Market Overview - The markets are focusing on earnings and economic news, with the University of Michigan's consumer sentiment index expected to fall by -1.4 points to 55.0 [1] - Bitcoin has plunged more than -12% to a 1.25-year low, down nearly 50% from its October record high, with significant outflows from Bitcoin ETFs totaling about $2 billion in the past month and over $5 billion in the past three months [2] - Stock indexes have extended their sell-off, with the S&P 500 falling to a 1.5-month low and the Nasdaq 100 dropping to a 2.5-month low [4] Economic Indicators - Fed Governor Lisa Cook supports the decision to hold interest rates steady, citing risks tilted toward higher inflation [3] - Challenger's January job cuts rose +117.8% year-over-year to 108,435, marking the largest amount of job cuts for a January since 2009 [3] - Weekly initial unemployment claims rose by +22,000 to an 8-week high of 231,000, exceeding expectations of 212,000 [3] - US December JOLTS job openings unexpectedly fell by -386,000 to a 5.25-year low of 6.542 million, against expectations of an increase to 7.250 million [3] Earnings Reports - Q4 earnings season is underway, with 150 S&P 500 companies scheduled to report earnings this week; 79% of the 275 companies that have reported so far have beaten expectations [6] - S&P earnings growth is expected to climb by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth [6] - Excluding the Magnificent Seven megacap technology stocks, Q4 earnings are expected to increase by +4.6% [6] Stock Performance - Qualcomm led the decline in technology stocks, falling more than -8% after forecasting weaker-than-expected Q2 revenue [4][13] - The Magnificent Seven technology stocks retreated, with Amazon.com and Microsoft closing down more than -4% [14] - Cryptocurrency-exposed stocks fell sharply, with MARA Holdings down more than -18% and Coinbase Global down more than -13% [15] - Cybersecurity stocks also sold off, with CrowdStrike Holdings down more than -9% [16] Notable Company Movements - Estee Lauder closed down more than -19% after forecasting full-year adjusted EPS below consensus [17] - McKesson Corp closed up more than +16% after reporting better-than-expected Q3 adjusted EPS and raising its full-year adjusted EPS estimate [19] - Corpay closed up more than +11% after reporting Q4 revenue above consensus [20] - Align Technology closed up more than +8% after reporting stronger-than-expected Q4 adjusted EPS [21]

Core Viewpoint - N-able, Inc. will host a conference call to discuss its financial results for Q4 and full-year 2025 on February 19, 2026, at 8:30 a.m. ET [1] Company Information - N-able, Inc. is a global cybersecurity company focused on delivering business resilience [1] - The conference call will be accessible via a live webcast on the N-able Investor Relations website [1] - A replay of the webcast will be available temporarily after the event [1]

Core Insights - Zscaler has acquired SquareX to enhance its Zero Trust capabilities in browser security for the AI era, allowing organizations to secure any browser on any device without needing third-party browsers [1][4] Company Developments - The acquisition of SquareX aims to redefine browser security by enabling lightweight extensions in standard browsers like Google Chrome and Microsoft Edge, thus eliminating the reliance on traditional VPNs and VDIs [1][3][4] - Zscaler's Zero Trust architecture, exemplified by Zscaler Private Access™ (ZPA™), is designed to provide unmatched security and device posture checks to millions of users, setting a new standard for secure enterprise connectivity [2][4] Industry Context - The shift from legacy VPNs and VDIs to a true Zero Trust architecture is driven by the need for enhanced security in a landscape increasingly threatened by cyberattacks [2][4] - Zscaler's integration with SquareX will allow organizations to secure SaaS and private applications across both managed and BYOD devices, promoting productivity while implementing precise Zero Trust policies tailored to specific risk profiles [4]

