Summary of Splunk (SPLK) Update / Briefing July 17, 2025 Company and Industry Overview - **Company**: Splunk (SPLK) - **Industry**: Cybersecurity and Data Analytics - **Focus**: The state of security in the APAC region for 2025, with insights into challenges, trends, and the role of AI in security operations Key Findings and Core Points 1. **Visibility Challenges**: Organizations struggle with visibility across cloud and hybrid environments, leading to exploitable gaps for threat actors. Approximately 52% of organizations in Japan report data silos as a major concern [9][11][10] 2. **Budget Constraints**: There is increasing pressure on budgets, with organizations required to cut costs while simultaneously investing in AI technologies. This creates a "perfect storm" for cost management [14][15] 3. **Alert Overload**: Nearly 60% of Security Operations Center (SOC) leaders spend more time managing tools than responding to threats, leading to inefficiencies and alert fatigue. Almost half of respondents struggle to triage alerts effectively [21][22] 4. **Data Management Gaps**: Over half of security leaders report that investigations are slowed due to lack of access to the right data at the right time, exacerbated by data silos and inconsistent access controls [23][24] 5. **AI Adoption**: Organizations are increasingly looking to AI to improve efficiency in security operations, although challenges remain regarding the accuracy and governance of AI systems [33][36][41] 6. **Regulatory Pressure**: Financial services organizations (FSOs) are more advanced in cybersecurity maturity due to regulatory scrutiny, while public sector organizations face significant challenges from tool fragmentation [66][68] 7. **Manufacturing Sector Issues**: The manufacturing industry experiences high attack frequencies and tool sprawl, with 76% of time spent on tool maintenance rather than threat investigations [69][70] Additional Important Insights 1. **Vendor Relationships**: Complexity in vendor relationships can hinder incident response, with organizations often outsourcing components that may create inefficiencies [26] 2. **Skill Gaps**: The evolving landscape of cybersecurity necessitates a shift in skill sets, with a focus on building detections and compliance with regulatory requirements [45][47] 3. **Insider Threats**: There is a growing focus on managing insider threats, with organizations recognizing that trusted individuals can also pose risks [52] 4. **Data Governance**: Effective data governance is critical for managing data access and ensuring compliance, especially in light of increasing regulatory demands [57][58] 5. **Unified Platforms**: The need for unified platforms and shared processes is emphasized to overcome the challenges of fragmented tools and improve operational efficiency [72] Conclusion - The briefing highlights the critical need for organizations to enhance visibility, streamline operations, and leverage AI effectively while addressing budget constraints and regulatory pressures. The focus on data governance and unified platforms is essential for improving security posture across industries.

Core Insights - Liberty Defense Holdings Ltd. has launched its HEXWAVE system at Palm Springs International Airport to meet new TSA employee screening requirements and enhance aviation security [1][2][3] Group 1: TSA Mandate and Implementation - The TSA mandate (TSA-NA-32-02), introduced in 2023, requires U.S. airports to implement employee screening procedures capable of detecting explosive threats by April 2026 [2] - Palm Springs International Airport selected Liberty's HEXWAVE system in January 2025 to comply with this federal security directive [2] Group 2: Technology and Features - HEXWAVE utilizes proprietary AI and 3D-radar imaging to detect concealed metallic and non-metallic threats, including various types of explosives and non-traditional weapons [3][4] - The system offers fast, contactless, high-throughput screening through a walkthrough portal, minimizing disruption while maximizing security [3] Group 3: Strategic Importance and Future Outlook - The deployment of HEXWAVE at PSP represents a significant milestone for Liberty as demand for AI-driven security solutions increases [3] - The partnership aims to set a new benchmark for employee and passenger security, operational effectiveness, and convenience [4] - Liberty Defense is committed to modernizing screening processes across various sectors, including airports and public gathering spaces, to address evolving security threats [5][8]

Core Insights - Cloudastructure's AI-driven security platform achieved a deterrence rate of over 98% for threatening activities from January to May 2025, effectively preventing incidents such as theft and trespassing before escalation [1][2][3] - The platform generated 3.28 million alerts in the first five months of 2025, with 929,019 alerts in May alone, and facilitated 13,129 live audio interventions [2][3] - The company operates in 23 U.S. states and is expanding its presence in high-need markets such as multifamily housing, commercial real estate, and construction [5][6] Company Performance - Cloudastructure's subscription-based model and proprietary AI provide a compelling alternative to traditional security solutions, especially as municipalities face shrinking police resources and rising costs for on-site security [4][6] - The company offers a scalable, end-to-end security platform that replaces outdated surveillance systems, achieving strong gross margins and recurring revenue [4][7] - The platform's proactive approach to security, which includes intelligent detection and real-time human intervention, represents a transformative shift in the industry [6][7] Market Context - The rise in property crime nationwide highlights the effectiveness of Cloudastructure's platform at a time when traditional security solutions are under pressure [2][3] - The company's technology enables clients to achieve up to a 75% lower Total Cost of Ownership compared to other systems, enhancing its value proposition [7]

