News and Research

Cybersecurity Mergers and Acquisitions Update, Q2 2025

Cybersecurity mergers and acquisitions (M&A) update report Q2 2025

July 24, 2025 – Dallas, TX and Los Angeles, CA – Solganick has published its latest mergers and acquisitions (M&A) update report on the Cybersecurity industry sector, covering Q2 2025. 

 

Here are the highlights to the report:

  • In Q2 2025, M&A transaction activity for cybersecurity companies rebounded strongly to 114 deals, compared to the previous quarter (96) and the same period last year (90). The quarter started at a slower pace in April, possibly due to macroeconomic and policy uncertainty, but ramped substantially in May and June.
  • We expect continued consolidation activity by strategic buyers in 2H 2025, prioritizing the acquisition of critical capabilities and accretive growth, as reflected by recent transactions such as Proofpoint/Hornetsecurity ($1 billion), Zscaler/Red Canary ($675MM), and Palo Alto Networks/Protect AI ($500MM+).
  • Infrastructure constituted the largest sub-sector of M&A activity, followed by Risk Management and Data Protection. Artificial intelligence (AI) is especially becoming a key focus for acquirers, not only for its security benefits but also because of the escalating risks related to AI-powered applications not addressed by traditional security tools.
  • Total funding for venture capital-backed cybersecurity companies reached the highest level in 3 years and totaled $9.4 billion in 1H 2025, up from $8.8 billion in the prior year period.
  • Deal count decreased to 497 in 1H 2025, compared with 595 in 1H 2024, reflecting fewer deals overall but a significant contribution from larger deals (>$100MM).
  • Valuation multiples for publicly traded cybersecurity companies ranged from a median of 14.2x EV/2025E revenue for high-growth vendors (those growing more than 20%) to a median of 5.3x EV/2025E revenue for low-growth vendors (those growing less than 10%), a substantially wider gap from the previous quarter (8.9x versus 5.5x).

 

You can download the complete report here:

Solganick Cybersecurity M&A Update – Q2 2025

 

About Solganick

Solganick is a data-driven investment bank and M&A advisory firm exclusively focused on software and technology services companies. The deal team has completed over 200 M&A transactions to date and is recognized by Axial and other industry leaders as a top investment banking firm. Established in 2009 with offices in Dallas and Los Angeles.

Its cybersecurity M&A practice is one of its fastest-growing sectors led by our Director of Cybersecurity M&A, Michael Kim, with approximately 20 years of experience in the sector.

For more information on this report or to inquire about an M&A transaction in the cybersecurity sector, please contact us for more information.

 

 

    Frequently Asked Questions

    1 What were the key trends in cybersecurity M&A during Q2 2025?

    In Q2 2025, cybersecurity M&A transaction activity rebounded strongly to 114 deals. Strategic buyers are expected to continue consolidation in 2H 2025, prioritizing critical capabilities and accretive growth. Infrastructure, Risk Management, and Data Protection were the largest sub-sectors for M&A activity.

    2 How is Artificial Intelligence (AI) influencing cybersecurity M&A?

    Artificial intelligence is becoming a key focus for acquirers in cybersecurity M&A. This is due to both its security benefits and the escalating risks related to AI-powered applications that traditional security tools may not address.

    3 Can you name some notable cybersecurity M&A transactions from Q2 2025?

    The report highlights several significant transactions from Q2 2025. These include Proofpoint/Hornetsecurity ($1 billion), Zscaler/Red Canary ($675MM), and Palo Alto Networks/Protect AI ($500MM+). These deals reflect strategic buyers' focus on acquiring critical capabilities.

    4 What is the outlook for cybersecurity M&A activity in the second half of 2025?

    Solganick expects continued consolidation activity by strategic buyers in 2H 2025. The focus will remain on acquiring critical capabilities and achieving accretive growth, building on the strong rebound observed in Q2.