💰 Security, Funded #181 - Billion Dollar Baby, Don't At Me

Security, Funded provides a weekly analysis of economic activity in the cybersecurity market. This week’s issue is presented together with Yesh ID, Comp AI, and Palo Alto Networks.

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Table of Contents

• 😎 Vibe Check

• Market Summary

• 📸 YoY Snapshot

• ☎️ Earnings Reports

• 🧩 Funding By Product Category

• 🏢 Funding By Company

• Funding by Country

• 🤝 Mergers & Acquisitions

• 📚 Great Reads

• 🧪 Labs

• 15 companies from 4 countries raised $378.4M across 14 unique product categories

• 7 companies were acquired or had a merger event for $425.0M across 6 unique product categories

• 93% of funding went to product-based cybersecurity companies

• 3 public cyber companies had an earnings report

This is a rolling 12-week chart comparing funding and acquisitions each week in a year-over-year (YoY) view between the end of 2023 and the start of 2024 and 2025.

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Cyber Market Movers

Earnings reports from last week: CyberARk, Palo Alto Networks, and Rapid7

CyberArk (CYBR)

CyberArk delivered another strong quarter, with revenue growing 37% to reach $314.4 million. This success was driven by continued demand for human and non-human identity (NHI) security solutions and continued platform expansion. CyberArk also hit a significant milestone by surpassing $1 billion in revenue and ARR while showing impressive operating leverage, with margins expanding to 15% (up from 4% last year).

The strategic acquisitions of Venafi and Zilla Security position CyberArk to capitalize on the growing demand for machine identity protection and IGA capabilities. CyberArk appears well-positioned to benefit from several industry tailwinds as companies are combining identity solutions that can handle both human and machine identities, especially in AI-driven environments. The stock rose on these results as analysts endorsed both the execution and strategic direction.

Palo Alto Networks (PANW)

Palo Alto delivered another strong quarter, with revenue growing 14% to reach $2.3 billion. This success was driven by strong performance in large deals and contributions from SASE, software firewalls, and the Cortex security operations product.

Strategic moves such as platformization and a focus on AI have positioned Palo Alto Networks to capitalize on the growing demand for integrated security solutions. Palo is well-positioned to benefit from industry tailwinds, such as increased cloud transformation projects driven by AI projects and customer demand for AI-enhanced security solutions.

Unrelated, but this is the first time a company has both sponsored and had an earnings call review in the same newsletter. Achievement unlocked! 🎮️ 

Rapid7 (RPD)

Rapid7 delivered a steady quarter, with revenue growing 5% to reach $216 million. This performance was driven by strong demand in their detection and response (D&R) business and early traction from its new Exposure Command platform offering.

Rapid7’s shift towards integrated exposure management and managed detection and response (MDR) puts them in a unique position to provide software AND services that meet their customers where they are. Analyst acknowledged and appreciated their proactive approach to addressing growth opportunities and anticipated improvements in operational efficiency.

Macro Context:

• The US Federal Reserve and my boy JPow decided to keep interest rates flat because the US economy was moving along as they expected but not quite at the goal it wanted to see.

• Inflation data in the US for January came in higher than analysts expected, and US stocks fell as a result (a good reminder that the economy is not the stock market).

Earning reports to watch this coming week:

• None

🤘 IPO-h Yeah

• SailPoint, a United States-based enterprise identity and access management (IAM) platform, went public (again! 🤯 ), pricing its IPO at $23/share on the Nasdaq stock exchange, raising $1.4B at a $12.8B valuation. (more)

• How to Say "No" Well - My friend Rami McCarthy talks about how the ability to effectively communicate a strategic “No” can strengthen security teams’ alignment with business goals and how poorly timed or ambiguous refusals erode trust.

• *Introducing Cortex Cloud — The Future of Real-Time Cloud Security - Cortex Cloud natively brings together new releases of its best-in-class cloud detection and response (CDR) and industry-leading CNAPP capabilities on the unified Cortex platform.

• Never Waste a Good Compliance Framework - Companies pay for compliance but want security. Smart teams leverage compliance as a strategic tool to drive security improvements and business growth.

• OpenAI is IBM - Jack Raines discusses the competitive landscape of cloud and AI markets, comparing IBM's early cloud efforts to OpenAI's current challenges.

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Data Methodology and Sources

• All of the data is captured point-in-time from publicly available sources.

• All financial figures are converted to U.S. dollars (USD) when collected.

• Company country locations are pulled from publicly available sources.

• Companies are categorized using our system at Return on Security, and we write all the company descriptions.

• Sometimes, the details about deals, like who led the round, how much money was raised, or the deal stage, might get updated after the issue is first published.

• Let us know if you spot any errors, and we’ll fix them.

About Return on Security

Return on Security is all about breaking down the cybersecurity industry for you with expert analysis, hard facts, and real-life stories. The goal? To keep security pros, entrepreneurs, and investors ahead in a fast-moving field. Read more about the “Why” here.

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