Cyberark Software Ltd (CYBR) 2014 Q4 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the CyberArk Software Fourth-Quarter 2014 Earnings Conference Call. Today's call is being recorded.

At this time, I'd like to turn the conference over to Ms. Staci Mortenson. Please go ahead, ma'am.

Thank you.

Good afternoon. Thank you for joining us today to review CyberArk's fourth-quarter and full-year 2014 financial results. With me on the call today are Udi Mokady, Chief Executive Officer; and Josh Siegel, Chief Financial Officer. After preliminary remarks, we will open up the call to a question-and-answer session.

Before we begin, let remind you that certain statements made on the call today may be considered forward-looking statements, which reflect management's best judgment based on currently available information. I refer specifically to the discussion of our expectations and beliefs regarding our projected results of operations for the first quarter and 2015 fiscal year. Our actual results may differ materially from those projected in these forward-looking statements.

I direct your attention to the risk factors contained in the final prospectus of our IPO filed with the US Securities and Exchange Commission and those referenced in today's press release, both of which detail factors which could cause our actual results to be materially different from those projected in the forward-looking statements. CyberArk expressly disclaims any application or undertaking to release publicly any updates or revisions to any forward-looking statements made herein.

Additionally, non-GAAP financial measures will be discussed on this conference call. A reconciliation for the most directly-comparable GAAP financial measures is also available in our fourth-quarter 2014 earnings press release, which can be found at www.cyberark.com in the Investor Relations section. Also, please note that a webcast of today's call will be available on our website in the Investor Relations section.

With that, I'd like to turn the call over to our Chief Executive Officer, Udi Mokady. Udi?

Thanks, Staci, and good afternoon, everyone.

I'd like to start by thanking all of you for joining us today. 2014 was a great year for CyberArk, capped off by very strong fourth-quarter results, exceeding our guidance across all financial metrics.

As we have seen in multiple headlines (inaudible), Privileged Accounts continue to be at the center of all serious security breaches. Hackers are no longer just out to steal information, but to get embedded in networks, IT systems and applications that completely disrupt a company's ability to do business. It has become increasingly clear that privileged account security is the new layer of protection that is critical for organizations, and we are seeing an increasing percentage of security budgets being earmarked specifically for solutions like ours.

Our results in Q4 and the full-year 2014 reinforce that we are addressing a huge opportunity and are clearly the leaders in our space.

CyberArk reported total revenue for the quarter of $36.3 million, an 81% increase over Q4 2013. For the full year 2014, our revenues of $103 million grew 56% over 2013. For the fourth quarter and full year, we also reported strong non-GAAP net income of $7.2 million and $15.8 million, respectively, resulting in non-GAAP net income per diluted share of $0.21 for Q4 and $0.53 for the full year 2014.

We continue to see returns on our investments in sales and marketing programs, as well as in areas our customers care about the most, like product innovation, support and services. We will continue on this path of investing in order to grow and scale.

Josh will walk through the financial details in a moment, but I would like to spend a few minutes sharing some of the highlights from the fourth quarter and 2014 and discuss the priorities that the entire company is strategically aligned around for 2015.

Security today is no longer just about protecting the perimeter. Instead, the focus is clearly shifting to the inside of the organization and towards the new layer of protection that CyberArk provides. This was emphasized in CyberArk's sponsored research report that was released in Q4. This research was conducted in collaboration with some of the industry's most renowned forensics firms who are investigating and remediating breaches around the globe on a daily basis.

By looking across their collective experiences, we were able to gain significant insight into common patters in cyber attacks. Among the findings is the fact that privileged accounts are exploited in almost every targeted attack, and this is the primary reason why attacks are so damaging and so hard to stop. These accounts empower attackers to access secure networks and databases, destroy breach evidence, avoid detection and establish back doors that make it nearly impossible to dislodge them.

This research also showed that every company, large and small, across all verticals, is a target. Securing privileged accounts represents the new first line of defense in the ongoing cyber battle that companies and governments are fighting.

