Palo Alto Networks CEO warns companies need modern, integrated cybersecurity: 'The bad actors are moving faster'

KEY POINTS

• Palo Alto Networks CEO Nikesh Arora told CNBC's Jim Cramer that companies need updated cybersecurity systems to protect against hackers who are getting faster and more skilled.
• "It's important for us to make sure we're ready to deflect the stuff in hours, not in days," Arora said.

Palo Alto Networks CEO Nikesh Arora told CNBC's Jim Cramer on Monday that companies need integrated, modernized cybersecurity systems in order to protect themselves from "bad actors" who are getting faster at gaining access to sensitive information.

Arora said the problem isn't that companies lack cybersecurity vendors. Rather, their security infrastructure may consist of a complicated assortment of vendors, some of which are outdated.

"Listen, you need to have a two-, three-year road map to try and modernize all of that. Put that in some sort of an AI stack, so you can actually do this in more real time. Because, the bad actors are moving faster," he said. It used to take days to hack into systems, Arora added, but now it can occur within a matter of hours.

"It's important for us to make sure we're ready to deflect the stuff in hours, not in days," Arora continued. "And that requires sort of a modernization. It doesn't necessarily mean you have to spend more money. It just means you have to spend it smartly."

The Securities and Exchange Commission released new guidelines late last month that require companies to report a "material" security breach within four days from when the breach is confirmed. Notable companies like copper miner Freeport-McMoRan, cosmetics maker Estee Lauder and consumer products manufacturer Clorox were recently hit with cybersecurity breaches.

"You really don't want to be exposed, telling the SEC that you have been breached, you haven't fixed it yet," Arora said. "So, one of the things which all of us will have to make sure, is that customers can fix these things much faster."

Palo Alto Networks' stock surged nearly 15% on Monday, likely driven by a Friday after-hours earnings report that showed the company's revenue increased 26% compared with the year-earlier quarter. Revenue came in at $1.95 billion, slightly below $1.96 billion consensus estimates, according to Refinitiv. The company reported adjusted quarterly earnings per share of $1.44, beating the Refinitiv consensus of $1.28 per share.

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Palo Alto Networks and Estee Lauder.

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