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Group 1 - Cybersecurity stocks have experienced significant volatility since November last year, primarily due to investor concerns regarding AI [1] - The article highlights the losses suffered by three specific cybersecurity stocks, indicating a trend of declining performance in this sector [1] Group 2 - The investment landscape for publicly listed securities, particularly in the tech sector, is influenced by various factors including market sentiment and technological advancements [2] - The focus on capital preservation strategies is emphasized, reflecting lessons learned from past financial crises [2]

Core Insights - Palo Alto Networks (PANW) and Cisco Systems (CSCO) are significant players in the cybersecurity sector, with PANW focusing on next-generation firewalls, cloud security, and AI-driven threat detection, while CSCO emphasizes Threat Intelligence, Detection, and Response offerings, including Secure Access Service Edge (SASE) and Network Security [1][2] Industry Overview - The cybersecurity market is expected to grow at a CAGR of 12.28% from 2026 to 2031, driven by increasing complex attacks such as credential theft and social engineering [2] Company Analysis: Palo Alto Networks (PANW) - PANW is recognized as a leader in cybersecurity, providing comprehensive solutions for network security, cloud security, and endpoint protection [4] - The company’s SASE segment is its fastest-growing area, with Annual Recurring Revenues (ARR) increasing by 40% year-over-year in Q2 of fiscal 2026 [5] - A significant deal worth over $50 million was secured with a global automotive leader for a major security transformation, highlighting PANW's strong market position [6] - PANW faces challenges from integration and acquisition-related costs, including a $25 billion acquisition of CyberArk and a $3.35 billion acquisition of Chronosphere, leading to increased costs and potential profitability impacts [7] - The issuance of 112 million shares as part of the CyberArk deal is expected to cause significant equity dilution, with EPS guidance for fiscal 2026 revised down to $3.65-$3.70 from $3.80-$3.90 [8] Company Analysis: Cisco Systems (CSCO) - CSCO is making steady advancements in its security business, with new products like Secure Access and AI Defense gaining traction, now representing about one-third of its security portfolio [9] - The company added 2.5 million Secure Access users in Q2 of fiscal 2026, with new customer acquisitions contributing significantly to new bookings [11] - CSCO has reported three consecutive quarters of double-digit growth in firewall units, supported by new high-end firewall platforms [12] - The company is embedding AI deeper into its security offerings, enhancing its capabilities to address advanced threats [12] - CSCO's earnings estimates for fiscal 2026 and 2027 have been revised upward, with current estimates at $4.13 and $4.46, respectively [17] Market Performance - Over the past six months, CSCO shares have increased by 17.2%, while PANW shares have decreased by 17.7% [19] - CSCO is trading at a forward sales multiple of 4.95X, which is lower than PANW's 9.31X, making CSCO more attractive for value-seeking investors [21] Conclusion - The analysis suggests that CSCO presents a more compelling investment opportunity due to its steady execution, strong product adoption, and favorable earnings revisions, while PANW faces near-term risks from integration costs and share dilution [23][24]

Key Takeaways ALLT is expected to post Q4 revenues of $27.93M, up 12.2% Y/Y, with EPS of 7 cents.Allot's SECaaS ARR jumped about 60% Y/Y in Q3, lifting recurring revenues to 63% of total sales.ALLT trades at 4.21X forward sales, below sector and major cybersecurity peers.Allot Inc. (ALLT) is scheduled to report its fourth-quarter 2025 results on Feb. 25.The Zacks Consensus Estimate for Allot’s fourth-quarter 2025 revenues is pegged at $27.93 million, which implies growth of 12.2% from the year-ago reported ...

