kind across in of it And across the slices a XXX continues of in or is pie

an faster, performing continues well. the grow. ARR our are newer to perspective itself PAM they're core business So obviously and from areas growing But

catch which you And so emerging not but and underlying you doesn't core in is perform have of overall want your to continue weakness to that shifting business pie better, even all where the to your perform right? because change any much up much. to the so your want be, You businesses want core. you

seeing. this is we're what so And

think some through We I really early too more out talk there. cycles. a get still about want as to to we're NRR number

disclosed we we've feel strong within and think really that number deals see expansion base, that a very to not our within able to actually our we out base. in it's there. But So be harvest strong ability I

Your Piper next question Rob Owens of comes from from line the Sandler.

Yes. sounds your of in call tail and there. what pretty coming earnings heard the at much end quite out we've And that than different you're

And there counts finding drill in the mean ARR little or so -- urgency a I first that few a your up to I growth you're companies new of sense guys to have is that you from excuse me. into had net want bit customers, companies new down logo the half have. relative

together -- sense is best uneven or relatively for of flat most? at it urgency been there economy there coming point? So some because just is Or at the this is has all

seeing it's I a think good Rob, what is of we're indicative there. And question. out Yes,

by the So security let's environment their under out the looks what's their increases. what's they're C-suite asked most break by them right? that landscape risk at just down adversaries And And on breach prioritize important, that's list. if and security again materializes. And environments. likely are And within within the are most of it continues to likely of what's threat in CISOs also to pressure. the time, of what resilient top we, security to teams Boards security tremendous the focus the construct, risk the elevate, at moment a as conversations. identity in the At actually help be the identity ability identity frankly, And ultimately, a to amount leader the to environment, then, like. the as vectors, those whole and the secure space the forefront CISOs most reduce risk, and Because so there in

reduce the securely for Go neglected we workforce modernize what protect privilege attack out risk access the how understand been cloud. we're that has environment or sure answer the can MFA, machine So to example, they implement doing controls, to to we're how IT to not is to actually, just years. implement than and do just moving secure the into that for controls, core identity VMs more basics, of but make expand beyond secure SSO.

then do a becomes and how all customer move so with And we that we about, and the move. how us conversation all can of right, fast

Our so harder. partners it, it pushing get they're

for And our it we've results become we priority a partner top the see. in So ecosystem. materializes that ultimately,

to of I forward. out see their outlooks mission secure it's and uncertainty, we're in deliver, then same and pipe and in see what ultimately, results, factors of their the teams think And mind of top ours, there environments, is in it macros independent even think which to other the go digital I organization mission, protect a of that have independent see and the their to we of and transformations. able and we moving that for we're we the just security and

a second the one If free a closer on free on half any year. just historically, given And little look Josh, there. XX-month of is in I XX%. flow more margin. throughout to shape if cash commentary basis, cash quick your for even year flow you're about trailing not a Thanks weighted, the

unique flow the below actually year the you're that this TTM half? end to is your second XX.X% something Because of range, roughly relative I which guiding there margin at is high think cash in to So numbers?

Yes. Thanks, Rob.

cuts So that we we're Venafi speak, today that when think, but we look of still doing of raised, for at the guidance for around million, I the by we're so investment the the transaction I related year the $XX of second there's the potential would it to handicapping, consideration half rate in consider consideration on half. interest obligations in costs. second the significant into tax that income. say could We're third, and also be And the impact taking that full

were the obviously, still year year, in kind of we some that that had factors other February. but we full to this for consider increase and guidance started we -- able bullish glad the were our flow -- that extent to when the And on out we think guidance. So of these cash did we're we about more we than our free increased much about we

of Cowen. Your Shaul with next question comes from line TD Eyal the

Congrats any the and performed on during the of just the public views public been vertical this linearity And about quarter? to any on during execution. has ongoing the how Guys, it's quarter how maybe on consistent maybe -- the how trends views word July? month performing

I'll that. take Sure.

of solutions we've more kind federal across we've government I become mission-critical, distribution have our kind before, in our but this board. nature of more space, about of the think So talked as seen the even

which actually up. don't so across seeing see for And government, huge good, and us. behavior state is across growth We we just generally a local, SLED government, global tick solid are and a area

I And we're happy performance our with overall. think so

continue quarter. differences don't be I to We think outside there'll frankly, any say I wouldn't there come. outsized in it expect to And quarter was the the differences in any

just to I think strong continue to see going growth. we're

global of government we continue vertical to see overall I think XX% ARR. that I perform about And our well. our represents think

Any views about linearity trends?

