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Will Cisco’s Security Revenue Rise in Q3?

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May. 8 2019, Published 10:36 a.m. ET

Robust revenue growth over the years

Cisco’s (CSCO) Security segment accounted for 6.4% of its total sales in fiscal 2018. Revenue from the Security segment rose 9% in fiscal 2017 and 9% in fiscal 2018. It’s been Cisco’s fastest-growing segment for a while now, and its sales have been driven by unified threat management, web security, policy and access, and advanced threat products.

Cisco and its peers are expected to benefit from the growing threat in the cybersecurity market. An increase in global cyberattacks has significantly increased demand for cybersecurity products.

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Cisco is a leader in the global cybersecurity segment

In the fourth quarter of 2018, the worldwide security appliance market grew 16.7% YoY (year-over-year) to $4.46 billion, according to market research company IDC. Cisco managed revenue growth of 14.9%, bringing its market share to 14.1% at the end of the last quarter.

In the table above, we can see that other top players include Palo Alto Networks (PANW), Fortinet (FTNT), Check Point Software Technologies (CHKP), and Symantec (SYMC) with shares of 12.8%, 9.9%, 9.5%, and 4.2%, respectively.

Palo Alto Networks experienced solid revenue growth of 32.2% in the fourth quarter of 2018. Fortinet was another player that beat overall market growth. Check Point and Symantec posted sales growth that was far below the broader market’s.

The unified threat management vertical drove worldwide sales and accounted for 50.9% of the worldwide security appliance market. This vertical grew close to 20% in the fourth quarter of 2018. Sales from other verticals such as web security and messaging security grew 5.5% and 18%, respectively, in the fourth quarter of 2018.

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