Commercial Integrator + Security Sales Jan/Feb 2024 - 59

lowing the release of the company's Q1
2023 earnings on May 2. ADT reported
an adjusted EBITDA loss of $11 million
in its solar segment in Q1, while additionally
incurring a non-cash goodwill
charge of $193 million associated with
the solar segment, according to an
earnings release.13
The company also
reported interest rate pressures as a
barrier to growth throughout 2023.
Top Performers: Cybersecurity
■ Crowdstrike (Nasdaq:CRWD) - Crowdstrike,
a cloud-delivered endpoint
protection provider, increased its stock
price by 137.3% through Dec. 12, 2023.
According to an earnings release,
total revenue for the company grew
35% YOY, to $786 million, in its fiscal
Q3 2024.14
Crowdstrike's adjusted net
income also doubled YOY to a record
$199.2 million, according to its fiscal Q3
2024 earnings.
■ Rapid7 (Nasdaq:RPD) - Cybersecurity
solutions provider Rapid7 increased its
stock price by 67.5% through Dec. 12,
2023. The company finished Q3 2023
with $777 million in AAR, an increase of
14% compared to the prior year period,
according to an earnings release.15
The
company also expanded its customer
base by 6% YOY, according to its Q3
earnings. Following the release of its Q3
earnings on Nov. 1, 2023, Rapid7's stock
price rose 11.8%, to $51.35 per share,
on Nov. 3, 2023.
Laggards: Cybersecurity
■ Everbridge (Nasdaq:EVBG) - Software
security manager Everbridge
experienced a 24.6% decrease in its
stock price through Dec. 12, 2023. In
particular, the company reported a
$15.1 million net loss in Q1, which sent
the stock price down 21.8% between
Aug. 8 and 10, according to an earnings
release.16
The stock continued to drop,
reaching a 2023 low of $19.34 per share
on Nov. 13.
■ Tenable (Nasdaq:TENB) - Despite
seeing its stock increase 11.7% through
Dec. 12, 2023, Tenable underperformed
Despite unpredictable economics, the security sector's M&A market for the year
ahead is anticipated to build on the sustained growth experienced in 2023.
Endnotes
1. U.S. Bureau of Economic Analysis, " Personal
Consumption Expenditures Price Index, Excluding
Food and Energy, " https://www.bea.gov/data/per
sonal-consumption-expenditures-price-index-ex
cluding-food-and-energy, accessed December 5,
2023.
2. Allegion, " Q3 2023 Earnings Call, " https://investor.
allegion.com/~/media/Files/A/Allegion-IR/re
ports-and-presentations/allegion-q3-2023-earn
ings-call-presentation.pdf, accessed December
5, 2023.
3. U.S. Census Bureau, " Value of Private Nonresidential
Construction Put in Place - Seasonally
Adjusted Annual Rate, " https://www.census.
gov/construction/c30/pdf/nonresidentialsa.pdf,
accessed December 5, 2023.
4. National Equipment Register, " Equipment
Theft Report, " https://www.ner.net/wp-content/
uploads/2017/10/Annual-Theft-Report-2016.pdf,
accessed December 5, 2023.
5. Security.org, " 2023 Package Theft Annual
Statistics and Trends, " https://www.security.org/
package-theft/annual-report/, accessed December
5, 2023.
6. Research and Markets, " Smart Home Security
Camera Market Size, " https://www.researchand
markets.com/reports/5786689/smart-home-se
curity-camera-market-size-share-and#src-pos-3,
accessed December 5, 2023.
7. Arlo, " Q3 2023 Investor Presentation, " https://s22.
q4cdn.com/363130056/files/doc_financials/2023/
q3/Arlo-Investor-Deck-Q3-2023-Final.pdf,
accessed December 5, 2023.
8. PitchBook, " Q3 2023 Global Private Market
Fundraising Report, " https://files.pitchbook.com/
website/files/pdf/Q3_2023_Global_Private_Mar
ket_Fundraising_Report.pdf, accessed Dec. 5.
9. GF Data, " GF Data Third Quarter 2023 Leverage
Report, " https://gfdata.com/, accessed December
11, 2023.
10. Arlo Technologies, " Arlo Technologies First
Quarter 2023 Earnings, " https://events.q4inc.
com/attendee/360315514, accessed December
12, 2023.