Core Insights - Fortinet reported strong financial results for Q4 2025 and the full year, with significant growth in revenue and billings, driven by high demand across its product portfolio [3][4][7]. Financial Performance - Q4 2025 revenue increased by 15% year-over-year to $1.91 billion, while full-year revenue grew by 14% to $6.80 billion [7]. - Product revenue for Q4 2025 rose by 20% year-over-year to $691 million, and for the full year, it increased by 16% to $2.22 billion [7]. - Billings for Q4 2025 grew by 18% to $2.37 billion, and for the full year, billings increased by 16% to $7.55 billion [7]. - Unified SASE billings surged by 40%, reflecting strong market demand [7]. Profitability Metrics - The GAAP operating margin for Q4 2025 was 33%, while the non-GAAP operating margin was 37% [7]. - For the full year, the GAAP operating margin was 31%, and the non-GAAP operating margin was 35% [7]. - Free cash flow for the year reached $2.21 billion, exceeding the 'Rule of 45' for the sixth consecutive year [7]. Share Repurchase Program - Fortinet's Board of Directors authorized an increase in its share repurchase program by $1.0 billion, bringing the total authorized amount to $10.25 billion through February 28, 2027 [6]. Recent Business Developments - Fortinet announced an integrated solution with NVIDIA to enhance AI infrastructure performance [8]. - The company was recognized as a Gartner Peer Insights™ Customers' Choice for Security Service Edge for the third consecutive year [8]. - Fortinet was named the inaugural Google Unified Security Recommended partner for network protection [8]. Guidance - For Q1 2026, Fortinet expects revenue in the range of $1.700 billion to $1.760 billion and billings between $1.770 billion and $1.870 billion [15]. - For the full fiscal year 2026, revenue is projected to be between $7.500 billion and $7.700 billion, with billings expected to range from $8.400 billion to $8.600 billion [15].

Core Insights - Qualys, Inc. reported a revenue growth of 10% year-over-year for both Q4 and the full year 2025, with Q4 revenues reaching $175.3 million and full year revenues totaling $669.1 million [1][11] - The company announced a $200 million increase to its share repurchase program, indicating confidence in its financial position and future growth prospects [1] Financial Performance - **Q4 2025 Financial Highlights**: - Revenues increased by 10% to $175.3 million compared to $159.2 million in Q4 2024 [3] - GAAP gross profit rose by 12% to $146.1 million, with a gross margin of 83% [4] - GAAP operating income increased by 19% to $58.8 million, representing 34% of revenues [5] - GAAP net income grew by 21% to $53.2 million, or $1.47 per diluted share [6] - Adjusted EBITDA increased by 11% to $82.6 million, maintaining a margin of 47% [7] - Operating cash flow surged by 59% to $75.7 million, accounting for 43% of revenues [8] - **Full Year 2025 Financial Highlights**: - Revenues increased by 10% to $669.1 million compared to $607.6 million in 2024 [11] - GAAP gross profit rose by 12% to $554.4 million, with a gross margin of 83% [11] - GAAP operating income increased by 19% to $222.0 million, representing 33% of revenues [12] - GAAP net income grew by 14% to $198.3 million, or $5.44 per diluted share [13] - Adjusted EBITDA increased by 11% to $313.4 million, with a margin of 47% [14] - Operating cash flow increased by 27% to $309.4 million, accounting for 46% of revenues [14] Business Developments - Qualys introduced several enhancements to its Enterprise TruRisk Management solution, including identity security and industry-specific threat prioritization [9][23] - The company successfully launched its TotalAppSec solution, integrating various security features for comprehensive application risk management [23] - Qualys achieved FedRAMP High Authorization for its GovCloud Platform, expanding its support for federal and defense agencies [23] - The company hosted its reimagined user conference series, ROCon, with attendance up over 20% from the previous year [10][23] Market Recognition - Qualys was recognized as a leader in multiple security categories by independent analyst firms, including GigaOm and IDC [17] - The company received accolades for its TotalCloud and Cybersecurity Asset Management solutions, highlighting its contributions to technology and cybersecurity [17]

