Zilla's Early Wins: Can it Accelerate CyberArk's Expansion?

Core Insights - CyberArk (CYBR) is scaling its identity security platform, reporting Annual Recurring Revenues (ARR) of $1.215 billion and net new ARR of $46 million in Q1 FY25, with growth partly driven by the acquisition of Zilla Security [1][10] Company Performance - Zilla Security contributed approximately $5 million in ARR during the first quarter, including a significant win in the financial services sector, where a customer replaced its legacy identity governance vendor with Zilla [2][10] - Customer feedback on Zilla has been overwhelmingly positive, particularly regarding its ability to simplify access reviews and automate provisioning [2][10] Product Development - Zilla enhances CyberArk's identity security platform with AI-powered identity governance and administration (IGA) capabilities, enabling scalable automation for identity compliance and provisioning [3][4] - Zilla's offerings, including Zilla Comply and Zilla Provisioning, are becoming integral to CyberArk's platform, with expectations for more significant contributions to sales in late 2025 and into 2026 [4][10] Competitive Landscape - Competitors like Palo Alto Networks (PANW) and Zscaler (ZS) are also evolving their platforms to meet enterprise security demands, with PANW closing over 90 new platform deals and Zscaler reporting a 23% year-over-year increase in ARR to $2.9 billion [5][6][7] Valuation and Estimates - CyberArk's shares have gained 16.6% year to date, compared to the Zacks Security industry's growth of 21.3% [8] - The company trades at a forward price-to-sales ratio of 13.37, below the industry's 14.65 [12] - The Zacks Consensus Estimate for CyberArk's earnings implies a year-over-year increase of approximately 25.74% for 2025 and 25.72% for 2026, although estimates have been revised downward recently [15]