Core Viewpoint - Liberty Defense Holdings Ltd. is initiating a non-brokered private placement to raise between approximately C$2,500,000 and C$3,750,000 through the issuance of units priced at C$0.22 each [1][3]. Group 1: Offering Details - The offering consists of a minimum of 11,363,636 units and a maximum of 17,045,454 units, with each unit comprising one common share and one warrant [1][2]. - Each warrant allows the holder to purchase one common share at an exercise price of C$0.35, valid for 12 months post-closing [2]. - The offering is conducted under the LIFE Exemption, allowing for immediate resale of the units without a hold period [3]. Group 2: Use of Proceeds - Proceeds from the offering will be allocated for purchasing inventory to enhance the production of HEXWAVE technology units, investor relations, marketing initiatives, operating expenses, and general working capital [5]. Group 3: Closing and Conditions - The offering is expected to close around July 22, 2025, contingent upon receiving subscriptions for at least C$2,500,000 and necessary approvals [6]. Group 4: Company Overview - Liberty Defense Holdings Ltd. specializes in AI-based detection solutions for concealed weapons, with products designed for high-traffic areas requiring enhanced security [10]. - The company has secured exclusive licensing for its HEXWAVE product from MIT, which utilizes advanced 3D radar imaging technology [10].

Core Insights - Xtract One Technologies has been selected by Mecklenburg County Public Schools to implement its Gateway system for enhanced school security [1][2][4] - The Gateway system is designed to efficiently screen for weapons while allowing students to carry personal items without the need for divesting [3][4] - The partnership aims to improve safety and provide a deterrent against contraband and weapons in schools [4] Company Overview - Xtract One Technologies specializes in AI-driven threat detection and security solutions, focusing on unobtrusive weapons detection systems [6] - The company's Gateway solutions are tailored for various environments, including schools, hospitals, and stadiums, ensuring high security while maintaining a seamless experience for users [6] Industry Context - The implementation of advanced security systems like Xtract One's Gateway reflects a growing trend in educational institutions to enhance safety measures amid rising concerns about school security [2][4] - The Gateway system addresses previous challenges faced by schools in effectively screening personal items, thus streamlining security processes [2][3]

Core Insights - Verona Pharma and Evolv Technologies are highlighted as strong investment opportunities with high momentum characteristics and Zacks Rank 1 (Strong Buy) [1][2][3] Company Summaries Verona Pharma (VRNA) - Focuses on developing innovative therapeutics for chronic respiratory diseases with significant unmet medical needs [1] - Zacks Consensus Estimate for current year earnings increased by 37.5% over the last 60 days [1] - Shares gained 69% over the last three months, outperforming the S&P 500's gain of 26% [2] - Possesses a Momentum Score of A [2] Evolv Technologies (EVLV) - Offers AI touchless screening technologies for weapons detection, identity verification, and health-related threats through Evolv Cortex AI(TM) software platform [2] - Zacks Consensus Estimate for current year earnings increased by 23.3% over the last 60 days [2] - Shares gained 100.7% over the last three months, significantly outperforming the S&P 500's gain of 25.9% [3] - Possesses a Momentum Score of B [3]

Core Viewpoint - Gorilla Technology Group Inc. has successfully closed a registered direct offering of 6,000,000 ordinary shares at an offering price of $17.50 per share, raising approximately $105 million in gross proceeds to support various corporate initiatives [1][2][10]. Group 1: Offering Details - The offering closed on July 2, 2025, and the gross proceeds are expected to be around $105 million before deducting fees and expenses [1][2]. - The offering was conducted under an effective shelf registration statement previously filed with the SEC [4]. Group 2: Use of Proceeds - The net proceeds from the offering will be utilized for working capital needs, including establishing performance guarantees, bid bonds, and statutory capital reserves for project bids [2][10]. - Additional uses include supporting business growth related to previously announced acquisitions and other general corporate purposes [2][10]. Group 3: Strategic Importance - The addition of an institutional balance sheet partner is viewed as a significant milestone for the company, reflecting investor confidence and positioning the company to accelerate its project pipeline [3]. - The offering was led by a $100 million investment from a new institutional investor, with participation from a large existing shareholder [10]. Group 4: Company Overview - Gorilla Technology Group Inc. is a global solution provider specializing in Security Intelligence, Network Intelligence, Business Intelligence, and IoT technology, with a focus on enhancing urban operations and security through AI and deep learning technologies [6][7]. - The company offers a range of solutions across various sectors, including government, manufacturing, telecom, retail, transportation, healthcare, and education [6].

