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Russian (RU) Ricardo Pillai
Mon, Jun 9, 2025, 6:28 AM 3 min read
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We came across a bullish thesis on CyberArk Software Ltd. (CYBR) on Compounding Your Wealth’s Substack. In this article, we will summarize the bulls’ thesis on CYBR. CyberArk Software Ltd. (CYBR)'s share was trading at $378.95 as of 29th May. CYBR’s trailing and forward P/E were 2320 and 99.01 respectively according to Yahoo Finance.
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CyberArk delivered a strong first quarter in 2025, reporting total revenue of $317.6 million, representing a 43.3% year-over-year increase and exceeding estimates by 4.1%.
Annual Recurring Revenue (ARR) reached $1.215 billion, up nearly 50% year-over-year, driven by $46 million in net new ARR including $5 million from the Zilla Security acquisition. Non-GAAP operating income rose to $57.5 million, with an 18.1% operating margin, while EPS of $0.98 beat expectations by 25.6%. Despite strong cash flow of $95.5 million, free cash flow margin slightly declined due to increased headcount and acquisition spending, with CyberArk ending the quarter with $776 million in cash.
Subscription revenue grew 60.4% year-over-year, although subscription gross margin decreased, reflecting investments and integrations related to acquisitions. CyberArk’s platform momentum accelerated, with 50% of new customers adopting multiple solutions, and nine of the top ten deals being multi-product, signaling successful cross-selling efforts and deeper platform engagement.
The company expanded its identity security capabilities across human, machine, and AI identities, introducing new modules such as Zilla Provision and Comply, Secure Workload Access, and a Secure AI Agent solution to address emerging AI threats. Machine identity growth was notable, with a rapid increase in machine-to-human identity ratio, driven by certificate lifecycle management amid stricter renewal mandates.
CyberArk continues to consolidate identity tools for customers amid strong demand and limited competitive pressure. While management took a cautious outlook due to macroeconomic risks, they raised full-year guidance to $1.313–$1.323 billion in revenue, anticipating continued ARR growth, operating leverage, and strong free cash flow expansion as identity, cloud, and AI security converge on their unified platform.
For a comprehensive analysis of another standout stock covered by the same author, we recommend reading our summary of their bullish thesis on Snowflake Inc. (SNOW).
CyberArk Software Ltd. (CYBR) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 64 hedge fund portfolios held CYBR at the end of the first quarter which was 57 in the previous quarter. While we acknowledge the risk and potential of CYBR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.
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