Cybersecurity stocks had a bad week after the effects of the Silicon Valley Bank failure showed up in earnings reports — and after a strength that many companies relied on last earnings season shifted to a liability.
On... Cybersecurity stocks had a bad week after the effects of the Silicon Valley Bank failure showed up in earnings reports — and after a strength that many companies relied on last earnings season shifted to a liability. On Friday, analysts were discussing how Cloudflare — which went public three and a half years ago and whose stock is now trading at more than triple its IPO pricing — was caught up in a perfect storm of lengthening sales cycles in the broader market brought on by economic uncertainty, and of customers who were acutely sensitive to Silicon Valley Bank’s failure. Analysts noted that Tenable was caught up in the same storm.
Upsells to customers already within the ecosystem, however, were cited as a strength by most cybersecurity companies that had a good earnings season. Last quarter, identity-management-software company Okta Inc. OKTA said the bulk of its business was in upsells and cross-sells to established customers, and the same story was coming out of other cybersecurity companies like CrowdStrike CRWD , Palo Alto Networks PANW and Zscaler ZS .