Core Insights - The upcoming RSAC 2026 conference is referred to as the "Super Bowl of cybersecurity marketing," highlighting its significance in the industry [1] - Common mistakes made by cybersecurity companies in investor communication were discussed, emphasizing the need for effective messaging [1] - ICR is positioned as a leading strategic communications and advisory firm, leveraging its expertise to enhance investor relations for clients [3][4] Company Overview - ICR was founded in 1998 by former sell-side analysts and an attorney, establishing a unique service model that combines capital markets experience with communication expertise [3] - The firm has grown to become one of the largest independent strategic communications firms in North America, with over 400 team members across multiple locations [3] Ryan Flanagan's Role - Ryan Flanagan provides investor relations services primarily to enterprise software companies, utilizing his extensive Wall Street experience to enhance corporate messaging and financial strategies [4] - His approach focuses on evolving and optimizing investor messaging through concise communication and stable execution [5] - Flanagan's value lies in identifying potential issues that clients may not be aware of, thereby adding significant strategic insight [5]

Market Overview - The S&P 500 and Nasdaq experienced declines for the third consecutive session, with the S&P 500 down 1% and the Nasdaq down 1.4%, putting both indices in negative territory year-to-date [1][1] - Bitcoin and silver prices fell significantly, while investors shifted towards bonds for safety [1] Company Performances - Bristol Myers Squibb reported strong earnings, leading to a nearly 3.5% increase in its stock [1] - Procter & Gamble also saw a gain of 1% during the session [1] - Salesforce's stock dropped 4.5% amid concerns that AI tools could replace enterprise software solutions [1] - Alphabet shares were down more than 1.5% but recovered from earlier lows after reporting strong cloud growth and AI investments [1] Boeing and Airbus Developments - Boeing shares rose nearly 2% following reports of talks with Saudi Arabia's flagship carrier for a potential record-breaking order of at least 150 jets [1] - Citi analysts have a bullish outlook on Boeing, citing improved deliveries and reiterating a buy rating [1] - Jefferies forecasted potential new orders from China for Boeing, linked to trade negotiations [1] Costco Sales Growth - Costco's stock advanced more than 1%, contributing to a 15% gain year-to-date after reporting a 6.4% increase in core comparable sales for January, surpassing the consensus of 5.1% [1] - The growth was driven by strong sales in non-food items and favorable weather conditions [1] Upcoming Earnings Reports - Amazon is set to release earnings, with expectations on how it will leverage AI to enhance its business [1] - Fortinet's earnings release could impact related cybersecurity stocks like Palo Alto Networks and CrowdStrike, which have been affected by the enterprise software downturn [1]

Core Viewpoint - DA Davidson has adopted a more optimistic outlook on CyberArk Software Ltd following a strong quarterly performance driven by subscription growth and increasing recurring revenue [1]. Group 1: Financial Performance - CyberArk reported revenue of $372.7 million and adjusted EPS of $1.33, slightly below profit expectations but supported by robust subscription growth [3]. - Subscription revenue increased by 28% year-over-year to $310.5 million, accounting for 83% of total revenue, while recurring revenue reached 96% of the total [3]. - Total Annual Recurring Revenue (ARR) rose by 23% to $1.44 billion, with subscription ARR growing approximately 29% organically [4]. Group 2: Market Position and Analyst Insights - Analyst Rudy Kessinger maintained a Buy rating on CyberArk and raised the price target from $518 to $573, aligning the stock's valuation with that of Palo Alto Networks Inc [1][2]. - Despite some uncertainty regarding a pending acquisition by Palo Alto Networks, Kessinger revised forward estimates, projecting first-quarter revenue of $378.6 million and EPS of $1.35 [5]. - Operating margins were slightly lower than expected due to increased costs, but free cash flow exceeded forecasts [4].