In order to stay ahead of the attackers, we remain focused on innovation. Over the last year, we introduced Version 9 of our Privileged Account Security solution, our new SSH Key Manager product, CyberArk Privileged Threat Analytics 2.0, and extended our platform to all major public, private and hybrid cloud environments. We also made several enhancements to our solution for Unix/Linux security, including a new active directory bridging capability addressing a [painful] security challenge for our customers. We are very pleased with the initial up-tick in the new growth engine that we released in the past 12 to 15 months. We have several orders for our new SSH Key Manager product which was just announced last quarter. This product secures SSH keys which are widely used by IT teams to gain privileged root access to high-value Unix systems and is yet another critical target for cyber attackers.

As an example, a large European financial services company and an existing CyberArk customer selected SSH Key Manager over a point product from another vendor. They value CyberArc's integrated platform approach to Privileged Account Security. This platform enables them to secure and manage SSH keys along with other privileged credentials in a single solution.

Privileged Threat Analytics continues to be a competitive differentiator, and it's helping us close business with both existing and new customers. For example, in Q4 we added a new government customer and a major retailer that both purchased Privileged Threat Analytics along with substantial orders of other products in our Privileged Account Security solution.

CyberArk has built an effective, global go-to-market model which we believe will enable us to scale the business. Through a combination of direct sales and channel partners, we had a strong year adding new accounts, bringing the total customer count to approximately 1,800. We also expanded to 40 of the Fortune 100 and 18% of the Global 2000. In addition, we continue to see more than 30% of our existing customer base come back and buy more each year. In 2014, we created our Customer Success Teams, which act as an overlay sales resource and focus on expanding customer deployment. We are pleased with their success and will continue to grow these teams going forward.

We are also pleased with the progress we have made with the channels. We've seen (inaudible) contribution across all tiers of our channel model, including advisory firms, system integrators and value-added resellers. This reflects the market demand they are seeing from their clients, as well as the recognition that CyberArk is the clear leader in the space and the preferred vendor to work with to help customers implement this new layer of security. Our channel program remains a critical component of our growth strategy.

We are also increasing our investment in our technology alliance partners and believe this is yet another avenue to drive growth.

I mentioned a few minutes ago that one of our research findings was that every company is a target, regardless of size, vertical or geographical location, and therefore, they need to protect privileged accounts. We saw this clearly in our recent results. We continued to perform well around the globe in 2014, generating approximately 40% of our revenue outside the Americas. Our business is also very diverse across vertical and size of company. Here's a quick look at a wide range of our new business in Q4 alone. In the retail vertical, for example, we added a large multinational chain with several thousand stores and also added a regional 150-store liquor retailer. In higher education, we closed a small, private New England college with a few thousand students and also a large and statewide university system with over 80,000 students. In government, we added one of the 10 largest states in the US, as well as a government-owned television station in Asia.

In addition, we saw new business in multiple professional services verticals, like legal and financial advisory services, as they are required by their clients to improve their security. We saw mining companies, with operations from Alaska to Australia, purchase from CyberArk. And of course, we continue to see new customers in banking and financial services.

I would also like to share a great example with you from a large integrated managed health care company in the US. They had been using Enterprise Password Vault departmentally for some time and expanded the scope of their privileged accounts security initiative to ensure that all of the organization's sensitive assets are protected by CyberArk. In Q3 of 2014, they placed another large order of Enterprise Password Vault. In Q4, they purchased Privileged Session Manager and are currently considering our Application Identity Manager and On-Demand Privileges Manager product for additional protection. The primary deal driver here was the result of an increased security budget initiated by the company's CEO in response to the Target breach, and CyberArk was at the top of their list.

We exited 2014 with great momentum. In 2015, the entire company is aligned around building on this success. Our strategy at the highest level remains intact. Focus on innovation, scale and execution, all while keeping the customer first. We have already the most comprehensive, competitive and effective set of products in the market. Our focus in 2015 will be on technology innovation that advances the products we have, more effectively stopping the bad guys and further extending our lead in the market.

In terms of scale, this is such a greenfield opportunity so we will continue to invest in our go-to-market on all fronts. This includes adding more direct sales headcount, as well as expanding our Customer Success Teams. We will invest in training and (inaudible) programs for our channel partners to help them more effective as we work together to open up new markets. We will look to leverage the scalability and agility we have built across our R&D organization and apply lessons we have learned across the company. And, as I mentioned, we will remain focused on investing in the areas that our customers really care about -- R&D, support and services. And finally, execution. We have a great team in place and a massive market opportunity which is ours for the taking. The energy and focus at CyberArk has never been greater.

