Core Insights - Mimecast is expanding its presence in the Asia-Pacific (APAC) region with a new ASEAN regional headquarters and a data center to enhance cybersecurity offerings [1][3] - The APAC region represents 25% of the global cybersecurity market and is the fastest-growing market for AI, driven by digital transformation and advanced cyber threats [2] - Nicky Choo has been appointed as Vice President and General Manager for APAC, tasked with leading regional strategy and operations [4][5] Company Expansion - The establishment of a regional headquarters and data center in Singapore is a strategic move to strengthen Mimecast's local presence and innovation capabilities [1][3] - The new data center will utilize AWS's secure cloud infrastructure, ensuring compliance with local data residency requirements, including Singapore's Personal Data Protection Act [8] Leadership and Strategy - Nicky Choo brings extensive experience in cybersecurity and enterprise technology, having previously held senior roles at Devo, Pegasystems, and IBM [4] - Under Choo's leadership, Mimecast aims to address the increasing AI-driven cyber threats faced by organizations in APAC [5] Technological Advancements - Mimecast is developing AI-powered solutions to mitigate human risk and enhance threat detection, including the Mimecast Insider Risk Management tool [7] - The company is also focusing on building an AI Lab in India, which employs 150 engineers dedicated to creating an innovative, AI-driven platform [9] Market Context - The cybersecurity landscape is evolving, with Shadow AI emerging as a significant risk, as 86% of security leaders express concern over data leaks through generative AI tools [6]

Core Insights - CGI has signed a contract with NATO Communications and Information Agency (NCIA) to deliver the HERMES project, which aims to enhance NATO's command and control capabilities through secure mobile communication solutions [1][2] - The HERMES project integrates CGI's managed services with secunet's Secure Inter-Network Architecture (SINA) technology, providing a scalable IT solution for NATO executives [1][4] - The project emphasizes the importance of reliability and interoperability in a security-critical environment, allowing NATO leaders to access classified information securely while mobile [2][4][5] Company Overview - CGI is one of the largest independent IT and business consulting services firms globally, founded in 1976, with a reported revenue of CA$15.91 billion for fiscal 2025 [6] - The company employs 94,000 consultants and professionals worldwide, offering a comprehensive portfolio of IT and business consulting services [6] - Secunet, a partner in the HERMES project, is Germany's leading cybersecurity company, specializing in areas with unique security requirements and generating revenue of around 406 million euros in 2024 [9][10]

Core Insights - Arqit Quantum Inc. is focused on quantum-safe encryption technology, essential for protecting data from future quantum computing threats [1] Financial Performance - For the earnings report on December 9, 2025, Arqit reported an EPS of -$0.92, matching estimates, with revenue of $470,000, also in line with expectations [1][5] - Anticipated revenue for fiscal year 2026 is projected to be approximately $1.2 million, driven by seven contracts, including multi-year agreements with telecom operators and various organizations [2][5] Valuation Metrics - The company has a negative P/E ratio of approximately -15.64, indicating a lack of profitability [3] - The price-to-sales ratio is extremely high at about 1,320, suggesting a significant premium paid by investors for each dollar of sales [3] - The enterprise value to sales ratio stands at roughly 1,250, reflecting a high valuation relative to sales [3] Financial Health - The enterprise value to operating cash flow ratio is negative at approximately -17.85, indicating financial challenges [4] - The debt-to-equity ratio is low at 0.052, suggesting minimal debt compared to equity [4] - The current ratio is 2.45, indicating that Arqit has more than twice the current assets needed to cover its current liabilities, a positive sign of liquidity [4]

Core Viewpoint - The article discusses the insights and analyses of an independent investor with expertise in the Indian and US equity markets, emphasizing the importance of quantitative research in various financial sectors [1]. Group 1: Investor Profile - The investor holds a CFA Charter and a PhD in Finance from the University of Durham, U.K. [1] - The investor is an Honorary Associate Professor in Finance and Corporate Governance at Brunel University London [1]. - The investor runs a YouTube and Podcast channel titled "The Stock Doctor," where weekly discussions on the US and Indian markets take place [1]. Group 2: Research Focus - The investor actively engages in quantitative research in areas such as US equities, Behavioral Finance, Corporate Governance, Activist Hedge Funds, Cryptocurrencies, and M&A [1]. - The investor has published research in top-ranked peer-reviewed journals, indicating a strong academic and professional background [1].

