The cybersecurity sector is indeed an interesting market. There are countless operators, and new ones seem to be entering the market all the time. Almost all players operate at a loss, with the exception of Checkpoint, Fortinet, and Palo Alto. At a quick glance, all others are making losses, and have been doing so for a long time.
Everyone also has a similar market message. The big players try to talk about a platform, but customers primarily buy “best-of-breed” point solutions.
It will be interesting to see how long private equity investors are willing to finance new entrants and the loss-making companies currently listed on the stock exchange. Turning a profit seems agonizingly slow, as salaries in the industry are high, and they also act as a moat for large profitable players. You can’t even enter the market with little money. The flip side, however, is that if competition ever eases and the flow of private equity money into the market stops, prices will likely be raised by the remaining players.
Below is a slightly more comprehensive tweet, which highlights, among other things, how CrowdStrike stands out in the cybersecurity market because its Falcon platform is genuinely unified and real-time, unlike competitors who have “partial” or otherwise passive solutions. Its competitors, such as SentinelOne, Palo Alto Networks, and Wiz, offer partial solutions, but not comparable comprehensive protection, etc.
This article might interest those following the cybersecurity sector.
The article discusses, among other things, how Google’s $32 billion acquisition of Wiz could mark a turning point for the IPO and M&A markets, which have suffered a clear slowdown. Cybersecurity companies, such as Netskope and Snyk, are considering going public. The increasing prevalence of AI is boosting demand for cybersecurity solutions, which potentially makes the sector an attractive investment target.
CyberArk’s Q1 was strong, and its business grew significantly from the previous year, with recurring subscription revenue and cash flow improving significantly.
The company also expanded its operations by acquiring Zilla Security and launched new solutions for protecting machine identities and managing AI agents.
The company is considered an industry leader in password management and released new research related to identity security data. According to the CEO, the results demonstrate the strength of CyberArk’s platform and the resilience of its business model (“surprise” ).
Palo Alto received a ‘buy’ recommendation from Jefferies and a price target increase to $225 due to strong product demand, a growing order backlog, and good cash flow prospects.
The stability of the cybersecurity market supports the company’s positive development.
Palo Alto increased its revenue in the third quarter of the fiscal year compared to the previous year.
The company’s operating profit remained stable according to GAAP figures, but non-GAAP net income grew significantly, reflecting improved business efficiency.
Management emphasized the company’s progress in the strategic transition towards a broader platform solution and significant success in recurring revenue from security services.
Growth continues while maintaining profitability, and expectations for the rest of the year are positive.
I find it nice to follow companies in this field a bit, but I understand too little about the industry.
The main point of the tweet is apparently that many compare Palo Alto and Fortinet, but the latter’s advantage is a so-called hardware-centric model, which apparently engages customers better and gradually increases service margins.
Zscaler reported good revenue growth, and the result also remained at a quite good level. The company appointed a new CFO and also expanded its management team; additionally, the company plans to acquire Red Canary, so the plans seem quite clear.
New services strengthen the company’s market position, and its outlook for the rest of the year remains positive.
Private equity firm Thoma Bravo, which is very active in corporate arrangements in the cybersecurity sector, has raised over 34 billion more in capital for future deals:
The first fund aimed at Europe has also now been raised, so it will be interesting to see what moves will be seen here. Of course, it’s quite small in size, but with that, for example, all our Helsinki-based cybersecurity companies could be bought easily
The tweet states that the cybersecurity market for autonomously operating AIs is expected to grow to 40 billion dollars by 2030. The tweet nicely highlights the players in this field.
Palo Alto Networks is indeed buying the Israeli identity security company CyberArk for about 25 billion.
According to the story below, this is a 26 percent premium to CyberArk’s share price. Palo Alto’s stock fell over 8 percent, while CyberArk’s stock dropped 2 percent.
The California-based cybersecurity company will pay shareholders $45 apiece for 2.2005 shares of CyberArk, representing a 26% premium to its share price Friday. The deal is expected to close during Palo Alto Networks’ fiscal year 2026.
Palo Alto continued its strong growth, as revenue and profit increased from the previous year.
The company’s annual subscription base for next-generation cybersecurity services reportedly rose significantly, and for the upcoming fiscal year, the company forecasts continued growth in both revenue and profit.
Management emphasized that unified cybersecurity is vital against today’s threats, and thus their company’s solutions bring efficiency and better results to customers, meaning they will continue to be needed.
Major changes occurred in the management team when the founder and CTO retired. A long-time product director was appointed as CTO in his place, whose task will be to further develop the company’s AI-based cybersecurity strategy.
).
