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6-K 1 zk2533306.htm 6-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549
______________________

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934

For the month of June 2025

Commission File Number: 001-36625

CyberArk Software Ltd.
(Translation of registrant’s name into English)

CyberArk Software Ltd.
9 Hapsagot St.
Park Ofer B, P.O. Box 3143
Petach-Tikva, 4951040 Israel
 (Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ☒          Form 40-F ☐
 

EXPLANATORY NOTE

On June 4, 2025, CyberArk Software Ltd. (the “Company”) issued a press release announcing a proposed offering of $750 million principal amount of convertible senior notes (the “Offering”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). A copy of the press release is attached as Exhibit 99.1 to this Report on Form 6-K.

The unaudited financial statements of the Company for the three months ended March 31, 2025 and 2024 and as of March 31, 2025 are furnished herewith as Exhibit 99.2 to this Report on Form 6-K.

Other than as indicated below, the information in this Form 6-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act.

Exhibit 99.2 to this Report on Form 6-K are hereby incorporated by reference into the Company’s Registration Statements on Form S-8 (File Nos. 333-200367, 333-202850, 333-216755, 333-223729, 333-230269, 333-236909, 333-254152, 333-254154, 333-263436, 333-270222, 333-270223, 333-277932, 333-280349, 333-285753 and 333-285751) and on Form F-3 (File No. 333-282722).
 
2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Date: June 4, 2025
 
 
     
 
CYBERARK SOFTWARE LTD.
 
 
 
 
 
 
By:
/s/  Erica Smith
 
 
Name:
Erica Smith
 
 
Title:
Chief Financial Officer
 
 
3

EXHIBIT INDEX
 
Exhibit                    
Description
 
 

4
EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
Exhibit 99.1

CyberArk Software Ltd. Announces Proposed Private Offering of $750 million of 0.00%
Convertible Senior Notes due 2030
 
NEWTON, Mass. & PETACH TIKVA, Israel – June 4, 2025 – CyberArk Software Ltd. (Nasdaq: CYBR) (“CyberArk”), the global leader in identity security, today announced its intention to offer, subject to market conditions and other factors, $750 million aggregate principal amount of 0.00% Convertible Senior Notes due 2030 (the “Notes”) in a private offering (the “Offering”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). In connection with the Offering, CyberArk expects to grant the initial purchasers of the Notes a 13-day option to purchase up to an additional $125.0 million aggregate principal amount of the Notes.

The final terms of the Notes, including the initial conversion price and certain other terms, will be determined at the time of pricing of the Offering. When issued, the Notes will be senior, unsecured obligations of CyberArk. The Notes will not bear regular interest, and the principal amount of the Notes will not accrete. The Notes will mature on June 15, 2030, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. Prior to February 15, 2030, the Notes will be convertible at the option of holders only upon satisfaction of certain conditions and during certain periods. Thereafter, the Notes will be convertible at any time until the close of business on the second scheduled trading day immediately prior to the maturity date. The Notes will be convertible into cash, ordinary shares of CyberArk or a combination thereof, with the form of consideration determined at CyberArk’s election.

CyberArk may redeem for cash (1) all of the Notes at any time on or prior to the 31st scheduled trading day immediately preceding the maturity date if certain tax-related events occur and (2) all or any portion (subject to certain limitations) of the Notes, at any time, and from time to time, on or after June 20, 2028, and on or before the 31st scheduled trading day immediately before the maturity date, at its option at any time and from time to time, if the last reported sale price per share of CyberArk’s ordinary shares exceeds 130% of the conversion price for a specified period of time and certain other conditions are satisfied. The redemption price will be equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date.

If certain corporate events that constitute a “fundamental change” occur, then, subject to a limited exception, noteholders may require CyberArk to repurchase their Notes for cash. The repurchase price will be equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid special interest, if any, up to, but excluding, the applicable repurchase date.

In connection with the pricing of the Notes, CyberArk expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers of the Offering and/or their respective affiliates and/or other financial institutions (in this capacity, the “Option Counterparties”). The capped call transactions are expected to cover, subject to anti-dilution adjustments substantially similar to those applicable to the Notes, up to the number of shares of CyberArk’s ordinary shares that will initially underlie the Notes. If the initial purchasers exercise their option to purchase additional Notes, then CyberArk expects to enter into additional capped call transactions with the Option Counterparties. The capped call transactions are expected to generally reduce the potential dilution to the ordinary shares of CyberArk upon any conversion of Notes and/or to offset any cash payments CyberArk is required to make in excess of the principal amount of the converted Notes, as the case may be, in the event that the market price per share of CyberArk’s ordinary shares, as measured under the terms of the capped call transactions, is greater than the strike price of the capped call transactions, with such reduction of potential dilution and/or offset of cash payments subject to a cap.


CyberArk has been advised that, in connection with establishing their initial hedges of the capped call transactions, the Option Counterparties or their respective affiliates expect to enter into various derivative transactions with respect to the ordinary shares of CyberArk concurrently with or shortly after the pricing of the Notes. This activity could have the effect of increasing (or reducing the size of any decrease in) the market price of the ordinary shares or the Notes at that time. In addition, the Option Counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the ordinary shares and/or by purchasing or selling ordinary shares or other securities of CyberArk in secondary market transactions following the pricing of the Notes and prior to the maturity of the Notes (and are likely to do so following any conversion, repurchase or redemption of the Notes, in each case, if CyberArk exercises the relevant election under the capped call transactions and in connection with any negotiated unwind or modification of the capped call transactions). This activity could also cause an increase or avoid a decrease in the market price of the ordinary shares of CyberArk or the Notes, which could affect the ability of holders of Notes to convert the Notes and, to the extent the activity occurs during any observation period related to a conversion of the Notes, it could affect the number of ordinary shares, if any, and value of the consideration that holders of Notes will receive upon conversion of the Notes.
 