Core Insights - Zscaler, Inc. (ZS) is experiencing significant growth from its Z-Flex program, which allows customers to commit to spending levels while maintaining flexibility to adjust modules later, potentially driving future growth [1][2] Group 1: Z-Flex Program Performance - Z-Flex was introduced in Q3 of fiscal 2025 and generated over $175 million in total contract value bookings in Q1 of fiscal 2026, marking a 70% sequential increase, indicating strong customer interest in flexible licensing [2][11] - The program is enhancing relationships with existing clients, leading to increased annual spending as enterprises adopt multiple modules under Z-Flex, which is crucial for Zscaler's strategy focused on platform adoption across various security offerings [3][5] - Z-Flex is facilitating larger deal sizes, as customers are more inclined to commit to broader deployments knowing they can adjust product choices later, thus accelerating sales cycles [4][11] Group 2: Financial Outlook - The early success of the Z-Flex program suggests it could become a sustainable growth engine for Zscaler, with the Zacks Consensus Estimate projecting revenue growth of 23.2% for fiscal 2026 and 19.8% for fiscal 2027 [5] - Zscaler's shares have decreased by 14.8% over the past year, slightly better than the Zacks Security industry's decline of 15.6% [9] - The company trades at a forward price-to-sales ratio of 7.37, which is below the industry average of 10.01, indicating potential undervaluation [13] Group 3: Competitive Landscape - Zscaler faces competition from Palo Alto Networks, Inc. and CrowdStrike Holdings, Inc., both of which employ similar platform-driven growth strategies with flexible bundles to enhance customer spending [6][8] - Palo Alto Networks offers subscription pricing and bundled offerings that can provide 10-15% savings compared to purchasing products separately, encouraging broader platform adoption [7] - CrowdStrike's Falcon platform bundles and Falcon Flex licensing model allow customers to add modules without new procurement cycles, contributing to a significant year-over-year growth in annual recurring revenue [8]

Core Insights - CrowdStrike Holdings has developed the Falcon cybersecurity platform, which provides comprehensive protection for companies, utilizing AI for threat detection and incident response [1][3] - The stock of CrowdStrike is down 22% from its peak, as investors express concerns over its high valuation compared to peers, but upcoming fiscal results are expected to show strong revenue growth due to increased demand for Falcon [2][3] Company Overview - Falcon is a cloud-based cybersecurity solution that requires minimal installation, allowing for seamless updates without disrupting customer operations [3] - Businesses can customize their cybersecurity solutions by selecting from 32 Falcon modules, with the flexibility to adjust their subscriptions as needs evolve [4] Industry Trends - The rise of AI is transforming the cybersecurity landscape, creating new vulnerabilities as businesses adopt AI technologies [5] - AI agents, which lack their own identity or credentials, present significant security risks if compromised, potentially leading to unauthorized access to sensitive data [6] Product Innovations - In response to emerging threats, CrowdStrike launched Falcon Next-Gen Identity Security, employing a "zero standing privileges" approach to minimize unauthorized access risks [7]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 reached $1.095 billion, representing a 7% year-over-year increase as reported and a 6% increase in constant currency [5][16] - Non-GAAP operating margin was 29%, and non-GAAP earnings per share (EPS) was $1.84, up 11% year-over-year as reported and in constant currency [5][16] - Non-GAAP net income for Q4 was $270 million, with a non-GAAP EPS of $1.84, reflecting an 11% year-over-year increase [18] Business Line Data and Key Metrics Changes - Cloud Infrastructure Services (CIS) revenue was $94 million, up 45% year-over-year as reported and 44% in constant currency, marking an acceleration from 39% growth in Q3 [5][16] - Security revenue totaled $592 million, up 11% year-over-year as reported and 9% in constant currency, with API Security and Zero Trust enterprise security revenue growing by 36% year-over-year [10][17] - Delivery revenue was $311 million, down 2% year-over-year as reported and down 3% in constant currency, indicating steady trends in the delivery business [18] Market Data and Key Metrics Changes - International revenue was $542 million, up 11% year-over-year or 8% in constant currency, representing 50% of total revenue in Q4 [18] - The company experienced a negative impact of $5 million from foreign exchange fluctuations on a sequential basis, but a positive impact of $12 million year-over-year [18] Company Strategy and Development Direction - The company is focusing on AI-related infrastructure, launching Akamai Inference Cloud to support AI applications, and has signed a four-year, $200 million commitment with a major U.S. tech company [6][7][21] - Investments of approximately $250 million in CapEx are planned to augment the AI inference cloud [21] - The company aims to report CIS as a standalone revenue category starting Q1 2026, reflecting its significance as a growth engine [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the rapid growth of CIS, driven by AI-related demand and strong customer interest [9][10] - The company anticipates continued strong demand for security solutions, particularly API Security, which has seen over 100% year-over-year growth [10][17] - Management acknowledged inflationary pressures in the computer hardware market, particularly in memory chip prices, affecting CapEx forecasts [21][30] Other Important Information - The company was recognized as a Customers' Choice for network security micro-segmentation in the Gartner Peer Insights Report for 2026, with a 99% recommendation rate [10] - Akamai was named in Forbes' list of America's Most Trusted Companies and The Wall Street Journal's list of America's Best Managed Companies for 2026 [14][15] Q&A Session Summary Question: Can you discuss the increase in CapEx and its translation into revenue? - Management indicated that $1 of CapEx for $1 of revenue may not hold true due to inflation in memory chips, but it remains a decent model [32][33] Question: What is the pipeline for Akamai Inference Cloud? - The pipeline is strong, with significant interest in AI applications, and the initial offering has already sold out [35][36] Question: Can you provide details on the major U.S. tech customer contract? - This was an existing customer who increased their spend significantly, transitioning from CDN and security services to CIS [40] Question: How are larger CIS deals progressing? - Management noted that larger workloads are ramping up, with the $200 million deal expected to start recognizing revenue in Q4 2026 [58][81] Question: What is the outlook for delivery growth this year? - The company expects mid-single-digit growth in delivery, with longer commitments from customers becoming more prevalent [74][75]

