Wrapping up Q2 earnings, we look at the numbers and key takeaways for the cybersecurity stocks, including CrowdStrike (NASDAQ:CRWD) and its peers.
Cybersecurity continues to be one of the fastest-growing segments within software for good reason. Almost every company is slowly finding itself becoming a technology company and facing rising cybersecurity risks. Businesses are accelerating adoption of cloud-based software, moving data and applications into the cloud to save costs while improving performance. This migration has opened them to a multitude of new threats, like employees accessing data via their smartphone while on an open network, or logging into a web-based interface from a laptop in a new location.
The 9 cybersecurity stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady as they are up 2% on average since the latest earnings results.
CrowdStrike (NASDAQ:CRWD)
Known for detecting the massive SolarWinds hack in 2020 that compromised numerous government agencies, CrowdStrike (NASDAQ:CRWD) provides cloud-based cybersecurity solutions that protect endpoints, cloud workloads, identity, and data through its Falcon platform.
CrowdStrike reported revenues of $1.17 billion, up 21.3% year on year. This print exceeded analysts’ expectations by 1.7%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.
“With reacceleration a quarter ahead of our expectations, CrowdStrike delivered an exceptional Q2. Record Q2 net new ARR of $221 million, over 1,000 Flex customers, and more than 100 re-flexes highlight CrowdStrike as the leader in cybersecurity consolidation,” said George Kurtz, Founder and CEO.
CrowdStrike delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 1.3% since reporting and currently trades at $416.90.
Best Q2: Varonis Systems (NASDAQ:VRNS)
Beginning with protecting Windows file shares in 2005 and evolving into a comprehensive security platform, Varonis Systems (NASDAQ:VRNS) provides data security software that helps organizations protect sensitive information, detect threats, and comply with privacy regulations.
Varonis Systems reported revenues of $152.2 million, up 16.7% year on year, outperforming analysts’ expectations by 2.8%. The business had a very strong quarter with EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.
Varonis Systems achieved the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 3% since reporting. It currently trades at $55.90.
Is now the time to buy Varonis Systems? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Tenable (NASDAQ:TENB)
Starting with the widely-used Nessus vulnerability scanner first released in 1998, Tenable (NASDAQ:TENB) provides exposure management solutions that help organizations identify, assess, and prioritize cybersecurity vulnerabilities across their IT infrastructure and cloud environments.
Tenable reported revenues of $247.3 million, up 11.8% year on year, exceeding analysts’ expectations by 2.2%. Still, it was a slower quarter as it posted EPS guidance for next quarter missing analysts’ expectations significantly and a significant miss of analysts’ annual recurring revenue estimates.
As expected, the stock is down 3.7% since the results and currently trades at $31.06.
Read our full analysis of Tenable’s results here.
Okta (NASDAQ:OKTA)
Named after the meteorological measurement for cloud cover, Okta (NASDAQ:OKTA) provides cloud-based identity management solutions that help organizations securely connect their employees, partners, and customers to the right applications and services.
Okta reported revenues of $728 million, up 12.7% year on year. This number surpassed analysts’ expectations by 2.3%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ EBITDA estimates and full-year EPS guidance beating analysts’ expectations.
The stock is flat since reporting and currently trades at $91.20.
Read our full, actionable report on Okta here, it’s free.
Rapid7 (NASDAQ:RPD)
With its name inspired by the need for quick responses to cyber threats, Rapid7 (NASDAQ:RPD) provides cybersecurity software and services that help organizations detect vulnerabilities, monitor threats, and respond to security incidents.
Rapid7 reported revenues of $214.2 million, up 3% year on year. This print topped analysts’ expectations by 1.1%. Zooming out, it was a satisfactory quarter as it also produced a solid beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations.
Rapid7 had the slowest revenue growth among its peers. The company lost 42 customers and ended up with a total of 11,643. The stock is up 1.9% since reporting and currently trades at $20.20.
Read our full, actionable report on Rapid7 here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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