With that, let me turn it over to Josh.

Thanks, Udi. I will start with a more detailed overview of our fourth-quarter and then discuss our full-year financial performance. I will conclude with some comments on our first quarter and full-year 2015 outlook.

To start, we generated revenue in the fourth quarter of $36.3 million, up 81% year over year and ahead of our expectation. License revenue was $24.4 million, increasing 95% over the prior-year period and representing 67% of total revenue.

We continue to benefit from the significant increase in new license sales to both new and existing customers, and the overall increasing commitment that they are making to us.

Maintenance and professional services revenue was $11.9 million, increasing 57% over the prior-year period, driven by the high dollar rate of renewals on our growing install base, which was again over 90% in 2014.

Looking at the business geographically, in the fourth quarter we continued to see strength weighted to the Americas, with revenue more than doubling year over year to $23.8 million, or 66% of total revenue. EMEA was $10.6 million, or 29% of total revenue, a 48% increase year over year. In Asia-Pacific was a balance of $1.9 million in revenues.

As I've noted in the past, given the size of our economy -- of our company, we do expect our regional mix to move around on a quarter-by-quarter basis due to deal sizes and timing.

Turning to margin, I will review our results on a GAAP basis and, where applicable, on a non-GAAP basis. Non-GAAP numbers exclude stock-based compensation for the fourth-quarter results, and both stock-based compensation and warrant re-evaluation expenses for the full year since there were no warrants outstanding in the fourth quarter. Please note that a full GAAP-to-non-GAAP reconciliation can be found in the tables of our press release that went out today.

Our fourth-quarter gross profit was $31.8 million, or an 88% gross margin, compared to $17.5 million, or 87% gross margin, in the same period last year.

In regards to operating expenses, we continue to make significant investments in order to fully address the considerable market opportunity in front of us. As you have seen from the multiple headlines in the news recently, privileged accounts are one of the key areas under attack, and we are very focused on driving awareness and adoption of our solutions. Throughout 2014, we increased our direct sales force, customer success teams and channel partner relationships. We also increased our investments in product innovation, customer support and marketing.

For the fourth quarter, R&D expenses grew 46% year over year, compared to $4.2 million. Sales and marketing expense increased 42% year over year, compared to $14.8 million, and this grow also reflects increased sales and commission payments due to our strong quarterly and annual revenue performance. G&A expenses increased 111% to $3.3 million, reflecting also the incremental expenses we have begun to incur for operating as a public company. In total, operating expenses for the fourth quarter of 2014 were $22.3 million, compared with $14.8 million for the fourth quarter of 2013, a 50% increase.

For the fourth quarter, we showed strong bottom-line results ahead of our expectations, driven by leverage from our model as we outperformed on the top line and kept expenses in line with our budget. GAAP operating income was $9.5 million, compared to $2.7 million in the fourth quarter of last year. Our non-GAAP operating income was $10 million for the fourth quarter, resulting in a non-GAAP operating margin of 28%, this compared to non-GAAP operating income of $2.8 million and a 14% margin in the prior-year period. Non-GAAP operating income for fourth quarter of 2014 excludes $547,000 of stock-based compensation expense compared with $117,000 in the prior-year period.

Net income on a GAAP basis was $6.7 million for the fourth quarter of 2014, compared to $1.4 million for the fourth quarter of 2013. GAAP net income per diluted share was $0.19, compared to $0.01 in the fourth quarter of 2013. That's based on 34.7 million and 10.4 million weighted average diluted shares, respectively. On a non-GAAP basis, our net income was $7.2 million for the fourth quarter of 2014, compared to $2.2 million the prior year. Non-GAAP net income per diluted share was $0.21, compared to $0.08 in the fourth quarter of 2013, based on 34.7 million and 27 million weighted average diluted shares, respectively.

During the quarter, we had financial expense of $555,000, primarily due to foreign exchange losses, very much in line with the expense in the same period last year resulting from F/X and warrant re-evaluation expenses combined. As you know, foreign exchange gains and losses can fluctuate, and our guidance does not consider any additional potential impact to financial and other income and expenses associated with foreign exchange gains or losses, as we do not try to estimate future movements in foreign currency rates.

