As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q2. Today we are looking at the cybersecurity stocks, starting with Palo Alto Networks (NASDAQ:PANW).
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 mixed Q2; on average, revenues beat analyst consensus estimates by 2.01% while next quarter's revenue guidance was 0.61% below consensus. Investors abandoned cash-burning companies since higher interest rates make it harder to raise capital, but cybersecurity stocks held their ground better than others, with the share prices up 15.7% on average since the previous earnings results.
Palo Alto Networks (NASDAQ:PANW)
Founded in 2005 by cybersecurity engineer Nir Zuk, Palo Alto Networks makes hardware and software cybersecurity products that protect companies from cyberattacks, breaches and malware threats.
Palo Alto Networks reported revenues of $1.95 billion, up 26% year on year, falling short of analyst expectations by 0.23%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.
"We finished off the year with strong execution and the changing environment drove more customers towards platformization," said Nikesh Arora, chairman and CEO of Palo Alto Networks.
The stock is up 24.1% since the results and currently trades at $260.55.Is now the time to buy Palo Alto Networks? Read our full report on Palo Alto Networks here.
Best Q2: Okta (NASDAQ:OKTA)
Founded during the aftermath of the financial crisis in 2009, Okta (NASDAQ:OKTA) is a cloud-based software-as-a-service platform that helps companies manage identity for their employees and customers.
Okta reported revenues of $556 million, up 23.1% year on year, outperforming analyst expectations by 4.06%. It was a solid quarter for the company, with a decent beat of analysts' revenue estimates and strong sales guidance for the next quarter.
The stock is up 15.9% since the results and currently trades at $85.55.
Is now the time to buy Okta? Access our full analysis of the earnings results here, it's free.
Slowest Q2: Varonis (NASDAQ:VRNS)
Founded by a duo of former Israeli Defense Forces cyber warfare engineers, Varonis (NASDAQ:VRNS) offers software-as-service that helps customers protect data from cyber threats and gain visibility into how enterprise data is being used.
Varonis reported revenues of $115.4 million, up 3.56% year on year, falling short of analyst expectations by 3.23%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.
Varonis had the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. The stock is up 18.4% since the results and currently trades at $33.99.
After successfully selling all four of his previous cybersecurity companies, Jay Chaudhry's fifth venture, Zscaler (NASDAQ:ZS) offers software-as-a-service that helps companies securely connect to applications and networks in the cloud.
Zscaler reported revenues of $455 million, up 43.1% year on year, surpassing analyst expectations by 5.67%. It was a decent quarter for the company, with a solid beat of analysts' revenue estimates but underwhelming revenue guidance for the next year.
The stock is up 5.47% since the results and currently trades at $171.7.
With roots in the Israeli cyber intelligence community, SentinelOne (NYSE:S) provides software to help organizations efficiently detect, prevent, and investigate cyber attacks.
SentinelOne reported revenues of $149.4 million, up 45.8% year on year, surpassing analyst expectations by 5.98%. It was a decent quarter for the company, with a solid beat of analysts' revenue estimates but its net revenue retention rate in jeopardy.
SentinelOne delivered the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The company added 77 enterprise customers paying more than $100,000 annually to a total of 994. The stock is up 3.85% since the results and currently trades at $17.26.
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The author has no position in any of the stocks mentioned