Industry Report: Cybersecurity Q3 2025 [Solganick & Co.]

Key Report Highlights

• Cybersecurity M&A Holds Strong Momentum into Q4
  Q3 2025 saw 111 cybersecurity M&A transactions, just slightly below Q2 (114), but up from 98 in Q3 2024—signaling healthy, sustained deal activity. Strategic buyers led the charge with major transactions including Palo Alto Networks’ $25B acquisition of CyberArk and Accenture’s $650M purchase of CyberCX, as consolidation intensifies in areas like identity and infrastructure security.
• Infrastructure and AI-Enhanced Security Are Top Targets
  Infrastructure accounted for the largest share of M&A volume, followed by security operations and identity. There’s a sharp focus on acquiring AI-driven platforms, as seen in Check Point’s $300M acquisition of Lakera (GenAI protection) and F5’s $180M deal for CalypsoAI (LLM orchestration). Buyers are prioritizing assets that enhance automated threat detection, real-time visibility, and generative AI security stacks.
• Valuation Premiums Persist for High-Growth Vendors
  Public cybersecurity companies showed a wide spread in 2025E valuation multiples: high-growth vendors (20%+ YoY revenue growth) traded at a median of 13.1x EV/Revenue, while low-growth firms (<10%) traded at just 5.3x. Names like CrowdStrike, Zscaler, and Rubrik continue to command steep premiums, supported by enterprise demand and AI-fueled scalability.
• Venture Funding Pulls Back but Remains Focused on Quality
  Venture capital activity cooled in Q3, with total funding dropping to $3.3 billion across 167 rounds, down from $5.1B and 209 rounds in Q2. However, capital remains available for larger, high-conviction plays—like Quantinuum’s $600M round and Ontic’s $230M raise. This suggests investors are narrowing focus to late-stage and revenue-backed cybersecurity innovators.
• Middle Market Still Active with AI and Identity-Driven Deals
  Q3 featured a string of strategic mid-market acquisitions in the $100M–$350M range. These include Cato Networks’ $350M acquisition of AIM Security (GenAI defense), Okta’s $100M deal for Axiom (cloud identity automation), and SentinelOne’s $225M acquisition of Prompt Security (GenAI protection). These reflect strong buyer demand for automation, observability, and cloud-native identity tools that enhance modern threat response.

Solganick & Co. is a boutique investment bank specializing in M&A advisory services for software and IT services companies. Founded in 2009, the firm delivers strategic guidance and transaction execution for middle-market clients across high-growth sectors such as cloud services, cybersecurity, data analytics, digital transformation, AI consulting, and enterprise software.

With offices in Los Angeles and Dallas, Solganick leverages a data-driven, industry-focused approach to connect founders, private equity, and strategic acquirers. The firm advises on sell-side and buy-side mandates for companies typically generating $10 million to $200 million in revenue and $2 million to $20 million+ in EBITDA.

Solganick’s senior team brings deep domain expertise and a targeted network of technology buyers and investors. The firm is consistently recognized among the top investment banks in the U.S. for technology services M&A, and conducts securities transactions through M&A Securities Group, Inc., member FINRA and SIPC.

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