Fincredible MacroTalk September 22: Cybersecurity
Management commentary on cybersecurity from $CRWD $ZS $S $PANW $CYBR $MSP $ALLT $RF $AMOT $TUP $IPGP $EWCZ
Cybersecurity and privacy threats are increasing at a growing rate, evidenced by the recent wave of ransomware attacks. Shifts towards hybrid work and a new digital environment with more connected devices and data have expanded the possible points of attack from cyber threats. This has led more and more organizations to prioritize their investments in cyber security. In fact, according to the Gartner 2021 CIO Agenda Survey, cybersecurity was the top priority for new spending. Out of 2000 CIOs surveyed, 61% said they plan on increasing investments in cyber/information security this year. For 2021, Gartner forecasts the information security and risk management market to grow 12.4% to $150Bn.
Given the growing importance of this industry to companies, consumers, governments, and the overall economy, we’ve decided to dedicate this edition of MacroTalk to the topic.
In this post we’ve compiled the best quotes from recent earnings calls regarding the cybersecurity industry. The first section is dedicated to companies selling cybersecurity services, and the second one to those buying these services. Quotes are sourced from Fincredible.
Cybersecurity Sellers
Cybersecurity companies like Crowdstrike and SentinelOne spoke about the threats companies face today, and what trends and factors have contributed to a rising number of succesull attacks.
“The threat environment remains fierce as expanding attack surface and inherent vulnerabilities in widely used operating systems, along with the complexity of active directory, leave companies of all sizes open to attack and provide a rich feeding ground for sophisticated and novice e-criminals alike. The lessons learned from recent attacks emphasize that a breach involves more than just malware, which is why companies need to employ a holistic breach prevention strategy rather than overly relying on malware prevention, regardless if it's legacy or next-gen.”
George R. Kurtz, Co-Founder, CEO
Crowdstrike Holdings Q2 2022 Earnings Call
“All product pillars of our platform saw strong demand. Notably, ZPA revenue surpassed $100 million in fiscal '21, growing 166% year-over-year. Increased cybersecurity risk and accelerating digital transformation have increased the need for our zero trust architecture.
Zscaler Inc Q4 2021 Earnings Call
“We created an autonomous cybersecurity platform to deliver our vision. Attacks and threats are only becoming more sophisticated and more common, and legacy solutions and human defenses just can't keep up. Look no further than all the ransomware attacks. Unfortunately, this isn't new, and it isn't going away, and it's impossible to ignore. Our mission to protect our customers and our way of life has never been more important in a digitized world. There are several structural forces at play that will drive long-term and sustained growth for us and our industry. The growing threat landscape is just one of them. Next is the digital enterprise environment, more devices, more places, more data, requires updates to critical enterprise infrastructure, and that includes new attack surfaces such as containers and workloads.At the same time, we've moved to a hybrid work environment. This is the new normal, forcing the evolution of how we work, where we work from and fundamentally how we secure the future of work.
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In Q2, our ARR growth accelerated to 127% year-over-year, and our revenue was up 121%. I want to pause on that for a second. Our business is expanding well into the triple digits both for ARR and revenue, and our guidance for Q3 shows that we expect that to continue. Our growth is very well balanced across new and existing customers as well as large and midsized enterprises.”
Tomer Weingarten, Co-Founder, CEO
SentinelOne Q2 2022 Earnings Call
“So I think we're going to see stuff happen in the next fiscal year for the government. They have great intentions. They want to make sure that the cybersecurity posture of the country, of the infrastructure is improved. You've seen some executive orders in that regard. There is a very positive mindset in terms of leaning in and solving many of these problems. I'm hoping that leads to positive impact for the cybersecurity industry.”