CyberArk intends to use a portion of the net proceeds from the Offering to pay the cost of the capped call transactions, and the remaining net proceeds for working capital or other general corporate purposes. CyberArk may also use a portion of the net proceeds to make acquisitions or investments. However, CyberArk has not entered into any agreements or commitments for any specific acquisition or investment at this time. If the initial purchasers exercise their option to purchase additional Notes, CyberArk expects to use a portion of the net proceeds from the sale of the additional Notes to enter into additional capped call transactions with the Option Counterparties and the remaining net proceeds for general corporate purposes. Pending these uses, CyberArk intends to invest the net proceeds in high-quality, short-term fixed income instruments which include corporate, financial institution, federal agency or U.S. government obligations.
 
The Notes will be offered only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. The offer and sale of the Notes and the ordinary shares of CyberArk issuable upon conversion of the Notes, if any, have not been, and will not be, registered under the Securities Act or the securities laws of any other jurisdiction, and unless so registered, the Notes and such ordinary shares, if any, may not be offered or sold in the United States except pursuant to an applicable exemption from such registration requirements.

This press release does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any offer or sale of, the Notes (or any ordinary shares of CyberArk issuable upon conversion of the Notes) in any state or jurisdiction in which the offer, solicitation, or sale would be unlawful prior to the registration or qualification thereof under the securities laws of any such state or jurisdiction.

About CyberArk

CyberArk (Nasdaq: CYBR) is the global leader in identity security, trusted by organizations around the world to secure human and machine identities in the modern enterprise. CyberArk’s AI-powered Identity Security Platform applies intelligent privilege controls to every identity with continuous threat prevention, detection and response across the identity lifecycle. With CyberArk, organizations can reduce operational and security risks by enabling zero trust and least privilege with complete visibility, empowering all users and identities, including workforce, IT, developers and machines, to securely access any resource, located anywhere, from everywhere.


Forward-Looking Statements

This press release contains forward-looking statements, including, among other things, about whether CyberArk will be able to consummate the Offering, the terms of the Offering and the capped call transactions, and expectations regarding actions of the Option Counterparties and their respective affiliates. In some cases, forward-looking statements may be identified by terminology such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential,” or the negative of these terms or other similar expressions. Such statements involve a number of known and unknown risks and uncertainties that could cause CyberArk’s future results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. You should not rely upon forward-looking statements as predictions of future events.

The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to differ materially, including (i) changes as a result of market conditions or for other reasons, (ii) the risk that the Offering will not be consummated, (iii) the risk that the capped call transactions will not become effective, and (iv) the impact of general economic, industry or political conditions in the United States or internationally.

The forward-looking statements contained in this press release are also subject to additional risks, uncertainties, and factors, including those more fully described in CyberArk’s filings with the Securities and Exchange Commission (the “SEC”), including its annual report on Form 20-F filed with the SEC on March 12, 2025. Forward-looking statements in this press release are made pursuant to the safe harbor provisions contained in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are made only as of the date hereof, and CyberArk undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Investor Relations Contact:
Floris van der Veer
CyberArk
617-558-2132
ir@cyberark.com

Media Contact:
Rachel Gardner
CyberArk
603-531-7229
press@cyberark.com
EX-99.2 3 exhibit_99-2.htm EXHIBIT 99.2
Exhibit 99.2

CYBERARK SOFTWARE LTD.

CYBERARK SOFTWARE LTD.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2025

INDEX

 
Page
   
F-2 - F-3
   
F-4
   
F-5
   
F-6
   
F-7 – F-23



CYBERARK SOFTWARE LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
U.S. dollars in thousands (except share and per share data and unless otherwise indicated)

   
December 31,
2024
    
March 31,
2025
  
         
Unaudited
  
             
ASSETS
            
             
CURRENT ASSETS:
            
Cash and cash equivalents
  
$
526,467
    
$
413,554
  
Short-term bank deposits
    
256,953
      
235,396
  
Marketable securities
    
36,356
      
73,440
  
Trade receivables (net of allowance for credit losses of $0 and $341 at December 31, 2024 and March 31, 2025, respectively)
    
328,465
      
229,972
  
Prepaid expenses and other current assets
    
45,292
      
56,862
  
                 
Total current assets
    
1,193,533
      
1,009,224
  
                 
LONG-TERM ASSETS:
                
Marketable securities
    
21,345
      
53,725
  
Property and equipment, net
    
19,581
      
21,334
  
Intangible assets, net
    
534,726
      
555,915
  
Goodwill
    
1,317,374
      
1,444,680
  
Other long-term assets
    
258,531
      
246,087
  
Deferred tax assets
    
3,305
      
7,003
  
                 
Total long-term assets
    
2,154,862
      
2,328,744
  
                 
TOTAL ASSETS
  
$
3,348,395
    
$
3,337,968
  

The accompanying notes are an integral part of the condensed consolidated financial statements.
F - 2

CYBERARK SOFTWARE LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Cont.)
U.S. dollars in thousands (except share and per share data and unless otherwise indicated)

   
December 31,
2024
    
March 31,
2025
  
         
Unaudited
  
             
LIABILITIES AND SHAREHOLDERS' EQUITY
            
             
CURRENT LIABILITIES:
            
Trade payables
  
$
23,671
    
$
19,492
  
Employees and payroll accruals
    
133,400
      
84,337
  
Accrued expenses and other current liabilities
    
53,486
      
80,124
  
Deferred revenues
    
596,874
      
600,309
  
                 
Total current liabilities
    
807,431
      
784,262
  
                 
LONG-TERM LIABILITIES:
                
Deferred revenues
    
95,190
      
90,709
  
Other long-term liabilities
    
75,970
      
35,290
  
                 
Total long-term liabilities
    
171,160
      
125,999
  
                 
TOTAL LIABILITIES
    
978,591
      
910,261
  
                 
COMMITMENTS AND CONTINGENCIES
                
                 
SHAREHOLDERS' EQUITY:
                
