Reflecting On Cybersecurity Stocks’ Q1 Earnings: Qualys (NASDAQ:QLYS)
Wrapping up Q1 earnings, we look at the numbers and key takeaways for the cybersecurity stocks, including Qualys (NASDAQ:QLYS) 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 slower Q1; on average, revenues beat analyst consensus estimates by 1.4%. while next quarter's revenue guidance was 0.5% below consensus. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and cybersecurity stocks have held roughly steady amidst all this, with share prices up 2.7% on average since the previous earnings results.
Qualys (NASDAQ:QLYS)
Founded in 1999 as one of the first subscription security companies, Qualys (NASDAQ:QLYS) provides organizations with software to assess their exposure to cyber-attacks.
Qualys reported revenues of $145.8 million, up 11.6% year on year, in line with analysts' expectations. Overall, it was a weak quarter for the company with underwhelming revenue guidance for the next quarter and a miss of analysts' billings estimates.
"We delivered another quarter of healthy revenue growth and strong profitability," said Sumedh Thakar, president and CEO of Qualys.
Qualys delivered the weakest performance against analyst estimates of the whole group. The stock is down 12.6% since reporting and currently trades at $145.23.
Read our full report on Qualys here, it's free.
Best Q1: 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 $553.2 million, up 32.1% year on year, outperforming analysts' expectations by 3.2%. It was a very strong quarter for the company with an impressive beat of analysts' billings estimates and a solid beat of analysts' ARR (annual recurring revenue) estimates.
Zscaler delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 25.9% since reporting. It currently trades at $195.80.
Is now the time to buy Zscaler? Access our full analysis of the earnings results here, it's free.
Weakest Q1: Rapid7 (NASDAQ:RPD)
Founded in 2000 with the idea that network security comes before endpoint security, Rapid7 (NASDAQ:RPD) provides software as a service that helps companies understand where they are exposed to cyber security risks, quickly detect breaches and respond to them.
Rapid7 reported revenues of $205.1 million, up 12% year on year, in line with analysts' expectations. It was a weak quarter for the company with underwhelming revenue guidance for the next quarter and decelerating customer growth.
Rapid7 posted the weakest full-year guidance update in the group. The company lost -64 customers and ended up with a total of 11,462. As expected, the stock is down 14.9% since the results and currently trades at $39.
Read our full analysis of Rapid7's results here.
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 $216 million, up 14.4% year on year, surpassing analysts' expectations by 1.2%. Zooming out, it was a weak quarter for the company with a miss of analysts' ARR (annual recurring revenue) estimates and a miss of analysts' billings estimates.
The stock is down 6.4% since reporting and currently trades at $42.13.
Read our full, actionable report on Tenable 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 $617 million, up 19.1% year on year, surpassing analysts' expectations by 2.1%. Overall, it was a solid quarter for the company with optimistic revenue guidance for the next quarter and a decent beat of analysts' ARR (annual recurring revenue) estimates.
Okta achieved the highest full-year guidance raise among its peers. The stock is down 3.4% since reporting and currently trades at $93.15.
Read our full, actionable report on Okta here, it's free.
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