Core Insights - Arctic Wolf has been selected by Chubb as a preferred Managed Detection and Response (MDR) provider for its cyber policyholders with over 100 employees, highlighting a mutual commitment to reducing cyber risk [1][5] Group 1: Partnership Details - Chubb's decision to partner with Arctic Wolf is influenced by the effectiveness of the Arctic Wolf Aurora Platform, which significantly reduces the likelihood and impact of major cyber incidents [2] - The Aurora Platform processes over nine trillion security events weekly, consolidating thousands of daily alerts into an average of one actionable ticket per customer per day, thereby enhancing operational efficiency [2] Group 2: Service Offerings - Arctic Wolf operates global security operations centers across North America, EMEA, and APAC, providing 24/7 operations and local personnel to support its services [3] - The company has a dedicated "insurance alliance" team that collaborates with brokers and carrier partners to promote the adoption of their security products [3] Group 3: Cyber Threat Insights - Both the Q2 2025 Chubb Cyber Threat Intelligence Report and the 2025 Arctic Wolf Threat Report identify unsecured Remote Desktop Protocol (RDP) and compromised VPN credentials as primary causes of major cyber incidents like ransomware [4] - Arctic Wolf's Concierge Experience and Security Journey provide ongoing guidance to customers, helping them implement critical security controls to enhance their security posture and reduce risk over time [4] Group 4: Customer Benefits - Joint customers of Arctic Wolf and Chubb may qualify for preferred pricing and promotional benefits aimed at strengthening their security posture and mitigating cyber risk [6]

Financial Performance - For Q3 FY2026, total revenue was approximately $251 million, consistent with the same period last fiscal year, and diluted earnings per share totaled $1, reflecting a 6% year-over-year increase [5][16] - For the first nine months of FY2026, revenue was approximately $656 million, a 6% year-over-year increase, with diluted earnings per share of $1.96, up 15% from $1.70 in the prior year [5][20] - Gross profit margin was 82.8% in Q3, consistent with the prior year, while operating margin increased to 35.9% from 35.6% year-over-year [19][20] Business Line Performance - Service assurance revenue increased approximately 5% year-over-year for the first nine months, driven by growth in enterprise customer verticals, particularly from government-related spending [6][20] - Cybersecurity revenue grew 9% year-over-year during the same period, reflecting strong demand in response to a complex cyber threat landscape [8][20] - Product revenue for Q3 was $121.7 million, down from $128.2 million last year, while service revenue increased 4.1% to $129 million [16][20] Market Insights - The U.S. represented 57% of total revenue, while international markets accounted for 43% during the first nine months of FY2026 [21] - The enterprise customer vertical accounted for approximately 58% of total revenue, with a 9.4% growth, while service provider vertical revenue grew 2.2% [20][21] Company Strategy and Industry Competition - The company is focused on product innovation, returning to annual revenue growth, and enhancing margins through disciplined cost management [13][14] - The competitive landscape in the service provider sector is characterized by price pressures and budget constraints, particularly in the context of 5G initiatives [43][44] Management Commentary on Operating Environment and Future Outlook - Management expressed cautious optimism regarding demand signals, noting potential supply chain challenges that could affect order timing [26][27] - The company raised its revenue outlook for FY2026 to a range of $835 million to $870 million, reflecting solid execution and continued demand for its solutions [23][24] Other Important Information - NETSCOUT's Omnis Cyber Intelligence was recognized as a 2025 CyberSecured Award Winner, highlighting its advanced capabilities in network security [9] - The company ended Q3 FY2026 with $586.2 million in cash and cash equivalents, representing an increase of $93.7 million since the end of FY2025 [21] Q&A Session Summary Question: Can you comment on demand trends and if they are improving? - Management noted that demand signals are similar or improving, but supply chain challenges could delay order timing [26][27] Question: Can you quantify the pull-ins this quarter? - Approximately $15 million in pull-ins were noted, impacting both product and service revenue [28] Question: How did customer budgets work in pulling orders from one quarter to another? - Customers often pull orders based on their fiscal year-end budgets, which can lead to demand in one quarter that reflects budget utilization from another [33][35] Question: What is driving the service assurance business? - The service assurance business is seeing growth from traditional service triage and AI use cases, with Smart Data being a key differentiator [36][37] Question: How is the supply chain impacting product growth margins? - Management indicated that while supply chain issues could affect timing, they do not significantly impact margins due to the software-centric nature of the business [46][48]