Newly public cyber company ZeroFox stays optimistic about economy

The only cybersecurity company to go public in 2022 is already beating analysts' revenue expectations — and it's doing so at a weird time for public cyber markets.

Why it matters: Cybersecurity is typically seen as a recession-proof market since customers still need to keep their networks secured even in a downturn.

• However, recent stock price changes suggest some cyber companies are adapting to the current market conditions better than others.

Driving the news: Earlier this week, ZeroFox reported its first-ever quarterly earnings after becoming the only cybersecurity company to go public this year via a SPAC deal with L&F Acquisition Corp. in August.

• The company reported third-quarter revenue of $43 million, while analysts expected $40.6 million.

The big picture: ZeroFox CEO James Foster told Axios that going public gives the company a financial cushion to navigate whatever the economy has in store heading into 2023.

• Meanwhile, major cyber companies are seeing double-digit percentage drops in their stock prices and are revising guidance for the upcoming year in anticipation of an economic downturn.

Between the lines: Foster argues that ZeroFox is lean enough to survive the upcoming economic downturn, yet large enough to support a wide product range that can accommodate customers' changing needs.

• "We are at the scale where most companies dream of being, and it's up to us to make sure that we can continue to move forward at a rapid pace," Foster said.

Yes, but: Foster is still watching global inflation rates and jobs reports closely to guide his company strategy.

• "When you lose jobs, people stop spending money. People stop spending money and businesses make less money," he said. "The question is when that happens."

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