Let’s dig into the relative performance of Rapid7 (NASDAQ: RPD) and its peers as we unravel the now-completed Q2 cybersecurity earnings season.
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 2.3% on average since the latest earnings results.
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 exceeded analysts’ expectations by 1.1%. Overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations.
“Our Detection and Response business remains a consistent growth engine, and we are encouraged by growing customer interest in our Command Platform strategy,” said Corey Thomas, CEO of Rapid7.
Rapid7 delivered the slowest revenue growth of the whole group. The company lost 42 customers and ended up with a total of 11,643. Unsurprisingly, the stock is down 1.9% since reporting and currently trades at $19.44.
Is now the time to buy Rapid7? Access our full analysis of the earnings results here, it’s free.
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 a solid beat of analysts’ EBITDA estimates.
Varonis Systems scored the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 3.2% since reporting. It currently trades at $56.
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 and a significant miss of analysts’ annual recurring revenue estimates.
As expected, the stock is down 8.2% since the results and currently trades at $29.61.
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 print beat analysts’ expectations by 2.3%. It was a strong quarter as it also put up 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 $90.75.
Read our full, actionable report on Okta here, it’s free.
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 result topped analysts’ expectations by 1.7%. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.
CrowdStrike had the weakest full-year guidance update among its peers. The stock is up 5.2% since reporting and currently trades at $444.30.
Read our full, actionable report on CrowdStrike 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.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