see stick. business, Across entire we normal we hockey continue to see the our

we've to loaded We say here. perform saw would So of always quarter. I normal back-end start had with in QX QX we are QXs. kind the consistent a strong

pretty quite be solved thing one the it's yet stick, hockey quarterly haven't good. feeling But to CyberArk. we're I solved at here So

of question DiFucci next with comes Your Guggenheim. from John line the

I'd that tactical like unique way. But they've -- a protect they that up here, in results and Rob's quarter priority the only also in I but said, to happening point, because any only the time have they're saying CISOs about just robust past. But is -- of cyber strength spoke identities environment the the to in this the catalyst also spending very you IT in not is impressive, it's conversations uptick more as around here. But that this about talked logos need to or other here, this insurance really know in threat have that a -- origin X.X identify -- first what's like the -- than you uniqueness? for hey, cyber is there. driving it's companies. have some to Rob's Is it's CISOs -- of the insurance decent cyber new year-over-year are to not this in sort the, heard and what's of identity math of a years, Because about curious, I lot least a I follow is -- price, seeing have guess, to you insurance grow is of impressive. we've sort having question at everyone are you cyber breaches I'm and to demand? that It's PAM out get part recognized you

a place. And need cyber that cyber the controls models, perfected they've increasingly their Yes. be it tailwind insurance all about is to at in kind the core nice way, I and look talked as Listen, there. insurers for By security is there. we've is us EPM think PAM of

look You the see given them identity vector threat the at machine starting to there. space and move over

For sure, always MFA, SSO there. been has

to of create here or SEC most go you regulations an to nice cyber regulatory We're what's think tailwind factors. us. talking would of is regulations environment just The most important in tailwinds. what do. kind of about, talked Europe as I for I an on And you is tailwind. awareness So a lot what do. Cyber is tell DORA to insurance of you a other there's important U.S. is awareness And the started in hit insurers, a create go they about

increasingly, a go talk and You the that mentioned our recommend And firms see making coming is breach the customers breach CyberArk we're us, both perspective. IR they sure thing come do deals to environment. seeing first or the picking post we kind of up even way and from

ultimately Rob, I So which think thesis mind the fundamental we're support a reinforce results. the lead that They and gave, that priority. top that point stronger I across all tailwinds to board, is of we're kind think, of and I the

Okay.

a sounds happening like things out it of lot there. So are

Wolf from Research. question Tilton comes of next Joshua Your the with line

customers lot more secure. me. think rates you because for you workforce mentioned guys that side. makes you maybe they're not Matt, to help how getting you're value product the of I much improving that rates? like talk just win and MFA feel just offerings one I know win initiatives can only as But talk helped taking portfolio it but differentiated a those SSO make the how some feel adjacent driving from Just that is your some more is portfolio that pricing on well strategic about and product differentiated, have improving workforce were you the

Josh. Sure

So thank you.

solutions a our little talked right, the and moved motion I think simple the persona really but launching bit about group, persona Investor -- to per for group. solution at a where concept, we we're we're Day, this this pricing it's which we've is

developers IT again, and So there's workforce, machines.

anything personas, one it you even from competitor a of step better is out can we've package the enterprise takes standard any kind make that got sure goal And obviously, each those our enterprise further. standard one get of For in the package. there. And to is an than

solution, certainly web of so the you're second you in workforce getting our standard layers MFA we two secure security first layers slice a of not And think a just workforce the think side SSO, and you're standard two when of getting enterprise sessions about our for second, one, and but about and enterprise. the

a of workflow management life engine. getting around level and You're identity cycle management

You're getting the browser.

element You're workforce getting manager. of password an

because you kind biggest solution your out, where challenger workforce. solutions, in from And shared total there, and swap an offer it our to I MFA shark to the say, we're with in customer is as script resonates offer the we're what they especially workforce. We're competing -- SSO, we're which let's value provider. secure important their the, competing going even then if security, And out IdP, way, I don't the you you fine. security top versus want in a the that it's that. we're of say, doesn't resonating. in you've what want And out, on Okta so that controls pointed saying, MFA their not on as by on really example choice to We made and to can position, Microsoft or SSO, out that's listen, our if that's want spaces recently, one a to wait, new start in think wrap And for even swap we of and

We the effectively, can we more sales and and but there I what happens. bring you confidence. competing can into I energized with think they're what not only lot And our see think out more platform is -- that's over then time, team by, feeling a

And lot of makes maybe follow-up. a then sense. a That just quick

out there is demand the rate of solution these you called that change the modern are when You in of handle headlines multiple with incremental think their impressing the I these think, news that people new a be used realizing certificate to also seeing out a incumbent management to XX -- that seems prepared you companies? Are Venafi on requirements little lot I it There be, years. in how kind shrinking days companies of remarks, just market the lifetime certificates losing to upon of a is providers. which faith in can

customers, And to end-to-end for really of kind broad close course, out a about identity Listen, you And But machine I finish this of second. Yes. want just I'm And machine think understand enthused talking it to it Venafi landscape. discussing I'm try day. every by to might everybody this board. talking We to out, we I and we're identities. go imagine, acquisition. get incredibly customers remain the need them on there our as

identity, each That take can can It be For bot. application, IoT identities. AI-driven application. multiple it take an a application let's application. let's be It device. body, it be can be machine can an But an has an an

like lot application the driver's to can't website. through like username passport a the core certificate. password. they call that ability and application It We their secret. an That's on example, can an with can its get of identify for without license. themselves think certificate, that the human equivalent with So listed And or that also identifying their have a features, to a can't, a identity have identity looks a a be able

can't listed in get Google. You

can They here idea all be -- that whether that credentials, CyberArk the each to machine is end-to-end it key can it's keys, provider allows their And keys. of these modern within can combination end do Venafi only across manage machine the to manage features. able really then manage So end. to us plus the And the certificates be our our can secrets, identifying identity goes the machines.