Ordinary shares of NIS 0.01 par value – Authorized: 250,000,000 shares at December 31, 2024 and March 31, 2025; Issued and outstanding: 49,426,711 shares at December 31, 2024 and 49,786,181 shares at March 31, 2025
    
130
      
131
  
Additional paid-in capital
    
2,494,158
      
2,543,671
  
Accumulated other comprehensive income (loss)
    
2,173
      
(901
)
Accumulated deficit
    
(126,657
)
    
(115,194
)
                 
Total shareholders' equity
    
2,369,804
      
2,427,707
  
                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  
$
3,348,395
    
$
3,337,968
  

The accompanying notes are an integral part of the condensed consolidated financial statements.
F - 3
CYBERARK SOFTWARE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

   
Three Months Ended
March 31,
  
   
Unaudited
  
   
2024
    
2025
  
Revenues:
            
Subscription
  
$
156,239
    
$
250,611
  
Maintenance, Professional Services and Other
    
65,311
      
66,990
  
                 
Total revenues
    
221,550
      
317,601
  
                 
Cost of revenues:
                
Subscription
    
20,962
      
51,078
  
Maintenance, Professional Services and Other
    
21,446
      
25,183
  
                 
Total cost of revenues
    
42,408
      
76,261
  
                 
Gross profit
    
179,142
      
241,340
  
                 
Operating expenses:
                
                 
Research and development
    
53,914
      
78,565
  
Sales and marketing
    
104,964
      
145,640
  
General and administrative
    
26,642
      
37,868
  
                 
Total operating expenses
    
185,520
      
262,073
  
                 
Operating loss
    
(6,378
)
    
(20,733
)
Financial income, net
    
14,052
      
8,641
  
                 
Income (loss) before taxes on income
    
7,674
      
(12,092
)
Tax benefit (taxes on income)
    
(2,204
)
    
23,555
  
                 
Net income
  
$
5,470
    
$
11,463
  
                 
Basic net income per ordinary share
  
$
0.13
    
$
0.23
  
Diluted net income per ordinary share
  
$
0.13
    
$
0.22
  
                 
Other comprehensive loss
                
                 
Change in net unrealized gains (losses) on marketable securities:
                
Net unrealized gains (losses) arising during the period
    
(671
)
    
337
  
Net (gains) losses reclassified into net income
    
1
      
(1
)
                 
     
(670
)
    
336
  
Change in net unrealized losses on cash flow hedges:
                
Net unrealized losses arising during the period
    
(642
)
    
(2,628
)
Net gains reclassified into net income
    
(505
)
    
(782
)
                 
     
(1,147
)
    
(3,410
)

Other comprehensive loss, net of taxes of $247 and $0 for the three months ended March 31, 2024, and 2025, respectively
    
(1,817
)
    
(3,074
)
                 
Total comprehensive income
  
$
3,653
    
$
8,389
  

The accompanying notes are an integral part of the condensed consolidated financial statements.
F - 4

CYBERARK SOFTWARE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
U.S. dollars in thousands (except share data and unless otherwise indicated)

   
Ordinary shares
    
Additional paid-in
Capital
              
Total
shareholders'
equity
  
   
Shares
    
Amount
    
Accumulated other comprehensive income (loss)
    
Accumulated deficit
  
                                     
Balance as of January 1, 2024
    
42,255,336
    
$
111
    
$
827,260
    
$
(1,849
)
  
$
(33,196
)
  
$
792,326
  
Exercise of options and vested RSUs granted to employees
    
369,627
      
1
      
3,357
      
-
      
-
      
3,358
  
Other comprehensive loss, net of tax
    
-
      
-
      
-
      
(1,817
)
    
-
      
(1,817
)
Share-based compensation
    
-
      
-
      
37,614
      
-
      
-
      
37,614
  
Net income
    
-
      
-
      
-
      
-
      
5,470
      
5,470
  
                                                 
Balance as of March 31, 2024 (Unaudited)
    
42,624,963
    
$
112
    
$
868,231
    
$
(3,666
)
  
$
(27,726
)
  
$
836,951
  
Exercise of options and vested RSUs granted to employees
    
764,980
      
2
      
4,949
      
-
      
-
      
4,951
  
Other comprehensive income, net of tax
    
-
      
-
      
-
      
5,839
      
-
      
5,839
  
Share-based compensation
    
-
      
-
      
131,666
      
-
      
-
      
131,666
  
Issuance of ordinary shares under employee stock purchase plan
    
105,098
      
*
      
19,185
      
-
      
-
      
19,185
  
Conversion of Convertible Senior Notes
    
3,646,594
      
10
      
574,448
      
-
      
-
      
574,458
  
Reclassification of Capped Call Transactions
    
-
      
-
      
256,740
      
-
      
-
      
256,740
  
Shares issued related to Venafi acquisition, net of issuance costs
    
2,285,076
      
6
      
638,939
      
-
      
-
      
638,945
  
Net loss
    
-
      
-
      
-
      
-
      
(98,931
)
    
(98,931
)
                                                 
Balance as of December 31, 2024
    
49,426,711
    
$
130
    
$
2,494,158
    
$
2,173
    
$
(126,657
)
  
$
2,369,804
  
Exercise of options and vested RSUs granted to employees
    
359,470
      
1
      
906
      
-
      
-
      
907
  
Other comprehensive loss, net of tax
    
-
      
-
      
-
      
(3,074
)
    
-
      
(3,074
)
Share-based compensation
    
-
      
-
      
48,607
      
-
      
-
      
48,607
  
Net income
    
-
      
-
      
-
      
-
      
11,463
      
11,463
  
Balance as of March 31, 2025 (Unaudited)
    
49,786,181
    
$
131
    
$
2,543,671
    
$
(901
)
  
$
(115,194
)
  
$
2,427,707
  

* Represents an amount lower than $1.