Financial Data and Key Metrics Changes - Akamai reported Q4 2025 revenue of $1.095 billion, representing a 7% year-over-year increase as reported and a 6% increase in constant currency [4][15] - Non-GAAP operating margin was 29%, and non-GAAP earnings per share (EPS) was $1.84, up 11% year-over-year as reported and in constant currency [4][15] - Non-GAAP net income for Q4 was $270 million, with a cash gross margin of approximately 71%-72% expected for Q1 2026 [17][24] Business Line Data and Key Metrics Changes - Cloud Infrastructure Services (CIS) revenue was $94 million, up 45% year-over-year as reported and 44% in constant currency, now representing approximately 50% of total compute revenue [4][15] - Security revenue reached $592 million, up 11% year-over-year as reported and 9% in constant currency, with API security and zero trust enterprise security combined revenue at $90 million, an increase of 36% year-over-year [16][10] - Delivery revenue was $311 million, down 2% year-over-year as reported and down 3% in constant currency, indicating steady trends in the delivery business [17] Market Data and Key Metrics Changes - International revenue was $542 million, up 11% year-over-year or 8% in constant currency, representing 50% of total revenue in Q4 [17] - The company experienced a negative impact of $5 million from foreign exchange fluctuations on a sequential basis, but a positive impact of $12 million year-over-year [17] Company Strategy and Development Direction - Akamai is focusing on its transformation into a cybersecurity and cloud company, with significant investments in AI and cloud infrastructure [14] - The launch of Akamai Inference Cloud aims to support the growing demand for AI applications, with a commitment of $200 million from a major US tech company [6][19] - The company plans to invest approximately $250 million in CapEx to augment its AI inference cloud [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the AI market entering a critical transition point, with Akamai positioned to benefit from AI-related tailwinds [6] - The company anticipates continued strong demand for its cloud infrastructure services, projecting revenue growth to accelerate further in 2026 [9][25] - Management noted inflationary pressures in the computer hardware market, particularly in memory chip prices, which may impact future CapEx [19][27] Other Important Information - Akamai was recognized as a customer's choice for network security micro-segmentation in the Gartner Peer Insights Report for 2026, earning a 99% recommendation rate [10][13] - The company took a $55 million restructuring charge in Q4, primarily for severance costs and impairments of certain intangible assets [20][82] Q&A Session Summary Question: Can you discuss the increase in CapEx and its translation into revenue? - Management indicated that the increase in CapEx is influenced by inflation in memory chips, and while $1 of CapEx for $1 of revenue may not hold true, it remains a decent estimate [29][30] Question: What is the pipeline for Akamai Inference Cloud? - The pipeline is strong, with significant interest from various sectors, and the initial offering has already sold out [32][35] Question: How did the major U.S. tech customer deal come together? - The deal was with an existing customer who increased their spend significantly, transitioning from CDN and security services to cloud infrastructure [37][38] Question: What are the revenue commitments from customers today? - There is an increase in longer commitments across services, with the delivery growth expected to remain stable at mid-single digits [71][73] Question: How are major events expected to impact revenue? - Events like the Winter Olympics and FIFA World Cup are not expected to have a significant impact on overall revenue, but they are beneficial [50][52]

