Published on November 8th, 2021 📆 | 4511 Views ⚑0
Cybersecurity Firms’ Shares Soar Despite Losses
Despite the booming market for cybersecurity, many companies in the industry aren’t making a lot of money, The Wall Street Journal (WSJ) reported.
Of 26 firms reviewed by WSJ, 17 have seen net losses for their most recent fiscal year, according to the report. Twelve have seen net losses for all of the past three fiscal years.
While it’s not unusual for a company to take some time getting on its feet, many cybersecurity ventures are still in the red as they spend their time bolstering their values and spending money on sales, marketing and research, the report stated.
The worry is that some companies may not hold up with the amount of investments pouring in, according to the report.
As more of daily life becomes digitized, investors have caught on. The cybersecurity industry has seen a mass increase of ransomware attacks, espionage incidents and other hacks has seen more spending in ways to counter in. The new spate of threats has seen a bigger wave of spending in both the public and private sectors, the report stated.
Mark McClain, CEO of cybersecurity firm SailPoint Technologies Holdings, for example, told WSJ that investors have been more interested in SailPoint since the pandemic’s surge in cyberattacks.
Meanwhile, Mandiant, previously FireEye, has seen net losses every year since going public in 2013. According to CEO Kevin Mandia the company is now focused more on cybersecurity and cyber-incident response after selling its old FireEye name. Mandia said the point is to focus on its strengths. But the third-quarter results showed a $68 million net loss alongside a 22% revenue growth year over year, according to the report.
Cyberattacks have increased during the pandemic, including a 1,318% increase in ransomware attacks against the banking industry alone in the first six months of 2021.
Read more: US Cyber Director Says Cyberattacks Traced to Russia Are Down