Although several cybersecurity firms have reported lower-than-expected earnings recently, there’s still room for growth in the industry.
Israeli firm CyberArk announced Tuesday that total revenue for the second quarter of 2016 was up 39% year over year. It predicted less robust growth for the rest of the year: between 29% and 31% for the third quarter and between 31% and 32% for the whole year.
CyberArk’s share price (CYBR) fell from 55.31 on Tuesday to 51.95 on Wednesday.
FireEye, a cybersecurity firm based in Milpitas, California, announced second-quarter results on Aug. 4 that showed a 19% increase in revenue and 10% increase in billings from a year ago. However, both of these measures are lower than expected, according to Kevin Mandia, CEO of FireEye.
FireEye also announced it is planning to lay off between 300 and 400 of its 3,400 workers as part of a restructuring effort that aims to reduce annual costs by about $80 million, Reuters reported. FireEye expects third-quarter revenue between $180 million and $186 million, and total 2016 revenue between $716 million and $728 million.
Shares of Palo Alto Networks, which will announce fourth-quarter fiscal year 2016 results at the end of August, have been trending downward since late last year.
Symantec reported revenue of $884 million for the first quarter of fiscal year 2017, down 3% from the year-ago period. However, that beat analysts’ expectations and shares rose 5% following the announcement, Reuters reported.
Cisco reported third-quarter 2016 revenue of $12 billion, down slightly from last year’s revenue of $12.1 billion.
“To be fair, the cyber industry cannot possibly sustain its initial steep growth curve,” Tim Starks, a reporter for Politico, wrote Wednesday. He cited research from CB Insights that found venture capitalist investment in cyber firms rose from about $1 billion in 2011 to $3.8 billion in 2015.
The Dublin-based market research firm Research and Markets estimates the global cybersecurity market will grow by almost 11% annually over the next five years from over $122 billion this year to $202.36 billion by 2021.
The firm expects that the cybersecurity market will experience the highest compound annual growth rate in the banking financial services and insurance industries due to “increasing adoption of web and mobile applications, which are prone to advanced cyberattacks,” according to a press release.
The Internet of Things and the “bring your own device” trend of workers using personal devices to access company data will also drive increases in cybersecurity investment, according to the firm.
— Check out What Regulators Are Looking for in Your Firm’s Cybersecurity on ThinkAdvisor.