Now let me briefly summarize our results for the year -- the full year 2014. We generated total revenue of $103 million, up 56% from 2013. The license revenue portion was $61.3 million, increasing 58% year over year. Approximately 60% of the license revenue came from new customers, with the remaining 40% generated by existing customers who increased their license coverage or added on additional software product to their CyberArk platform.

Maintenance and professional services revenue was $41.7 million, increasing 53% over the prior year.

The Americas contributed 62% of revenue in 2014, and EMEA represented 32%, with the balance coming from the Asia-Pacific region.

Through a combination of direct and channel partners, we ended the year with approximately 1,800 customers. Both new and existing customers are making increasing commitments to CyberArk, and during the full year 2014, we closed 270 deals greater than $100,000. That's compared to 154 in 2013.

Our business continues to be diverse across a wide set of verticals. For the full year 2014, financial services continues to be our largest vertical at 41% of bookings. But we also had 7 other verticals contribute greater than 5%. In the fourth quarter, we saw particular strength in the manufacturing, retail and energy verticals, driven by the meaningful demand trend that Udi just discussed before.

Our non-GAAP operating income was $22 million in 2014, resulting in margins of 21%, compared to $9.5 million, or a 14% margin, in 2013. On a non-GAAP basis, our net income was $15.8 million in 2014, compared to $8.5 million in 2013. Non-GAAP net income per diluted share was $0.53, compared to $0.31 in 2013, based on 29.7 million and 27.3 million weighted average diluted shares, respectively.

Turning to our balance sheet, as of December 31, we had $177.2 million in cash, cash equivalents and short-term deposits, compared with $65.4 million as of December 31, 2013.

In 2013, we generated $23.8 million in cash flow from operations, compared with $20.2 million in 2013. We ended 2014 with 430 employees worldwide, compared with 317 in 2013, of which 195 are in sales and marketing, compared to the 135 in sales and marketing at the end of 2013.

Now moving to the guidance. For the first quarter of 2015, we expect total revenue of $25.5 million to $26.5 million. We expect non-GAAP operating income to range between $1.6 million to $2.5 million, and non-GAAP net income per diluted share of $0.04 to $0.06. This assumes 34.7 million weighted average diluted shares.

For the full year 2015, we expect total revenue in the range of $127 million to $130 million, or growth of approximately 25% at the midpoint. We expect non-GAAP operating income to be in the range of $11 million to $12.5 million, and non-GAAP net income per diluted share of $0.24 to $0.27. This assumes 35.1 million weighted average diluted shares.

Our guidance reflects the strong demand for our solutions, as privileged accounts are being increasingly targeted for attack. Typical with most enterprise software companies, we usually experience a sequential revenue decline into the first quarter and moderate sequential growth into the second and third quarters. And [with] fourth quarter is our largest revenue quarter of the year.

Due to our large addressable market and the significant opportunity in front of us, we expect to accelerate our investments in R&D and innovation and in sales and marketing to drive greater awareness and adoption of our solutions.

From a hiring perspective, we expect headcount increases across all areas, but to be more front-loaded in the first half of the year, with the greatest expense impact in Q2 as we start to carry more of a full run rate of these new hires.

In closing, this was a great fourth quarter and a year for CyberArk. We are already in full pursuit for our 2015 objectives and believe we are extremely well-positioned to win in our marketplace.

I will now turn the call over to the operator for Q&A. Operator?

Thank you. (OPERATOR INSTRUCTIONS.) We'll hear first from Sterling Auty with JP Morgan.

Hi. This is actually Ken Talanian in for Sterling. I was wondering -- you gave the figure on new customer versus existing customer license revenue for the full year and I was wondering what that was in the fourth quarter.

Well, we don't -- we weren't breaking it out on a quarter-by-quarter basis, and I think -- what we can say is that we saw a lot of new business coming in the fourth quarter and I think Udi alluded to that in his part. But we're only providing the actual information for the annual basis, which was 60% of licenses coming from new customers and 40% coming from existing customers.