Palo Alto Networks Q4 2021 Earnings Call
“Positive secular tailwinds and the execution of our land-and-expand strategy are contributing to the acceleration in our business. Identity Security is at the center of digital transformation, Zero Trust and hacker innovation. Here are the most important and intertwined trends in cybersecurity. With digital transformation and the move to the cloud, privileged access is everywhere. And every identity across human users, applications and bots can be privileged under certain conditions. If you think about Zero Trust, organizations around the world are no longer just strategizing about frameworks. They are implementing programs and allocating budgets, taking an assumed breach mindset that trusts nothing and verifies everything. Attackers are exploiting the changing IT landscape. In the landmark breaches like SolarWinds, Microsoft Exchange, Foxconn and Colonial Pipeline, identity compromise and the abuse of privileged access is the common denominator. Weaponized software targeting supply chains and sophisticated ransomware attacks are examples of the severity of the threat landscape and are pushing identity securities at the top of CIO and CISO priorities.”
Cyberark Software Q2 2021 Earnings Call
“Digital transformation and cybersecurity are the top strategic priorities for many small and medium businesses, SMBs, around the world, driving strong demand for managed services. And the outlook is bright. Based on our annual State of the MSP survey, MSPs expect these 2 trends to continue to drive revenue growth for years to come. Most MSPs are reporting optimism about 2021 and the future. But the challenges are also growing for MSPs, and chief among them is an increase in cybersecurity attacks, which represent both opportunity and risk for MSPs and their clients. These days, rarely a week goes by without another high-profile security breach in the news. This environment creates opportunities for MSPs in the form of growing their revenue from being a trusted security provider for their SMB clients.”
Datto Holding Q2 2021 Earnings Call
“There is a revolution happening in the consumer cybersecurity market. Responsibility on securing the consumer, the family, the small business lies today with the individual. Each person is responsible to protect himself or herself and their families and small businesses.
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End users, consumers and small, medium businesses are looking for a simple, 0 touch cybersecurity service. They prefer a simple security service and not have to do anything technical like downloading an app to each device and configuring it. While most people are practically left unprotected, threats such as phishing and others are growing. We recently published a report showing that our consumers protected by Allot Secure in Europe. During a period of 3 months alone, our security software blocked 140 million attacked attempts by the Flubot Banking Trojan. This is just one case, but it clearly shows the level of threats people are facing on the internet. The revolution of shifting responsibility from protecting the consumers and small businesses from the individual to the CSP is indeed happening.”
Erez Antebi, CEO
Allot Q2 2021 Earnings Call
Cybersecurity Buyers
The range of companies using cybersecurity services grows everyday. Even companies like Tupperware Brands are seeing the need to spend more on cybersecurity to protect customer information.
“We're accelerating some of the work around IT, specifically to ensure that we're more prepared for the business expansion opportunities that we have with consumers. So enhancing our IT infrastructure around cybersecurity, data privacy and all the things that are necessary as we approach more consumers and provide more access.”
Cassandra E. Harris, CFO & COO
Tupperware Brands Q1 2021 Earnings Call
“That's more of a function of what was in Q4 of '19. 1 month back in that period, we did have a malware incidence that the company has kind of taken meaningful strides to invest in cybersecurity on go forward basis.”
Jennifer C. Vanderveldt, CFO
European Wax Center Q2 2021 Earnings Call
“We said we're spending about $625 million, as you pointed out. Roughly 10% of that is dedicated to cybersecurity and defending our -- the bank and our customers. Approximately 48% we said is dedicated to keeping the bank going, to maintaining operations and 42% support innovation and new ideas. And we're going to continue to make those investments.”
Regions Financial Q2 2021 Earnings Call
“During the quarter, we were among those that were the subject of a cybersecurity breach. We discovered the issue fairly early, and we're able to immediately implement our risk management playbook, which entails bringing in forensic experts in the field. We were able to contain the issue, and we were able to get operations back up and running without a material impact on our results for the quarter. We have also since implemented additional security measures, thus further safeguarding our systems. Unfortunately, we believe cybersecurity is a national issue and all are at risk. We were pleased with our ability to act quickly and decisively to contain the breach and move forward.”
Allied Motion Technologies Q2 2021 Earnings Call
“The other area on G&A, which -- it requires some investment is the sort of whole cybersecurity thing where you need to continue to invest on the IT infrastructure there. The cost of having a more significant cyber event on us. It's a challenge faced by every organization. You've got to invest in that to make sure that you harden your security and protect yourself as much as possible.”
IPG Photonics Q2 2021 Earnings Call
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