Core Thesis - Fortinet, Inc. is experiencing strong financial performance, with significant growth in revenue and margins, positioning the company favorably for sustained growth despite some concerns in service revenue [2][5]. Financial Performance - Fortinet reported Q3 revenue of $1.72 billion, a 14% year-over-year increase, driven by strong performance in EMEA and APAC markets [2]. - Product revenue increased by 18% to $559 million, attributed to multi-product deals and expansion in operational technology (OT) security [2]. - Service revenue rose 13% to $1.17 billion, although it has been decelerating for nine consecutive quarters, with expectations for growth to pick up in the second half of 2026 [2]. Billings and Customer Growth - Billings reached $1.81 billion, exceeding guidance, with large deals over $1 million increasing by 32% year-over-year [3]. - The company added approximately 6,600 new customers, indicating strong demand and deal momentum [3]. Profitability Metrics - Non-GAAP EPS was reported at $0.74, a 17% increase year-over-year, significantly above consensus estimates [3]. - Operating margins reached a record 36.9%, reflecting effective cost management and operational efficiency [4]. - Gross margins remained robust at 81.6%, despite a slight decline due to product mix shifts [3][4]. Capital Management - Fortinet executed a $1.83 billion share repurchase program, with $796 million remaining under its current authorization [4]. - Adjusted free cash flow totaled $646 million, representing a 37% margin, even with increased infrastructure spending [4]. Strategic Outlook - Despite concerns over decelerating service revenue and moderated 2025 guidance, Fortinet's strong product performance and operational efficiency position it well for future growth [5]. - The combination of high-margin product expansion, disciplined cost management, and shareholder-friendly actions highlights Fortinet's ability to generate durable cash flow [5].

Financial Performance - Palo Alto Networks reported a revenue growth of 15% year over year, reaching $9.22 billion for fiscal 2025 [3] - The Annual Recurring Revenue (ARR) for Next Generation Security grew 32% year over year to $5.58 billion, while the total Platform Offering (PO) increased by 24% year over year to $15.8 billion [3] - Network Security ARR reached $3.9 billion, marking a 35% year over year increase, driven by strong adoption of software firewalls and SASE solutions [4] Business Line Performance - The Cortex segment saw a significant expansion in its XSIAM customer base, which more than doubled year over year, indicating strong adoption of Next Generation Security capabilities [5] - The Security Operating Platform also experienced broad-based momentum, with NGS ARR reaching $1.7 billion, an approximately 25% year over year increase [4] Market Trends - The cybersecurity landscape is undergoing a transformation due to the rise of generative and agentic AI, prompting the company to evolve its product offerings to protect customers using AI tools [6] - The company announced its intent to acquire CyberArk, aiming to reshape the identity security category and enhance its multi-platform strategy [7][8] Strategic Direction - The company is committed to innovation across all security platforms, focusing on the integration of AI into its offerings [4][6] - The acquisition of CyberArk is expected to establish a leading platform for end-to-end AI security, positioning the company as a key player in the evolving cybersecurity landscape [8] Management Commentary - Management emphasized the importance of their dedicated workforce of over 16,000 employees in driving innovation and delivering cutting-edge technologies [9] - The management expressed confidence in the company's ability to protect customers from increasing cyber threats through their innovative solutions [9] Other Important Information - The company spent $567 million on share buybacks in 2024, raising concerns about the impact of such financial engineering on executive compensation metrics [19] - Shareholder proposals regarding adjusting financial performance metrics to exclude share repurchase impacts and declassifying the board were discussed, with the board recommending against these proposals [20][28] Q&A Summary Question: Concerns about executive compensation linked to share buybacks - Shareholders urged the board to adopt a policy that adjusts financial performance metrics to exclude the impact of share repurchases when determining executive compensation [20] Question: Issues with classified board structure - A shareholder criticized the board's practice of making director appointments outside the annual meeting cycle, arguing it undermines shareholder oversight and accountability [24]