The accompanying notes are an integral part of the condensed consolidated financial statements.
F - 5

CYBERARK SOFTWARE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

   
Three Months Ended
March 31,
  
   
Unaudited
  
   
2024
    
2025
  
Cash flows from operating activities:
            
Net income
  
$
5,470
    
$
11,463
  
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation and amortization
    
4,021
      
31,624
  
Share-based compensation
    
37,499
      
48,202
  
Amortization of premium and accretion of discount on
marketable securities, net
    
(1,866
)
    
(26
)
Deferred income taxes, net
    
(1,052
)
    
(45,549
)
Amortization of debt issuance costs
    
751
      
-
  
Decrease in trade receivables
    
47,156
      
100,338
  
Increase in prepaid expenses, other current and long-term assets and others
    
(5,803
)
    
(6,917
)
Changes in operating lease right-of-use assets
    
1,909
      
2,748
  
Decrease in trade payables
    
(7,323
)
    
(4,816
)
Increase (decrease) in short-term and long-term deferred revenue
    
20,656
      
(5,943
)
Decrease in employees and payroll accruals
    
(28,012
)
    
(49,060
)
Increase (decrease) in accrued expenses and other current and long-term liabilities
    
(2,383
)
    
19,327
  
Changes in operating lease liabilities
    
(2,388
)
    
(2,863
)
                 
Net cash provided by operating activities
    
68,635
      
98,528
  
                 
Cash flows from investing activities:
                
Investment in short-term and long-term deposits
    
(156,382
)
    
(63,806
)
Proceeds from short-term and long-term deposits
    
164,800
      
86,252
  
Investment in marketable securities
    
(92,343
)
    
(76,118
)
Proceeds from maturities of marketable securities
    
102,686
      
7,104
  
Purchase of property and equipment and other assets
    
(1,356
)
    
(1,699
)
Capitalized internal-use software
    
(509
)
    
(1,307
)
Payments for business acquisitions, net of cash acquired
    
-
      
(164,383
)
                 
Net cash provided by (used in) investing activities
    
16,896
      
(213,957
)
                 
Cash flows from financing activities:
                
Payments of withholding tax related to employee stock plans
    
(6,327
)
    
(6,397
)
Proceeds from exercise of stock options
    
3,358
      
907
  
Proceeds in connection with employee stock purchase plan
    
4,848
      
6,119
  
                 
Net cash provided by financing activities
    
1,879
      
629
  
                 
Increase (decrease) in cash and cash equivalents
    
87,410
      
(114,800
)
Effect of exchange rate differences on cash and cash equivalents
    
(2,819
)
    
1,887
  
Cash and cash equivalents at the beginning of the period
    
355,933
      
526,467
  
                 
Cash and cash equivalents at the end of the period
  
$
440,524
    
$
413,554
  
                 
Non-cash activities:
            
             
Lease liabilities arising from obtaining right-of-use-assets
  
$
364
    
$
24
  
Non-cash purchase of property and equipment
  
$
333
    
$
1,821
  
Non-cash capitalized internal-use software
  
$
332
    
$
826
  
Non-cash purchases of intangible assets
  
$
28
    
$
22
  
                 
Supplemental disclosure of cash flow activities:
                
                 
Cash paid for income taxes
  
$
5,212
    
$
7,704
  

The accompanying notes are an integral part of the condensed consolidated financial statements.
F - 6
CYBERARK SOFTWARE LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

NOTE 1:-
OVERVIEW, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES


a.
CyberArk Software Ltd. (together with its subsidiaries, the “Company”) is an Israeli company that develops, markets and sells software-based identity security solutions and services. The Company's solutions and services secure access for any identity – human or machine – to help organizations secure critical business assets, protect their distributed workforce and customers, and accelerate business in the cloud. CyberArk’s AI-powered Identity Security Platform applies intelligent privilege controls to every identity with continuous threat prevention, detection and response across the identity lifecycle. With CyberArk, organizations can minimize operational and security risks by enabling zero trust and least privilege with complete visibility, empowering all users and identities, including workforce, IT, developers and machines, to securely access any resource, located anywhere, from everywhere.


b.
Basis of presentation:



The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and applicable rules and regulations of the Securities and Exchange Commission (“SEC”)  regarding interim financial reporting and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The condensed consolidated balance sheet as of December 31, 2024 was derived from the audited consolidated financial statements as of that date, but does not include all of the disclosures, including certain notes required by GAAP on an annual reporting basis. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2024, included in the Company’s Annual Report on Form 20-F for the year ended December 31, 2024 filed with the SEC on March 12, 2025.

In management’s opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, which include only normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of March 31, 2025 and the Company’s condensed consolidated statements of comprehensive income, shareholders’ equity and cash flows for the three months ended March 31, 2024 and 2025. The results for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the full year ending December 31, 2025 or any other future interim or annual period.
F - 7
CYBERARK SOFTWARE LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

NOTE 1:-
OVERVIEW, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Cont.)


c.
Use of estimates:

The preparation of condensed financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Such management estimates and assumptions are related, but not limited to contingent liabilities, income tax uncertainties, deferred taxes, share-based compensation, and fair value of assets acquired and liabilities assumed in business combinations, as well as the determination of standalone selling prices in revenue transactions with multiple performance obligations and the estimated period of benefit for deferred contract costs. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.


 d.
Concentration of credit risks:

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term bank deposits, marketable securities, trade receivables, severance pay funds and derivative instruments.

The majority of the Company’s cash and cash equivalents and short-term bank deposits are invested with major banks in Israel and the United States. Such investments in the United States are in excess of insured limits and are not insured in other jurisdictions. Generally, these investments may be redeemed upon demand, and the Company believes that the financial institutions that hold the Company’s cash deposits are financially sound and, accordingly, bear minimal risk.

The Company’s marketable securities consist of investments, which are highly rated by credit agencies, in government, corporate and government sponsored enterprises debentures. The Company’s investment policy limits the amount that the Company may invest in any one type of investment or issuer, in order to reduce credit risk concentrations.