Palo Alto Networks Announces Offer to Purchase Relating to CyberArk Software Ltd.'s 0.00% Convertible Senior Notes due 2030 [Accessibility Statement] Skip NavigationSANTA CLARA, Calif., Feb. 19, 2026 /PRNewswire/ -- Today, Palo Alto Networks, Inc. (NASDAQ: PANW) ("Palo Alto Networks") announced that, in connection with the closing of the transaction (the "Acquisition") contemplated by the Agreement and Plan of Merger, dated as of July 30, 2025, by and among Palo Alto Networks, CyberArk Software Ltd., a comp ...

Core Insights - Akamai Technologies reported strong financial performance for Q4 and full-year 2025, with notable revenue growth in key product areas, particularly in Cloud Infrastructure Services and security solutions [4][5][6]. Financial Performance - Q4 2025 revenue reached $1.095 billion, a 7% increase from Q4 2024, and a 6% increase when adjusted for foreign exchange [5][6]. - Full-year 2025 revenue totaled $4.208 billion, up 5% year-over-year, and adjusted for foreign exchange [5][6]. - Cloud Infrastructure Services revenue for Q4 was $94 million, reflecting a 45% year-over-year increase, and $314 million for the full year, up 36% [5][6]. - Security revenue for Q4 was $592 million, an 11% increase year-over-year, and $2.243 billion for the full year, up 10% [6][10]. Profitability Metrics - GAAP net income for Q4 was $85 million, a 39% decrease from Q4 2024, while full-year GAAP net income was $452 million, down 10% year-over-year [10][11]. - Non-GAAP net income for Q4 was $270 million, up 6% year-over-year, and $1.046 billion for the full year, a 5% increase [11][12]. - GAAP net income per diluted share for Q4 was $0.58, down 36% from the previous year, while for the full year it was $3.07, down 6% [12][10]. Operational Efficiency - GAAP income from operations for Q4 was $95 million, a 36% decrease from Q4 2024, while full-year GAAP income from operations was $567 million, a 6% increase [8][9]. - Non-GAAP income from operations for Q4 was $316 million, a 6% increase year-over-year, and $1.254 billion for the full year, up 7% [9][8]. Cash Flow and Capital Management - Cash from operations for Q4 was $367 million, representing 33% of revenue, and for the full year, it was $1.519 billion, or 36% of revenue [13][24]. - The company did not repurchase shares in Q4 2025 but spent $800 million to repurchase 10 million shares throughout the year [14]. Geographic Revenue Breakdown - U.S. revenue for Q4 was $553 million, up 4% year-over-year, and $2.139 billion for the full year, up 3% [15][27]. - International revenue for Q4 was $542 million, up 11% year-over-year, and $2.069 billion for the full year, up 8% [15][27]. Future Guidance - For Q1 2026, Akamai expects revenue between $1.060 billion and $1.085 billion, with a non-GAAP operating margin of 26% to 27% [16]. - For the full year 2026, revenue guidance is set between $4.400 billion and $4.550 billion, with a non-GAAP net income per diluted share expected to be between $6.20 and $7.20 [16].