Okay. And the growth in the fourth quarter was way ahead of our expectations -- the Street expectations. And I was just curious -- in light of that, why is the guide for top-line 2015 only 23% to 26%?

This is Udi. First of all, yes, we were very pleased with our Q4 and 2014 results, and we believe we provide a very strong guide for the year 2015, signaling strong demand for our solutions. And we believe that this demand will continue. Now remember, we overachieved in our Q4 expectations, therefore are creating a very aggressive compare for the second half. We take a multi-quarter approach. Josh will talk about the bottoms-up approach we take to our guidance as we take all of the factors in.

Yes. So just to add to that, the way we look at our guidance, we look at it really from three components. And the first one is we look at our recurring revenue stream. As I pointed out in my remarks, again in 2014, we had over 90% of our maintenance contracts renew, and that gives us a very strong basis for visibility into where that stream is going into 2015. We also take a look at our existing customer base. And we've seen historically that over 30% of our customers are coming back each year and either buying new licenses or buying new products from CyberArk to broaden out their platform. So we have pretty good visibility, when we look at our existing customer base, where that business is going to take us into the following year. And then the third component is the group of our new customers. And with that, we obviously -- we're going into 2015 with a robust pipeline. We feel very confident about the aggressive guidance that we've provided for the first quarter, and -- but we should remember that our sales cycle, as we've said before, is typically around 6 to 9 months. So when we think about -- as we think about the second half of the year, we start to really get full visibility into that pipeline as we move from Q1 into Q2. And as Udi mentioned before, we had great Q3 and Q4 quarters so we will have a tough compare there. And we feel very confident as we go into 2015 with our pipeline and we look forward to seeing how that pipeline progresses to be able to point to the second half of the year as we go along.

Great. Thank you and congratulations on the quarter.

Thank you.

Thank you. Our next question comes from Karl Keirstead with Deutsche Bank.

Hi, guys. It's actually [Kaz] on behalf of Karl. Thanks for taking my question. I have two questions. One is last call you had some benefit from the early recognition of the deferred revenues on the income statement. Was there anything of that sort in this quarter?

No. There was no real material license impact coming in from deferred revenues. As I've talked about in the past, there's always some new licenses going into deferred revenues. There's some coming out. But there was no -- anything significant to remark about here.

But I think you mentioned last call that there was some balance that was left on the balance sheet which would come off for 4Q.

Yes. Like I said, every quarter there's some -- there's always some transactions that may roll in and there's always some that roll out, but this was very much the revenue that we saw in the fourth quarter was revenue that was fundamental revenue coming in from new and existing customers.

There's no material (inaudible) recognition of your deferred revenues like in 3Q? This was all revenues that were generated and recognized in 4Q.

Yes.

Got it. And just one follow-up. If I look at the DSOs, they've been usually trending down. This quarter saw a slight uptick compared to what you had in the previous quarters. Any color on the (inaudible) quarter? Was the quarter more back-end-loaded or this is just a function of the quarter being so huge that collections took longer than usual?

No. I think actually if you look at kind of the Q2 and the Q3 DSOs -- particularly the Q3 DSO -- and we talked about it in the last quarter release -- it was affected by the fact that there was that big deferred revenue piece that was recognized in the third quarter, and that kind of created a bit of an unnatural -- unnaturally low DSO. When we look at our business, we kind of see our sweet spot -- our natural DSO range should be mid-40s to mid-50s.

Got it. That's all for me. Thanks, guys.

Thank you. I'll go to Saket Kalia with Barclays Capital.

Hi, guys. Thanks for taking my questions here. Udi, can you just maybe talk about your win rates in the quarter and just broadly for 2014 versus some of your larger competitors, especially as privileged account security becomes a little bit better-known out there in the market? And then how have you sort of thought about them directionally in your 2015 guide?

Hi, Saket. Thank you. First of all, we won't put a number on it, but I would say that we are invited into most of the deals. Many of the deals are part of our organic lead generation efforts as a market leader that has been investing in this space. When we do get to competitive situations, we actually feel that 2014 was even stronger in our competitive edge than ever before with the fact that we had the new -- the Privileged Threat Analytics and the newly-released SSH Key Manager as really unique differentiators, and as CyberArk is the vendor with the broadest product offering out there in competition. I alluded to it in my notes because I think that is also very dear to the CyberArk DNA to continue to invest in the existing product set and in new growth engines to always have that edge and always with things that really the customers care about and make us as the winner in the company (inaudible).