The trade receivables of the Company are mainly derived from sales to a diverse set of customers located primarily in the United States, Europe and Asia. The Company performs ongoing credit evaluations of its customers and, to date, has not experienced any significant losses.

The Company has entered into forward contracts with major banks in Israel to protect against the risk of changes in exchange rates. The derivative instruments hedge a portion of the Company’s non-dollar currency exposure.
F - 8
CYBERARK SOFTWARE LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

NOTE 1:-
OVERVIEW, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Cont.)


e.
Significant Accounting Policies:

There have been no material changes in the significant accounting policies from those that were disclosed in the audited consolidated financial statements for the fiscal year ended December 31, 2024 included in the Annual Report on Form 20-F other than those noted below.


 f.
Recently issued accounting standards:

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, which requires disaggregated information about the effective tax rate reconciliation as well as information on income taxes paid. The guidance will be effective for the Company for annual periods beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the impact on its financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure in the notes to the financial statements of prescribed categories of expenses within relevant income statement captions. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact on its financial statement disclosures.


 g.
Reclassification:

Certain comparative figures have been reclassified to conform to the current period’s presentation. Additionally, beginning in the first quarter of 2025, the Company revised the presentation of its revenue and cost of revenue line items by combining the amounts previously reported under the ”Perpetual license” line and ”Maintenance and Professional Services” lines into a new line titled ”Maintenance, Professional Services and Other”. The Company believes this revised presentation of revenue and cost of revenue in the consolidated statement of operations aligns with how management evaluates the business.

F - 9
CYBERARK SOFTWARE LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

NOTE 2:-
REVENUE RECOGNITION

  The following table presents the Company’s revenue by category:

   
Three Months Ended March 31,
  
   
2024
    
2025
  
   
(Unaudited)
  
             
SaaS
  
$
100,410
    
$
153,013
  
Self-hosted subscription*
    
55,829
      
97,598
  
Maintenance and support
    
49,603
      
47,614
  
Professional services
    
12,757
      
16,074
  
Other
    
2,951
      
3,302
  
                 
   
$
221,550
    
$
317,601
  

* Self-hosted subscription also includes maintenance associated with self-hosted subscriptions. For additional information regarding disaggregated revenues, please refer to Note 11 below.

Unbilled Receivable:
 
The Company records unbilled receivables from contracts when the revenue recognized exceeds the amount billed to the customer. As of December 31, 2024 and March 31, 2025, $37,495 and $42,947 short-term unbilled receivables are included in trade receivables, respectively, and $5,580 and $3,434 long-term unbilled receivables are included in other long-term assets, respectively.
 
Deferred revenue:
 
Deferred revenue consists of unrecognized amounts billed under SaaS, self-hosted subscriptions, and maintenance and support contracts, as well as professional services which have not yet been performed as of the balance sheet date, for which the Company has an unconditional right for consideration or has collected the amounts. Deferred revenue is recognized as (or when) the Company performs under the contract. During the three months ended March 31, 2025, the Company recognized $201,049 that was included in the deferred revenues balance as of December 31, 2024.
 
  Remaining Performance Obligations:
 
Transaction price allocated to remaining performance obligations represents non-cancelable contracts that have not yet been recognized, which include deferred revenues and amounts not yet received that will be recognized as revenue in future periods.
 
The aggregate amount of the transaction price allocated to remaining performance obligations was $1,377 million as of March 31, 2025, out of which the Company expects to recognize approximately 60% during the next 12 months and the remainder thereafter.
F - 10
 
CYBERARK SOFTWARE LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

NOTE 2:-
REVENUE RECOGNITION (Cont.)

Deferred Contract Costs:

Sales commissions are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions are capitalized and amortized over an expected period of benefit.

For the three months ended March 31, 2024 and 2025, the amortization of deferred contract costs included mainly in sales and marketing expenses was $14,188 and $19,971, respectively.

As of December 31, 2024 and March 31, 2025, the Company presented deferred contract costs from contracts which are for periods of less than 12 months of $1,043 and $1,614 in prepaid expenses and other current assets, respectively, and deferred contract costs in respect of contracts which are greater than 12 months of $197,807 and $195,117 in other long-term assets, respectively.
F - 11
CYBERARK SOFTWARE LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

NOTE 3:-
BUSINESS COMBINATIONS

Acquisition of Zilla, Inc.

On February 12, 2025, the Company completed the acquisition of all outstanding shares of Zilla, Inc. (“Zilla”), a privately held company based in the United States, specializing in identity governance and administration (“IGA”) solutions. The acquisition is intended to enhance CyberArk’s Identity Security Platform by integrating Zilla’s artificial intelligence–driven IGA capabilities, which are designed to support scalable identity compliance and provisioning across digital environments. The acquisition date fair value of consideration transferred amounted to $172.4 million, including $166.4 million of cash  and a $6.0 million earn-out tied to the achievement of certain contingent milestones.

Acquisition related expenses of $1.1 million were expensed by the Company in general and administrative expenses in its condensed consolidated statements of comprehensive income for the three months ended March 31, 2025.

The transaction was accounted for as a business combination in accordance with ASC 805, “Business Combinations”. The total purchase price was preliminarily allocated using information currently available to the Company and may be subject to change as additional information is received during the respective measurement period, up to one year from the acquisition date. The preliminary allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date is as follows:

 
Fair Value
Cash and Cash Equivalents
$2,015
Accounts Receivable, net
1,846
Other Assets
461
Deferred Revenue
(4,897)
Other Liabilities
(515)
Deferred Tax Liability
(4,318)
Acquired Intangible Assets
50,500
Goodwill
127,306
Total Purchase Consideration
$172,398

The excess of the purchase price over the tangible assets acquired, the identifiable intangible assets acquired and assumed liabilities was recorded as goodwill. We believe that the amount of goodwill reflects the expected synergistic benefits of being able to leverage the technology acquired with our existing solutions and being able to successfully market and sell to our customer base. Goodwill is not expected to be deductible for income tax purposes.
F - 12

CYBERARK SOFTWARE LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

NOTE 3:-
BUSINESS COMBINATIONS (Cont.)