Financial Performance and Key Metrics - Fiscal 2025 revenue grew 15% year over year to $9.22 billion [2] - Next Generation Security (ARR) increased 32% year over year to $5.58 billion [2] - PO grew 24% year over year to $15.8 billion [2] Business Line Performance - Network Security (NGS ARR) reached $3.9 billion, a 35% year over year increase [3] - Security Operating Platform (NGS ARR) saw a 25% year over year increase, reaching $1.7 billion [3] - Cortex's XSIAM customer base more than doubled year over year, indicating strong adoption [3] Market Data and Key Metrics - The cybersecurity landscape is shifting due to the emergence of generative and agentic AI, influencing product offerings [4] Company Strategy and Industry Competition - The focus for fiscal 2025 was on evolving product offerings to support customer adoption of AI tools [4] - The launch of Prisma AIRS, a comprehensive AI security platform, was a key strategic move [4] - The intent to acquire CyberArk was announced to enhance identity security capabilities [4] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of innovation and the role of employees in driving the company's success [5] - The company is committed to protecting customers from increasing cyber threats [5] Other Important Information - Shareholder proposals regarding executive compensation and board declassification were discussed, with mixed outcomes [10][18] Q&A Session Summary Question: Concerns about executive compensation linked to stock buybacks - A shareholder urged the board to adjust financial performance metrics to exclude the impact of share repurchases when determining executive compensation [10][11] Question: Proposal for declassifying the board - A shareholder argued that declassifying the board would improve accountability and align with best practices in corporate governance [13][14] Response from Management - The board recommended voting against the shareholder proposals, citing reasons outlined in the company's proxy statement [15]

Core Insights - Meta Platforms, ASML, and CrowdStrike are potential candidates for stock splits in 2026, which could enhance accessibility for average investors and serve as a positive catalyst for their stock prices [1][2]. Meta Platforms - Meta Platforms is the only stock among the "Magnificent Seven" that has never split its stock, with a current price nearing $700, suggesting a possible split in 2026 [4]. - The company aims to bolster market confidence in its significant AI infrastructure investments while reducing spending on metaverse projects, indicating a strategic shift [5]. - Meta's AI initiatives have positively impacted ad revenue, contributing to a 26% revenue increase last quarter [7]. ASML - ASML's stock price exceeds $1,000, making it a strong candidate for a stock split in 2026, with its last split occurring in April 2000 [8]. - The company holds a monopoly on extreme ultraviolet lithography (EUV), essential for advanced semiconductor chips, positioning it well for the ongoing AI boom [9]. - ASML is developing a new generation of lithography technology, High-NA EUV, which will further enhance chip manufacturing capabilities [11]. CrowdStrike - CrowdStrike's stock price is over $500, and it has never split its stock, making 2026 a potential year for a split as its annual recurring revenue (ARR) begins to accelerate [12]. - Following a significant IT outage in 2024, CrowdStrike introduced a flexible licensing model, Falcon Flex, which has improved customer engagement and led to a 23% ARR growth last quarter [14]. - The company is experiencing strong momentum with its next-generation solutions, with nearly half of its customers using six or more modules [15].

Financial Data and Key Metrics Changes - For fiscal year 2025, the company generated $530,000 in revenue, an increase from $293,000 in fiscal year 2024, primarily due to the commencement of a multi-year contract in the Middle East [17] - Revenue in the second half of fiscal year 2025 was $463,000, significantly higher than the first half's $67,000, indicating a positive revenue trajectory [18] - The company ended fiscal year 2025 with $1.2 million in contractual revenue expected to be recognized in fiscal year 2026 [15][18] - Administrative expenses for fiscal year 2025 were $34.7 million, up from $25.4 million in fiscal year 2024, mainly due to a reduction in foreign exchange gains and increased operational costs [19][21] Business Line Data and Key Metrics Changes - Revenue from the Arqit SKA Platform as a Service and Arqit Network Secure products totaled $476,000 in fiscal year 2025 [18] - Professional services and maintenance revenue was $54,000 for the period, compared to $102,000 in fiscal year 2024 [19] Market Data and Key Metrics Changes - The company has seen increased activity with prospective customers, signing 12 demonstration and test engagements in the first two months of fiscal year 2026, indicating a strong market migration towards post-quantum cybersecurity [6] - The market is experiencing a shift from awareness of quantum threats to action, with organizations increasingly recognizing the need to upgrade their cryptographic posture [4][5] Company Strategy and Development Direction - The company is focused on broadening its product and service offerings, including the acquisition of Amplify's encryption intelligence product to enhance customer engagement [3][7] - Collaborations with Intel and Sparkle aim to expand product solutions into confidential computing and quantum-secure communications [4][9] - The company is targeting the telecom and defense sectors for growth, having secured contracts with major players like Sparkle and RHD Telecom [11][13] Management's Comments on Operating Environment and Future Outlook - Management believes fiscal year 2025 represents a trough year for revenue, with expectations of building upon the momentum into fiscal year 2026 [15] - The company is optimistic about the increasing demand for quantum-safe solutions and its position in the market to capture this demand [15][23] Other Important Information - The company has a cash and cash equivalents balance of $36.9 million as of September 30, 2025 [21] - The company has 91 employees as of September 30, 2025, compared to 82 the previous year, indicating growth in operational capacity [20] Q&A Session Summary Question: What is driving the higher level of demonstrations and activity recently? - Management noted that significant news flow on quantum advancements and regulatory pressures are driving organizations to take action regarding their cryptographic posture [26][27] Question: What does the sales cycle look like for Encryption Intelligence compared to legacy products? - Management indicated that the sales cycle for Encryption Intelligence is shorter, with telco operators showing interest in using the tool on an ongoing basis [30][31] Question: Are there additional acquisition opportunities similar to the Amplify purchase? - Management expressed interest in acquiring companies that align with data sovereignty and confidential computing, particularly those lacking deep intellectual property in quantum-safe technologies [32][33] Question: Should we anticipate any change in operating expenses for fiscal 2026? - The CFO confirmed plans to maintain current operating expense levels, targeting a maximum cash spend of $2.5 million per month [35]