a a spreadsheet diving or of thought out they been that into in think upper when about question, space, long your aren't on there thousands actually, that is all -- which has themselves. aren't and they they was enterprise create regulated, tier certificate there all track the my able do the organizations the we the preamble, been more. can highly be this certificates, I or could even can Now

certificate issue And I expires it that's can script, when an figure out when I to need automated rotate today. or through a impractical new

possible. of certificates, If you or it are just idea automated is an managing doing the more through than not manually X,XXX fashion

that a in tool enterprise-grade what so And in cycle which triggers management environment, is Venafi really modern then life an SaaS offers. certificate real interest

applicable. where no I this think some do-it-myself it inflection we're with do the point on so people at longer And smart is really or IT

idea when why it, And wow, the we we more I'm little you acquisition what talk and and can as story. because like that that why, we this the the of, add you momentum close what that's looks identity. tell see. as this offering leader machine in So with that's CyberArk a on end-to-end about at you total about back, going see bit can do we'll come can And we'll

of Citi. Boolani question Fatima with comes the line next from Your

Just that cash Venafi. around some be directly one might things alluded you the for you of me. maybe flow response in Josh, free to bringing doing down to the

anticipatory So give if a on. I'm maybe closed But a or give wondering us taste flavor around what some investments if plans that of doing, or provided or anticipatory could bit more be you you're a little might us of detail initiatives yet. maybe Venafi, you anything again, could efforts that these hasn't or

additional my you now first of it's half doing start, for around add. I I'll Matt, anything think really what It's second and we all, the cash from we're year. have to But Yes, to the more free of trying forecast angle, cash if and are flow, whether that flow be advisory the related going are integration legal costs well. sure course, dry advisory, investments transaction, as full the that it's it, around making for PMI of one as, the successful various around to into of and as costs well the going transactional

are on I I And which also to half interest would of where in want consideration took flow. second to we of related know the today But integration Venafi. free direct going around not actually impact the an with there's -- year, -- rates the cash also is repeat, would we the the also around costs we're it's and what really to doing has related things indirect

comes of Your from the next line Securities. question with Siddiqui Junaid Truist

seeing traction the other talk logos? you're importance have that really growth talked about And new recently you've that leaned of you that the Matt, MSP MSP it. the channel. the to launched into are about and in any initiatives in Could maybe contributing you console

Yes, sure. No.

future. I of and an of today even component important think more MSPs the component important are

to choosing I are down actually and outsource out organizations, think enterprise there. organizations security just more providers but market MSP more not to stack their the for

regularly. of we as a see actually that partner it big about so our We And talk piece program.

And did they and them understand rave it to going helps again, on allows really it the it's focus of and have console satisfied. year, happy kind the life their helps earlier to tenant ability the the once It's and reviews. customers. made It us and itself able and usage, in life be it, significantly management. just keeping with easier. of find console customers gotten makes easier those helping MSP launch MSP to the out with the We

So I a big piece of future the MSPs are of think CyberArk.

kind of more more nontraditional, ourselves resellers MSPs, how forward. see MSPs. SIs and get You And we into it's big become going think kind of a piece see of I the of

stack. portfolio It to us, by the also a allows talk broader about way,

And MSPs year If moving embracing were full talk you machines, platform us see did in side. MSPs focused really have, actually the moving into we portfolio we X ago really maybe strategy, the itself, to they PAM. with the into a access the or on the would now

and notion really release press secure is in architects areas the partners, and cloud stack a MSPs script, we SAP organization. And of we've I and just actually and the to them developers, released wanted was have our all think the the seen of or access what of to access fundamental we that how developers Access they they sitting a do will secures here, that IT, this about environment, evident of Secure the component they how platform excited our example, cloud modern in sitting about Cloud whether are of mentioned they're developer is PAM the the environment. One cloud not how adopted actually most cloud in in the idea developers it the expand

and cases of new It's CyberArk they types a of cover to organizations well, those all that for win their they if of And they really personas come the as MSPs exciting can with us. effectively use the adopt platform. the play realize

Cohen over this for Matt question-and-answer to Please our At go That Mr. turn now ahead. remarks. closing will the time, I concludes session. call

talk for an around you identity track identity. Venafi close about We than world in soon. deliver innovation, the security. be all of it is thanking privilege amazing to delivering you, idea the every effort overall right more excited diligent around leadership Thank which can thrilled delivering to I X,XXX to our to we're build you. controls continuing we'll CyberArk and in couldn't our the want XXXX. And another as making we're this the their work, by of of acquisition, on what to more expanding and half And quarter. end second and employees in today. continue vision position We're strong the hard tell, CyberArk just position their in level Thank remains at we're to

call. for you joining. today's concludes This Thank all

now may You disconnect.