Could Demisto Be a Good Fit for Palo Alto Networks?


Feb. 11 2019, Updated 5:35 p.m. ET

Demisto could boost automation offerings

Palo Alto Networks (PANW) is in talks to buy information security company Demisto, Reuters has reported, citing a report from Israeli financial daily Calcalist. Demisto was founded in 2015 and makes automation tools for information security management, indicating that it could be a great fit for Palo Alto Networks. Automation is a key area of focus for Palo Alto’s cybersecurity business.

Palo Alto Networks’ CEO, Nikesh Arora, said in November when the company released its fiscal 2019 first-quarter results, “Our approach of providing best-in-class security products, combined with automation and integration to remove complexity, continues to resonate with customers.”

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Demisto experiencing robust growth

In addition to strengthening Palo Alto Networks’ automation solutions, Demisto could also provide an immediate boost to its top line. According to Demisto cofounder Dan Sarel, the company is experiencing significant growth in its sales.

Palo Alto Networks reported a 31% YoY (year-over-year) rise in its revenue to $656 million in the first quarter of fiscal 2019, which ended in October. Revenue rose 8.0% YoY at Cisco Systems (CSCO) in the comparable period. Palo Alto Networks’ cybersecurity peers Verisign (VRSN), Fortinet (FTNT), and Splunk (SPLK) reported revenue rises of 4.6%, 21.3%, and 40.4% YoY, respectively, in the comparable quarter.

Palo Alto Networks eyeing 26% revenue growth

Palo Alto Networks is scheduled to report its fiscal 2019 second-quarter earnings results on February 26. The company expects its revenue for the quarter to fall between $675 million and $685 million, indicating a potential upside of up to 26% compared to the previous year’s quarter.


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