Wrapping up Q2 earnings, we look at the numbers and key takeaways for the cybersecurity stocks, including SentinelOne (NYSE: S) and its peers.

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.

Thankfully, share prices of the companies have been resilient as they are up 7% on average since the latest earnings results.

SentinelOne (NYSE: S)

Built on the principle of "fighting machine with machine," SentinelOne (NYSE: S) provides an AI-powered cybersecurity platform that autonomously prevents, detects, and responds to threats across endpoints, cloud workloads, and identity systems.

SentinelOne reported revenues of $242.2 million, up 21.7% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a solid beat of analysts’ EBITDA estimates but a significant miss of analysts’ billings estimates.

“We surpassed $1 billion in ARR and delivered record net new ARR, continuing to deliver robust growth and platform adoption across AI, data, cloud, and endpoint,” said Tomer Weingarten, CEO of SentinelOne.

SentinelOne scored the fastest revenue growth but had the weakest performance against analyst estimates of the whole group. The company added 54 enterprise customers paying more than $100,000 annually to reach a total of 1,513. Unsurprisingly, the stock is up 8.6% since reporting and currently trades at $19.15.

Is now the time to buy SentinelOne? 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 achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 10.5% since reporting. It currently trades at $59.99.

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 6.2% since the results and currently trades at $30.25.

Read our full analysis of Tenable’s results here.

Zscaler (NASDAQ: ZS)

Pioneering the "zero trust" approach that has fundamentally changed enterprise network security, Zscaler (NASDAQ: ZS) provides a cloud-based security platform that connects users, devices, and applications securely without traditional network-based security hardware.

Zscaler reported revenues of $719.2 million, up 21.3% year on year. This result surpassed analysts’ expectations by 1.6%. It was a strong quarter as it also logged an impressive beat of analysts’ billings estimates and full-year guidance of robust revenue growth.

Zscaler achieved the highest full-year guidance raise among its peers. The stock is up 6.1% since reporting and currently trades at $291.35.

Read our full, actionable report on Zscaler 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 print topped analysts’ expectations by 1.7%. Overall, it was a strong quarter as it also produced 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 16.9% since reporting and currently trades at $493.62.

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

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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