In a recent development reported through the U.S. Securities and Exchange Commission (SEC) filings dated November 13, São Paulo-based Absolute Gestao de Investimentos Ltda. unveiled a newly initiated position in CyberArk Software Ltd. (NASDAQ: CYBR). The investment entails the acquisition of 190,897 shares, culminating in a valuation of approximately $92.23 million based on third-quarter pricing. This sizable stake accounts for almost 12% of the fund's reportable U.S. equity assets, which total $769.14 million, signifying a deliberate strategic allocation to CyberArk within its asset composition.
Analyzing the fund’s portfolio reveals how CyberArk now stands as its foremost U.S. equity holding. Alongside CyberArk's $92.23 million investment, other prominent positions include the iShares MSCI Emerging Markets ETF (NYSEMKT: EEM) at $89.72 million (11.85% of assets), Chart Industries Inc. (NYSE: GTLS) valued at $88.22 million (11.66%), the iShares MSCI Brazil ETF (NYSEMKT: EWZ) with $48.85 million (6.45%), and the iShares MSCI Emerging Markets ex China ETF (NASDAQ: EMXC) at $48.27 million (6.38%). This distribution illustrates a portfolio blend favoring prominent equity ETFs alongside select growth-focused stocks.
The market price of CyberArk shares at the close of the latest reporting period was $454.65, reflecting a 41% appreciation over the trailing year. This performance notably surpasses the S&P 500's gain of approximately 15% during the same timeframe, indicating strong investor confidence in CyberArk amidst a competitive technology landscape.
Company Profile and Financial Overview
CyberArk Software Ltd. provides cybersecurity expertise specializing in privileged access management, endpoint privilege security, cloud entitlement management, and identity and access management (IAM) solutions. These offerings are available both as traditional software licenses and as software-as-a-service (SaaS) products, aligning with broader industry shifts towards subscription-based service models.
The firm’s revenue generation heavily depends on consistent software license sales, subscription renewals, and technical support services. Its recurring revenue structure supports financial stability and long-term client engagement, particularly serving sectors with stringent security and compliance mandates such as financial services, healthcare, energy, technology, and government agencies.
Operational Performance and Growth Metrics
Recent financial disclosures reveal that CyberArk is undergoing a transformation from a premium security vendor to a scalable identity security platform, with signs of operating leverage materializing. In the third quarter, the company reported total revenues of $342.8 million, marking a 43% year-over-year increase. Subscription revenue surged by 60% over the previous year, causing annual recurring revenue (ARR) to rise to $1.34 billion.
Equally significant is CyberArk’s progress on profitability. The company’s non-GAAP operating margin expanded from 15% to 19% year-over-year, demonstrating that growth is being achieved without sacrificing efficiency or increasing losses. This margin expansion points to a mature scaling phase where revenue growth aligns with improved cost management.
Additionally, CyberArk ended the reporting quarter with nearly $2 billion in cash and investments, buttressed by positive adjusted free cash flow generation. This robust liquidity position supports operational flexibility and potential strategic initiatives.
Investment Implications and Fund Strategy
Within Absolute Gestao’s portfolio context, CyberArk contrasts with the fund’s predominant holdings in liquid exchange-traded funds (ETFs) and established growth franchises. The decision to allocate roughly 12% of assets to a single company underscores a high-conviction stance on CyberArk's enterprise security focus, particularly in identity management.
This concentrated exposure reflects the fund’s confidence in CyberArk’s durable ARR expansion, margin improvement trajectory, and the strategic potential associated with its announced pending acquisition by Palo Alto Networks—an industry development that may further elevate the company’s market presence. However, the precise acquisition timing relative to the fund’s purchase decision remains unspecified.
Key Financial and Market Data Summary:
Investment and Sector Terminology:
The fund manages assets under management (AUM), representing the total market value of all client assets overseen. Its holdings are subject to 13F reporting rules, which mandate disclosure of U.S. equity securities overseen by investment firms managing over $100 million.
CyberArk’s core products address privileged access management, which controls and audits elevated user permissions; endpoint privilege security for device-level administrative rights; cloud entitlement management overseeing user permissions in cloud environments; and identity and access management that authenticates users and manages resource access.
Key Points
Risks and Uncertainties
Disclosure
All information is based on publicly available financial data and SEC filings without inference or speculation regarding future outcomes. No new or speculative information has been introduced beyond the disclosed company performance and fund holdings.