11. Alarm.com, " Alarm.com Reports Second Quarter
2023 Results, " https://s24.q4cdn.com/652723797/
files/doc_financials/2023/q2/Alarm-comQ2-2023-Press-Release-FINAL.pdf,
accessed
December 12, 2023.
12. SoundThinking, " SoundThinking, Inc. Reports
Third Quarter 2023 Financial Results, " https://
ir.soundthinking.com/news-events/press-releas
es/detail/275/soundthinking-inc-reports-thirdquarter-2023-financial,
accessed December 12,
2023.
13. ADT, " ADT Reports First Quarter 2023 Results, "
https://investor.adt.com/News--Events/news/
news-details/2023/ADT-Reports-First-Quarter2023-Results/default.aspx,
accessed Dec. 12.
14. Crowdstrike, " Crowdstrike Reports Third Quarter
Fiscal Year 2024 Financial Results, " https://
ir.crowdstrike.com/news-releases/news-re
lease-details/crowdstrike-reports-third-quarterfiscal-year-2024-financial,
accessed December
12, 2023.
15. Rapid7, " Rapid7 Announces Third Quarter
2023 Financial Results, " https://s29.q4cdn.
com/157304370/files/doc_financials/2023/
q3/Q3-2023-Earnings-Release-Final-110123.pdf,
accessed December 12, 2023.
16. Everbridge, " Everbridge Announces First Quarter
2023 Financial Results, " https://ir.everbridge.
com/news-releases/news-release-details/ever
bridge-announces-first-quarter-2023-financial-re
sults, accessed December 12, 2023.
Jan/Feb 2024 | Commercial Integrator+Security Sales & Integration
59
the cybersecurity market. Cybersecurity
businesses with similar market capitalizations
as Tenable ($4.8 billion), such
as Varonis Systems (Nasdaq:VRNS) ($4.8
billion) and Rapid7 ($3.5 billion), experienced
returns of 83.2% and 66.2%,
respectively, through late 2023.
To discuss key trends driving top-line
growth for sector players, to get an update
on your business, or to learn about Capstone's
wide range of advisory services
and security solutions M&A knowledge,
please contact me. I am reachable at
tmcconnell@capstonepartners.com. SSI
Analyst Joe Collins was the lead market
intelligence contributor to this article.
SIZSUS/STOCK.ADOBE.COM
https://www.gfdata.com/ https://www.bea.gov/data/personal-consumption-expenditures-price-index-excluding-food-and-energy https://www.events.q4inc.com/attendee/360315514 https://investor http://www.Alarm.com http://www.Alarm.com http://www.investor.allegion.com/~/media/Files/A/Allegion-IR/reports-and-presentations/allegion-q3-2013-earnings-call-presentation.pdf https://s24.q4cdn.com/652723797/files/doc_financials/2023/q2/Alarm-com-Q2-2023-Press-Release-Final.pdf http://https://ir.soundthinking.com/news-events/press-releases/detail/275/soundthinking-inc-reports-third-quarter-2023-financial https://www.census.gov/construction/c30/pdf/nonresidentialsa.pdf http://ir.soundthinking.com/news-events/press-releas https://www.ner.net/wp-content/uploads/2017/10/Annual-Theft-Report-2016.pdf https://investor.adt.com/News--Events/news/news-details/2023/ADT-Reports-First-Quarter-2023-Results/default.aspx http://www.Security.org https://www.security.org/package-theft/annual-report/ http://https://ir.crowdstrike.com/news-releases/news-release-details/crowdstrike-reports-third-quarter-fiscal-year-2024-financial http://ir.crowdstrike.com/news-releases/news-re https://www.researchandmarkets.com/reports/5786689/smart-home-security https://www.s29.q4cdn.com/157304370/files/doc_financials/2023/q3/Q3-2023-Earnings-Release-Final-110123.pdf https://s22 http://www.s22q4cdn.com/363130056/files/doc_financials/2023/q3/Arlo-Investor-Deck-Q3-2023-Final.pdf https://www.ir.everbridge.com/news-releases/news-release-details/everbridge-announces-first-quarter-2023-financial-results https://files.pitchbook.com/website/files/pdf/Q3_2023_Global_Private_Market_Fundraising_Report.pdf http://www.markets.com/reports/5786689/smart-home-security-camera-market-size-shre-and#src-pos-3

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