The following table presents the identified intangible assets acquired:

 
Fair Value
Estimated useful life (in years)
Technology
$34,510
5
Customer Relationships
15,734
3
Trademark
256
1

The income approach was used to evaluate the fair value of the acquired intangible assets. Specifically, the multi-period excess earnings method was used to evaluate the fair value of the technology, the with and without method was used to evaluate the fair value of the customer relationships, and the relief from royalty method was used to evaluate the fair value of the trademark assets identified in the transaction.

NOTE 4:-
GOODWILL AND OTHER INTANGIBLE ASSETS, NET

                      Changes in the carrying amount of goodwill:

   
December 31, 2024
    
March 31, 2025
  
         
(Unaudited)
  
             
Balance as of beginning of the year
  
$
153,241
    
$
1,317,374
  
Goodwill acquired
    
1,164,133
      
127,306
  
                 
Closing balance
  
$
1,317,374
    
$
1,444,680
  

   The composition of intangible assets is as follows:


 
  
December 31, 2024
    
March 31, 2025
  
         
(Unaudited)
  
             
Original amount:
            
             
Technology
  
$
432,998
    
$
467,508
  
Customer relationships
    
164,548
      
180,282
  
Other
    
16,450
      
16,728
  
                 
     
613,996
      
664,518
  
                 
Less - accumulated amortization
    
79,270
      
108,603
  
                 
Intangible assets, net
  
$
534,726
    
$
555,915
  

  Amortization expense amounted to $1,840 and $29,333 for the three months ended March 31, 2024 and 2025, respectively.

  As of March 31, 2025, the weighted-average remaining useful lives (in years) of Technology, and Customer relationships was 4.5 and 7.1, respectively.
F - 13
CYBERARK SOFTWARE LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

NOTE 4:-
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Cont.)

The estimated future amortization expense of intangible assets as of March 31, 2025 is as follows:

2025 (the remainder of 2025)
    
88,582
  
2026
    
112,634
  
2027
    
111,519
  
2028
    
104,961
  
 2029
    
83,206
  
Thereafter
    
55,013
  
         
   
$
555,915
  

NOTE 5:-
MARKETABLE SECURITIES

The following tables summarize the amortized cost, unrealized gains and losses, and fair value of available-for-sale marketable securities as of December 31, 2024 and March 31, 2025:

   
December 31, 2024
  
   
Amortized cost
    
Gross unrealized losses
    
Gross unrealized gains
    
Fair value
  
                         
Corporate debentures
  
$
58,265
    
$
(871
)
  
$
6
    
$
57,400
  
Government debentures
    
301
      
-
      
-
      
301
  
                                 
Total
  
$
58,566
    
$
(871
)
  
$
6
    
$
57,701
  

   
March 31, 2025 (Unaudited)
  
   
Amortized cost
    
Gross unrealized losses
    
Gross unrealized gains
    
Fair value
  
                         
Corporate debentures
  
$
100,710
    
$
(548
)
  
$
29
    
$
100,191
  
Government debentures
    
26,984
      
(10
)
    
-
      
26,974
  
                                 
Total
  
$
127,694
    
$
(558
)
  
$
29
    
$
127,165
  

F - 14

CYBERARK SOFTWARE LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

NOTE 5:-
MARKETABLE SECURITIES (Cont.)

The following table summarizes the continuous unrealized loss position and fair value of available-for-sale marketable securities as of December 31, 2024 and March 31, 2025, by duration of continuous unrealized loss:

   
December 31, 2024
    
March 31, 2025 (Unaudited)
  
   
Gross unrealized losses
    
Fair value
    
Gross unrealized losses
    
Fair value
  
                         
Continuous unrealized loss position for less than 12 months
  
$
(31
)
  
$
10,266
    
$
(44
)
  
$
82,758
  
Continuous unrealized loss position for more than 12 months
    
(840
)
    
40,852
      
(514
)
    
32,671
  
                                 
   
$
(871
)
  
$
51,108
    
$
(558
)
  
$
115,429
  

The following table summarizes the amortized cost and fair value of available-for-sale marketable securities as of December 31, 2024 and March 31, 2025, by contractual years-to maturity:

   
December 31, 2024
    
March 31, 2025
(Unaudited)
  
   
Amortized cost
    
Fair value
    
Amortized cost
    
Fair value
  
                         
Due within one year
  
$
36,775
    
$
36,356
    
$
73,548
    
$
73,440
  
Due between one and three years
    
21,791
      
21,345
      
54,146
      
53,725
  
                                 
   
$
58,566
    
$
57,701
    
$
127,694
    
$
127,165
  

F - 15
CYBERARK SOFTWARE LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

NOTE 6:-
FAIR VALUE MEASUREMENTS

The carrying values of cash and cash equivalents, short-term bank deposits, trade receivables, prepaid expenses and other long-term and current assets, trade payables, employees and payroll accruals and accrued expenses and other current liabilities approximate their fair values due to the short-term maturities of these instruments.