That's great -- actually a great dovetail into my follow-up, which is can you just talk a little bit about that SSH Key product? I know it's early -- just a quarter out. But what sort of average deal size do you think you could command there? And do you think that's a product that's going to appeal to most of your customer base or maybe a subset of it? Maybe just talk a little bit about the opportunity with that product specifically.

This product is very well-integrated into the CyberArk Privileged Account Security platform because it addresses another key attack vertical that, at the end of the day, the attacker tries to get root access to systems. This is one is root access through Unix and Linux using -- leveraging the SSH key. So basically it's applicable to any enterprise that has Unix and Linux in its environment, and so there's an opportunity to eventually behave like Enterprise Password Vault, classically behave for shared accounts and root accounts which, of course, has a much stronger headstart in the market, and, of course, our Enterprise Password Vault applies to all types of systems. So this will -- over time, we will probably see similar deal sizes and, again, with enterprises with a Unix/Linux footprint.

Very helpful. Thanks.

Thank you.

We'll continue on to Rick Sherlund with Nomura.

Thanks, guys, and great quarter. I wonder if you could comment about sales cycles. FireEye yesterday said that they think they've kind of crossed the chasm. There's far less proof of concepts and the sales cycles are kind of quickening now because of the growing awareness of cyber security. Is that rippling through -- affecting you guys as well?

Hi, Rick. We're definitely seeing the much more awareness in the market and the de-education phase in our sales process is decreasing, especially in the US and in Western Europe. I think in other geographies, we probably see more typical [lead] of education in the sales cycle. What was very unique and exciting that we saw in Q4 is that companies are viewing this as much more of a strategic and not just compliance-driven, and that they have to have it as part of their security infrastructure. And very often, we came into conversation not needing to educate them about at all and they want this new layer of security. So we're yet to put in a number of what the new sales cycle is. There's definitely growing awareness. There's also growing awareness of CyberArk. We have the momentum off the IPO that we saw is getting [mind] share and confidence with more and more customers.

Your expansion of sales capacity -- is that kind of proportional to the revenue growth that we're seeing?

Yes. Well, with regard to that, before -- I'll answer that in a second, Rick, but I wanted to just follow on to -- with regard to the sales cycle. I think that we may not necessarily be shortening of our sales cycle, although for sure we're seeing a lot less education having to go into it, but what we are seeing are deals that have been in our pipeline during our typical sales cycle come to closure all of a sudden in a more aggressive fashion. So the deals that have been on our pipeline longer or even in 6 to 9 months -- closing more rapidly, but not necessarily the begin-to-end necessarily closing. In terms of the growth of the sales relative to our teams, so as you saw, we actually grew our sales and marketing team roughly 40 -- mid 40s. We went from 135 to 195 people and -- which was a bit below what our actual annual growth rate was for the year, and I think part of that was that we -- part of that was we -- I believe we had excellent execution by our sales team, particularly as we moved into the second half of the year and a lot of the new recruits who came on in the first half of the year were at full steam. And also, as we talked about a couple times -- both Udi and myself -- we're continuing to invest in our channel relationships and we see leverage coming out of that as well.

Great. Thank you.

Thank you.

Thank you. We'll go to Jonathan Ho with William Blair.

Hi, guys. Congratulations on the strong quarter. I just wanted to build on that prior point. And just relative to the guidance that you saw for 4Q, can you talk about how the demand trends materialized, given that level of out-performance? Did you see sort of short-term reactionary buying or is this, in your view, a bit more of a sustained demand trend that you're seeing going forward?

Hi, Jonathan, and thank you, first of all. I would say that, definitely with regards to Q4, we also -- as Josh alluded, we saw this acceleration at the last phase of the pipeline because of the increased awareness -- the Privileged Account Security are such a major attack vector. It was all the things that were happening. And so that acceleration of things that were in the pipeline and also increasing scope. So we had deals go through the pipe where initially we're perhaps taking a more siloed approach or departmental approach, and as they were taking more of a cyber security approach, increased the scope and the type of line items that they were taking from cyber. And so -- and, of course, with Q4, there was also end-of-year money coming our way and not on other project.

