CyberArk plans $750 million convertible notes offering

NEWTON, Mass. & PETACH TIKVA, Israel - CyberArk Software Ltd. (NASDAQ:CYBR), a company specializing in identity security, announced its proposal to issue $750 million of 0.00% Convertible Senior Notes due 2030 in a private offering to qualified institutional buyers. This offering is contingent on market conditions and other factors. Additionally, an option for initial purchasers to buy up to an additional $125 million in notes is anticipated.

The notes, set to mature on June 15, 2030, will be senior, unsecured obligations of CyberArk. These will not accrue interest or principal over time. While the company is currently trading near its 52-week high of $421, InvestingPro data reveals multiple growth indicators, with analysts projecting profitability this year. InvestingPro subscribers have access to 12 additional key insights about CyberArk’s financial health and market position. Conversion of the notes is subject to specific conditions and timeframes, with full convertibility commencing shortly before the maturity date. Upon conversion, CyberArk may elect to pay in cash, ordinary shares, or a combination thereof.

Under certain circumstances, CyberArk reserves the right to redeem the notes for cash before the maturity date. This includes tax-related events or if CyberArk’s ordinary share price exceeds 130% of the conversion price for a sustained period. Redemption would include the principal amount and any accrued special interest.

Noteholders may require CyberArk to repurchase their notes at the principal amount plus any special interest if a "fundamental change" occurs within the company. To mitigate dilution from note conversions and offset potential cash payments, CyberArk plans to enter into capped call transactions, which are subject to market conditions and price caps.

The initial purchasers or their affiliates may engage in derivative transactions with CyberArk’s ordinary shares following the notes’ pricing, potentially affecting the market price of these shares and the notes.

CyberArk intends to use the proceeds from the offering to fund the capped call transactions and for general corporate purposes, which may include potential acquisitions or investments, though no specific commitments exist at present. With the company’s strong financial health score from InvestingPro, and trading above its calculated Fair Value, investors seeking detailed analysis can access the comprehensive Pro Research Report, available exclusively to subscribers, covering all aspects of CyberArk’s financial position and growth prospects. Any additional proceeds from the sale of notes will be used for general corporate purposes and invested in short-term, high-quality fixed income instruments.

The notes and the ordinary shares of CyberArk issuable upon their conversion have not been registered under the Securities Act or any state securities laws. As such, they may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

This article is based on a press release statement and contains forward-looking statements which are subject to risks and uncertainties. CyberArk’s actual results could differ materially from those projected in the forward-looking statements. CyberArk does not undertake any obligation to update these statements in the future.

In other recent news, CyberArk Software has shown strong financial performance, with JPMorgan increasing its price target for the company to $443 and maintaining an Overweight rating. This adjustment follows CyberArk’s impressive growth in Annual Recurring Revenue (ARR) and Free Cash Flow (FCF), alongside a notable expansion in margins. Cantor Fitzgerald also raised its price target for CyberArk to $420, citing the company’s strong execution and improved product portfolio. CyberArk’s first-quarter results exceeded expectations in several key areas, including ARR and overall revenue, prompting an increase in full-year operating income and earnings per share projections.

RBC Capital Markets reiterated an Outperform rating with a price target of $420, highlighting CyberArk’s robust growth in organic subscription Net New Annual Recurring Revenue. Similarly, KeyBanc Capital Markets maintained an Overweight rating with a $425 price target, emphasizing the company’s focus on non-human identities and the potential revenue boost from Venafi solutions. Despite these positive developments, CyberArk has maintained a cautious stance on its 2025 ARR guidance due to macroeconomic factors.

Additionally, CyberArk announced its upcoming annual general meeting of shareholders, scheduled for June 24, 2025, in Israel. The meeting will allow shareholders to vote on various proposals, with details provided in a Form 6-K filing with the SEC. This routine corporate governance event underscores CyberArk’s commitment to shareholder engagement and strategic direction.

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