The following tables present the fair value of money market funds and marketable securities as of December 31, 2024 and March 31, 2025:

         
December 31, 2024
          
March 31, 2025
(Unaudited)
  
   
Level 1
    
Level 2
    
Total
    
Level 1
    
Level 2
    
Total
  
Cash equivalents:
                                    
Money market funds
  
$
455,712
    
$
-
    
$
455,712
    
$
359,456
    
$
-
    
$
359,456
  
Corporate debentures and commercial paper
    
-
      
-
      
-
      
-
      
8,193
      
8,193
  
Government debentures
    
-
      
-
      
-
      
-
      
1,018
      
1,018
  
                                                 
Marketable securities:
                                                
Corporate debentures and commercial paper
    
-
      
57,400
      
57,400
      
-
      
100,191
      
100,191
  
Government debentures
    
-
      
301
      
301
      
-
      
26,974
      
26,974
  
                                                 
Total money market funds, marketable securities derivative assets measured at fair value
  
$
455,712
    
$
57,701
    
$
513,413
    
$
359,456
    
$
136,376
    
$
495,382
  

NOTE 7:-
NON-CANCELABLE MATERIAL PURCHASE OBLIGATIONS

The Company entered into non-cancelable material agreements for the receipt of cloud infrastructure services and subscription-based cloud services. Future payments under non-cancelable material purchase obligations as of March 31, 2025 (Unaudited) are as follows:

2025 (the remainder of 2025)
    
39,932
  
2026
    
64,488
  
2027
    
52,913
  
         
   
$
157,333
  

F - 16

CYBERARK SOFTWARE LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

NOTE 8:-
REVOLVING CREDIT FACILITY

On June 25, 2024 (the “Commencement Date”), the Company entered into a revolving credit facility agreement (“Credit Facility”) with Bank Leumi le-Israel B.M. (“Lender”). The Credit Facility enables the Company to borrow up to $250 million and matures on June 24, 2026. Following the Commencement Date, the Lender transferred a part of the Credit Facility to other banks.

The borrowings under the Credit Facility bear interest at either (i) a base rate plus a spread ranging from 0.8% to 1.8%, or (ii) a three-month Secured Overnight Financing Rate (SOFR) plus a spread ranging from 2.45% to 4%. The ongoing fee on undrawn amounts was initially 0.7%, and decreased to 0.5% effective January 1, 2025.

The Credit Facility requires the Company to maintain at all times a minimum amount of $150 million in unrestricted cash and cash equivalents, of which at least $60 million must be held in a specified bank account of the Lender. In addition, the Company is required to maintain a maximum quarterly net debt to adjusted EBITDA ratio of 4.5, which steps down to 2.5 over time. Non-compliance with a financial covenant may be cured in the subsequent quarter. In addition, the Credit Facility includes customary covenants requiring the consent of the Lender for certain actions including change in control, mergers, consolidations, or incurrence of pledges.

As of March 31, 2025, the Company has no outstanding amounts under the Credit Facility and was in compliance with all financial covenants.

NOTE 9:-
SHAREHOLDERS' EQUITY


a.
Ordinary shares:

The ordinary shares of the Company confer upon the holders the right to receive notices of and to participate and vote in general meetings of the Company, rights to receive dividends and rights to participate in distribution of assets upon liquidation.


 b.
Share-based compensation:

The 2024 Share Incentive Plan (the “2024 Plan”) was adopted by our board of directors and became effective on June 1, 2024. 1,787,022 ordinary shares reserved for issuance were transferred from the 2014 Share Incentive Plan to the 2024 Plan.

The maximum aggregate number of shares that may be issued pursuant to awards under this 2024 Plan is the sum of (a) 1,786,992 ordinary shares, plus (b) on January 1 of each calendar year commencing in 2025, a number of ordinary shares equal to the lesser of: (i) an amount determined by the Board, if so determined prior to the January 1 of the calendar year in which the increase will occur, (ii) 4% of the total number of ordinary shares of the Company outstanding on December 31 of the immediately preceding calendar year, and (iii) 4,000,000 ordinary shares.
F - 17
CYBERARK SOFTWARE LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

NOTE 9:-
SHAREHOLDERS' EQUITY (Cont.)

On January 1, 2021, the Company’s Employee Share Purchase Plan (“ESPP”) became effective. The ESPP enables eligible employees of the Company and its designated subsidiaries to elect to have payroll deductions made during a six-month offering period in an amount not exceeding 15% of the gross base compensation which the employees receive. The applicable purchase price will be no less than 85% of the lesser of the fair market value of the Company’s ordinary shares on the first day or the last day of the purchase period. The total number of ordinary shares initially reserved under the ESPP as of January 1, 2021 was 125,000 shares (the “ESPP Share Pool”). On January 1 of each year between 2022 and 2026, the ESPP Share Pool will be increased by a number of ordinary shares equal to the lower of (i) 1,000,000 ordinary shares, (ii) 1% of the Company’s outstanding ordinary shares on December 31 of the immediately preceding calendar year, and (iii) a lesser number of ordinary shares determined by the Company’s board of directors.

Under the 2024 Plan, options, restricted stock units (“RSUs”), performance share units (“PSUs”) and other share-based awards may be granted to employees, officers, non-employee consultants and directors of the Company.

Under the 2024 Plan and ESPP, as of March 31, 2025, an aggregate number of 2,983,391 ordinary shares were reserved for future grant. Any share under the 2024 Plan underlying an award that is cancelled, terminated or forfeited for any reason without having been exercised will automatically be available for grant under the 2024 Plan.

The total share-based compensation expense related to all of the Company's equity-based awards, recognized for the three months ended March 31, 2024 and 2025 is comprised as follows:

   
Three Months Ended
March 31,
  
   
2024
    
2025
  
   
(Unaudited)
  
             
Cost of revenues
  
$
4,820
    
$
5,692
  
Research and development
    
7,560
      
11,026
  
Sales and marketing
    
14,879
      
18,593
  
General and administrative
    
10,240
      
12,891
  
                 
Total share-based compensation expense
  
$
37,499
    
$
48,202
  

The total unrecognized compensation cost amounted to $390,988 as of March 31, 2025 and is expected to be recognized over a weighted average period of 2.59 years.
F - 18

CYBERARK SOFTWARE LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

NOTE 9:-
SHAREHOLDERS' EQUITY (Cont.)


c.
Options granted to employees:

There were no options granted during the three months ended March 31, 2025.

