Q2 Earnings Roundup: Palo Alto Networks (NASDAQ:PANW) And The Rest Of The Cybersecurity Segment

Let’s dig into the relative performance of Palo Alto Networks (NASDAQ:PANW) 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 slower Q2. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was in line.

Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation, and cybersecurity stocks have had a rough stretch. On average, share prices are down 8.7% since the latest earnings results.

Palo Alto Networks (NASDAQ:PANW)

Founded in 2005 by cybersecurity engineer Nir Zuk, Palo Alto Networks (NASDAQ:PANW) makes hardware and software cybersecurity products that protect companies from cyberattacks, breaches, and malware threats.

Palo Alto Networks reported revenues of $2.19 billion, up 12.1% year on year. This print exceeded analysts’ expectations by 1.2%. Overall, it was a good quarter for the company with a decent beat of analysts’ billings estimates.

"We finished off the year with strong execution on our platformization strategy in Q4," said Nikesh Arora, chairman and CEO of Palo Alto Networks.

The stock is down 2.6% since reporting and currently trades at $334.14.

Is now the time to buy Palo Alto Networks? Access our full analysis of the earnings results here, it’s free.

Best 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 $130.3 million, up 12.9% year on year, outperforming analysts’ expectations by 4.4%. It was a very strong quarter for the company with an impressive beat of analysts’ billings estimates and optimistic revenue guidance for the next quarter.

Varonis achieved the highest full-year guidance raise among its peers. The market seems content with the results as the stock is up 3.2% since reporting. It currently trades at $50.

Is now the time to buy Varonis? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Tenable (NASDAQ:TENB)

Founded in 2002 by three cybersecurity veterans, Tenable (NASDAQ:TENB) provides software as a service that helps companies understand where they are exposed to cyber security risk and how to reduce it.

Tenable reported revenues of $221.2 million, up 13.4% year on year, exceeding analysts’ expectations by 1.2%. It was a weak quarter for the company with underwhelming revenue guidance for the next quarter.

As expected, the stock is down 15% since the results and currently trades at $39.11.

Read our full analysis of Tenable’s results here.

Zscaler (NASDAQ:ZS)

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 $592.9 million, up 30.3% year on year, surpassing analysts’ expectations by 4.4%. Revenue aside, it was a decent quarter for the company with an impressive beat of analysts’ ARR (annual recurring revenue) estimates but management forecasting growth to slow.

Zscaler achieved the biggest analyst estimates beat among its peers. The stock is down 18.9% since reporting and currently trades at $156.77.

Read our full, actionable report on Zscaler here, it’s free.

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 $646 million, up 16.2% year on year, surpassing analysts’ expectations by 2.1%. Taking a step back, it was a mixed quarter for the company with a decent beat of analysts’ ARR (annual recurring revenue).

The stock is down 25% since reporting and currently trades at $72.40.

Read our full, actionable report on Okta here, it’s free.

Join Paid Stock Investor Research

Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.