Core Insights - Allegion plc (ALLE) has completed the acquisition of ELATEC for €330 million (approximately $379.1 million) on a cash and debt-free basis [1][8] - ELATEC specializes in security and access technology, particularly in RFID credentials and reader solutions, with a portfolio supporting nearly 100 credential types [2] - The acquisition aligns with ALLE's strategy to expand its market share and customer base, particularly in non-residential markets such as education, healthcare, hospitality, and industrial sectors [3][8] Acquisition Details - ELATEC will be integrated into the Allegion International segment, led by senior vice president Tim Eckersley [4] - The company anticipates that ELATEC will generate net sales of approximately €60-€65 million (approximately $69-$75 million) in 2026 and positively impact adjusted earnings per share in the same year [4][8] Previous Acquisitions - In June 2025, ALLE acquired Novas to enhance its door hardware portfolio, which has been incorporated into the Allegion International segment [5] - ALLE also acquired Trimco Hardware in April 2025, boosting its door and frame portfolio within the Allegion Americas segment [5] - Other acquisitions include Lemaar Pty Ltd in March 2025 and Next Door Company in February 2025, both aimed at enhancing ALLE's security and accessibility offerings [6] Market Performance - Allegion is experiencing growth in the Allegion Americas segment, driven by increased demand for non-residential products across various end markets [7] - The company currently holds a Zacks Rank 2 (Buy) and has seen its stock gain 13% year-to-date, outperforming the industry growth of 7.7% [7]

Core Insights - Liberty Defense Holdings Ltd. has established a new Strategic Advisory Board to enhance its focus on scaling AI-based detection solutions for concealed weapons and threats [1] - The board includes Thomas Monheim, a former Inspector General for the US Intelligence Community, who brings over three decades of experience in national security [2][4] - The company aims to improve security detection in various high-traffic areas, including airports, schools, and public venues, leveraging advanced technologies [5] Company Overview - Liberty Defense specializes in multi-technology security solutions for concealed weapons detection, particularly in high-volume foot traffic areas [5] - The company has secured an exclusive license for its HEXWAVE product from the Massachusetts Institute of Technology (MIT), which utilizes active 3D radar imaging technology [5] - Liberty has also licensed millimeter wave-based High-Definition Advanced Imaging Technology (HD-AIT) body scanners and shoe scanners to enhance its technology portfolio [5] Leadership and Expertise - Thomas Monheim has held significant roles in various government agencies, including the National Geospatial-Intelligence Agency and the Department of Justice, and has received multiple distinguished service awards [2][4] - His appointment is expected to provide strategic vision and leadership to Liberty Defense as it seeks to enhance security measures [4]

Core Insights - Xtract One Technologies' SmartGateway has been selected by San Mateo Medical Center to enhance security and provide AI-powered weapon detection in compliance with California's new mandate for hospitals [1][2][3] Company Overview - Xtract One Technologies specializes in technology-driven threat detection and security solutions, utilizing AI to create unobtrusive weapons detection systems that improve safety while enhancing user experience [5] - The company aims to deliver seamless and secure experiences across various sectors, including healthcare, schools, and public venues [5] Industry Context - The deployment of SmartGateway comes in response to California's Assembly Bill (AB) 2975, which mandates hospitals to implement weapons detection screening policies at key entrances [2] - Healthcare facilities face unique challenges, with violent incidents occurring five times more frequently than in other industries, highlighting the need for effective security solutions [3] Technology Features - SmartGateway utilizes AI-powered sensors for fast, discreet, and reliable individual screening, allowing guests to be scanned for weapons without the need to empty pockets, thus optimizing the security experience [3] - The technology is designed to facilitate seamless passage through checkpoints, minimizing disruptions and enhancing the flow of movement within healthcare facilities [3] Client Commitment - San Mateo Medical Center emphasizes its commitment to creating a safe environment for patients and staff by adopting Xtract One's technology, which was selected after extensive testing of various systems [3][6]