A summary of the activity in options to employees for the three months ended March 31, 2025 is as follows:

   
Amount
of
options
    
Weighted
average
exercise
price
    
Weighted average remaining contractual term
(in years)
    
Aggregate
intrinsic value (in thousands)
  
                         
Balance as of December 31, 2024
    
123,384
    
$
86.37
      
3.69
    
$
30,449
  
                                 
Exercised
    
15,511
    
$
58.41
            
$
4,880
  
Forfeited and expired
    
2,755
    
$
143.73
            
$
657
  
                                 
Balance as of March 31, 2025
    
105,118
    
$
88.99
      
3.51
    
$
26,176
  
                                 
Exercisable as of March 31, 2025
    
103,168
    
$
87.68
      
3.44
    
$
25,825
  

The expected volatility of the Company’s ordinary shares is based on the Company’s historical volatility. The expected option term represents the period of time that options granted are expected to be outstanding, based upon historical experience.


 d.
A summary of RSUs and PSUs activity for the three months ended March 31, 2025 is as follows:

   
Amount
of
RSUs and PSUs
    
Weighted
average
grant date fair value
  
             
Unvested as of December 31, 2024
    
2,628,782
    
$
184.84
  
                 
Granted
    
216,350
      
391.29
  
Vested
    
343,959
      
158.61
  
Forfeited
    
36,622
      
179.43
  
                 
Unvested as of March 31, 2025
    
2,464,551
    
$
206.70
  

F - 19

CYBERARK SOFTWARE LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

NOTE 9:-
SHAREHOLDERS' EQUITY (Cont.)

The total fair value of RSUs and PSUs vested (based on fair value of the Company’s ordinary shares at vesting date) during the three months ended March 31, 2025 was $133,779.

The amount of unvested PSU as of March 31, 2025 is 325,918.


 e.
The following table summarizes the assumptions used in the Black-Scholes option pricing model to determine the fair value of the Company’s ordinary shares to be issued under the ESPP during the three months ended March 31, 2025:

   
Three Months Ended March 31,
  
ESPP
  
2025
  
   
(Unaudited)
  
       
Expected volatility
    
29.27
%
Expected dividends
    
0
%
Expected term (in years)
    
0.5
  
Risk free rate
    
4.43
%


F - 20

CYBERARK SOFTWARE LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

NOTE 10:-
BASIC AND DILUTED NET INCOME PER SHARE

   
Three Months Ended
March 31,
  
   
2024
    
2025
  
   
(Unaudited)
  
             
Net income available to shareholders of ordinary shares, basic
  
$
5,470
    
$
11,463
  
Add: Interest expense on convertible senior notes
    
498
      
-
  
Net income available to shareholders of ordinary shares, diluted
  
$
5,968
    
$
11,463
  
                 
Weighted-average shares used in computing basic net income per ordinary shares
    
42,430,559
      
49,589,733
  
                 
Weighted-average effect of potentially dilutive securities:
                
Employee equity incentive plans
    
1,656,852
      
1,614,072
  
Convertible senior notes
    
3,649,985
      
-
  
Weighted-average shares used in computing diluted net income per ordinary shares
    
47,737,396
      
51,203,805
  
                 
Net income per share, basic
  
$
0.13
    
$
0.23
  
Net income per share, diluted
  
$
0.13
    
$
0.22
  

The total weighted average number of shares related to outstanding options, RSUs and PSUs that have been excluded from the computation of diluted net income per ordinary share due to their antidilutive effect was 6,131 and 125,206 for the three months ended March 31, 2024 and 2025, respectively.
F - 21

CYBERARK SOFTWARE LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

NOTE 11:-
SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION


a.
The Company identifies operating segments in accordance with ASC Topic 280, “Segment Reporting”. Operating segments are defined as components of an entity for which separate financial information is available and it is regularly reviewed by the chief operating decision maker (“CODM”) in making decisions regarding resource allocation and evaluating financial performance. The Company determined that it operates in one reportable segment as its Chief Executive Officer, who is the Company's CODM, makes operating decisions, evaluates performance and allocates resources on a consolidated basis. The Company’s CODM uses consolidated net income to evaluate operational results and determine the allocation of additional resources to support business growth. Since the Company operates as one operating segment, financial segment information, including information regarding profit or loss and assets is presented in the consolidated financial statements.


b.
The total revenues are attributed to geographic areas based on the location of the Company’s channel partners which are considered as end customers, as well as direct customers of the Company.

The following table presents total revenues for the three months ended March 31, 2024 and 2025:

Revenues:

   
Three Months Ended
March 31,
  
   
2024
    
2025
  
   
(Unaudited)
  
             
United States
  
$
107,014
    
$
169,070
  
Israel
    
2,041
      
2,248
  
United Kingdom
    
12,739
      
19,224
  
Europe, the Middle East and Africa *
    
59,231
      
72,280
  
Other
    
40,525
      
54,779
  
   
$
221,550
    
$
317,601
  

For the three months ended March 31, 2024 and 2025, no single customer contributed more than 10% to the Company’s total revenues.

* Excluding United Kingdom and Israel

F - 22

CYBERARK SOFTWARE LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except per share data and unless otherwise indicated)

NOTE 12:-
INCOME TAXES

The Company's interim tax provision or benefit is determined using an annual effective tax rate, adjusted for year-to-date discrete items, as prescribed under ASC 740 (“Income Taxes”). Each quarter, the Company updates the estimate of the annual effective tax rate, and if required, makes a cumulative adjustment, which results in a provision or benefit from income taxes in current or subsequent quarters.

The Company recorded an income tax benefit of $23.6 million for the three months ended March 31, 2025, representing an effective tax rate of (194.8)%, compared with an income tax expense of $2.2 million for the three months ended March 31, 2024, representing an effective tax rate of 28.7%. 

For the three months ended March 31, 2025, income tax benefit was primarily due to losses in foreign profitable jurisdictions which are expected to reverse during fiscal 2025.

F - 23