The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Okta (NASDAQ:OKTA) and the rest of the cybersecurity stocks fared in Q2.
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 2.2% on average since the latest earnings results.
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 print exceeded analysts’ expectations by 2.3%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and full-year EPS guidance beating analysts’ expectations.
“Okta’s unified identity platform is winning customers ranging from the world’s largest global organizations to massive government agencies,” said Todd McKinnon, Chief Executive Officer and co-founder of Okta.
Unsurprisingly, the stock is down 4.6% since reporting and currently trades at $87.40.
Is now the time to buy Okta? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 9.6% since reporting. It currently trades at $59.50.
Is now the time to buy Varonis Systems? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 and a significant miss of analysts’ annual recurring revenue estimates.
As expected, the stock is down 9.1% since the results and currently trades at $29.31.
Read our full analysis of Tenable’s results here.
Qualys (NASDAQ:QLYS)
Originally developed to address the growing complexity of IT security in the cloud era, Qualys (NASDAQ:QLYS) provides a cloud-based platform that helps organizations identify, manage, and protect their IT assets from cyber threats across on-premises, cloud, and mobile environments.
Qualys reported revenues of $164.1 million, up 10.3% year on year. This number topped analysts’ expectations by 1.7%. Overall, it was a strong quarter as it also put up a solid beat of analysts’ EBITDA estimates and full-year EPS guidance beating analysts’ expectations.
The stock is down 3.2% since reporting and currently trades at $126.60.
Read our full, actionable report on Qualys here, it’s free for active Edge members.
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 result beat analysts’ expectations by 1.1%. Taking a step back, it was a satisfactory quarter as it also recorded 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 down 9.6% since reporting and currently trades at $17.93.
Read our full, actionable report on Rapid7 here, it’s free for active Edge members.
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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