Analyzing the fund’s portfolio reveals how CyberArk now stands as its foremost U.S. equity holding. Alongside CyberArk's $92.23 million investment, other prominent positions include the iShares MSCI Emerging Markets ETF (NYSEMKT: EEM) at $89.72 million (11.85% of assets), Chart Industries Inc. (NYSE: GTLS) valued at $88.22 million (11.66%), the iShares MSCI Brazil ETF (NYSEMKT: EWZ) with $48.85 million (6.45%), and the iShares MSCI Emerging Markets ex China ETF (NASDAQ: EMXC) at $48.27 million (6.38%). This distribution illustrates a portfolio blend favoring prominent equity ETFs alongside select growth-focused stocks.
The market price of CyberArk shares at the close of the latest reporting period was $454.65, reflecting a 41% appreciation over the trailing year. This performance notably surpasses the S&P 500's gain of approximately 15% during the same timeframe, indicating strong investor confidence in CyberArk amidst a competitive technology landscape.
Company Profile and Financial Overview
CyberArk Software Ltd. provides cybersecurity expertise specializing in privileged access management, endpoint privilege security, cloud entitlement management, and identity and access management (IAM) solutions. These offerings are available both as traditional software licenses and as software-as-a-service (SaaS) products, aligning with broader industry shifts towards subscription-based service models.
The firm’s revenue generation heavily depends on consistent software license sales, subscription renewals, and technical support services. Its recurring revenue structure supports financial stability and long-term client engagement, particularly serving sectors with stringent security and compliance mandates such as financial services, healthcare, energy, technology, and government agencies.
Operational Performance and Growth Metrics
Recent financial disclosures reveal that CyberArk is undergoing a transformation from a premium security vendor to a scalable identity security platform, with signs of operating leverage materializing. In the third quarter, the company reported total revenues of $342.8 million, marking a 43% year-over-year increase. Subscription revenue surged by 60% over the previous year, causing annual recurring revenue (ARR) to rise to $1.34 billion.
Equally significant is CyberArk’s progress on profitability. The company’s non-GAAP operating margin expanded from 15% to 19% year-over-year, demonstrating that growth is being achieved without sacrificing efficiency or increasing losses. This margin expansion points to a mature scaling phase where revenue growth aligns with improved cost management.
Additionally, CyberArk ended the reporting quarter with nearly $2 billion in cash and investments, buttressed by positive adjusted free cash flow generation. This robust liquidity position supports operational flexibility and potential strategic initiatives.
Investment Implications and Fund Strategy
Within Absolute Gestao’s portfolio context, CyberArk contrasts with the fund’s predominant holdings in liquid exchange-traded funds (ETFs) and established growth franchises. The decision to allocate roughly 12% of assets to a single company underscores a high-conviction stance on CyberArk's enterprise security focus, particularly in identity management.
This concentrated exposure reflects the fund’s confidence in CyberArk’s durable ARR expansion, margin improvement trajectory, and the strategic potential associated with its announced pending acquisition by Palo Alto Networks—an industry development that may further elevate the company’s market presence. However, the precise acquisition timing relative to the fund’s purchase decision remains unspecified.
Key Financial and Market Data Summary:
- CyberArk share price as of the latest quarter: $454.65
- Market capitalization: $22.95 billion
- Trailing twelve-month revenue: $1.30 billion
- Annual recurring revenue: $1.34 billion
- Third-quarter total revenue growth: 43% (year-over-year)
- Subscription revenue growth: 60% (year-over-year)
- Non-GAAP operating margin: 19% (up from 15% a year prior)
Investment and Sector Terminology:
The fund manages assets under management (AUM), representing the total market value of all client assets overseen. Its holdings are subject to 13F reporting rules, which mandate disclosure of U.S. equity securities overseen by investment firms managing over $100 million.
CyberArk’s core products address privileged access management, which controls and audits elevated user permissions; endpoint privilege security for device-level administrative rights; cloud entitlement management overseeing user permissions in cloud environments; and identity and access management that authenticates users and manages resource access.
Key Points
- Absolute Gestao established a $92.23 million position in CyberArk, representing nearly 12% of its U.S. equity portfolio.
- CyberArk’s robust financial growth includes a 43% increase in total revenue and a 60% rise in subscription revenue year-over-year in Q3.
- The company’s expanding operating margins and solid cash reserves suggest a shift toward sustainable profitability within the enterprise cybersecurity space.
Risks and Uncertainties
- The timing of Absolute Gestao's investment relative to CyberArk's pending acquisition by Palo Alto Networks is unclear, which could influence future valuation and strategic direction.
- The heavy portfolio concentration in a single stock poses a risk if CyberArk’s operational or market performance diverges from expectations.
- Market competition and rapidly evolving cybersecurity requirements could affect ongoing revenue and margin growth.
Disclosure
All information is based on publicly available financial data and SEC filings without inference or speculation regarding future outcomes. No new or speculative information has been introduced beyond the disclosed company performance and fund holdings.