Financial Data and Key Metrics Changes - For fiscal year 2025, the company generated $530,000 in revenue, an increase from $293,000 in fiscal year 2024, primarily due to the commencement of a multi-year contract in the Middle East [17][18] - The first half of fiscal 2025 revenue was $67,000, while the second half saw a significant increase to $463,000, driven by new contracts [18] - Administrative expenses for fiscal year 2025 were $34.7 million, up from $25.4 million in fiscal year 2024, mainly due to reduced foreign exchange gains and increased operational costs [19][20] - The operating loss for the period was $38.5 million compared to a loss of $26.9 million in fiscal year 2024, attributed to higher administrative expenses and an exceptional item related to a class action lawsuit [20][21] Business Line Data and Key Metrics Changes - Revenue from the Arqit SKA Platform as a service and Arqit Network Secure products totaled $476,000 for fiscal year 2025, compared to $191,000 in fiscal year 2024 [18][19] - Professional services and maintenance revenue was $54,000 for the period, down from $102,000 in fiscal year 2024 [19] Market Data and Key Metrics Changes - The company has seen increased activity with prospective customers, signing 12 demonstration and test engagements in the first two months of fiscal year 2026, indicating a strong market migration towards post-quantum cybersecurity [6][16] - The company is experiencing momentum in customer engagements, particularly in the telecom and defense sectors, with significant contract wins [12][14] Company Strategy and Development Direction - The company aims to broaden its product and service offerings, including the acquisition of Amplify's encryption intelligence product to enhance customer engagement in post-quantum cryptography [3][8] - Collaborations with Intel and Sparkle are expected to expand product solutions to include confidential computing and quantum-secure communications [4][10] - The focus remains on building momentum in key markets, particularly telecom and defense, while addressing the increasing need for enhanced cryptography [15][16] Management's Comments on Operating Environment and Future Outlook - Management believes fiscal 2025 represents a trough year for revenue, with expectations of growth in fiscal year 2026 driven by increasing market demand for quantum-safe solutions [16][22] - The company is optimistic about its position in the marketplace, anticipating that organizations will begin their migration journey towards post-quantum encryption [16][22] Other Important Information - The company ended fiscal year 2025 with $1.2 million in executed contracts that could be recognized in fiscal year 2026, indicating a positive revenue trajectory [16][18] - The company has a cash and cash equivalents balance of $36.9 million as of September 30, 2025 [21] Q&A Session Summary Question: What is driving the higher level of demonstrations and activity recently? - Management noted that significant news flow on quantum advancements has increased awareness and urgency among organizations to address quantum threats [24][25] Question: What does the sales cycle look like for Encryption Intelligence compared to legacy products? - The sales cycle for Encryption Intelligence is shorter, with organizations eager to use the tool for ongoing assessments of their cryptographic landscape [27][28] Question: Are there additional acquisition opportunities similar to the recent asset purchase? - Management is exploring tuck-in opportunities related to data sovereignty and confidential computing, which align with the company's strategic focus [30] Question: What is the competitive landscape like for post-quantum security? - Management acknowledged increased competition from traditional security vendors but emphasized the company's unique position and extensive experience in the field [32][33] Question: What industries are showing interest in the company's solutions? - The company is seeing interest from regulated industries, critical infrastructure sectors, and organizations rich in intellectual property, particularly in financial services and life sciences [35][36]