Got it. And then just relative to that expectation, were there any deals that you saw pulled forward or any types of shifts left to right that were notable, just given the level of that performance?

We saw -- as Josh mentioned, we saw a very strong execution against that deal pipeline where we, of course, overachieved on the close rate of those deals. But just as we saw deals being closed, we also saw entrants into the pipeline, as that increased awareness is also feeding the pipe itself -- the earlier part of the sales cycle. So yes, some things definitely pulled earlier, but also a growing amount of new leads.

Got it. And then just one last one on currency. Does that impact your quarter much at all? I know you gave sort of the currency impact on the F/X, but in terms of on the sales side, did that (inaudible) any impact in terms of the deal sizes or potentially just in terms of the translation?

Yes. That's a great question. As I pointed out, we do about -- we did about a third of the business -- so coming out of Europe -- of which we sell really multiple currencies. There's a piece that's still in US dollar and there's a piece in sterling, and then there's probably half of that business coming out in euro. So clearly, there was some deal size shrinkage in dollar terms because of the euro as it moved a bit in the end of the year, but not material. And clearly, as you see, we executed well enough to be able to overcompensate for any of that impact. And as we think about kind of going forward in terms of the growth, probably it would have an impact of 2% to 3% is what we think about for concerns about the euro.

Great. Thank you.

(OPERATOR INSTRUCTIONS.) And we'll go to Srini Nandury with WR Hambrecht and Summit Research.

Hi, guys. This is Jonathan [Adelman] on the call for Srini. We've got a couple calls going on right now. But I (inaudible) want to focus a little bit on new versus existing customers. So Udi, you talked a little bit how existing customers have been adding new products, and you guys have roughly 40% of revenues that come in from existing customers. Can you just generally comment on your customer penetration? How many customers are using how many products? Thank you.

So I couldn't hear the end of the question. He's -- the question was how many customers (inaudible)?

Yes. Generally speaking, do you see your customers using multiple products now and could you maybe quantify that a bit? Or do you see customers really just adding more of the enterprise (inaudible) licenses on when they're coming back for existing licenses?

Jonathan, definitely. I think we've alluded earlier and in the past that the existing customer base represents an opportunity of itself that many of our customers are using one or two of the products. When we see upselling -- and that's -- I think what's very important about the customer success team is actually -- it includes additional products from the products that they purchase -- so additional enterprise Password Vault or additional Privileged Session Manager or -- but also cross-sell -- so customers adopting our Application Identity Manager or our On-Demand Privileged Manager, our new SSH Key. So it's really a mix that includes add-on and cross-sell, and we really train the team and also our channel partners to execute on both of those fronts as a major opportunity for us.

Okay. Great. Thank you. And also, of the $100K+ deals that you guys did this year, were any of them driven by the SSH Key Manager product or the Threat Analytics 2.0, given that your deals grew about 75% year over year when it comes to deals [right about] $100,000? Thank you.

Well, I think they -- certainly there were several of those deals that were driven by the fact that either PTA -- Privileged Threat Analytics -- or SSH Keys were part of the transaction, but they were also driven frequently by when customers come to CyberArk even for the Enterprise Password Vault, it's because of the platform approach that we're able to offer them, and they come and they choose our Enterprise Password Vault to -- knowing that, as they build it out, they will also be able to add either the SSH Key piece and the Privileged Threat Analytics to be able to round out the platform. So we believe actually it's very impactful for closing all of our deals, and specifically, we saw it being significant in some of the larger deals that were over $100K.

Okay. Great. Thanks a lot, guys. And congrats on the great quarter.

Thank you.

Thank you. With no additional questions, I'd like to go ahead and turn the conference back over to Udi Mokady for any additional or closing remarks.

Thank you. As you've just heard, 2014 was an incredible year for CyberArk. I want to thank our passionate and dedicated employees, our channel partners and, of course, our customers for making it happen. And again, thank you, all of you, for joining us tonight.

Thank you. And again, ladies and gentlemen, that does conclude today's conference. Thank you all again for your participation.